ECR minerals (LSE:ECR) announced it has secured strategic funding of £680k on Monday. The company states that together with existing cash, ECR now has sufficient working capital for operational plans until at least Q2 2020.
In addition to the new shares being issued at 0.70p, participants in the fundraise will also receive a warrant for each share subscribed, exercisable at 1.125p within two years. Directors, David Tang and Craig Brown have also subscribed for a total of £20k on the same terms.
Chief Executive Officer, Craig Brown, commented: “I am pleased to announce this additional financing which adds to the money raised in July and considerably bolsters our balance sheet working capital at a key time for the ECR business.Market conditions in the resource sector have been challenging in the latter half of 2018, for companies of our size and we believe the ability to source additional financing at this time is a validation of our business model and plans. ECR is in a financially robust position and can now push ahead with exploration and development across the business. In this regard ECR has a portfolio of projects in Australia which have yielded highly positive exploration results during our 2018 work programmes and deserve a proactive exploration approach.”
The funds raised will partly be used to expand exploration at the company’s gold projects in Victoria, Australia. Things appear to be hotting up in the region, and just recently mining giant Newmont applied for a license for a large area of ground in close proximity to licenses held by ECR. In fact, ECR is looking to increase its territory in the vicinity via its 100% owned operating vehicle Mercator Gold Australia Pty Limited. Earlier this month, Mercator submitted three new license applications to augment existing licenses related to the Bailieston/Moormbool gold project area just south and southwest of Newmont’s potential license. A fourth license application has been submitted to add to the ground in the Creswick project area that sits between two large gold producing areas.
In its update Monday, ECR detailed some of the activities the placing will fund which include 4,000 metres of reverse circulation drilling at Blue Moon, Creswick and Black Cat prospects and 1,400 metres of scout drilling at the Avoca prospect.
Brown adds: “We believe our gold interests in Victoria region in Australia have been validated by the large licence application submitted by Newmont Mining Pty Limited adjacent to our Bailieston and Moormbool projects. Moreover work at our Creswick project has revealed, through exploration mapping, a large gold system with exciting potential.
We have added additional ground with complementary licence applications recently announced, and we have more opportunities for new licences and new corporate activity to further bolster our business. The extent of our new opportunity pipeline is such that we are taking time to carefully select the primary opportunities.
Notwithstanding challenging conditions of late and what we perceive to be a general retrenchment in activity across the resource sector due to funding limitations, shareholders in ECR can be assured that the Company is well financed and operationally active, and we look forward to updating shareholders in due course on our activities.”
Author: Stuart Langelaan
Disclosure: The author does not own shares in the company mentioned above