Just when will cashed up ECR Minerals hit the Jackpot?
“…the company is well placed to continue to roll out a busy programme for 2024 with a set of promising assets and money in the bank. In the near term, prospective investors should look out for results from continued exploration and drilling at Bailieston, Creswick and Lolworth….”
ECR Minerals (AIM:ECR), a mineral exploration and development company focused on gold, is looking ahead to a bright 2024 after raising a gross £585,000 earlier this month to fund continued exploration of a set of assets in Australia’s Victoria and Queensland regions burnished by a succession of positive updates.
ECR has long been associated with its fully owned Bailieston and Creswick gold projects in central Victoria, which comprise eight active exploration tenements and two in application. More recently, the company has acquired 100pc ownership of three approved exploration permits covering 946 km2 over a relatively unexplored area in the Lolworth Range, Queensland, some 120 km west of the well known Charters Towers gold district.
It has submitted a license application for Kondaparinga, an area of approximately 120 km2 located within the Hodgkinson Gold Province in North Queensland, where it is proposing an exploration programme to verify historic stream results, paving the way for a detailed survey programme.
Lolworth ‘exceeds expectations across all metrics’
ECR has recorded robust progress in defining the potential of Lolworth and Creswick over the past few months. Early exploration at Lolworth last year ‘exceeded expectations across all metrics’, with sampling returning multiple gold anomalies with a 14pc visible gold strike rate, and indicating the prospect ‘could be host to significant Gold, Niobium, Tantalum and REE discoveries’.
By January the company was able to publish a promising set of results from last year’s field work at the location, including rock chips of 22 g/t with stream samples of 205 PPM at the Reedy Creek prospect, 13.75 g/t with 1395 PPM from Gorge Creek, and 962 PPM at Butterfly Creek. Peak gold results in soils at Flaggy Creek included 0.41 g/t, 0.19 g/t and 0.13 g/t gold. Other prospects identified but yet to be explored in more detail include Brumby Creek and Gorge Creek East where soil sampling campaigns have demonstrated sporadic anomalous gold. Pan concentrate sampling has also identified another prospect, Oaky Creek, prosective for niobium and tantalum mineralisation.
ECR said ‘work at surface, whilst early stage, is designed to predict what may occur in greater concentrations at deeper levels and the widespread presence of gold in our sample results increases our confidence in both the prospectivity and potential scale of the Lolworth resource.’
Contiguous gold at Creswick
There was also positive news from Creswick, where seven holes were drilled in December. A preliminary update published last month reported ‘extensive evidence of anomalous gold’ with the best result being 23.39 g/t gold over 1 metre. The best sample ‘still has 4.7 g/t gold in the tailings of the initial results’ which ECR says is typical of the coarse gold that the company expects in this location.
A second update, focused on laboratory analysis of bulk samples left over from the preliminary results, reported ‘both greater prevalence and higher grades of gold’ with the best result now 41.03 g/t gold over 1 metre. Several other significant results included 10.26 g/t, 8.46 g/t and 6.22 g/t gold. The bulk sample results showed contiguous gold over multiple metres – of particular note, approximately 4.4 g/t gold average over 3 metres. A second phase of drilling at Kuboid Hill, Creswick, is now underway. ECR said: ‘These results at Davey Road are very promising indeed. As we anticipated, bulk sample analysis has provided far greater clarity on the prospect as well as indicating contiguous gold over multiple metres in depth. The higher grades now being indicated support our view that Creswick has the potential to become a very significant asset for our company.’
ECR’s programme for 2024
ECR is well financed for its 2024 drilling programme. The company raised £580,000 last September by way of a direct subscription with high net worth individuals and institutional investors, and another £585,000 (before expenses) earlier this month. The net proceeds from the placing will be used to advance ECR’s projects in Victoria and Queensland, specifically stream sampling at Bailieston, drilling at Tambo, Victoria, where the company has previously recorded 22 g/t rock chips with Silver and Bismuth credits, and trenching at Flaggy Creek and Reedy Creek at Lolworth, followed by drilling. The company will also undertake reconnaissance for niobium and gold in streams over eastern tenements in Lolworth, where geological mapping suggests the presence of pegmatite intrusion extending some 45 km2. ECR said the fundraising was ‘a significant achievement for ECR, coming at a more than 70pc premium to our raise last September. We are now fully funded for our 2024 exploration programme.’
The company has a number of other active and potential revenue streams. A scheme to realise value from assets it no longer requires is covering G&A expenses, notably the AUD$350,000 being raised through a hire purchase agreement for a surplus drilling rig. Other equipment has been sold for AUD$70,000, and a plot of 20 acres of land in Victoria is currently for sale. The company saves further cost by settling supplier fees through the issue of shares whenever possible. ECR also holds a royalty on the SLM gold project in La Rioja Province, Argentina, and has the right to receive up to AUD$2m subject to production on three Victoria gold projects sold to Fosterville South Exploration.
Outlook
ECR’s progress over the past few months has injected new life into the company’s share price, which had subsided through 2021 to 2023. It has risen 25pc over the past half year to 0.31p at the time of writing – spiking at 0.43p earlier this month – taking the company’s market cap to £5.16m. Following its recent fundraise ECR is looking ahead to a busy year in the field, pursuing the new strategy driven by Chairman Nick Tulloch and Chief Operating Officer Mike Whitlow, who came on board last September. Mr Tulloch is the founder and CEO at Aquis listed Voyager Life, and a former CEO of Zoetic International, and Mr Whitlow, known to many small cap investors under his Doc Holiday persona, has more than 20 years experience investing in and financing start-up companies and overseeing natural resources projects.
Although nothing is certain in the mercurial gold market, the company also stands to benefit from the ongoing rally in the price of the yellow metal, which has risen to record highs in the past few weeks, hitting $2,195 per troy ounce earlier this month. Gold’s value climbed last year as central banks built up their stocks and investors looked for safe havens in the midst of economic uncertainty, continued war in Ukraine and conflict in the Middle East. The latest surge seems motivated by expectations of lower US interest rates, which makes non-yielding assets like gold more attractive, and simmering uncertainties such as tensions between China and Taiwan and the prospect of a second Trump presidency. The price could rise higher: gold’s value is still some way below the inflation-adjusted record of more than $3,000 per troy ounce set in the 1980s.
That is all beyond ECR’s control. For its part, the company is well placed to continue to roll out a busy programme for 2024. With a set of promising assets and money in the bank, ECR seems set for a positive year ahead. In the near term, prospective investors should look out for results from continued exploration and drilling at Bailieston, Creswick and Lolworth.
