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ECR Minerals #ECR – Unaudited half-yearly financial results for six months ending 31 March 2021 & Update
LONDON: 29 JUNE 2021 – ECR Minerals plc, the gold exploration and development company, is pleased to announce unaudited half-yearly financial results for the six months ending 31 March 2021 for the Company as consolidated with its subsidiaries (the “Group”), along with a review of significant developments during the period and subsequently.
HIGHLIGHTS
- Victoria, Australia continues to enjoy a gold exploration boom, with continued third-party interest in ECR’s Creswick project in Victoria. Discussions are ongoing in respect to a potential commercial transaction in relation to our Creswick project.
- Late in 2020, the Company took delivery of its new Cortech CSD1300G diamond drill rig and at the same time established a new operational base at Bendigo in the Central Victoria Goldfields.
- The Company announced three new strategic licence applications, adding new exploration opportunities in North Queensland, Australia. Three applications for Exploration Permits – Minerals (“EPM”) licences have been submitted by LUX Exploration Pty Ltd, ECR’s 100% owned subsidiary.
- In January 2021, ECR’s 100% owned Australian subsidiary MGA commenced drilling operations at the Byron Prospect in the HR3 area of the Bailieston Project. The Company’s newly acquired ‘Midas’ drill rig was utilised to undertake the first of numerous planned drilling campaigns, all of which are being coordinated from ECR’s central exploration facility compound at Bendigo.
- Announced results from exploration activity in Victoria included immediate success at the first drill hole at Creswick, intersecting 1m @ 9.68 g/t and confirming high gold anomalies (up to 3.75 g/t Au) along with spatially associated antimony which is thought to be from the mineral stibnite which forms a close association with gold mineralisation. Furthermore, a total of 720 B-horizon soil samples were taken across the central and eastern part of the Bailieston Historic Reserve #3 (HR3) between February and March 2021.
- Post-period end, the Company’s cash position was strengthened by a £2,000,000 equity financing by Novum Securities in April 2021 to ramp-up drilling and exploration activities on ECR’s gold exploration projects.
- During the period, the Company issued an aggregate of 11,800,000 share options from the management and consultant option pool to certain key consultants and staff, and also issued an additional 235,420,387 shares from the exercise of warrants and options, receiving a total of £3,289,520.
- Group total comprehensive expenses of £468,112 are reported for the six months ended 31 March 2021 (£1,846,202 for the six months ended 31 March 2020) and net assets of £6,442,465 at 31 March 2021 (£2,206,211 at 31 March 2020).
- A Group Operating Loss is reported for the six months ended 31 March 2021 of £403,079, compared with £369,102 for the six months ended 31 March 2020.
- Adam Jones appointed as a Non-Executive Director.
- Despite the effect of the COVID-19 pandemic on the global economy, ECR is in a robust financial position and continues to provide shareholders with exposure to an exciting range of gold projects.
FINANCIAL RESULTS
For the six months ended 31 March 2021 the unaudited financial statements of the Group record a total comprehensive expense of £468,112.
The Group’s total assets were £6,522,307 at 31 March 2021, compared with £2,275,479 at 31 March 2020. The increase in total assets has occurred largely due to the increase in purchase of property, plant and equipment and exercise of warrants during the period.
The Group held £3,928,905 of cash and cash equivalents at 31 March 2021, compared with £166,852 at 31 March 2020. Post the period end, the Group’s cash position benefited from a £2,000,000 equity financing completed by the Company in April 2021. Cash at 23 June 2021 is £5,242,081.
REVIEW OF PRINCIPAL DEVELOPMENTS DURING THE PERIOD AND SUBSEQUENTLY
The six months to 31 March 2021 and the subsequent period since have been marked by a series of exciting developments for ECR, all of which are related to the Group’s primary strategic activity, of exploration and development in Australia through ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”).
Currently, the Company is focused on an aggressive drilling programme at Bailieston and Creswick properties in Victoria, with two diamond drill rigs working every day to deliver large quantities of drill core for technical review, processing and assay testing. The ongoing pace and sheer volume of core and data recovered, along with the EPM applications in N Queensland is expected to expose ECR to potential new gold discoveries.
Application for 300 Sub-Blocks West of Charters Towers in the Lolworth District of North Queensland, Australia.
In May 2021, ECR Minerals announced three new strategic licence applications with a view to adding new exploration opportunities in Queensland, Australia. These were submitted by LUX Exploration Pty Ltd which is a 100%-owned Australian subsidiary of ECR Minerals.
The three Exploration Permits – Minerals (EPM) in application (27901, 27902 and 27903) represent 300 sub-blocks covering a total 900 km2 of highly prospective ground located within the Lolworth Range, 200km WSW of Townsville and 30km north from Pentlands, North Queensland Australia.
The application area contains metamorphic rocks of the Charters Towers Province, that host historical large gold producing centres such as Charters Tower (6.6M Oz Au) and Ravenswood (>1M Oz Au). The structural and basement geology is poorly understood in the area, suggesting numerous opportunities to find new deposits. The area also contains reported rhyolitic volcanism, which play host to intrusion-related breccia gold deposits in the region such as Mount Leyshon (>2.5M oz) and Mount Wright (>1M oz).
The application area is encompassed on the southern boundary by rich alluvial gold deposits of the Cape River and Gorge Creek area, which drain the southern Lolworth Range.
The east boundary of EPM27902 and EPM27903 is bordered by current exploration permits across the Lolworth dyke swarm; a north-west trending system of rhyolitic dykes and small breccia pipes containing gold, copper and molybdenum.
Historic samples also highlighted tin-tungsten mineralisation in the western areas of EPM27902. Reports show no detailed follow-up work has been undertaken.
ECR considers EPM27901, 27902 and 27903 offer significant potential for precious and base metal discoveries in an area of Australia where multiple large-scale discoveries have already been made.
Soil Sampling – HR3 Bailieston Project
In May 2021, MGA carried out soil sampling generated within the Historic Reserve #3, (HR3) Bailieston in Victoria, Australia. The results of the study were announced on 15 June 2021, and revealed high gold anomalies (up to 3.75 g/t Au) along with spatially associated antimony, which is thought to be from the mineral stibnite, which forms a close association with gold mineralisation. A total of 720 B-horizon soil samples were taken across the central and eastern part of the Bailieston Historic Reserve # 3 (HR3) between February and March 2021.
These findings mean we have now submitted a request for consent to undertake additional exploration drilling at the location, which is over and above initial planned drill holes in the area. The collected samples were tested by portable X-ray fluorescence (“pXRF”) for anomalous pathfinder elements for gold and a selected sub-set of 229 samples have been sent for trace element analysis (TL) for Au, Ag, As, Sb, Zn, Cu and Pb. Results of this work show a strong spatial relationship between Au (gold), Sb (antimony) and to a lesser extent As (arsenic). Plotting of spatial Au-Sb elemental maps reveals trends that may correspond to the weathering of high-grade gold shoots under shallow cover.
Field mapping shows sub-cropping quartz with little to no historical workings associated with these anomalies. Plans have been submitted for approval to drill along strike to test these quartz reefs at depth.
Soils grids were designed over known and possible strike extensions of gold-bearing quartz reefs. A 10m x 10m spaced grid was chosen as it is known that narrow high-grade gold reefs will erode over a small spatial area into the adjacent soil. Soils have been taken from the B-horizon, often at the gravel-clay interface at a depth around 10cm. This is where the gravels have not transported too far from their source rocks. Soils located within gullies and adjacent mullock dumps were removed due to contamination. All soils were sieved on site to < 2mm and bagged, producing a sample around 300g in weight. A total of 720 samples have been taken to date (June 2021).
All soils were systematically analysed in-house using ECR’s owned Olympus pXRF. Analysis is undertaken using three sequential beams with a 15 second count attributing to each beam. Results are evaluated for traditional pathfinder elements such as As, Ag, Pb, Zn, Cu and Sb.
Soil with moderate arsenic content (generally > 40 ppm) and soils spatially close to extensions to known reef lines were selected for further trace elemental analysis for Au, Ag, As, Pb, Zn, Cu and Sb. A total of 229 sub-samples have been selected and sent to ALS laboratories, Adelaide, South Australia. Method Au-TL44/ME-ICP44 was chosen for analysis.
A detection limit in ppm is sufficient given the proximity to possible gold sources. Any Au-TL44 results greater than 1 ppm was analysed by Au-AROR44, which is used for ‘ore grade’ analysis. A 50g charge from a 95% passing 75µm pulverise was chosen due to the likely presence of coarse gold.
Thirteen samples returned gold values above 0.1 g/t Au. Silver, Copper, Lead and Zinc results are low within the soils.
Arsenic is traditionally used as a pathfinder element for gold mineralisation and occurs at moderate levels within soils at HR3 and is fairly distributed, masking blind gold deposits.
Antimony (Sb) results are variable with high results correlating spatially with high gold assays.
Rock chips taken during 2018 along strike of the main soil anomaly showed a visible speck of coarse gold. Assays for these rock chips were analysed using a small charge fire assay resulting in variable results (up to 0.32 g/t Au) reflecting how coarse gold can be missed using traditional assay methods. Furthermore, non-executive director (Adam Jones) in February 2019 has found coarse gold by using a metal detector within the shallow soils in the vicinity of the reported soil anomalies.
Early Successful RC Diamond Drilling at Creswick Project
MGA has made great progress to date with the completion of the four diamond holes at Creswick and 909.2m of diamond drilling has been undertaken efficiently at the Creswick Project. So far, the Company has received assay results from hole CSD001, with gold intersected in the first drill hole.
The first hole, CSD001 has been completed to 295m. This hole is an orientation hole to establish the position of the Dimocks Main Shale (DMS) and associated structures. As previously reported (21 June 2019) data from the RC drilling conducted in 2019 showed a lack of geological continuity indicating faulting and folding of the DMS. CSD001 intersected quartz zones within the DMS in addition to multiple reefs above and below it. Drilling of CSD001 has demonstrated that much of the 2019 RC drilling was done into the minor reefs above the DMS.
CSD001 revealed three parallel reef systems above the DMS that have been folded by small and large parasitic folds. The DMS was reached at 72m down the hole and continued to 93m and intersected two 2m quartz zones at the upper contact and at 86m with minor veining throughout the shale. The hole continued to 295m to test the folding and faulting beneath the DMS and encountered an additional 8 reef zones that mostly related to east-dipping faults and minor shales. 76 of the 108 samples sent for laboratory testing from CSD001 have been reported from the lab with the best result 1 m @ 9.68 g/t from an east-dipping fault beneath the DMS. Results from the final 32 samples are awaiting laboratory analysis.
CSD002 was collared 10 m to the west of CSD001 and drilled steeper to target where projected parasitic folding and the mineralised east-dipping fault intersect the DMS. The previously reported result from 2019 from CSR005 of 1m @ 81.0 g/t came from quartz in the parasitic folds. Drilling of CSD001 intersected an 8m quartz zone where the DMS and these structures intersect plus minor veining throughout the shale. The core from CSD002 has been logged, sampled and sent to the laboratory for analysis.
Work to better understand the nugget effect at Creswick is ongoing. As described in the release dated 5 November 2019 grade variability due to the nugget effect was demonstrated at Creswick with some of the initial samples under-reported and others over-reported.
Outlook, Future Prospects and COVID 19
The Board of ECR Minerals plc is very positive in regard to the outlook for the Company and for sustained demand for Gold over the longer term. We remain enthused over the potential and prospectively of the Company’s projects in Victoria, Australia.
As a consequence of COVID 19, governments around the world have imposed restrictions on
international travel, and in particular extensive restrictions have been imposed on domestic travel within Australia. These restrictions have meant that until May 2021, the board have been unable to visit the assets. However, the team on the ground in Victoria have continued the work at site without interruption, and as a result there has been no significant negative impact on the Company from the coronavirus.
FOR FURTHER INFORMATION, PLEASE CONTACT:
|
ECR Minerals plc |
Tel: +44 (0)20 7929 1010 |
| David Tang, Non-Executive Chairman | |
| Craig Brown, Director & CEO | |
| Email: info@ecrminerals.com | |
| Website: www.ecrminerals.com | |
| WH Ireland Ltd | Tel: +44 (0)161 832 2174 |
| Nominated Adviser | |
| Katy Mitchell/James Sinclair-Ford | |
| Novum Securities | Tel: +44 (0)20 7399 9425 |
| Broker | |
| Jon Belliss | |
| SI Capital | Tel: +44 (0)1483 413500 |
| Broker | |
| Nick Emerson | |
| Brand Communications | Tel: +44 (0)7976 431608 |
| PR & IR | |
| Alan Green |
ABOUT ECR MINERALS PLC
ECR Minerals is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) has 100% ownership of the Bailieston and Creswick gold projects in central Victoria, Australia, has eight licence applications outstanding including two licence applications lodged in eastern Victoria. (Tambo gold project). MGA is currently drilling at both the Bailieston and Creswick projects and has an experienced exploration team with significant local knowledge in the Victoria Goldfields and wider region. https://mercatorgold.com.au/
ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd (“LUX”) which has three licence applications covering 900 km2 covering a relatively unexplored area in Queesnland, Australia. https://luxexploration.com/
Following the sale of the Avoca, Moormbool and Timor gold projects in Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX) and the subsequent spin-out of the Avoca and Timor projects to Leviathan Gold Ltd (TSX-V: LVX), MGA has the right to receive up to A$2 million in payments subject to future resource estimation or production at any of those projects.
ECR has earned a 25% interest in the Danglay gold project; an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines, and holds a royalty on the SLM gold project in La Rioja Province, Argentina.
FORWARD LOOKING STATEMENTS
This announcement may include forward-looking statements. Such statements may be subject to a number of known and unknown risks, uncertainties and other factors that could cause actual results or events to differ materially from current expectations. There can be no assurance that such statements will prove to be accurate and therefore actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements. Any forward looking statements contained herein speak only as of the date hereof (unless stated otherwise) and, except as may be required by applicable laws or regulations (including the AIM Rules for Companies), the Company disclaims any obligation to update or modify such forward looking statements as a result of new information, future events or for any other reason.
Please find the full financial statements here.
The rise and fall – or should we say, fall and rise – of the gold market in 2021
by Hannah Howes
Gold investment demand fell early this year, largely attributed to outflows in gold-backed ETFs as growing expectations of higher interest rates influenced investor attitude, according to the most recent World Gold Council (WGC) report (Gold outlook for 2021 positive, despite uncertainty – World Gold Council (miningweekly.com). When analysing this trend more closely, it has been noted that investment demand actually saw positive growth in the retail market with ETF outflows negatively impacting the overall picture. The WGC market intelligence manager Krishan Gopaul notes that the “The overall picture of investment falling in the quarter really hides two different stories – we see the ETF outflows but there is still the more positive growth story on the bar and coin side”.There has also been an increase in consumer demand which has been further enhanced by low gold prices, one of the major buyers of such commodities being China and other emerging markets. The catalysed global economic recovery, bolstered by swift vaccination efforts, has also boosted consumer confidence in the technology sector raising demand by 11% year on year.
The cyclical elements of gold demand have been heightened by the 10% decrease in gold price in the first quarter, in combination with the global economic recovery in response to positive Covid-19 outlooks. Senior Market Analyst Louise Street at WGC has observed that “having seen investors take shelter in gold from the initial impacts of Covid-19, the first quarter saw a sell-off in the gold price as confidence in economic recovery grew and US interest rates rose sharply,”adding that, notwithstanding this, gold holds a strong position in the most well-balanced portfolios. This is particularly so given the repeatedly reported fears of inflation. In previous years where records show inflation rates of over 3%, the price of gold increased 15% on average (https://www.gold.org/goldhub/research/outlook-2021). When looking ahead to the next few less-tumultuous years, Louise sees “reasons to be optimistic about the gold market”due to the resilience of the markets main drivers, low interest rates and increasing yields.
History ready to repeat itself?
The only certain thing to come from the past year is uncertainty in abundance. That said, when it comes to gold mining, we can remain confident in the fact that the Victoria goldfields, southern Australia, continues to stand as a reputable and reliable source of precious metals. This follows decades of mining in the region, in the wake of a glimmering spotlight launched by the 19thcentury gold rush. Testament to this fact is the nugget of gold rested assertively on my mantel, panned by myself during a trip to the Sovereign Hill attraction at the Ballarat Gold Mine.
AIM listed ECR Minerals (AIM: ECR) is a company on the brink of a gold fest from current drilling in the territory, focused on delivering the next multi-million ounce gold resource. ECR outright owns the Bailieston and Creswick projects located in Central Victoria, Australia, and with an operational HQ at Bendigo, is able to process and fast track core samples and assay results.
As well as holding financial interests in the Avoca, Moormbool and Timor projects, following the sale of those licenses to TSX-V listed Fosterville South Exploration Ltd for up to £1.3 million. Further retaining a 25% interest in the Danglay epithermal gold project located in Northern Philippines and a net smelter royalty agreement from the sale of the SLM gold project in Argentina.
Creswick
The Dimocks Main Shale, a geological feature believed to be have great gold potential, is home to Creswick and extends some 15km from the aforementioned mining centre of Ballarat.
Drill sites for the current programme are 2.2km south from those used in the previous drill programme in 2019, individual samples of which returned assays as high as 80.97 g/t gold over one metre. A study by pre-eminent consulting geochemist Dr Dennis Arne, whose experience includes extensive consultancy at the exceedingly successful Fosterville gold mine in Central Victoria, emphasized the significant gold exploration potential at Creswick, and ‘nuggety gold mineralisation’.
Bailieston
Also located in the sought-after central Victoria region, Bailieston is not far from the renowned Fosterville mine owned by Kirkland Lake Gold. Bailieston is base to ongoing drilling in the HR3 area, undertaken using ECR’s own diamond drill rig, with prospects also including Cherry Tree, Red Moon and Yellow Moon. Assay results have been announced for four holes in the HR3 area, with a further four holes awaiting final geological interpretation. What has been reported is that BH3DD005 holes 6 and 7 indicate the hypothesized central anticline does exist and represents a favourable target for gold mineralisation. Quality samples have been recorded from drilling by ECR at the Blue Moon prospect in 2019, including a 17.8g/t sample from a 2 metre interval. Making Blue Moon a noteworthy new discovery.
Through previously selling three Victoria licences (Avoca, Moormbool and Timor gold exploration projects) for cash and royalties to TSX-V listed Fosterville South Exploration Ltd, and a number of warrant exercises, the company is fully funded to continue drilling at its 100% owned Creswick and Bailieston projects through to into 2022. This strong cash position has given the company desirable footing moving forward, enabling them to push for the launch of further drilling programmes across existing property and acquire new opportunities.
In the recent Proactive Investors interview, ECR Minerals CEO Craig Brown spoke to Andrew Scott, highlighting the recent news of application for three new licenses in north-east Queensland, Australia. These permits are to cover a total of 900sq km of highly prospective ground within the Lolworth Range. Historical mining in the region totals 24.4mil ounces, equivalent to $48 billion worth of gold. Despite this, the area is relatively unexplored, offering “huge potential” according to Craig. As well as emphasising that he expects the gold price to only gain strength, with the precious metal being the hedge against inflation concerns.
Despite the recent retreat in share price, dropping from 4.25p in January, to 1.89p in May 2021, ECR’s strong cash position attributed to the aforementioned license sales and warrant exercises puts the company in an enviable industry spot. This, in combination with the fact the company owns a diamond drilling rig, currently operational at Bailieston while a contractor’s rig is active at Creswick, means ECR Minerals is set for a prosperous 2021/22 as demand for gold remains bullish. Making the current share price a bargain investment.
ECR Minerals #ECR CEO Interview – Alan Green talks to Craig Brown
Brand Comms CEO Alan Green talks to ECR Minerals #ECR CEO Craig Brown about the company’s flagship gold exploration projects in the heart of Australia’s Victoria Goldfields.
Craig talks about the recent placing to raise a further £2m with Novum Securities at 2.2p, and elaborates on the rationale behind it, before discussing the initial drilling results at the Bailieston Historic Reserve 3 prospect, that led to a fall in the share price despite identifying gold and gold mineralisation.
We look at slides from the current company presentation, and examine the scale of the operations and historic gold grades from the other Bailieston prospects including Blue Moon, Black Cat, HR4 (Cherry Tree, Cherry Tree South) and Yellow & Red Moon.
We move to Creswick and discuss the Dimocks Main Shale geological feature, the historical (2019) grades, license applications and JV implications and the upcoming drilling campaign. Craig then updates on the Tambo Project, and the connection with ECR’s Head Geologist Dr Rodney Boucher before we discuss the Bendigo HQ operation.
Alan and Craig then summarise by looking at the current company valuation vs. assets and work underway.
ECR Minerals #ECR – CEO Craig Brown talks to Alan Green
Brand Comms CEO Alan Green talks to ECR Minerals #ECR CEO Craig Brown about the company’s flagship gold exploration projects in the heart of Australia’s Victoria Goldfields. Taking slides from the latest company presentation, Craig talks about ECR’s wholly owned drill rig, HQ at Bendigo and the £4m funding and extra cash resources owned by the company. We look at the Creswick Gold project located close to the Ballarat Gold Mine before discussing this year’s production numbers at the Fosterville goldmine and how they might compare to assay results and ore grades currently being drilled at the Bailieston HR3 target. Craig looks at Black Cat, Cherry Tree and other targets at Bailieston, before we move onto the blue sky potential at the Tambo Project, and the connection with ECR’s Head Geologist Dr Rodney Boucher. We end with some takeaway points for investors.
USD28tn COVID bill keeps the Gold bull case intact for ECR Minerals #ECR and the new Victoria Gold rush.
In October 2020 IMF economic counselor *Gita Gopinath described coronavirus as the worst crisis since the Great Depression, adding that the pandemic would leave deep and enduring scars from job losses, weaker investment and children being deprived of education.
In its flagship world economic outlook, the IMF said stronger than expected Q2 and Q3 performances would see global output fall by 4.4% in 2020 compared with the 5.2% drop forecast during the summer.
The groundbreaking news of a vaccine with high efficacy rates from both Pfizer and Moderna triggered strong rallies in global stock markets, and while this led to a downward correction in the gold price, most market analysts remained bullish on gold over the longer term.
US Investment Group Energy & Capital are of the view that gold remains in a bull market super cycle. Energy & Capital editor, Gold bug, and investment analyst Luke Burgess said “The historic gold run of 2011 actually began in 2001, when gold was trading around $300 per ounce.”
“The same exact gold super-cycle happened in 1971–1980, when gold ran from $50 per ounce to almost $700,” Burgess added. “The value of the U.S. dollar is being weakened every day and there is nothing that the Federal Reserve or politicians can do to stop it. This will continue to have a tremendous effect on gold prices and the gold market in general.”
Energy & Capital are ultra bullish in outlook, with a $6500oz target price for the yellow metal within 2 years. While other commentators are more circumspect, the view on the longer-term trend is clear.**
“It is worth recalling that the driver of investment flows into precious metals has ultimately been sourced from a powerful impulse lower in real rates,” TD Securities said in a note.
“The U.S. Federal Reserve’s continued attempt to spark higher inflation expectations should suppress real rates deeper into negative territory. This will continue to drive investment appetite for precious metals, as capital seeks to shelter itself from increasingly negative real rates.”
Junior Gold Miners Flourish
It has been an extraordinary year for junior gold miners. Despite the recent gold correction to $1860oz, global gold producers are under more pressure than ever to replace their depleting reserves. The major gold producing conglomerates face declines in production, shrinking reserves and a potential increase in production costs, which means it is cheaper (and faster) for these companies to buy developed or developing gold projects.
As a result, there has been a rush to develop and fast track quality assets, which for some junior miners has meant revisiting dormant mining projects. The latest tools, survey techniques and desktop assets available to mining engineers have proved invaluable in the search for precious metals within existing dormant assets and mines around the world.
As gold prospecting continues apace in far flung and remote areas, this year has seen the goldfields in Victoria, South Australia thrust into the limelight once again.
A major mining centre since the 19th century gold rush, modern technology has today has paved the way for another gold rush in the region.
Indeed the Geological Survey of Victoria estimates that some 75 million ounces of high-grade gold is currently awaiting discovery, and with grants available to mining companies operating in the region, it is no exaggeration to say that companies are literally queuing up for licenses.
As an incumbent operator owning some of the most fertile territory in Victoria, London listed ECR Minerals (LSE: ECR) is already at the front of the queue, with its 100% owned Bailieston and Creswick Victoria gold projects, plus the recently acquired Tambo Gold project.
ECR also has financial interests in the Avoca, Moormbool and Timor projects following the sale of those licenses to Fosterville South Exploration Ltd (TSX.V:FSX), raising $500,000 plus $1 for every ounce of gold discovered. ECR also has interests in projects in the Philippines and Argentina.
Creswick
Creswick is situated within the Dimocks Main Shale, a geological feature considered to be highly prospective for gold, and which extends to the Ballarat gold mine centre and further south. ECR’s exploration licenses cover approximately 7km of this region, and along with several other mining companies with licenses in the region, has applied for a further license covering a further 140 sq km between Creswick and Ballarat.
A recent study by pre-eminent consulting geochemist Dr Dennis Arne, whose experience includes extensive consultancy at the Fosterville mine, (now the largest gold producer in Victoria), underlined the significant gold exploration potential at Creswick, and ‘nuggety gold mineralisation’. Joint venture / earn-in talks are continuing at Creswick.
Bailieston
Bailieston is also at the centre of the current gold exploration boom in Victoria, sited as it is a few km east of the world class Fosterville mine. Fosterville has delivered spectacular investment returns over recent years for owner Kirkland Lake Gold, not to mention some of it’s now millionaire shareholders.
The Bailieston license areas include a raft of prospects, including HR3, Black Cat, Cherry Tree, Red Moon and Yellow Moon, and with drilling permissions now received, the company reported last Friday that its newly acquired drilling rig will shortly be en route to the HR3 prospect from ECR’s new operational base at Bendigo. Work also continues apace at the Cherry Tree prospect, with soil geochemistry and geological mapping recently completed.
ECR’s Baillieston project also has a high profile neighbour in the form of mining giant Newmont, which has a license application in for ground immediately to the north of ECR’s Black Cat prospect.
Tambo Gold Project – Local Knowledge
One of the key advantages lies in the fact that ECR’s principal geologist Dr Rodney Boucher was born and raised in Bruthen, East Victoria, and therefore has an intimate knowledge of the region. In September 2020, this area knowledge was further employed by ECR when it lodged two new license applications for the new Tambo gold project in eastern Victoria. ECR CEO Craig Brown highlighted Dr Boucher’s knowledge in the stock exchange press release.
“Good quality exploration ground available for direct application is very difficult to find in Victoria, so we are very pleased to have identified and applied for the Tambo project, which covers a sizeable area of prospective geology near historic goldfields and has received little contemporary exploration.”
Brown added “Our principal geologist, Dr Rod Boucher, was born and raised nearby in Bruthen. He grew up gold prospecting with his father throughout the application areas and has an in-depth knowledge of the gold potential in the small streams and gullies. He is a descendant of gold miners from a locality once known as Boucher Town between Cassilis and Swifts Creek and completed his third-year undergraduate thesis on the geology of the Tambo Crossing area.”
Untapped Potential
There is a sense that despite the rush of license applications in the region, the current day Victoria gold rush is still very much in its infancy.
As other leading mining companies, including Newmont Corporation (NYSE: NEM), Power Metal Resources (LSE:POW), Red Rock Resources (LSE:RRR), Fosterville South and a host of other smaller mining groups queue for licenses, their respective CEO’s will no doubt be harbouring ambitions for a Kirkland Gold–esque share price explosion. Indeed, Kirkland’s share price has rocketed over 2,200% in the past few years thanks to its ownership of the Fosterville Gold Mine and a 315% jump in annual gold production between 2014 and 2018 .
Despite movement restrictions in the Victoria region due to Covid-19, the foresight of the ECR board and CEO in securing the key licenses has not been lost on investors.
Following a further £600,000 fundraise in July, and further £400,000 from warrant exercises, ECR took the decision to acquire it’s own diamond drilling rig to press on with exploration Bailieston and Creswick. Investor bulletin boards are agog with anticipation, but despite the share price having nearly trebled between June and September 2020, in November the stock still trades on a ridiculously modest £13m market cap.
If, as all the pundits seem to be saying, we are at the start of a new Victoria Gold rush, then expectations that shares in small, incumbent explorers like ECR will deliver spectacular Kirkland-style increases in value may not be so far fetched after all.
*Source The Guardian: https://www.theguardian.com/business/2020/oct/13/imf-covid-cost-world-economic-outlook
**Source Reuters:
ECR Minerals #ECR – Business Operations Update
ECR Minerals plc (LON: ECR), the gold exploration and development company focussed on Australia, is pleased to provide the following update on its activities, which are centred on the Bailieston and Creswick gold projects in Victoria, Australia. Both projects are 100% owned by ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”).
HIGHLIGHTS
- Field mapping and geochemistry currently underway across numerous gold prospects in the Bailieston project area;
- ECR has acquired a diamond drilling rig capable of drilling as deep as 1,300 metres, due for delivery next month and which will be deployed immediately on an ECR managed drill programme;
- High priority gold prospects within the Bailieston and Creswick project areas with potential for immediate drilling have been identified.
Craig Brown, Chief Executive Officer of ECR, commented:
“There is continuing interest in ECR’s Bailieston and Creswick projects with regards to potential joint venture or earn in opportunities. However, there can be no guarantee that any transaction will occur. The Company will provide further updates as appropriate.
The engagement we are experiencing is not surprising given the interest in Victoria gold opportunities, as evidenced by the many corporate transactions that we have seen in the area.
ECR is also gearing up to launch next stage exploration campaigns across our properties and we look forward to providing updates as the work progresses
The Directors are very optimistic for the future, and the Company has a robust underlying cash position of £1.65m with which we can confidently push ahead with operational programmes.”
CURRENT EXPLORATION ACTIVITIES
With the approaching end of the Victorian winter, MGA has begun to ramp-up exploration at the Bailieston and Creswick projects. A programme of follow-up field mapping and geochemistry across numerous prospects in the Bailieston project area is currently underway. MGA has recently purchased its own portable Olympus XRF analyser in order to enhance and expedite its geochemical sampling capabilities.
A map of the eastern Bailieston project area showing some of the prospects and features referred to in this announcement can be viewed at:
https://www.ecrminerals.com/images/2020/09/09/prospectsreefs-eastern-bailieston-tenement-area.jpg
Detailed mapping and geochemistry at the Cherry Tree, Cherry Tree South and Black Cat prospects is aimed at locating the surface position of shoots and identifying mineralisation along strike of trends established by historical and recent exploration. This will assist with the consideration of these prospects for drilling.
Cherry Tree (Historic Reserve #4) and Cherry Tree South are along the Bailieston trend and south of the Fosterville-style mineralisation mined in a small open cut in the 1990s at Historic Reserve #1 (HR1).
Rock chip samples were taken by MGA from Cherry Tree and Cherry Tree South as part of a 2018 sampling programme along the Bailieston trend. A total of 58 rock chip samples were taken at Cherry Tree and Cherry Tree South, with 17 samples returning grades of >1 g/t gold and the highest assay result being 8.8 g/t gold.
Field mapping and geochemical sampling at the Kings Cross and Pontings prospects in the Bailieston project area will follow-up earlier results including soil samples of up to 1.79 g/t gold at Kings Cross and rock chip samples of up to 8.31 g/t gold at Pontings.
PURCHASE OF DIAMOND DRILLING RIG AND POTENTIAL FUTURE DRILLING
MGA has recently signed a contract for the purchase of a new Cortech CSD1300G diamond drilling rig complete with spares and all downhole equipment, which is capable of drilling as deep as 1,300 metres. The rig is expected to be delivered in October 2020 and will give MGA an in-house drilling capability, which will be preferable to relying on contractors.
MGA has access to experienced drilling personnel to operate the rig, and it is expected that future drilling can be completed at lower cost and with greater flexibility using MGA’s own rig.
High priority gold prospects within the Bailieston and Creswick project areas which have the potential for immediate further drilling are detailed below. Once the drill rig has been received in Australia, a decision will be taken as to where it should first be put to work.
Bailieston Project – Blue Moon
Blue Moon is an exciting new gold discovery made by MGA, with intercepts from 2019 reverse circulation (RC) drilling including 15 metres at 3.81 g/t gold from 51 metres downhole (with 2 metres at 17.87 g/t gold) (see announcement dated 14 March 2019 for full details of the drill programme). The best 2019 drilling results came from the western fence line. The host sandstone thins towards the east, where the drill results diminished accordingly.
ECR plans to test whether the mineralisation continues to improve towards the west, subject to gaining surface access. There is also potential to carry out further drilling within the zones already tested, with the objective of establishing an initial JORC Mineral Resource.
Bailieston Project – HR3
Three dimensional (3D) modelling of historical data for the Bailieston Historic Reserve #3 (HR3) and the results of drilling in the area by MGA in 2017 was completed in late 2019 and has assisted in the identification of the architecture of the major folds, structures and cross structures at the prospect. HR3 comprises at least four closely-spaced lines of reef, including the Byron, Dan Genders, Scoulars and Maori Reefs, plus numerous cross-structures. This provides a number of drill-ready targets.
Creswick Project
Drilling conducted by MGA in 2019 at the Slades Reef prospect covered 300 metres of the 12.5 kilometre strike length of the Dimocks Main Shale (DMS) within ECR’s granted exploration licence (EL) and EL application areas at Creswick. This drilling encountered complex structures at Slades Reef; the cross section shown in ECR’s announcement dated 21 June 2019 showed drilling into interpreted faulted and parasitic folded DMS on an overall west-dipping limb.
Diamond drilling can be utilised to test this structural hypothesis and test the gold-bearing structures identified at Slades Reef where key faults intersect the anticline. Elsewhere at Creswick, field mapping and geochemical sampling could be used to attempt to delineate the surface expression of shoots to the south including Jackass Reef and Mills Reef ahead of potential drilling of these targets.
Review of Announcement by Qualified Person
This announcement has been reviewed by Dr Rodney Boucher of Linex Pty Ltd. Linex Pty Ltd provides geological services to Mercator Gold Australia Pty Ltd, including the services of Dr Boucher, who has a PhD in geology, is a Member and RPGeo of the Australian Institute of Geoscientists and is a Member of the Australasian Institute of Mining and Metallurgy. Dr Boucher is a Qualified Person as that term is defined by the AIM Note for Mining, Oil and Gas Companies.
MARKET ABUSE REGULATIONS (EU) No. 596/2014
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.
FOR FURTHER INFORMATION, PLEASE CONTACT:
| ECR Minerals plc | Tel: +44 (0)20 7929 1010 | ||
| David Tang, Non-Executive Chairman | |||
| Craig Brown, Director & CEO | |||
| Email:info@ecrminerals.com | |||
| Website: www.ecrminerals.com | |||
| WH Ireland Ltd | Tel: +44 (0)161 832 2174 | ||
| Nominated Adviser | |||
| Katy Mitchell/James Sinclair-Ford | |||
| SI Capital Ltd | Tel: +44 (0)1483 413500 | ||
| Broker | |||
| Nick Emerson |
ABOUT ECR MINERALS PLC
ECR is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd has 100% ownership of the Bailieston and Creswick gold projects in central Victoria, Australia.
Following the sale of the Avoca, Moormbool and Timor gold projects in Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX), ECR has the right to receive up to A$2 million in payments subject to future resource estimation or production at those projects.
ECR has earned a 25% interest in the Danglay gold project, an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines, and holds a royalty on the SLM gold project in La Rioja Province, Argentina.
Insatiable Gold Demand Set To Continue – ECR On The Cusp Of ‘Great’ Ness.
Insatiable Gold Demand Set To Continue – ECR On The Cusp Of ‘Great’ Ness.
With the US Fed signalling a more relaxed approach to inflation in its end of month policy meeting, gold rebounded sharply after falling from August highs of $2,075oz as markets interpreted Fed Chairman Jerome Powell’s comments to mean that low interest rates are here for years to come.
Ole Hansen, head of commodity strategy at Saxo Bank believes that the Fed’s shift to let inflation and employment run higher will keep interest rates low for years to come, thereby lifting the appeal of non-interest-bearing gold.“There’s still room for bullion to set new all-time highs, although that may take time,” Hansen commented. “Powell’s speech did not threaten the bullish narrative for gold and silver.”
“Low interest rates for longer, a weaker dollar, massive amounts of stimulus and the increased demand for inflation hedges are likely to continue to drive demand for both metals,” he added.
Peter Hug, division head for precious metals at Kitco News is of the view that conditions have not changed for gold and silver.
Speaking to Kitco News on following the Fed meeting, Hug said conditions are positive for gold due to the amount of fiscal support provided by banks.
“The macro picture has not changed. Every central bank in the world has got their foot on the pedal, and I don’t think they’re going to take their foot off the pedal probably until the end of 2021.”
Old Gold projects resurfacing
The ever present strength in gold is sustaining huge levels of investor interest in junior gold explorers. As mining geologists take fees for their work in shares as well as cash, droves of canny investors are now following geologists on social media to try to get the early inside line to any upcoming projects, even to the point of investing into the company owning /operating the project as soon as a new appointment is announced. A successful drilling campaign can of course have a transformational effect the valuations of small cap explorers with quality projects, meaning that professional fees can potentially multiply in value.
The outlook for gold being what it is, many dormant mining projects are being re-examined and feasibility studies revisited. The latest tools, survey techniques and digital / desktop assets available to mining engineers have proved transformative in the search for precious metals within existing dormant assets and mines around the world. And as many projects have some infrastruture already in place, opportunities to ‘fast track’ such developments are ever present.
Mining Giants Lined Up for Fast Tracking
The major mining companies around the world today all started somewhere. Many will have started life as microcap exporation companies, developing assets into production, and using the proceeds to fund other projects. In some cases, the fuding will have come from existing shareholders. With others a farm-in agreement will be reached with another mining company to share or bear the developments costs, which sees the partner ‘earn-in’, usually at an increasing level of project ownership as the money is spent.
The current ‘pedal to the metal’ approach to monetary easing is providing a perfect backdrop for project developments of this nature, and has created fertile hunting ground for the world’s leading mining companies seeking lucrative farm-in opportunities. Equally, the project potential may see active investors support the board and go it alone.
AIM listed ECR Minerals (AIM: ECR) is a company on the cusp of a series of game changing deals. The company 100% owns Bailieston and Creswick projects in Central Victoria, Australia, and also has financial interests in the Avoca, Moormbool and Timor projects following the sale of those licenses to TSX-V listed Fosterville South Exploration Ltd. In addition ECR owns a 25% interest in the Danglay epithermal gold project in the north of the Philippines and a net smelter royalty agreement from the sale of the SLM gold project in Argentina.
Creswick
Creswick is situated within the Dimocks Main Shale, a geological feature considered to be highly prospective for gold, and which extends some 15km from the mining centre of Ballarat. ECR’s exploration licenses cover approximately 7km of this region. Following drilling results in 2019, a highest grade duplicate result of 80.97 g/t gold came from a 1 metre interval that originally assayed 44.63 g/t, confirming the original findings. A study by pre-eminent consulting geochemist Dr Dennis Arne, whose experience includes extensive consultancy at the highly successful Fosterville gold mine in Central Victoria, underlined the significant gold exploration potential at Creswick, and ‘nuggety gold mineralisation’.
Bailieston
Bailieston is also at the centre of the current gold exploration boom in Victoria, close to the world-class Fosterville mine owned by Kirkland Lake Gold. Mining giant Newmont has a license application in for ground immediately to the north of ECR’s Black Cat prospect, plus an open cut gold mine was operated at Bailieston by Perseverance Corporation in the 1990’s. Quality samples have been logged from drilling by ECR at the Blue Moon prospect in 2019, including a 17.8g/t sample from a 2 metre interval, confirming Blue Moon as a new gold discovery. The Bailieston license areas also include a raft of other prospects, namely HR3, Cherry Tree, Red Moon and Yellow Moon.
Mining Major Joint Ventures and Drilling
Having previously sold three Victoria licences (Avoca, Moormbool and Timor gold exploration projects) for upfront cash and royalties to TSX-V listed Fosterville South Exploration Ltd, along with a raft of warrant exercises, ECR is now fully funded to continue drilling at its 100% owned Creswick and Bailieston projects through to the end of 2021.
In a recent ShareTalk podcast here, ECR CEO Craig Brown provided some background on the most recent developments. He confirmed that several earlier offers to partner in the projects had been rejected, and that mining majors were interested in Creswick and the highly prospective Dimocks Main Shale gold trend that runs through Creswick from the Ballarat gold mine. Citing some of the most recent gold asset sales in the region, Brown stated that both Creswick and Bailieston projects were superior in quality to many in the region, and that value could be realised in a Greatland Gold type asset sale and free carry deal structure.
Progress and site visits are being hampered somewhat by the COVID lockdown – any teams flying in from other states are subject to a 14 day quarantine. But as regards the immediate future of both Creswick and Baileston, one thing is abundantly clear. ECR will commence drilling at one or both projects in the coming weeks, and given the ultra-bullish long term outlook for gold, mining majors seeking a JV will be keen to strike a deal sooner rather than later.
Currently valued at just GB£12m, many investors believe ECR is on the cusp of ‘Great’ Ness – a transformational Greatland Gold esque deal. Despite the lockdown restrictions, the insatiable demand for gold looks set to continue for the next 18 months – near perfect conditions for junior gold miners with superior quality assets.
References:
Share Talk: https://www.pscp.tv/w/choS9jF4blFyWHlrQW5rall8MWt2SnBla0xBbWt4RVXUWZxBJJOsdYs2rhJuzDRWVD0-zN2rj-l_AWcuc8bF
Junior Gold Explorers Continue to Shine Amid Global Market Volatility
The year 2020 has already delivered what HM Queen Elizabeth would refer to in her end of year speech as an Annus Horribilis. It is still only April 2020, and Covid-19 continues to wreak almost biblical levels of havoc and human tragedy across the globe. In our previous article on junior gold explorers, we stated that it seemed trite to discuss investment opportunities in the midst of the ongoing battle against CoronaVirus. But life does go on, and so does mining exploration, even with the movement restrictions currently in place.
Gold Set To Rebound Following Monetary Stimulus Measures
Although gold has retreated from the late March highs of $1700 oz, at $1646 the yellow metal still sits close to year highs, well above the 2019 highs of $1277 last August.
Kitco, a website dedicated to gold and metals believes a major rebound in gold is just around the corner as prices look ready to surge on massive global monetary policy stimulus and unprecedented fiscal policies. United Overseas Bank (UOB) head of markets strategy Heng Koon said their forecast is “for gold to rebound significantly in the quarters ahead to USD $1,650 in 2Q20, $1,700 in 3Q20, $1,750 in 4Q20 and $1,800 in 1Q21.”
Image courtesy of BP Trends
“Once the USD funding crunch potentially dissipates across 2Q20, massive global monetary policy easing coupled with unprecedented fiscal policy stimulus will light the fuel for further gold strength.”
Heng also added that global central banks “have not only floored rates near zero but many have also entered into large Quantitative Easing programs. These significant stimuli bode well for gold and will be the fuel for gold’s rally once the USD funding crunch abates across 2Q.”
This compelling backdrop continues to drive healthy levels of investor interest in junior gold explorers. Across the globe, the focus on gold is manifesting itself in investor speculation into small cap explorers with quality projects. Most small explorers however only have one or two key project in their asset arsenal, leaving little room for any disappointment. However, there are a handful of micro-cap gold exploration plays offering a broad spread of assets, and consequentially an attractive risk profile with significant upside potential.
Once such company is AIM listed ECR Minerals (AIM: ECR), which has 100% ownership of five gold exploration projects in Central Victoria, Australia, and four exploration licences in the north-eastern Yilgarn region of Western Australia.
ECR’s Bailieston at the Centre of the Current Gold Exploration Boom
ECR’s Victoria projects include Bailieston, Avoca, Timor, Creswick and Moormbool. Indeed Bailieston, which targets epizonal / epithermal gold mineralisation of the Melbourne Zone, is at the epicentre of the current gold exploration boom in Victoria, being located close to the highly successful Fosterville mine owned by Kirkland Lake Gold. Recently, Australian mining giant Newmont arrived in the district with an application for ground immediately to the north of the Black Cat prospect.
Study Data Endorses Creswick Potential
During Q4 2019, ECR reported ‘nuggety gold mineralisation’ in the Dimocks Main Shale prospect at Creswick, some of which proved to be exceptionally high grade. Creswick has long been viewed as a potential pivot project for ECR after the highest grade duplicate result of 80.97 g/t gold came from a 1 metre interval that originally assayed 44.63 g/t, confirming the original findings announced on 8 May 2019.
On March 27th, ECR announced the results of a study carried out by Dr Dennis Arne, a pre-eminent consulting geochemist in Victoria, whose experience includes extensive consultancy at the highly successful Fosterville gold mine in Central Victoria owned by Kirkland Lake Gold.
The well-regarded Dr Arne’s involvement was seen as a solid endorsement of Creswick’s potential, and indeed the results did not disappoint, as ECR CEO Craig Brown pointed out.
“We are very pleased with the results of this study, which show good indications of hydrothermal fluid flow related to gold mineralisation in a number of drill holes at Creswick. Importantly, the variation in the results, with some areas ‘lighting up’ and others not, is potentially useful for identifying gold-bearing shoots.”
Brown added that the results “underline the significant gold exploration potential that we believe exists at Creswick, where our tenement position covers approximately seven kilometres of the Dimocks Main Shale (DMS) trend, of which our 2019 drilling tested only approximately 300 metres.”
Windidda Progress
ECR’s Windidda Gold Project, based in the Yilgarn region of Western Australia originally consisted of a package of nine exploration licence applications covering a 1,600 square kilometre area with the potential to host komatiite hosted nickel-copper-PGE (platinum group element) mineralisation, as well as orogenic gold. Five exploration licences have been granted, and in its full year results statement at the end of March 2020, ECR said the remaining four licence applications had been withdrawn, in light of objections to the expedited grant procedure from native title parties and the findings of preliminary desktop work to assess the prospectivity of the licence areas.
Consolidation, R&D Cash Refund and Focus
A micro-cap gold explorer can only operate so many projects and licenses, and indeed with the burgeoning potential of Creswick now at front and centre, the board took the decision to sell its wholly owned Argentine subsidiary Ochre Mining SA, which holds the SLM gold project in La Rioja, Argentina. The sale to Hanaq Argentina SA still sees ECR retain a Net Smelter Royalty of up to 2% to a maximum of US$2.7m in respect of future production from the SLM gold project, while removing ongoing costs associated with acquiring and running an exploration license.
There has been further good news on the funding front too, as the group also received a significant cash refund under the Australian government’s R&D Tax Incentive scheme. A$318,972 (approximately £171,000) was received in relation to the financial year ended 30 June 2018, and received a further refund of A$555,212 (approximately £295,515) in relation to the fifteen month period ended 30 September 2019.
The qualifying R&D activities relate to research into turbidite-hosted gold deposits within the Company’s exploration licences in Victoria. It goes without saying that these two refunds have also provided a significant boost to ECR’s cash position.
The biggest boost however came on Monday 6 April 2020, when, in the midst of the upheaval and disruption caused by COVID-19, ECR announced that it had raised a further GB£500,000 in a placing at 0.5p. That ECR was able raise funds in some of the most challenging stock market conditions in living memory more than anything else underscores the quality of the asset portfolio.
Still trading on a miserly GB£2.5m capitalisation, the market has ascribed little more than the value of the administrative work undertaken to secure the licenses, with no premium whatsoever for the results from Creswick or any of the other work undertaken to ascertain the prospectivity and value of ECR’s projects.
Selected Junior Gold Explorers Offer Great Value
Amid unprecedented efforts to limit the spread of CoronaVirus, the fiscal and monetary stimulus measures announced by the world’s major economies over the past month are global policy events without precedent in peacetime. Gavyn Davies of the FT pointed out that the increase in fiscal spending and loans in the US this year alone “will reach more than 10 percent of GDP, larger than the rise in the federal deficit through 2008 and 2009.”
This wholly supports the UOB / Kitco view that the gold price is set for a major rebound in the months ahead. As such, this rebound is likely to be reflected in the valuations of junior gold mining explorers with strong project portfolios. Fully funded for the coming year, and with nine projects and licenses in key territories across Australia, ECR Minerals should be integral to any junior gold explorer portfolio as the world grapples with the challenges and uncertainties of the Covid-19 pandemic.
References:
Kitco – Here’s how gold prices will get to $1800 in the next three quarters – https://www.kitco.com/news/2020-04-01/Here-s-how-gold-prices-are-going-to-1-800-in-the-next-three-quarters-UOB.html
FT – Gavyn Davies: Can the world afford fiscal and monetary stimulus on this scale? – https://www.ft.com/content/0f289d20-6e97-11ea-89df-41bea055720b
PBOC Easing Boosts Gold Price & Investment Case for Junior Gold Explorers
Investors seeking to capitalise on a bullish gold market in 2020, and in particular the next raft of discoveries, will no doubt be aware of the impact that the easing in monetary policy by the Peoples Bank of China (PBOC) has had across markets in China, still reeling from the CoronaVirus.
With the yellow metal long viewed as the definitive safe haven investment, markets have also seen a surge in interest at the more speculative end of the gold spectrum, most specifically across junior gold explorers. AIM listed ECR Minerals (AIM: ECR) is one such company currently in focus.
Creswick Potentially Transformational for ECR
Prior to the recent surge in the gold price, ECR had already seen a transformational 2019 in regard to developments across it’s six flagship projects.The final quarter saw developments across the explorer’s key Creswick project in Victoria, Australia, with ‘nuggety gold mineralisation’ confirmed in the Dimocks Main Shale (DMS) prospect at Creswick, some of which proved to be exceptionally high grade.
Creswick is viewed as a potentially transformational project for the company, particularly given that the highest grade duplicate result of 80.97 g/t gold came from a 1 metre interval that originally assayed 44.63 g/t, confirming the original findings announced on 8 May 2019.
On February 20th, ECR announced it had appointed Dr Dennis Arne to carry out a lithogeochemical study of cuttings (chips) generated by reverse circulation (RC) drilling at Creswick in 2019. Dr Arne is a preeminent consulting geochemist in Victoria, whose experience includes extensive consultancy at the highly successful Fosterville gold mine in Central Victoria owned by Kirkland Lake Gold. Bringing someone of this calibre in to review the drilling samples is a solid endorsement of Creswick’s potential, and has set tongues wagging amongst the investing cognoscenti across social media channels. In typical understated fashion, ECR said the results of the study “are anticipated to be valuable for the purposes of future exploration at the Creswick.”
Elsewhere in Central Victoria
Activity continues across ECR’s other projects in Central Victoria, with a number of potential exploration programmes for the Bailieston project, (including further drilling at the Blue Moon prospect), are under consideration, along with soil and stream sediment sampling in the Cherry Tree South and Ponting’s areas.
ECR Interests Realigned
With six key projects across Australia, a country estimated to have the largest gold reserves globally, ECR’s CEO Craig Brown and the board have taken the decision to realign the group’s many interests to focus on Victoria Gold Projects, (Creswick, Bailieston, Avoca, Timor & Moormbool) and the Western Australia Windidda Project.
In this regard, on February 5th the group announced the sale of the SLM Gold Project in Argentina to Hanaq Argentina SA, a Chinese-owned company engaged in lithium, base and precious metals exploration.
The move sees ECR retain an NSR (Net Smelter) royalty of up to 2% to a maximum of US$2.7 million in respect of future production from the SLM gold project. Craig Brown stated that he was.. pleased to retain exposure to potential upside from the SLM gold project in the form of a royalty on future production..we believe that Hanaq has the operational capabilities and access to Chinese investment capital necessary to put the SLM project into production. And more importantly, it aligns the group’s operational activities exclusively across the six key Australian projects.
Windidda Progress
While activities across the Victoria projects are well documented, (not least because of the the Bailieston project is adjacent to a prospect territory acquired in 2018 by global mining giant Newmont), ECR has been pushing ahead its Windidda Gold Project based in the Yilgarn region of Western Australia. This consists of a package of nine exploration licence applications covering a 1,600 square kilometre area with the potential to host orogenic gold deposits. At the end of January ECR published an update on Windidda, stating that four exploration licences had been granted in the north-eastern Yilgarn, and announced a further license award on February 20th.
Aside from Gold, the region is also highly prospective for nickel-copper-PGE (platinum group element) mineralisation, so consequently ECR has commissioned a consultant to complete additional geophysical modelling and a review of historical activity reports for areas to the south of Windidda to better understand the potential prospectivity of the project.
Undervalued
The sale of the SLM Gold project has certainly saved ECR from the ongoing costs associated with acquiring and running an exploration license. There was further good news on the funding front too, as the group also received a cash refund for research and development (R&D) expenditure of AU$555,212 (approx GB£295,515), added to which for the year to 30 September 2019, the group carried forward corporate income tax losses of AU$ 66,341,587 (approximately GB£35.3 million) which are expected to be available for offset against future taxable gains.
Despite this, the current market capitalisation of GB£3.6 million reflects little more than the value of the administrative work undertaken to secure the licenses, with no premium whatsoever for the results from Creswick or any of the other work undertaken to ascertain the prospectivity and value of ECR’s projects.
Safe haven
While it seems trite to discuss investment opportunities in the midst of the shock, havoc and terrible human cost wrought on China and the world by CoronaVirus, the event has already significantly impacted on many of the larger resource and energy groups who provide raw materials to satisfy China’s enormous burgeoning economy.
As already highlighted, the impact on the China stock market (and global markets) has to some degree been mitigated by quantitative easing measures by the PBOC, but the consequential weakness in resource and energy stocks has inevitably driven investors to seek returns elsewhere, i.e. gold. So on February 20th, Beijing cut the one-year loan prime rate to 4.05% from 4.15%, prompting China’s banks to further lower the benchmark borrowing costs for new corporate and household loans.
On the subject of rate cuts and easing, Neils Christensen, a journalist at leading bullion website Kitco stated on February 17th that analysts “remain optimistic that (gold) prices can push higher as easing from the People’s Bank of China could ignite a further drop in global interest rates.”
This view is backed by other pundits too. Ole Hansen, head of commodity strategy at Saxo Bank, said that economists are still trying to estimate the full impact the spreading virus will have on the global economy. He added that this uncertainty will continue to support gold prices. “We have seen monumental demand destruction this past month and that won’t be resolved anytime soon,” he said. “Central banks will be forced to ease again, but the question is just how much impact further easing will have.”
As China and the world struggles to get to grips with limiting the spread of CoronaVirus, the strength in the gold price looks likely to be sustained throughout the year. This strength is likely to be reflected in across junior gold mining explorers with strong project portfolios. With the raft of project developments and drilling updates scheduled for early 2020, ECR is likely to benefit from this continued focus.
by Alan Green
ECR Minerals #ECR – Gold Drilling Update – Creswick & Blue Moon Australia
ECR Minerals plc (LON:ECR), the precious metals exploration and development company, is pleased to announce positive progress in the Company’s extensive gold drilling programmes being undertaken at the Creswick and Bailieston Blue Moon projects in the State of Victoria, Australia.
Readers are advised to consult the Company’s previous announcement outlining the proposed drilling programmes as follows:
https://polaris.brighterir.com/public/ecr_minerals/news/rns/story/x2q8qzx
Highlights:
- The Company has now completed 1,687 metres of reverse circulation drilling in 17 target holes at the Creswick gold project targeting multiple quartz vein orientations within the Dimocks Main Shale (“DMS”);
- The drilling at Creswick successfully intersected multiple quartz reefs as anticipated, and the Company is now awaiting assay results to determine the extent of gold mineralised shoots in samples;
- In addition, 774 metres of reverse circulation drilling in 6 target holes has been completed at the Blue Moon gold prospect within the Bailieston project area to follow up the significant near surface gold intercept and evidence of a near surface mineralised gold system announced in July 2018;
- Drilling is continuing at the Blue Moon gold prospect targeting extensions of areas where sulphides have been intersected and gold mineralisation has been identified including visible gold in panned reverse circulation samples;
- The Board of the Company is reviewing with its technical team the field findings to date, with a view to further drilling in areas of noted interest;
- A substantial number of samples have now been submitted to the laboratory for testing and the Company is awaiting results;
- A recent significant increase in the volume of samples being processed at the local laboratories, due to the increasing interest in State of Victoria gold exploration, has slowed the processing time from the original one week turnaround to a slower process extending between 2 and 4 weeks depending on the sample process. As many of our samples have already been in the laboratory for some time, we expect the flow of assay results in the coming weeks;
- Further updates to the market will be provided at the earliest opportunity as results are received and findings analysed by our technical team.
Craig Brown, Chief Executive Officer commented: “I am extremely pleased to announce the progress achieved by our technical team at Creswick and Bailieston Blue Moon projects in Australia with a combined 2,461 metres of drilling completed in less than a month.
We have successfully encountered a number of host structures that were anticipated and targeted in our drill programmes, and we have panned gold within some of the drill samples.
The Company’s approach has been to define drill targets based on historical exploration, field mapping and soil gochemistry with an iterative review programme to extend drilling where target geological structures and gold mineralisation therein is encountered.
We await assay data to add to our field observations and will provide further updates to the market when assay information has been received and reviewed by the team.”
COMPETENT PERSON STATEMENT
The information in this announcement that relates to Exploration Results is based on information compiled by Dr Rodney Boucher of Linex Pty Ltd. Linex Pty Ltd provides geological services to Mercator Gold Australia Pty Ltd, including the services of Dr Boucher, who has a PhD in geology, is a Member and RPGeo of the Australian Institute of Geoscientists and is a Member of the Australian Institute of Mining and Metallurgy. Dr Boucher has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Boucher consents to the inclusion in the announcement of the material based on his information in the form and context in which it appears.
MARKET ABUSE REGULATIONS (EU) No. 596/2014
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.
FOR FURTHER INFORMATION, PLEASE CONTACT:
| ECR Minerals plc | Tel: +44 (0)20 7929 1010 | |
| David Tang, Non-Executive Chairman | ||
| Craig Brown, Director & CEO | ||
| Email:
info@ecrminerals.com |
||
| Website: www.ecrminerals.com | ||
| WH Ireland Ltd | Tel: +44 (0)161 832 2174 | |
| Nominated Adviser | ||
| Katy Mitchell/James Sinclair-Ford | ||
| SI Capital Ltd | Tel: +44 (0)1483 413500 | |
| Broker | ||
| Nick Emerson |
ABOUT ECR MINERALS PLC
ECR is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Limited has 100% ownership of the Avoca, Bailieston, Creswick, Moormbool and Timor gold exploration licences in central Victoria, Australia and the Windidda Gold Project in the Yilgarn Region, Western Australia.
ECR has earned a 25% interest in the Danglay epithermal gold project, an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines. An NI43-101 technical report was completed in respect of the Danglay project in December 2015 and is available for download from ECR’s website.
ECR’s wholly owned Argentine subsidiary Ochre Mining has 100% ownership of the SLM gold project in La Rioja, Argentina. Exploration at SLM has focused on identifying small tonnage mesothermal gold deposits which may be suitable for relatively near-term production.