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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.
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.
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”).
- 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:
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.
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|
|WH Ireland Ltd||Tel: +44 (0)161 832 2174|
|Katy Mitchell/James Sinclair-Ford|
|SI Capital Ltd||Tel: +44 (0)1483 413500|
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.
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 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 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.
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