ECR Minerals plc (LON: ECR), the exploration and development company focused on gold in Australia is pleased to announce it has today entered into a conditional agreement to acquire, through its subsidiary Lux Exploration Pty Limited, a 100% interest in the Blue Mountain Project, Queensland, Australia, which also includes the Denny Gully Gold project (the “Proposed Acquisition”). The total consideration under the agreement is GBP200,000 which is to be settled by the issue of 31,913,196 ordinary shares at a price of 0.6267p (being the 30-day VWAP prior to the date of the Agreement), if the condition precedent is satisfied.
The Proposed Acquisition is conditional upon ECR obtaining Australian Ministerial approval for the transfer of the tenements comprising the Blue Mountain Project.
The Blue Mountain project consists of exploration permits EPM 27175 and EPM 27183, situated some 95 kilometres south southwest of the Gladstone port and industrial complex and, more specifically, lies about 35 kilometres southeast of Biloela, the small regional pastoral- agricultural-coal mining centre in Queensland (see Figure 1 below).
Based on reports from previous explorers, the directors believe that there is significant nascent potential at the project.
- Conditional agreement to acquire Blue Mountain project, Queensland, Australia, which includes the Denny Gully Gold project, for 31,913,196 Ordinary Shares in the Company.
- Ordinary Shares priced at the Issue Price, being an amount equivalent to the Volume Weighted Average Price (VWAP) of trading in ECR’s shares on AIM over the 30 days prior to execution of the agreement.
ECR CEO Andrew Haythorpe commented: “In laying out our vision for ECR in the strategy presentations in 2022, the Board were clear that ECR would not only examine and consider potentially accretive acquisitions, but that we would also shortlist projects enabling us to maximise logistical efficiencies in regard to our areas of operation.”
“The Blue Mountain marks our third and most southerly project in Queensland. The Board is of the opinion that with our extensive Queensland knowledge and experience we believe the project can be explored for the primary (hard rock) source of the gold in the coming months. We look forward to getting on the ground at Blue Mountain and Denny Gully and reporting back as soon as possible.”
Details of the Transaction
Panther Metals plc and Bluekebble Pty Limited (together, the Sellers), who between them hold 100% interest in the Tenements EPM27175 and EPM27183 (Panther Metals 30% and Bluekebble 70%), have agreed to sell the two tenements to Lux Exploration Pty Limited, a subsidiary of ECR. These are exploration assets and no turnover or profit attaches to them, and they have a negligible book value (unaudited accounts of Bluekebble for the twelve months ended 30 June 2022 and audited accounts of Panther Metals for the twelve months ended 31 December 2021). The total consideration is GBP200,000, will be satisfied by the issue of 31,913,196 Ordinary Shares at a price of 0.0.6267p (being the VWAP for trading in ECR’s shares on AIM in the 30 days prior to the date of the agreement).However, as set out above, the Proposed Acquisition is conditional upon Australian Ministerial approval being granted for the transfer of the tenements. If this condition is not satisfied or waived by 5 June 2023 (being 60 days from the date of execution of the agreement), then either the Sellers or Lux may terminate the agreement by written notice.
A further announcement will be made if the condition is satisfied, or if the agreement terminates. At this stage there can be no guarantee that the Proposed Acquisition will complete.
Figure 1 – Blue Mountain Topographic Map
Figure 2 – Blue Mountain Project – Regional Geology Map showing gold bearing areas
Figure 3 – Gold Location and Potential Resource Estimates
Blue Mountain Project Background and History:
The Blue Mountain tenements are situated some 95 kilometres south southwest of the Gladstone port and industrial complex and, more specifically, about 35 kilometres southeast of Biloela, the small regional pastoral-agricultural-coal mining centre.
The tenement is accessed from the nearby Burnett Highway and access within the license areas is generally good by way of station tracks and fence-lines (see Figure 1 above). The natural vegetation is open eucalypt forest with the flatter areas having been partially or completely cleared for grazing. The climate is warm and dry with an annual average rainfall at Biloela of 950 mm. The Exploration Permit lies within pastoral ground.
The Directors of ECR understand that, historically, the Cania & Kroombit Mineral Field has been described as a gold producer. Discovery of alluvial gold was in 1871 with a steady fall in alluvial mining by 1875. In 1879 the discovery of nearby gold bearing quartz reefs triggered a short-term revival. Independent work from BlueKebble suggests that over 1,000 ounces of gold (reef and alluvial) were recovered in 1880. By the mid late 20th century, many of the major Australian and multi-national mining houses focused their 1957-89 exploration activities towards the detection of large, low-tenor “porphyry” style Cu-Mo deposits amenable to bulk mining techniques. In 1993, it is understood that Western Goldfields concentrated its exploration activities on testing and mining the auriferous streambed alluvials in and around Denny’s Gully and the nearby Tertiary paleo-placers, particularly the “Hilltop” deposit. Several programmes of test pitting and bulk sampling carried out defined alluvial Ore Reserves and Resource Potentials near the head of South Kariboe Creek.
Whilst ECR has not undertaken any on-ground verification work at the tenements, the Board believes that there is an excellent opportunity to investigate the hard rock potential source of the alluvial gold, based on internal reports provided by Bluekebble. The information from Bluekebble has not been verified by ECR (and accordingly it cannot be relied upon and there can be no guarantee the findings are correct), however the following key points from Bluekebble’s internal reports have helped inform the board as to the potential at this site:
- The whole area is believed to host shallow gold mineralisation evidenced by trenches carrying gold.
- An area 1 km by 2km was systematically tested and Bluekebble believe they can show visible gold to be present in the volcanic basalts to the south and within the metasediments to the north.
- Bluekebble have utilised a Wilfley Table to make a heavy mineral concentrate to calculate additional alluvial gold resources within Denny Gully. This table concentrates alluvial gravels down to a heavy mineral concentrate. This concentrate is analysed for gold. The results are back calculated to a meaningful grade per cubic metre of alluvial gravel equivalent.
- Bluekebble believed that nearby sources of the alluvial gold could be hosted in the northern section proximal to the creeks where Bluekebble observed visible coarse and nuggetty gold during their Wilfley Table testing.
- Bluekebble believe that good gold grades could be hosted within the volcanic basalts within the tenement.
- Bluekebble believed that shallow mineralisation down to 4 metres could potentially yield over 100,000 oz Gold
Exploration Potential and Next Steps
The Board have identified the following exploration opportunities:
- Another 7 to 10 km of untested drainage system requires more trenching downstream from the Three Gums Dam area.
- Another 10 to 15 trenches which would provide the total strike length of the gold bearing zones in the Karrawong and Clarke’s Prospect areas (see Figure 2 above).
- The German Gully on the western zone of the area tested (see Figure 3 above) could yield more gold mineralisation on the western flank – 3 trenches would test the potential of 1.2 km with each trench excavated every 400m along the ridge.
- There are indications that the tenement hosts significant shallow alluvial gold within recent streambed gravels and Tertiary paleo-placer detritus grading 0.6 g/t per bank cubic metre (bcm). This would need to be confirmed. The potential for gold bearing lithologies in this drainage also extends a further 5.7 km upstream from the gorge.
- No systematic testing had been completed before 2020 – 80% of all the known, potential rich gold zones are on the contact between alluvial material and hard rock.
REVIEW OF ANNOUNCEMENT BY QUALIFIED PERSON
This announcement has been reviewed by Adam Jones, Technical Director of Exploration at ECR Minerals plc. Adam Jones is a professional geologist and is a Member of the Australian Institute of Geoscientists (MAIG). He 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:
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Andrew Haythorpe, CEO
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Katy Mitchell / Andrew de Andrade
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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 six licence applications outstanding which includes one licence application lodged in eastern Victoria. (Tambo gold project). MGA is currently drilling at the Bailieston Blue Moon Project (EL5433) and undertaking geochemical exploration on the Creswick (EL6148) project and has an experienced exploration team with significant local knowledge in the Victoria Goldfields and wider region.
ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd (“LUX”) which has three approved exploration permits covering 946 km2 over a relatively unexplored area in Queensland, Australia.
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), Mercator Gold Australia Pty Limited has the right to receive up to A$2 million in payments subject to future resource estimation or production from projects sold to Fosterville South Exploration Limited.
ECR holds a 90% 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, which has a 43-101 compliant resource. ECR also holds a royalty on the SLM gold project in La Rioja Province, Argentina and can potentially receive up to US$2.7 million in aggregate across all licences.