ECR Minerals (formerly Electrum Resources) plc is a diversified mining investment company with quality assets and the capability to undertake significant, value accretive transactions. ECR Minerals is dedicated to creating value for its shareholders through a process of finding value, adding value and realising value. In order to achieve this, Electrum Resources is able to access a pipeline of projects sourced from its global network and utilises the expertise of its directors and advisers.
ECR Minerals holds interests in the USA, Argentina, Indonesia, Thailand and Australia.
ECR Minerals to focus on gold in Argentina as it declines Unchimé iron acquisition
ECR Minerals (LON:ECR, OTC:MTGDY) today told investors that it will focus its efforts in Argentina on the El Abra gold prospect.
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.”
