A best of all worlds joint venture freeing ECR Minerals to focus on near term gold production

Описание: “We firmly believe we're going to be a gold producer and we need to think about what we're going to do when that gold starts coming out of the ground and we start getting money for it”

The proposed joint venture with confidently named Bold Gold, gives shareholders in ECR Minerals (LON:ECR) several advantages. It allows them to keep a percentage of the Creswick gold project in Victoria with the counterparty doing most of the heavy lifting financially and operationally, and crucially it frees the ECR team to focus on the Blue Mountain and Lolworth opportunities in Queensland.

The deal suits the partners too as the team of Bold Gold are savvy ‘old timers’ of the Australian exploration circuit and pursuing their own profit ambitions after initial expense.

“It's a joint venture whereby they will earn into increasing percentage interests the more they spend and they're spending money in the ground,” says ECR Chairman Nick Tulloch. “The more exploration they do, the more examination of the area that they do, the greater interest they will get until eventually they get up to 80%. And so ECR will be left with a balancing 20%. At that point, we have a choice. We can either pay our way. We can either pay a 20 % share of future operations or we can turn it into royalty where essentially we give them full control of the assets, but we will retain a royalty, for example, on production or on proved resource.”

That’s several years in the future, but in the near term there’s no financial commitment by ECR for Crestwick’s upkeep. All the company’s funds are being directed towards Blue Mountain. The first set of gold results from the drill sampling showing extensive zones of gold mineralization have been shared to the market and Tulloch says grades are of commercial quality and potential partners are already approaching ECR about involvement without solicitation.

What’s not lost on anyone is that the price of gold has increased by over a third this year and concurrently the value of Blue Mountain is increasing as are the hires of industry titans joining ECR to add their experience.

In addition to watching the gold price appreciate, shareholders are wanting reassurance that a mining licence is forthcoming. As Nick explains in this video interview with Sarah Lowther, he’s confident it is.

“We've got a number of things in our favour. The first is that to get a mining licence you have to prove that the project is commercial and everything we're seeing, and you can see in the RNS, is everything we're seeing shows this is a commercial project. The second is a big issue in Australia is of course native title. Blue Mountain is privately owned so we're dealing with one landowner, a farmer, who is frankly our biggest cheerleader. Thirdly, there's environmental considerations. Blue Mountain is a beautiful area, but the good news is it's not the nesting place of any particular species of birds or any sort of rare wildlife. We will have commitments. We'll need to put the land back together. We'll need to fill in the trenches and fill in the holes, but we're not going to be doing anything particularly disturbing for any wildlife or plants or fauna.