Last checked at 23 Aug 2016 13:47
AIM: ECR
US OTC: MTGDY
ECR MINERALS plc
(“ECR Minerals”, “ECR”, the “Company” or the “Group”)
UPDATE ON ACTIVITIES AND
ISSUE OF CONSIDERATION SHARES
LONDON: 23 AUGUST 2016 - The directors of ECR Minerals plc (the “Board” or the “Directors”) provide the following update on the Company’s activities in Australia.
AVOCA GOLD PROJECT, VICTORIA, AUSTRALIA
Metallurgical Testwork Results
The results of metallurgical testwork on a composite sample obtained from the Golden Lake, Working Miners and Working Miners United dumps have been received from Consep Pty Ltd, an independent laboratory and engineering firm based in Sydney, Australia.
Cyanide leach testwork on the -25um fraction of the sample achieved very high gold recoveries of 80% after 4 hours and 98% after 24 hours. The Gravity Recoverable Gold (GRG), as that term is used by Consep, of the whole sample was reported as 32%. This is the recovery obtained from two passes through a Knelson gravity concentrator based on certain operating parameters recommended by Consep as appropriate for an initial testwork phase. Cyanide leaching of the Knelson tailings achieved a high gold recovery of 84% after 4 hours and 90% after 24 hours.
The initial concept for reprocessing of the waste dumps was to use gravity techniques only to extract gold from the fine fractions of the waste dump material, however the metallurgical testwork results indicate that other methods (such as cyanidation), or a combination of methods, may be more suitable given the fine nature of the gold sampled. It is conceivable that further gravity testwork based on different parameters might yield higher recoveries. The detailed metallurgical testwork results will be reviewed by the Board and appropriate consultants, and will inform completion of the conceptual economic study regarding the Avoca dumps. A second source of potential revenue, in addition to gold, is construction materials (sand and gravel) sourced from the dumps. The Company notes that several sand and gravel operations exist in the Avoca area, and the possibility of cooperation with an existing operator may be explored in the future.
Further to the Company’s announcement dated 2 August 2016, the Board is continuing to review ECR’s existing projects and consider the Group’s future development in conjunction with evaluating potential options for providing further working capital for the Group. In view of this, the Board are unable to give an estimated timescale for completion of the Avoca economic study and will provide further updates in due course.
Inferred Mineral Resource Estimate, Avoca Dumps
To date, the Company has completed surveying and auger drilling programmes on four dumps at Avoca. The Directors believe up to a further 19 dumps within the Avoca EL may be suitable for testing using the same techniques. An Inferred Mineral Resource Estimate in respect of the first four dumps, reported in accordance with the JORC Code and estimated by a Competent Person, is presented in the table below.
| Inferred Mineral Resource Estimate Golden Lake, Golden Lake East, Working Miners and Excelsior Tailings Dumps Avoca Gold Project (EL5387), Victoria, Australia Reported in accordance with the JORC Code and estimated by a Competent Person, August 2016 | |||||||||
| Category | Deposit | Tonnes | Grade | Contained metal | |||||
| (JORC) | (g/t) | (Troy oz) | |||||||
| Inferred | Golden Lake | 19,631 | 0.71 | 448 | |||||
| Inferred | Golden Lake East | 11,443 | 0.69 | 254 | |||||
| Inferred | Working Miners | 111,399 | 0.19 | 681 | |||||
| Inferred | Excelsior | 11,516 | 0.30 | 111 | |||||
| Total Inferred Resources | 153,989 tonnes | 1,494 oz | |||||||
The information in this announcement that relates to Exploration Results and Inferred Mineral Resources is based on information compiled by Mr Neil Motton BSc (Hons), MAusIMM (CP - Geology), MSEG, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Motton has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Motton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The JORC Code Assessment Criteria
The JORC Code, 2012 Edition describes a number of criteria which must be addressed in the Public Reporting of Mineral Resource estimates. These criteria provide a means of assessing whether or not parts of or the entire data inventory used in the estimate are adequate for that purpose. The Inferred Mineral Resource estimates stated in this announcement were based on the criteria set out in Table 1 of that Code.
The JORC Code, 2012 Edition – Table 1 which pertains to the Inferred Mineral Resource estimate disclosed in this announcement will be available for download from www.ecrminerals.com under Projects & Investments – Mercator Gold Australia.
Potential conflict of interest
Mr Motton is a director of Mercator Gold Australia Pty Ltd (“MGA”) and the principal shareholder of Currawong Resources Pty Ltd (“Currawong”). MGA has entered into a deed of assignment and assumption (the “Deed”) with Currawong for the acquisition by MGA of 100% ownership of the Avoca and Bailieston gold projects in Victoria, Australia. The terms of the Deed were announced by ECR on 3 March 2016. Mr Motton was not a director of MGA prior to the Deed being entered into. Mr Motton provides consulting services to ECR and MGA as a professional geologist. There is no other relationship between Mr Motton and the Company or MGA.
Issue of Consideration Shares
Pursuant to the terms of the Deed, 98,001,024 new ordinary shares of 0.001 pence each in the Company (“Ordinary Shares”) are being issued at a price of approximately 0.025 pence to satisfy the first tranche of Consideration Shares (as that term is defined in the Company’s announcement dated 3 March 2016). These shares were due on execution of the Deed, but issuance of the shares has been delayed, initially at the request of Currawong while electronic delivery arrangements were made and subsequently as a result of Mr Motton’s status as a director of MGA and the pending completion of the Inferred Mineral Resource Estimate. The Company expects to issue the second tranche of Consideration Shares on or around 30 August 2016.
Pursuant to issuance of the first tranche of the Consideration Shares, application will be made for 98,001,024 new Ordinary Shares of the Company to be admitted to trading on AIM (“Admission”). Admission is expected to occur on or around 30 August 2016. Following Admission, it is expected that ECR’s issued ordinary share capital will consist of 12,086,067,610 Ordinary Shares. The new Ordinary Shares will rank pari passu in all respects with the Ordinary Shares of the Company currently traded on AIM.
Review of Announcement by Qualified Person
This announcement has been reviewed by William (Bill) Howell BSc (Hons), FAusIMM, FSEG, ECR’s Non-Executive Chairman. Mr Howell is a geologist with 49 years of experience in the minerals industry, and is a Qualified Person as that term is defined by the AIM Note for Mining, Oil and Gas Companies.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
ABOUT ECR
ECR is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia (MGA) has agreed to acquire 100% ownership of the Avoca and Bailieston gold projects in Victoria, Australia. Mercator Gold Australia is estimated to have tax losses of approximately AUD 66M as at 30 June 2015, which may be available, subject to certain conditions (as described in ECR’s announcement dated 4 December 2014), to reduce MGA’s future taxable profits. This is considered particularly significant in view of an opportunity which may exist at Avoca to establish relatively near term gold production from the reprocessing of historical mine dumps, with the potential for sale of gravel and sand by-products. A competent person’s report in relation to the Avoca and Bailieston projects is available for download from ECR’s website.
ECR has the right to earn a 50% interest in the Danglay epithermal gold project in the Philippines. Danglay is an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines. An NI43-101 technical report was completed in respect of the Danglay project in December 2015, and is available for download from ECR’s website.
ECR’s wholly owned subsidiary Ochre Mining has a 100% interest in the SLM gold project in La Rioja Province, Argentina. Exploration at SLM has focused on identifying small tonnage mesothermal gold deposits which may be suitable for relatively near term production.
FOR FURTHER INFORMATION, PLEASE CONTACT:
| ECR Minerals plc | Tel: +44 (0)20 7929 1010 | ||
| William (Bill) Howell, Non-Executive Chairman | |||
| Stephen Clayson, Director & CEO | |||
| Craig Brown, Finance Director | |||
| Richard (Dick) Watts, Non-Executive Technical Director | |||
| Email: info@ecrminerals.com | |||
| Website: www.ecrminerals.com | |||
| Cairn Financial Advisers LLP | Tel: +44 (0)20 7148 7900 | ||
| Nominated Adviser | |||
| Emma Earl / Jo Turner | |||
| Vicarage Capital Ltd | Tel: +44 (0)20 3651 2910 | ||
| Broker | |||
| Rupert Williams / Jeremy Woodgate | |||
| Blytheweigh | Tel: +44 (0)20 7138 3204 | ||
| Public Relations | |||
| Tim Blythe / Camilla Horsfall |
FORWARD LOOKING STATEMENTS
This announcement may include forward looking statements. Such statements may be subject to a number of known and unknown risks, uncertainties and other factors that could cause actual results or events to differ materially from current expectations. There can be no assurance that such statements will prove to be accurate and therefore actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements. Any forward looking statements contained herein speak only as of the date hereof (unless stated otherwise) and, except as may be required by applicable laws or regulations (including the AIM Rules for Companies), the Company disclaims any obligation to update or modify such forward looking statements as a result of new information, future events or for any other reason.
GLOSSARY
BCM:
bank cubic metre
cyanidation:
A method of extracting exposed gold or silver grains from crushed or ground ore by dissolving it in a weak cyanide solution.
g:
grams
gravity concentration:
Separating grains of minerals by a concentration method operating by virtue of the differences in density of various minerals.
g/t:
grams per tonne
Inferred Mineral Resource:
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to an Ore Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
JORC Code:
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
Knelson concentrator:
A type of gravity concentrator.
Mineral Resource:
A ‘Mineral Resource’ is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
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