ECR Minerals (LSE:ECR) advanced 5.9pc to 0.9p on Tuesday following the release of an upbeat research report covering its operations. An ‘Initiation of Coverage’ report by New York-based investment bank Hallgarten & Company can be found on ECR’s website by clicking here.
The work, compiled using publicly-available information, concludes by rating ECR as a long position with a 12-month target price of 2.5p per share.
‘With over GBP 1.2mn in the bank as at the end of last year and R&D rebates expected in from the Australian government, the company is well resourced and planned exploration only makes a relatively small dent in funds. This implies little to no dilution in the short term,’ it adds.
Hallgarten acts as a strategic consultant to ECR and is compensated for its services. However, it does not hold stock in the business and does not have the right to in the future.
The release of the report comes off the back of a busy start to the year for ECR. Earlier this month, the company announced the imminent launch of a third drilling programme in Victoria, Australia. The firm has signed a contract for 450m of rotary air blast (RAB) drilling at the Black Cat gold prospect within its Bailieston gold project area. The work is expected to begin this month.
Black Cat is among the high priority targets identified by geophysical interpretation and targeting studies completed by Terra Resources at Victoria in late 2017. The prospect is located immediately south of ground recently applied for by resources giant Newmont Exploration.
ECR is also preparing for two further drilling programmes in Victoria. At the end of last month, the firm announced that it had signed a contract for 4,000-6,000m of reverse circulation drilling in the region.
ECR said its first target is its Creswick Gold Project, where exploration mapping has identified a large gold system within the Dimocks Main Shale (DMS). The DMS is a 15km-long hard rock geological feature and the source of much alluvial and deep lead gold. Drilling will target multiple quartz vein orientations identified within the DMS.
Once this has completed, drilling will then move to the firm’s Blue Moon gold prospect, which is also located at Bailieston. Here, ECR will follow-up a significant near-surface gold intercept and evidence of a near-surface mineralised gold system. The drill target here is a sandstone that has been weathered heavily near the surface. However, ECR believes it may host higher grade gold mineralisation, including disseminated sulphides, at deeper levels.
Alongside its various drilling updates, last month also saw ECR announce that it had submitted applications for the nine exploration licences that make up the Windidda gold project in the Yilgarn region of Australia. The area has been identified as a gold exploration opportunity because it has the potential to contain Archaean greenstones beneath shallow cover. Archaean greenstones host many of Western Australia and the world’s most prolific gold deposits.
The under-cover greenstone gold exploration model has already been tested successfully by Greatland Gold at its nearby Ernest Giles project. Furthermore, ECR’s licence applications also cover a large proportion of an identified gravity-magnetic trend with known gold prospects along trend to the south.
Previous exploration at Windidda has only targeted base metal and manganese deposit within cover sequences. ECR expects its target areas to be amenable to aircore drilling. It hopes this will enable it to make a rapid assessment of their potential for gold mineralisation.
Author: Daniel Flynn
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