ECR Minerals zones in on highly-prospective core gold projects in Victoria following asset sale (ECR)

ECR Minerals (LSE:ECR) will press forward at its Creswick and Bailieston gold projects in Victoria from a significantly strengthened cash position following the disposal of several non-core assets, says its chief executive Craig Brown.

Monday saw the £3.5 million mineral exploration and development firm sell off its Avoca, Moormbool, and Timor exploration licences in the Australian state to Canadian miner Fosterville South (TSX.V:FSX). It received A$500,000 in cash immediately from the sale and can earn up to a total of A$2.5 million from the assets provided that certain resource and production milestones are crossed in the future.

However, Brown tells us that the most significant element of the sale is that it frees ECR up to focus entirely on its remaining interests in Victoria – the Bailieston and Creswick projects:

“These are two highly prospective licence packages in a state that is enjoying a renewed rush of interest thanks to the enormous success of Kirkland Lake’s Fosterville mine. Following strong results from our initial work at both projects, we can now focus more than ever on advancing these core opportunities.”

The Creswick project contains around 7 kilometres of a 15-kilometre trend called the Dimocks Main Shale (“DMS”) that runs through the world-renowned mining centre of Ballarat.

The DMS has been the source of vast swathes of both alluvial and deep lead gold over the years. It is believed to have been a significant contributor to around 11 million ounces of gold production in the Ballarat area as a whole. As such, ECR has been examining the trend’s potential for hosting gold on its own licence area – where multiple veins indicate the potential for bulk mining targets.

Maps of the DMS (Source: ECR Minerals)

ECR’s exploration efforts at Creswick took a significant step forward last month. The company enlisted a consultancy firm to stain drill cuttings from its 2019 drill programme on the asset to test for the presence of “ferroan carbonate” and “ferroan dolomite”. In layman’s terms, the presence of these minerals may serve to highlight the presence of gold shoots in gold deposits.

The work identified ferroan dolomite in five drill holes, and “staining” has been recommended for all future exploration at Creswick. This development once again underlines Creswick’s overall gold exploration potential, something Brown highlighted to us as a transformational opportunity on which it can now increase its focus:

Our drilling in 2019 only tested approximately 300 metres of the DMS trend – our tenement position covers seven kilometres, so there is a considerable amount of area left to explore. In this sense, then, the indications of gold that we have already had are highly encouraging.

 “You can certainly see that there is something on this property, and we will be able to explore this more intensely with the support of our new core focus and the proceeds from the sale of our non-core assets in Victoria.”

Bailieston, meanwhile, is located at the epicentre of the Victoria gold exploration boom – close to Fosterville, one of the world’s highest-grade, lowest-cost mines, and adjoining land applied for by Newmont Exploration.

Among other opportunities, the licence area contains a high priority prospect called Blue Moon on which ECR formally announced a new gold discovery in May last year. A drilling programme designed to follow on previously-encouraging exploration encountered a range of strong intersections, including grades of up to 17.87 grams per ton. For context, the World Gold Council defines a high-quality underground mine as one with ore grades of 8-10 grams per ton.

The Blue Moon prospect at Bailieston (Source: ECR Minerals)

Work has also begun to show that mineralisation at Blue Moon intensifies to the west. Brown tells us that ECR will now look to follow up on its highly-attractive results at Blue Moon, as well as testing other prospects nearby:

“With other opportunities such as Black Cat and Red and Yellow Moon also on offer at Bailieston, we are truly excited to continue driving forward at what we believe to be a truly prospective group of opportunities.”

Validation of Brown’s enthusiasm around both Creswick and Bailieston was also present in Monday’s announcement. The firm noted that “external parties” are currently reviewing data on both with a view to making a commercial transaction – including joint venture opportunities. Although there is no guarantee these will complete, and due diligence will likely suffer some degree of delay as a result of Covid-19 travel restrictions, Brown tells us he is highly encouraged by the value such a deal could bring:

“Both opportunities hold considerable potential. A deal with a major party looking to join the Victoria gold rush can help to accelerate the realisation of this potential and create great value for shareholders.”

It seems likely that newsflow will be on the horizon for both Creswick and Bailieston later this year. Against a backdrop of soaring gold prices, it will be exciting to see the impact this has on ECR’s market valuation. One thing is for sure, however – the timing of its asset sale and shift in focus could not have been better.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article’s content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

ECR Minerals raises £500k to fund gold projects in 2020 as third-party interest continues (ECR)

ECR Minerals (LSE:ECR) has raised £500,000 in a 100 million share equity placing at 0.5p per share to ensure it is fully funded for the rest of 2020. Chief executive Craig Brown said the cash proceeds would be used to support its gold exploration projects in the Victoria region of Australia. The placing was arranged by the company’s broker SI Capital Ltd.

For each new share, investors will receive a warrant which can be exercised for one new ordinary share in ECR Minerals at a price of 1p, for up to 24 months from the date of admission. If all these warrants were exercised, it would generate an additional £1 million for the company. 

ECR’s main focus is on gold projects through its wholly-owned Australian subsidiary, Mercator Gold Australia.  These include Creswick and Bailieston in central Victoria and the Windidda project in Yilgarn, western Australia.

On the placing, Brown said: “We are pleased by the confidence in ECR shown by investors in the Placing. The Company is now in a strong position to implement our strategy, which centres on our exciting portfolio of gold projects in Victoria, Australia. Discussions with third parties regarding certain of these projects are continuing, and we hope to be in a position to update the market shortly.”

Physical gold is in very short supply at present. As investors digest the wider volatility in equity markets, gold miners with the full backing of their shareholders will be best placed to take advantage of strong commodity prices. 

The spot price of gold is now approaching a retest of the seven-year highs seen in mid-March. In morning trading on 6 April the precious metal was trading at $1,632/oz.

ECR’s placing comes just days after it announced a “number of expressions of interest” in its portfolio of Australia assets amid the outbreak of Covid-19. In its 2019 results, the firm said gold prices have traded at “record levels” in Australia dollar terms this year as investors have swarmed to the safe-haven asset en-masse in response to the pandemic.

As a result, there is currently “a very high level of interest” in gold exploration and mining in Australia, according to ECR, including in Victoria and Western Australia where the bulk of the firm’s assets are based. “A number of expressions of interest in ECR’s projects have been received from third parties,” said Brown at the time, adding that the firm is also considering potential transactions that may create shareholder value.

The company’s results also saw it detail the operational progress made across its portfolio of assets during the results period and beyond. The centre of the group’s operations over the year and subsequently was Victoria, where it completed significant exploration programmes in the Bailieston and Creswick gold project areas.

The critical area of focus at Bailieston has been the Blue Moon prospect, where reverse circulation drilling returned an intercept of 2 metres at 17.87 g/t gold within a zone of 15 metres at 3.81 g/t gold from 51 metres in hole BBM007. This confirmed the prospect as a new gold discovery.

Meanwhile, at Creswick, an RC drilling programme identified more quartz than anticipated, leading ECR’s geologist to surmise that the project contained an “extreme nuggety distribution of gold”. To assess the significance of this observation, the company devised a new testing program using gravity and electrostatic concentration on full bags of drill cuttings.

“In nuggety gold systems, increasing sample size increases the chance of nuggets being captured in the sample, and thus being appreciated as part of the gold endowment of the system,” said ECR.

Using this new approach, ECR has confirmed the presence of nuggety gold mineralisation at Creswick in a structure called the Dimocks main Shale. Some of this is thought to be very high grade.

Meanwhile, another critical area of focus for the firm has been the Windidda gold project in Western Australia, where it has been granted five licences. These cover areas potentially prospective for komatiite-hosted nickel-copper-PGE mineralisation, as well as orogenic gold.

Post-financial year-end, ECR also sold off its wholly-owned Argentine subsidiary Ochre Mining, which holds the SLM gold project in La Rioja. The money raised has enabled the company to focus on its gold operations, and it retains an NSR royalty of up to 2% over the project to a maximum of $2.7 million in respect of future production.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article’s content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

 

ECR Minerals sees assets enjoy a “number of expressions of interest” as gold remains strong (ECR)

Tuesday saw gold explorer ECR Minerals (LSE:ECR) report a “number of expressions of interest” in its portfolio of Australia assets amid the outbreak of Covid-19.

In its 2019 results, the firm said gold prices have traded at “record levels” in Australia dollar terms this year as investors have swarmed to the safe-haven asset en-masse in response to the pandemic.

The precious metal has been trending upwards from a low of $1,060/oz in December 2015 to hit a peak of $1,700/oz in February 2020.  And despite the worldwide market crash in mid-March this year, prices have recovered strongly from $1,462/oz two weeks ago to regain stability above $1,600/oz.

As a result, there is currently “a very high level of interest” in gold exploration and mining in Australia, according to ECR, including in Victoria and Western Australia where the bulk of the firm’s assets are based. “A number of expressions of interest in ECR’s projects have been received from third parties,” said CEO Craig Brown, adding that the firm is also considering potential transactions that may create shareholder value.

Elsewhere, ECR’s chairman David Tang highlighted the impact that the suspension of many international travel routes as well as domestic movement restrictions have affected the company’s operations. However, he said the effect has been minimal, with the board expecting to be able to resume normal activities as restrictions lift.

From a cash perspective, ECR said it would be taking measures to conserve cash where possible in the face of the pandemic. At year-end, it had cash and cash equivalents of £268,517, with no borrowing. However, the company added that it would require further funding with 12 months from the date of approval of the 2019 financial statements to avoid a cash deficit.

“In addition, the potential impact of COVID-19, whilst not yet fully understood, will likely have an impact on the operations of the business and the ability to raise additional equity funds,” it added.

Over the financial year covered by the results, ECR reported a loss of £762,586, a slight increase on the £721,460 loss it made the previous year. However, it is worth noting that losses such as these are commonplace for exploration companies due to the prospective nature of their operations.

The company’s results also saw it detail the operational progress made across its portfolio of assets during the results period and beyond. The centre of the group’s operations over the year and subsequently was Victoria, Australia, where it completed significant exploration programmes in the Bailieston and Creswick gold project areas.

The critical area of focus at Bailieston has been the Blue Moon prospect, where reverse circulation drilling returned an intercept of 2 metres at 17.87 g/t gold within a zone of 15 metres at 3.81 g/t gold from 51 metres in hole BBM007. This confirmed the prospect as a new gold discovery.

Meanwhile, at Creswick, an RC drilling programme identified more quartz than anticipated, leading ECR’s geologist to surmise that the project contained an “extreme nuggety distribution of gold”. To assess the significance of this observation, the company devised a new testing program using gravity and electrostatic concentration on full bags of drill cuttings.

In nuggety gold systems, increasing sample size increases the chance of nuggets being captured in the sample, and thus being appreciated as part of the gold endowment of the system,” said ECR.

Using this new approach, ECR has confirmed the presence of nuggety gold mineralisation at Creswick in a structure called the Dimocks main Shale. Some of this is thought to be very high grade.

Meanwhile, another critical area of focus for the firm has been the Windidda gold project in Western Australia, where it has been granted five licences. These cover areas potentially prospective for komatiite-hosted nickel-copper-PGE mineralisation, as well as orogenic gold.

Post-financial year-end, ECR also sold off its wholly-owned Argentine subsidiary Ochre Mining, which holds the SLM gold project in La Rioja. The money raised has enabled the company to focus on its gold operations, and it retains an NSR royalty of up to 2% over the project to a maximum of $2.7 million in respect of future production.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article’s content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance