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

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