ECR Minerals (LON: ECR) announced a placing on Thursday that is set to boost drilling and exploration at its gold projects in Victoria, Australia.

Funds from the £2.0 million raise will be used for the company’s two wholly-owned projects in Victoria, Bailieston and Creswick.

The placing has a price per share of 2.2p, with investors receiving one warrant for every two placing shares. These warrants allow the holder to subscribe for shares at 3.75p for a 24-month period. If all warrants are exercised, ECR will receive around £1.7 million in proceeds.

Right now, ECR’s own diamond drill rig is continuing in the HR3 area of Bailieston, having drilled five holes so far. A sixth hole is currently being drilled, with the firm planning to report assay results from initial results later in April.

Already, visible gold has been noted in the first hole drilled at HR3’s Byron prospect, as reported in February.

Bailieston is targeting gold mineralisation of the Melbourne Zone, the same zone where Kirkland Lake Gold’s (NYSE: KL | TSE: KL | ASX: KLA) “world-class” Fosterville mine is located.

According to ECR, Bailieston is “at the epicentre of the current gold exploration boom in Victoria”, since it is close to Fosterville and has seen the recent arrival of Newmont Exploration to the district. Newmont has applied for ground immediately to the north of ECR’s Black Cat high-priority prospect.

Bailieston is around 150 kilometres north of Melbourne, Victoria’s state capital, and has “good road access”. Previous reverse circulation drilling at Bailieston’s Blue Moon prospect in 2019 intersected 2 metres at 17.87 grams per ton (g/t) of gold from 57 metres down hole and 3 metres at 3.88 g/t gold from 170 metres down hole.

Creswick, ECR’s other 100%-owned Victoria project, “is considered highly prospective for gold mineralisation”. Reverse circulation drilling there in 2019 completes 17 holes, total. Results from nine of these holes ranged from 0.6g/t gold to 44.63 g/t gold.

As well as funding efforts at the two prospects, the £2.0 million will also be put towards working capital purposes.

Chief executive Craig Brown said net proceeds of the placing will boost the firm’s cash position to more than £5.8 million.

Brown added that, as well as “funding a modest expansion of our operational capabilities at our Bendigo HQ in Central Victoria” the money raised will also let ECR drive hard towards establishing a maiden JORC compliant Bailieston gold resource alongside further drilling at Creswick.

Not only that, but the funds will also give the firm enough “financial flexibility” to evaluate possible “new opportunities” that may arise.

“We are now fully funded for these programmes and don’t envisage requiring additional equity financing for quite some time,” Brown concluded.

Author: Anna Farley

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