ECR Minerals: A Gold Exploration Company That Has Given 300% Return in A Year

Source: Phawat, Shutterstock

Summary

• Shares of ECR have given 300 per cent return in last one year.
• AIM listed ECR Minerals, the company is targeting the most prospective gold regions of Central Victoria in Australia
• Victoria, the major gold producing province of Australia, is in the midst of yet another gold rush

ECR Minerals Plc (LON: ECR) is a budding gold exploration company, which is on its way to deliver the next ‘Multi-Million Ounce’ gold resource in Victoria, Australia. The AIM-listed company through its Australian subsidiary Mercator Gold Australia (MGA) is targeting the most prospective gold regions of Central Victoria. MGA has a 100 per cent stake in two gold exploration projects there -- the Bailieston and Creswick projects.

Projects in brief

Bailieston: This project of MGA is at the core of the current boom of gold exploration in Victoria. Situated 150 km north of Melbourne, the project is highly approachable with good access of the road. The project area includes Siluro-Devonian sediments. The project is of a greater significance as it targets the Melbourne Zone, hosting many successful modern gold mines.

Creswick: This project is equally important as it is said to be highly prospective for gold mineralisation found within Dimocks Main Shale (DMS), a source of significant alluvial and deep lead gold.

In addition, MGA has a total of eight (8) other license applications. Details can be found at www.mercatorgold.com.au.

MGA also has interest in the Timor, Avoca, and Moormbool projects which it sold in 2020 for a cash consideration of up to A$2.5 million and immediately received A$500,000. Further, it will be receiving a payment of A$1 for every ounce of gold or gold equivalent of measured resource from the projects, up to a maximum of A$1,000,000 in aggregate.

Also Read: Sizeable Gold Exploration Potential at ECR Minerals’ Creswick Project

In addition, the Company sold its SLM Gold project in Argentina in February 2020 and can potentially receive a net smelter return (NSR) of 1-2% capped at 2.7 million USD. Furthermore, the Company disposed of several non-core licenses in April 2020 and could receive up to 2 million USD in payments subject to future resource estimation or production at those projects.

Share price performance

ECR Minerals has witnessed a massive surge in its share price in the last one year. Its shares surged by over 300 per cent, providing enormous gain to the stakeholders in last one year. The company’s share price, which was just around GBX 0.85 on 25 February 2020, reached an all-time high of GBX 4.25 on 29 December 2020 and was at GBX 3.55 on 23 February 2021.

Since mid of the last year, when things started stabilising a bit after the onslaught of the pandemic, the stock of the company has been on a consistent upmove with decent volume levels, which was reported 42,923,568.00 on 29 December 2020 and remained at an average 3,504,482 for the last one year.

The year 2020 was eventful for the company, and its consequent effects were widely seen on the stock movement on various occasions. Like when it got positive results in Alteration Study of Creswick Gold Project, progress in its drilling campaign at Victoria, or applying for two new licences in eastern Victoria, every time there was a strong affirmation visible in the form of price reaction, which was evident with improved volume traded on London Stock Exchange.

Based on 23 February 2021 price (Source: Refinitiv, Thomson Reuters)

Where the future lies

ECR Minerals, in its quest for multi-million-ounce gold deposits, has launched an extensive exploration campaign in Victoria, armed with its own drilling rig, Midas. The ECR’s key tenement of the Bailleston project is on the same rich seam of gold that has created a fortune for Kirkland’s investors. The Victoria region, which is now the focus of many multinational miners, has been a successful field for ECR. After selling three of its non-core but high-potential licences to Fosterville South, the company is now concentrating its resources on core projects in Bailieston and Creswick, while it will also maintain exposure to upside from those licences as a result of future resource valuation or production.

Also, the immediate amount received has helped ECR strengthen its working capital position to focus on the development of core projects. Going forward, more price reaction in stock can be seen with delivery of strong exploration results or some kind of commercial deal, which the management has indicated.