ECR Minerals (LSE:ECR) leapt by more than a third to its highest share price since November 2019 on Wednesday after revealing the sale of its Argentine operations.
Th Australia-focused company – which was up 36% at 0.85p a share with a £2.8 million market cap at writing – offloaded its subsidiary Ochre Mining to Chinese firm Hanaq Argentina for an undisclosed sum. Ochre holds the SLM gold project in La Rioja, Argentina, over which ECR will retain a 2% net smelter royalty on future production up to a maximum value of $2.7 million.
Hanaq is engaged in lithium, base, and precious metal exploration in Argentina and boasts a strong management team led by Juan Tang, responsible for the successful permitting of Peru’s Pampa de Pongo iron ore project.
ECR’s chief executive Craig Brown said the organisation was pleased to retain exposure to potential upside from SLM. He added that it believes that Hanaq has the “operational capabilities and access to Chinese investment capital necessary” to put SLM into production.
Critically, ECR said that the sale would allow it to focus on its core gold exploration activities in Australia. The company is the 100% owner of the Avoca, Bailieston, Creswick, Moormbool, and Timor gold exploration projects in central Victoria, where it is currently undertaking a considerable amount of exploration activity. Perhaps most notably, the company has completed a vast sampling programme over its Creswick asset that has confirmed the presence of nuggety gold mineralisation in an underlying feature called the Dimocks Main Shale.
ECR has also applied for the Windidda project in the country’s Yilgarn region, where it was recently granted four exploration licences.
Wednesday’s news comes just weeks after ECR revealed that it had been rewarded with a near £300,000 refund for its research and development work in Australia. Brown said the refund provided a “significant boost” to ECR’s cash position at a pivotal time – with gold prices enjoying an exceptionally strong run.
“The gold price remains strong and we believe there is considerable and growing interest in respect of Australian gold exploration, and we have also observed strong interest in the Victorian goldfields where we have an active exploration portfolio,” he added at the time. “Overall, the board believes the additional cash creates exciting opportunities for an entrepreneurial gold-focused company like ECR.”
Author: Daniel Flynn
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