Shares in ECR Minerals (LSE:ECR) soared by 49.23pc to 0.97p on Wednesday afternoon after the business announced that its Creswick gold project in Australia may be much more prospective than previously thought. The precious metals exploration and development company said its drilling programme at the Victoria-based target has identified more quartz than expected.

To date, the firm has carried out 1,687m of RC drilling in 17 holes at Creswick targeting multiple quartz vein orientations within a 15km-long hard rock geological feature called the Dimocks Main Shale (DMS). More than one third of its drilled area has encountered quartz, including a zone exceeding 60m in width - more than twice the 25m width expected. Meanwhile, the business has encountered gold in all of the holes it has drilled so far, with grades in nine holes ranging from 0.6g/t to a whopping 44.63g/t.

Critically, a technical review of the programme and its assay results - which has nearly completed - has confirmed that the mineralisation is ‘nuggety’ in nature. The State of Victoria in Australia is renowned for large gold nuggets. Indeed, in the list of nuggets published by the Geological Survey of Victoria it is reported there was a 112oz nugget found in a mine understood to be adjacent to one of the ECR’s drill locations at Creswick. In addition, it is reported several nuggets over 100 oz were found in the vicinity of the company’s drill targets and nuggets up to 625 oz further south in alluvial gullies downstream from the DMS.

The discovery that gold within the DMS is nuggety is also important because such a style of mineralisation can lead to understated assay results. This is because the chance that a gold nugget will be captured in a drilled meter decreases as the nugget increases in size. Likewise, only a small portion of each RC drilling sample bag is actually tested, meaning results could be understated if one or more large nugget is not included in the tested portion. That being said - as ECR points out - this could also lead to results being overstated in the event that a large nugget is captured in the small tested portion that does not accurately represent the sample bag as a whole.

To fix this issue, the business has resolved to complete gravity concentration tests on entire sample bags for all of its drilling to date. This new approach is already reaping rewards for the organisation, with a nugget being identified in a previously untested portion of a sample bag from hole CSR011. All-in-all, the whole bag has demonstrated gold grades of 11.8g/t from the new gravity concentration tests - some 528pc greater than the previous 1.88g/t assay result.

With this in mind, ECR said the results of the assays from its drilling programme may be unreliable indicators of true grade at this stage. It added that it will release results as the more representative while of sample bag analyses are conducted at an accelerated rate.

Regardless, the firm ended its update on a particularly bright note, claiming that it believes there is potential for a ‘very substantial gold deposit’ within the DMS. ECR’s chief executive Craig Brown added that the large footprint gold system at Creswick offers ‘transformational potential’.

‘The question we have to answer is how much gold does the DMS hold that would be amenable to a bulk tonnage gold mining operation. We are closing in on the answer and the directors believe that the outcome has the potential to be Company transformational and is therefore deserving of our close attention,’ he said. ‘We eagerly await the findings from the whole of bag gravity concentration work and will report back to the market as significant developments occur.’

The DMS sits between two large gold producing areas in Victoria, Australia where it is estimated that, historically, 15MMozs of gold have been produced. ECR’s technical team previously announced its belief that it had identified the hard rock source for a significant portion of this work. However, further work was required to validate this proposition. With this is mind, Wednesday announcement appears to add yet more weight to the company’s thesis regarding Creswick’s upside potential.

Author: Daniel Flynn

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