Bailieston

  • ECR Minerals – right at the heart of Australia’s second gold rush (ECR)

    The goldfields in Victoria, South Australia are grabbing the world’s attention for the second time in history.

    Upon the first discovery of the precious metal in the 1850s, we saw this desert area become a major international mining centre.

    As you can probably imagine, technology has moved on from the hand-dug pits, wooden ladders and dynamite that marked these times.

    Today, 3D-mapping, drone-based mineralogical studies, and vast national resources devoted to seismic, geochemical and geochronological surveys are unearthing a deeper, second layer to Victoria’s gold rush.

    The Geological Survey of Victoria now estimates that 75 million ounces of high-grade gold is currently sitting under the earth in Australia’s most southern state.

    Tax no dampener on gold rush

    The scale of finds being made in Victoria are so enormous that the local government is even keen to cash in.

    In January 2020, it announced that mines recovering more than 2,500 ounces of gold a year would be subject to a 2.75% tax.

    But this has done little to dampen exploration interest.

    Not least because the state government has been handing out multi-million-dollar grants to mining companies to get their projects underway.

    What the tax development does mean, however, is that the cost of mining an ounce of gold has risen to the point where only the most well-capitalised projects with licenses to boot will succeed.

    Enter ECR Minerals (LSE:ECR).

    ECR has more than a few strings to its bow in Australia.

    The firm’s main area of interest is the Victoria boom.

    In Bailieston and Creswick, ECRboasts two enormously exciting and prospective Victoria gold projects.

    Bailieston is found in the major orogenic Lachlan Fold Belt, while Creswick sits on the Dimocks Main Shale that extends to Ballarat then miles to the south.

    Bailieston’s location within Victoria

    Recreating Kirkland Lake’s success

    Kirkland Lake Gold (TSX.KL) (NYSE:KL) has become the poster child for success in the current wave of Victoria gold interest.

    In the last five years, the firm’s share price has exploded 2,263% thanks to its ownership of the Fosterville Gold Mine.

    This has made the company and its investors rich by any standard.

    Fosterville is the largest gold producer in Victoria, increasing annual gold production by 315% between 2014 and 2018 while also seeing a 540% jump in gold head grade from 4.6g/t to 24.8g/t, according to the national geological survey.

    Operating cash costs of $130 to $150 per oz are laughably small for a world-class deposit, and the spot price of gold hitting new eight-year highs of $1,759 per oz has done nothing to dampen enthusiasm for the precious metal.

    ECR’s key tenement of Bailleston sits just 18 miles east of Fosterville and on the same rich seam of gold that has made millionaires of Kirkland’s investors.

    Trading volume has started to pick up in ECR since it won licences at the start of 2020.

    But with wider equity markets consumed by Covid-19, attention has been diverted away from a potential goldmine.

    With the ECR share price trading in a range at around 0.7p, there is huge upside potential to be had.

    The Blue Moon prospect at Bailieston, Victoria

    Firms flocking to Victoria

    ABC Australia reported in May 2020 that more than 80 mineral exploration applications are now underway in Victoria.

    And it is the UK and Canada-listed companies that have got there first.

    Top names include Power Metal Resources(LSE:POW), Red Rock Resources (LSE:RRR) and Fosterville South (TSX.V:FSX).

    The latter of these has this week spun off two of its gold projects at Avoca and Timor in Victoria — bought from none other than ECR — to create a new company, Leviathan Gold, with FSX shareholders receiving shares in Leviathan on a one-to-one basis.

    Shares in FSX rose by nearly 30% to an all-time high of CAD$4.35 on the news.

    ECR’s sale of Avoca and Timor to Fosterville South means that – as well as an upfront $500,000 to fund its Bailieston and Creswick exploration – ECR will receive $1 for every ounce of gold discovered, up to a maximum of $2,000,000.

    Multinational miners are now converging on Victoria, but they have been beaten to the punch to by their nimbler rivals.

    As a relatively small AIM-listed exploration, the results here could be a kingmaker for ECR.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

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  • ECR Minerals zones in on highly-prospective core gold projects in Victoria following asset sale (ECR)

    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’sFosterville 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.