ECR is awaiting assay results, which were sent to AcmeLabs labroratory in Mendoza, from holes 9, 10, 11 and 12. Results are also pending in respect of hole 4.

On 27 April ECR confirmed that surface high-grade gold mineralisation at the prospect extends to depth after receiving assay results from seven of the 12 holes.

On receipt of those results chairman Patrick Harford said: “It is apparent that further drilling to follow on from this first programme is merited in order to more fully appraise the economic potential of El Abra in the context of ECR's high grade, low tonnage production strategy.” 

The El Abra prospect is located at the company’s wholly-owned Sierra de las Minas gold project in La Rioja Province. The project area is located approximately 800 kilometres north west of Buenos Aires

The company said assay results for the outstanding holes will be announced in due course.

Managing director Patrick Harford, who was in charge of Sierra de las Minas, has resigned from the company though he will oversee the project as a consultant until the drilling is completed.

ECR added that drilling had now started at the El Abra prospect at Sierra de las Minas.

Two holes have been completed and a total of 208 metres had been drilled out of an initial programme of 12 holes totalling approximately 1,000 metres.

Both holes drilled so far have intercepted the target vein at the target depths, confirming the vertical vein orientation, ECR said.

The drilling is intended to high grade gold mineralisation identified by surface sampling continues to depth.

If the results of the programme indicate the presence of a sufficient tonnage of high grade, near-surface mineralisation, small scale production will start at El Abra during the second half of 2012.

The firm also has an option to drill a further 1,000 metres.

Michael Silver, executive chairman, said ECR has high hopes for the current drilling programme and if successful: "The company will have added substantial value to the El Abra prospect and the wider project area.”

ECR added it has put its 70 per cent stake in Thai metal products business ACS Asia up for sale.

The management change will also reduce its general and administrative costs, it said. 

Michael Silver has also agreed to reduce his salary to £50,000 per annum while other employees have agreed to substantial salary reductions.

The group added it wants to find a highly qualified geologist to find and evaluate other projects that will fit ECR's strategy.

In addition to its gold project in Argentina, it has an interest in the Copper Flat project in New Mexico that is owned and managed by THEMAC Resources, while the Derewo River gold project in Papua, Indonesia is being managed and funded by West Wits Mining.

ECR is a mineral development company with interests in Argentina, the USA, Indonesia, Thailand and Australia.

Broker Old Park Lane welcomed the “extremely encouraging” resource upgrade, claling it a key milestone for the project’s development. Analyst Phil Swinfen has made no change to his current Copper Flat net asset value (NAV) estimate of US$79 million, valuing ECR’s 19 percent stake at US$15 million.

However, the analyst said he will review the NAV when the results of the upcoming drill programme and the pre-feasibility study (PFS) are released.

Swinfen noted that in addition to a higher level of confidence, the new resource could significantly improve the economics of the project as it will serve as the basis for the upcoming PFS. In particular, said the analyst, the addition of gold and silver into the mix has increased the possibility of by-product credits during processing.

“The total contained one billion pounds of copper positions Copper Flat favourably within the global group of known porphyry deposits,” said Swinfen.

Swinfen added that the high grade core provides an opportunity for early development as a high grade starter pit, which could increase the net present value (NPV) of the project.

ECR holds a 4% direct stake in West Wits and an indirect stake through its 26% holding in Paniai Gold, which owns performance shares and options.

Paniai’s performance shares relate to the Derewo River gold project in Papua Province, Indonesia which is 50% owned by West Wits.

They convert if the project, which covers approximately 129,000 hectares in Indonesia, achieves production of 20,000oz gold by 28 July 2013. Full conversion of the performance shares and options would give Paniai an 18% stake in West Wits.

ECR injected its interest in Derewo River into Paniai Gold in 2009. Paniai subsequently sold the project onto to West Wits.

Patrick Harford, ECR managing director, said today’s news vindicated that decision.

“West Wits now looks set to substantially improve its financial position without the issue of new equity and has stated that the proceeds of the sale of the four leases will be principally applied to development of the Derewo River project, the objectives of which include the commencement of alluvial gold production in the near future.”

“We note that technical due diligence has already been carried out to the satisfaction of the consortium purchasing the South African leases, leaving only legal due diligence outstanding, and on this basis we feel confident that the sale of the leases will proceed to completion,” he added.

ECR is a mineral development company with interests in Argentina, the USA, Indonesia, Thailand and Australia.

Here it plans to carry out important work in the coming months as it re-enters historic mine workings and conduct a sampling programme.

Meanwhile, the explorer says it has decided to forgo its option over the Unchimé iron ore project. It had the option to acquire a 70 per cent stake in the project.

However, results from the autumn’s drill programme were inconclusive and it decided not to proceed with the acquisition.

The company still plans to keep in ‘close contact’ with the Unchimé vendors and it said it might maintain a right to acquire a majority interest in the project so that further evaluation work can be carried out in the future.

“The company remains focused on the development of its gold interests in Argentina, and much important work will take place in January ahead of the planned drilling at El Abra,” said managing director Patrick Harford. 

“The results of the underground sampling taking place at El Abra this month will help improve our geological understanding of the prospect, and the ongoing metallurgical testwork is of central importance to the confirmation of the early cashflow opportunities that we believe exist at El Abra and elsewhere at Sierra de las Minas.”

Harford says Unchimé may have very significant long term potential but it would be inappropriate for ECR to make a financial commitment to the project on the basis of the information available.

In a note to clients, Old Park Lane Capital analyst Phil Swinfen said that ECR’s decision should be taken as a positive. 

He says it demonstrates that ECR is committed to protecting shareholder value, and passing over the Unchimé option saves US$1.3 million, which would have been paid to the vendors. 

“ECR is an incubator for growth projects, and in the current economic climate we applaud the company’s thorough due diligence before making a major capital allocation decision,” Swinfen said.

“There is no impact to our valuation as we had previously assigned zero value to the Unchimé project.”

He added: “We look forward to a strong year of news-flow in 2012 as ECR steps up the pace in Argentina, and continues to progress the other projects in the company’s portfolio.”

In the next two weeks ECR will re-enter and sample the historic mine workings at El Abra. This work will help the firm get an understanding of the El Abra system at depth. The findings will also supplement the data that will be gathered once drilling gets underway in February.

“ECR is gearing up for the maiden drill programme at the El Abra prospect in February ...  The drilling will be supplemented by further sampling of underground historic mine workings, and on-going metallurgical test-work,” Swinfen added.

“ECR’s focus is to evaluate the feasibility of toll-treating high-grade ore in order to generate opportunities for early cash flow within the next 12 months. Metallurgical test-work results are expected in the next few weeks.”

ECR Minerals (LON:ECR) is reviewing its proposed acquisition of the Unchimé iron ore project in Argentina due to the slowdown in the global economy.

ECR said while it remains “broadly positive” of the potential at Unchimé, it is in discussions with the owners over a revision of the terms to include a further deferment payment of any cash payment or reducing the amount in the near term.

The group added it has negotiated a three-week extension, to 22 December, to the deadline for the payment of an initial US$1.3 million for a 70% stake in Unchimé so it can get assay results for the project.

Delays have occurred due to a backlog of samples at the laboratory conducting the analyses, ECR said, though the results are now expected in a matter of weeks.

These results will assist a decision regarding the nature of ECR’s continued involvement in the project, if any, it added.

If it did decide to continue, project work would initially comprise additional metallurgical analysis as well as continued drilling.

Patrick Harford, managing director, said: “The results of the diamond drilling completed at Unchimé in September will put ECR in a much better position to decide whether to proceed with the project. We are also keenly observing iron ore market conditions, which are becoming more uncertain in view of the fragile world economic situation.”

ECR also cautioned that completion of the ground based geophysical programme underway at the El Abra gold prospect has been delayed due to the failure of equipment employed.

Samples from El Abra and other prospects within the Sierra de las Minas project area are currently being prepared to undergo an initial programme of metallurgical testwork.

“We are proceeding to advance our Sierra de las Minas gold project as rapidly as possible, with a particular eye towards early cashflow opportunities,” Harford added.

ECR is an explorer and developer with assets in Argentina, the US, Indonesia, Thailand and Australia.

ECR Minerals PLC (LON:ECR, OTC:MTGDY) reported “highly encouraging” first results from a diamond drilling campaign undertaken by associate THEMAC Resources Group (CVE:MAC) on the Copper Flat Copper-molybdenum-gold-silver project in New Mexico.

Drilling there this year was targeted to confirm existing grades, step out laterally and to depth to test for potential to increase the resources of the deposit, and confirm and expand high grade mineralised areas.

The results are from 8 of 16 completed diamond core holes announced by THEMAC. They form part of a programme of 47 holes, and drilling is to continue in 2012.

ECR said the initial set shows 102 intervals grading greater than or equal to 0.65 percent Copper, with a high of 2.26 percent Copper, and 34 gold intercepts with values of greater than or equal to 300 parts per billion gold, or 0.3 grams per tonne, with a high of 1,050 ppb gold, or 1.05 g/t.

The data will be incorporated into the Copper Flat project prefeasibility study which is on track to be completed in the first quarter of 2012.

ECR relayed a project update by its associate in which it holds approximately 19 percent. 

THEMAC holds a 100 percent ownership interest in the Copper Flat project having purchased an exclusive option over the project from ECR in March 2011 and completed the exercise of this option in May 2011.

ECR managing director Patrick Harford said: “These initial results from drilling by THEMAC at Copper Flat are highly encouraging, with all holes exhibiting average grades from surface to total depth that are of economic interest.

“Of the 8 holes for which results were reported, all 8 returned average Copper grades from surface to total depth that are significantly higher than the cut-off grade of 0.12% Copper at which Copper Flat’s NI43-101 resources have been estimated and in 4 holes the average Copper grade from surface to total depth substantially exceeds the deposit’s present indicated resource grade of 0.303% Copper. Moreover, a number of high grade intervals were reported at shallow depth,” he added.

The resource estimate of Copper Flat, upgraded last year, was for 107 million tonnes graded at an average of 0.3 percent Copper classified as indicated resources, with an additional 46 million tonnes graded at an average of 0.24 percent Copper classified as inferred resources.

Old Park Lane Capital analyst Phil Swinfen says ECR shares are cheap. In a note to clients today he estimates the group’s net asset value at 2.8p a share.

On AIM the shares currently trade at 1.125p each. Swinfen views ECR as a firm ‘buy’ at these levels.

“We view the latest drill results from Copper Flat as highly compelling and hold our view that THEMAC is a solid investment for ECR,” the analyst said.

This morning ECR told investors that THEMAC Resources Group (CVE:MAC) has completed the first phase of drilling at the Copper Flat copper-molybdenum-gold-silver project in New Mexico. The project’s prefeasibility study is scheduled for completion in the first quarter of next year.

Copper Flat was sold by ECR – then known as Mercator Gold – through a deal agreed back in March 2010, in return for its 19 per cent stake in THEMAC. 

While the project is no longer part of the ECR portfolio, Old Park Lane’s Phil Swinfen says the equity stake in THEMAC accounts for around 85 per cent of ECR’s current valuation.

Importantly the analyst believes that next year’s pre-feasibility could have a big impact for ECR.

“We would expect any improvement in the economics of Copper Flat to translate to a re-rating of both THEMAC and ECR’s share price,” Swinfen said in a note to clients today.

“The key catalysts to drive this will be the release of drilling results and the completion of the prefeasibility study.”

Now that the initial drill programme has been completed, THEMAC will embark on the 18 to 24-month construction phase of the copper-molybdenum-gold-silver project.

The resource estimate, upgraded last year, of Copper Flat was for 107 million tons that graded at an average of 0.3 percent copper classified as indicated resources, with an additional 46 million tons graded at an average of 0.24 percent copper classified as inferred resources.

In August 2009, ECR purchased an option over the Copper Flat project for US$150,000 and spent around £880,000 on the partial exercise of the option, as well as on technical, legal and permitting costs. ECR then agreed a transaction to place the project with THEMAC, with ECR contributing funding to the project in May 2010 of C$600,000 in return for shares and warrants in THEMAC as well as incurring further costs of £250,000.

"Transactions such as this are at the heart of ECR’s business model, and are intended to create value for ECR shareholders through exposure to upside potential from a range of mineral projects,” said Patrick Harford, ECR’s managing director.

“As well as its current 19.5 per cent shareholding, ECR’s holding of warrants gives the company the option to maintain or increase its shareholding at a relatively modest cost.”

Although the THEMAC stake is central to ECR’s current valuation, the group’s operational team is firmly focused on new opportunities. As far as investors are concerned the most exciting opportunity is found in Argentina. 

In January ECR acquired four exploitation concessions. The newly acquired area includes the El Abra historic gold mine which hosted a high grade, albeit small scale, mining operation. In recent months these assets have come into focus as sampling work unearthed high grades, of up to 54 grams of gold per tonne. 

ECR is also considering the acquisition of an iron ore project in Argentina, after it secured an option to buy up to 80 percent of the Unchimé property in the Salta Province.

Unchimé boasts historic indicated resources of 23.5 million tonnes and historic inferred resources of 372.8 million tonnes with reported grades of 35-45 percent iron, but ECR reckons the potential may be significantly larger.

Managing director of ECR Patrick Harford said the firm was excited that with further work, the project could become major.

"It may be feasible to develop a relatively small initial operation to supply the local market, with a larger export operation being developed at a later stage," he said in July.

Earlier this week the company extended its option over the project, at no cost, while it completes its due diligence. Core samples from the diamond drilling programme completed by the company at Unchimé during September are being analysed, however this process has been delayed due to a worldwide backlog of samples at suitable laboratories.  ECR is continuing to implement a programme of metallurgical testwork on samples from Unchimé. 

In order to acquire the initial 70 percent interest in the project, ECR is now required to make a payment to the owners of the project of US$1.3 million on or before December 1 2011, followed by an additional payment of US$500,000 not more than 7 months from the date of the initial payment. 

ECR Minerals PLC (LON:ECR, OTC:MTGDY) said it secured a 60 extension to the date by which it is required to make a US$1.3 million cash payment to the owners of the Unchimé iron ore project in Salta Province, Argentina.

The payment would be the first step in the acquisition of an initial ownership interest in the project of 70 percent. 

ECR requires more time to complete due diligence on Unchimé and decide whether to proceed with the acquisition. The extension was granted at no cost to ECR.

Core samples from the diamond drilling programme completed by the company at Unchimé during September are being analysed, however this process has been delayed due to a worldwide backlog of samples at suitable laboratories. 

ECR is continuing to implement a programme of metallurgical testwork on samples from Unchimé. 

In order to acquire the initial 70 percent interest in the project, ECR is now required to make a payment to the owners of the project of US$1.3 million on or before December 1 2011, followed by an additional payment of US$500,000 not more than 7 months from the date of the initial payment. 

ECR is a mineral development company with interests in the US, Argentina, Indonesia, Thailand and Australia.

“We welcome the extension, which has no impact on potential project development timelines but ensures that ECR is able to conduct thorough due diligence before committing to a major acquisition,” said Old Park Lane Capital analyst Phil Swinfen.

He added: “ECR is an incubator for growth projects and we assert that ECR has a place in a portfolio for investors looking for a mixture of diversification, growth, and built-in option value. 

“Unchimé is a good example of ECR’s corporate strategy of identifying potentially undervalued assets. We assign no value to ECR’s Argentinian projects at present, preferring to view them as a free option attached to the company. 

“Whichever way the Unchimé decision falls, we are confident that ECR management will act in the best interest of shareholders.”

ECR Minerals (LON:ECR, OTC:MTGDY)  opened strongly this morning after it published another batch of surface sampling results from its Sierra de las Minas project in Argentina’s La Rioja Province.

Three separate samples from the Cuerpo SI and Don Chiche prospects returned grades of 51 and 54 grams of gold per tonne.

The share leapt almost 10 per cent early trade to 1.48 pence. In the last three months the stock has advanced more than 29 per cent.

Managing Director Patrick Harford said: “These further high grade assays from sampling at Sierras de las Minas have identified another two exciting prospects as high priority for further exploration. 

“They particularly demonstrate the potential of Sierra de las Minas for the generation of highly promising exploration targets. The project area contains a large number of historic prospects still to be visited for first pass evaluation. 

"Results from the upcoming drilling and geophysical programme at El Abra will allow a more detailed understanding of the local geology and will be used to guide exploration across the Sierra de las Minas project area.” 

The latest data follows on from the some highly encouraging sampling results last week, which returned grades of 32.5 grams per tonne of gold and 21.9 grams.

Four of these prospects, Maestro Agüero, Mina San Antonio, Casa Viejas and Mina Azul, represented a combined potential strike length of approximately 800 metres making them priority targets for further work.

Earlier today ECR said it is planning further detailed sampling of the Cuerpo SI and Don Chiche prospects, along with the Maestro Agüero, Mina San Antonio, Casa Viejas and Mina Azul prospects.

It will also continue sampling of historic prospects at Sierra de las Minas in order to expand the identified prospective areas for further exploration and identify new ones. 

Preparations for the ground based geophysical survey planned to commence at the El Abra prospect later this 

Phil Swinfen, the mining analyst at Old Park Lane Capital, repeated his "buy" recommendation on the stock this morning. 

“With seven samples returning gold grades in excess of five grams of gold (per tonne) and three samples returning spectacular grades in excess of 50 grams, the results are testament to the prospectivity of ECR’s Argentinean licences,” he said.

“As part of this early stage of reconnaissance exploration, ECR is successfully teeing up a number of promising targets for further evaluation.”

ECR is an explorer and developer with assets in Argentina, the US, Indonesia, Thailand and Australia, and has a particular focus on gold and base metals. 

Swinfen said believes the firm's relatively complex structure and variety of different interests meant ECR is poorly understood and largely overlooked by the wider market.

“ECR is an incubator for growth projects and we assert that ECR has a place in a portfolio for investors looking for a mixture of diversification, growth, and built-in option value,” the analyst added. 

“At current levels ECR’s discount creates a compelling investment opportunity with potential value likely to come from a range of different interests. 

“The recent gold results set the scene for more intriguing developments as the company moves towards a maiden drilling programme at Sierra de las Minas.”

The group is planning further detailed sampling of the Cuerpo SI and Don Chiche prospects, along with the Maestro Agüero, Mina San Antonio, Casa Viejas and Mina Azul prospects.

It will also continue to conduct first pass sampling of historic prospects at Sierra de las Minas in order to expand the identified prospective areas for further exploration and identify new ones.

Preparations for the ground based geophysical survey planned to commence at the El Abra prospect later this month are continuing and discussions with drilling contractors are underway with regard to the drilling programme that is proposed to follow the survey.

ECR holds 100 percent exploration rights to the Sierra de las Minas project area and 100 percent exploitation rights to a number of prospects within it, including the El Abra prospect save for a 2 percent NSR royalty payable in respect of production from the El Abra and Jazmin prospects.

Exploration rights for other prospects may be converted to exploitation rights by application to the government of La Rioja Province.

Managing Director Patrick Harford said: “These further high grade assays from sampling at Sierras de las Minas have identified another two exciting prospects as high priority for further exploration. They particularly demonstrate the potential of Sierra de las Minas for the generation of highly promising exploration targets. The project area contains a large number of historic prospects still to be visited for first pass evaluation.

"Results from the upcoming drilling and geophysical programme at El Abra will allow a more detailed understanding of the local geology and will be used to guide exploration across the Sierra de las Minas project area.”

Old Park Lane Capital initiated coverage of the stock this week with a "buy" recommendation, saying ECR is poorly understood and largely overlooked by the wider market.

The AIM-quoted firm is suitable for investors looking for a mixture of diversification, growth, and built-in option value, added the City broker.

Explorer and developer ECR has assets in Argentina, the USA, Indonesia, Thailand and Australia with a particular focus on gold and base metals.

In a note, analyst Phil Swinfen said he believed the firm's relatively complex structure and variety of different interests meant it was poorly understood and largely overlooked by the wider market.

Swinfen said in a short note in reaction to the latest assay results: “The recent gold results set the scene for more intriguing developments as the company moves towards a maiden drilling programme at Sierra de las Minas.”