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HotStockRockets – ECR Minerals #ECR – a speculative buy?

Shares in gold-focused ECR Minerals (ECR) have recently risen strongly to a current 1.7p offer price but that follows not having previously joined in with the gold surge – they having commenced this year at 0.725p and the market cap is still comfortably below £10 million…

Recently-announced results for the company’s half-year ended 31st March 2020 showed administrative expenses of £0.37 million on nil revenue, with both cash and current assets over total liabilities of £0.17 million. However, “post the period end, the group’s cash position benefited from a £500,000 equity financing completed by the company and the receipt of AUD$500,000 from the sale of licences”. The latter also includes; “A further payment of A$1 for every ounce of gold or gold equivalent of measured resource, indicated resource or inferred resource estimated within the area of one or more of the Licences in any combination or aggregation of the foregoing, up to a maximum of A$1,000,000 in aggregate; A further payment of A$1 for every ounce of gold or gold equivalent produced from within the area of one or more of the Licences, up to a maximum of A$1,000,000 in aggregate.” In February the company also completed the sale of interests in Argentina – retaining a NSR royalty of up to 2% to a maximum of $2.7 million in respect of future production from the SLM gold project – to focus on gold exploration activities in Australia.

The above is with results from exploration activities in Victoria, Australia having recently included positive findings of an alteration study on RC drill cuttings from the Creswick project (in March), and confirmation of very high grade gold mineralisation at Creswick by the completion of ‘full bag’ testing (November 2019). It emphasises its “tenement position at Creswick covers approximately 7 kilometres of the DMS trend, and the 2019 drilling only tested approximately 300 metres of this. ECR therefore believes there is significant potential upside in the project”. There is also particularly Bailieston, where “ECR is considering a number of potential exploration programmes… including further drilling at the Blue Moon prospect, where 2019 reverse circulation drilling… returned an intercept of 2 metres at 17.87 g/t gold within a zone of 15 metres at 3.81 g/t gold from 51 metres in BBM007, and soil and stream sediment sampling in the Cherry Tree South and Ponting’s areas”.

This is still early-stage stuff but is in one of the ‘hottest’ geographic areas of interest currently – and the results statement noted “Victoria, Australia continues to enjoy a gold exploration boom and interest from third parties in ECR’s projects in Victoria is strong, with several discussions taking place in respect of potential commercial transactions over our Bailieston and Creswick projects”. There are COVID 19-related international travel restrictions but the team on the ground continues work and we expect the restrictions to relatively soon be eased, potentially facilitating the “potential commercial transactions”.

Therefore, at 1.7p and up to 1.8p, targeting 2.7p+ (a £15 million market cap) on continuing Victoria, Australia gold and deal excitement, Buy.

Link here to the full HotStockRockets article on ShareProphets

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