It’s a new dawn it’s a new day for ECR Minerals
“…with prospects in Queensland consistently indicating prospectivity for gold and Rare Earth Elements plus a refresh of its management team, might this be the time to revisit ECR Minerals…”
Mineral exploration and development company ECR Minerals (AIM:ECR) has had a rough time in the markets over the past couple of years, making mixed progress towards defining the potential of its Bailieston and Creswick gold projects in central Victoria, Australia. But with prospects in Queensland consistently indicating prospectivity for gold and Rare Earth Elements (REE), and a refresh of its management team, might this be the time to revisit a once high-flying share?
Frustration at Bailieston, promise at Lolworth
Until the past 12 months ECR was best known for its fully owned Bailieston and Creswick gold projects in central Victoria, Australia.
But its share price has tumbled over the past couple of years as exploration has failed to yield the transformative breakthrough its Victoria assets seemed to promise, and it has been caught up in the wider downturn within the small cap natural resources sector. Bailieston’s Blue Moon project was a particular disappointment, testing of a gold bearing structure finding that ‘both the width and strike of the predicted anomaly was narrower than at first thought’.
Those frustrations, however, have been balanced by the blossoming promise of three exploration permits across the Lolworth Range, a relatively unexplored 946 km2 area in Queensland located some 120 km west of the well known Charters Towers gold district. Early exploration last year ‘exceeded expectations across all metrics’, sampling returning multiple gold anomalies with a 14pc visible gold strike rate, together with significant levels of tantalum and niobium. ECR believes ‘the mineralisation at Lolworth is becoming ever more valuable and diverse’, and ‘could be host to significant Gold, Niobium, Tantalum and REE discoveries’.
The company consolidated its Queensland presence last autumn, securing an option to acquire three further mining tenements, collectively known as the Hurricane Project, where the intensive field work and sampling that has already taken place indicates high prospectivity for gold and antimony.
Progress at Queensland through 2023
ECR’s 2023 exploration work reflects the company’s decision ‘to focus resource on our Queensland assets in the near term’. In April it further extended its position in the region, taking a 100pc interest in the Blue Mountain Project, which encompasses the Denny Gully Gold project, before announcing promising niobium and tantalum results from a stream sampling campaign at Lolworth, the best samples including niobium up to 894 ppm and tantalum up to 290 ppm. The good news continued in May, geochemistry work indicating the project area’s potential for rare earths, including respective readings for cesium, lanthalum and yttrium of more than 6000 ppm, 2760 ppm and 530 ppm.
The first batch of results for follow-up pan concentrate stream sampling targeting gold, niobium, tantalum and REE at Lolworth, published last month, was also highly promising. Gold pan concentrates showed values of up to 594 ppm, and multiple occurrences of visible gold were been recorded around the project’s Reedy Creek area. 28 out of 200 samples showed niobium values greater than 500 ppm, augmenting the company’s confidence that ‘we are zeroing in on the source rocks and a potentially significant discovery’. Neodymium, another rare earth, was identified over a broad area of the project area, with 19 out of the 200 samples recording readings of more than 1000 ppm.
Results from Lolworth’s first batch of rock chips were similarly promising, gold results from outcrop in the Reedy Creek area recording 22 and 0.54 g/t, and niobium results up to 96.7 ppm from pegmatite outcrops in the headwaters of Oaky Creek, another focus area. Exploration has now moved further to the south of the project area to follow up gold bearing drainages.
Earlier in the summer ECR began defining its Hurricane prospect, interpretation of LIDAR data showing potential outcrops along strike at the existing gold and antimony mineralised quartz breccias known as the Tornado, Cyclone and Holmes prospects, with a follow up site visit to evaluate the identified structures with rock chip sampling planned.
ECR underlined its commitment to its Queensland work earlier this month, conditionally raising £580,000 by way of a direct subscription with high net worth individuals and institutional investors. The funds will be allocated ‘to fast track ECR’s Queensland projects’ and ‘a number of new opportunities on the table that the Board may decide to progress once the appropriate due diligence has been undertaken’.
The raise was accompanied by significant board and management changes, Andrew Haythorpe stepping down as CEO after stepping up following the passing of predecessor Craig Brown two years ago, and Nick Tulloch and Mike Whitlow coming in as Executive Director and Chief Operating Officer respectively. Mr Tulloch is the founder and CEO at Aquis listed Voyager Life plc, a health and wellness company focused on high quality CBD and hemp seed oil products, and a former CEO of Zoetic International plc, the first CBD company listed on the LSE (since renamed Chill Bands Group plc). Mr Whitlow, known to many small cap investors for his no nonsense straight talking approach, has more than 20 years experience investing in and financing start-up companies, and overseeing resource projects through his company Axies Ventures Ltd, focused on the Mediterranean and North America.
“Small cap resource companies have the ability of liberating you of your inner peace, or financially rewarding you on a scale unimaginable to many” says Mike Whitlow. “Cycles are everything and whilst this opportunity arrived with out a long distance smoke signal, it came at a time where Nick and I believe we can make a difference.We intend to set the trend of hard work and absolute commitment, which we are.already seeing replicated in other parts of the business. We relish the chance of working with the board at ECR, and whilst it’s early days, I’ve been suitably impressed by the willingness of the team in adopting our vision. Delivery is everything!”
Continued work at Victoria
Although – by ECR’s own acknowledgement – ‘results from Victoria have been generally inconsistent’, the company has continued to pursue the ‘great unexplored potential’ that it believes still exists at Creswick, Bailieston, and Tambo, another prospect in the region.
Last year re-assayed core from diamond drilling at Creswick completed in 2021 yielded duplicate samples proving ‘the high variability of coarse gold’, and soil geochemistry analysis identified a potential new parallel gold system within the project’s Dimocks Main Shale. This, and new prospects identified at Davey Road and at Blue Gum South, provide ‘strong indications’ that gold mineralisation originated from the north end of a line of historical gold workings. Soil sampling results published in April from 297 soil samples at Creswick’s Mills Reef Prospect, reported highs of 0.68 ppm gold. Further results for Mills Reef included a sample of 3530 ppb, and 2530 ppb for another prospect, Kuboid Hill.
In July newly received gold results from further soil sampling activities reported up to 0.3 ppm gold, and two anomalous ‘shoots’, each approximately 100 metres long, indicating exploration for other sources further along strike is open to the north and south of the area sampled. Last month results for 27 rock chips taken from gold prospects within the Tambo licence received included 0.2m @ 22.2 g/t gold and 0.5m @ 5.72 g/t gold.
Outlook
ECR says that ‘the minimum expenditure requirements to retain the key licenses at Bailieston and Tambo are warranted, and our teams will continue piecemeal work at these licenses throughout the year when it is logistically expedient to do so’. But Queensland is clearly coming into focus for a company invigorated with new management looking to forge ahead after some frustrating years.
Prospective investors should note ECR is likely to require new funds to allow significant further exploration. The company’s most recent half year report, to 31 March 2023, stated a pre tax loss for the six months of £724,566 (H1 2022: loss of £552,202), and cash of £319,000 (H1 2022: £1,204,289). It did, however, receive AUD$603,000 for the sale of a property within the Ballieston licence area, and the of its Avoca, Moormbool and Timor gold projects in Victoria to Fosterville South Exploration Ltd (TSX-V: FSX) qualify it for AUD$2m in payments subject to future resource estimation or production from projects sold to Fosterville. The company also holds a royalty on the SLM gold project in La Rioja Province, Argentina, potentially worth up to $2.7m.
Recently the company announced that the new directors are already conducting a comprehensive review of all exploration activities currently being undertaken. In addition a detailed evaluation of the existing asset base is underway, including the Company’s property, plant and other readily realisable assets.
ECR’s share price has fallen a long way since peaking at 4p in late 2020, standing at 0.28p at the time of writing, taking its market cap to just over £3m. A highlight is the extensive inventory and land package which has offered a source of funding as opposed new equity issues, indeed before this weeks news, the last fundraise was at 0.9p back in December 2022. The market may not yet have fully registered Lolworth’s potential, with its promise for gold, niobium, tantalum and REE discoveries. Mr Whitlow’s appointment augurs well for the company’s news flow: an interview with Alan Green of Brand and Novus Communications is already available on YouTube, plus this excellent, must listen to interview with Stockbox Media as well as a notice in the latest UK Investor Magazine Podcast If ongoing exploration – underpinned by this month’s placing – continues to highlight further promise, ECR may be set for another run.
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To view the latest ECR Minerals Corporate Presentation Click Here
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