TIDMECR
ECR MINERALS plc("ECR Minerals", "ECR" or the "Company")
AIM: ECRUS OTC: MTGDY
COMPETENT PERSON's REPORT FORAVOCA AND BAILIESTON GOLD PROJECTS,
AUSTRALIA
The directors of ECR Minerals plc (the "Directors") are pleased
to announce the publication of the JORC Code-compliant technical
report which has been prepared by Snowden Mining Industry
Consultants in relation to the Avoca and Bailieston gold projects
in Victoria, Australia (the "Report").
The executive summary and certain other sections of the Report
are excerpted below. The full Report is available for download from
the following
link:http://www.ecrminerals.com/projects-investments/mercator-gold-australia/snowden-jorc-report
A set of maps showing the locations and tenement outlines of the
projects may be viewed at the following
link:www.ecrminerals.com/avoca-bailieston-maps
The Company's wholly owned Australian subsidiary Mercator Gold
Australia Pty Ltd ("MGA") has entered into an agreement with
Currawong Resources Pty Ltd ("Currawong") for the acquisition by
MGA of 100% ownership of the Avoca and Bailieston projects. Further
details regarding the acquisition are available in ECR's
announcement dated 3 March 2016. The acquisition remains
conditional on the necessary Victorian government authorisations
and registration of the transfer of the projects to MGA. Issuance
of the Initial Consideration Shares, as defined in the 3 March 2016
announcement, to Currawong has been delayed at Currawong's request
while arrangements are made for delivery of the shares.
Stephen Clayson, Chief Executive Officer of ECR, commented:
"In accordance with the recommendations of the Report, the
Directors intend that MGA will continue to develop and implement a
measured and carefully controlled exploration strategy for the
Avoca and Bailieston projects, while prioritising the generation of
short term cash flow from the proposed reprocessing of historical
mine dumps at the Avoca project to produce gold, with saleable
gravel and sand as by-products.
The Directors are optimistic regarding MGA's ability to progress
in this manner, particularly in view of Victoria's status as a
mining friendly jurisdiction with a rich history of gold mining,
and which does not levy a government royalty on gold production. In
addition, the proposed reprocessing operations would be expected to
benefit from MGA's substantial tax losses, which may be available,
subject to certain conditions, to reduce MGA's future taxable
profits.
Reprocessing of the Avoca dumps remains subject to the outcome
of the necessary studies, as further discussed in the Report, and
to the availability of the required permits, including a mining
licence. A necessary precursor to application for a mining licence
is the estimation of a Mineral Resource. Snowden's recommendations
for estimation of a Mineral Resource in respect of the dumps are
discussed in the Report, including in the sections excerpted below.
A further announcement regarding MGA's immediate activities in
relation to the Avoca and Bailieston projects will be made in the
near future, once plans have been finalised."
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.
EXCERPTS FROM THE REPORT
1EXECUTIVE SUMMARY
This Competent Person's Report describes the mineral exploration
assets of Currawong Resources Pty Ltd (Currawong), a wholly owned
subsidiary of Flitegold Pty Ltd (Flitegold), an Australian private
company. Mercator Gold Australia (MGA), a wholly-owned Australian
subsidiary of ECR Minerals plc (ECR), of London, has agreed to
purchase 100% of these assets and has entered into a Deed of
Assignment and Assumption with Currawong. The assets are located in
the Central Goldfields region of the Australian state of Victoria.
MGA is assuming operating rights over the assets from
Currawong.
1.1Summary of Mineral Resources and Ore Reserves
Currawong's assets are exploration projects and do not contain
any identified Ore Reserves or Mineral Resources, as defined by the
JORC Code.
1.2Summary of geology and mineralisation
Victoria is one of the world's major gold provinces. Total
recorded gold production, from 1851 to June 1998 is about 2,500
tonnes (80.4 million ounces (Moz)). Total Victorian gold production
represents 32% of all the gold mined in Australia and 2% of all the
gold mined in the world. The Victorian alluvial gold production
from 1851 to present is approximately 710 tonnes (22.8 Moz), making
it possibly the largest alluvial gold province in the world.
Currawong's assets are in cratonised granite/volcanic Victorian
fold orogenies. Each location has significant potential for gold
mineralisation.
The assets consist of two projects, Avoca and Bailieston, both
within the major orogenic Lachlan Fold Belt. The Lachlan Fold Belt
is subdivided into zones, based on distinct geological and
metallurgical characteristics, with the Avoca project lying to the
west, within the major gold producing zone, the Stawell Zone and
the Bailieston project lying within the Melbourne Zone, to the
east.
1.2.1Avoca
The Stawell Zone Avoca project consists of a flysch of intensely
folded Cambrian turbidites, altered to greenschist facies slate and
greywacke. Granite intrusives provide the regional fluid and
structural control. Mineralisation is hosted by quartz-filled
brittle/volcanic fault structures and is characterised by gold with
base metal sulphides.
The Avoca area has a significant production history of alluvial
gold from Tertiary river beds and "deep leads", which represent
palaeochannels that have been buried by basalt lava flows or
fluvial terraces. The gold in these locations is trapped by
undulations on the basement rock and follows the sinuous course of
these palaeochannels.
1.2.2Bailieston
The Melbourne Zone Bailieston project consists of
Siluro-Devonian sediments intruded by Devonian granite stocks.
Mineralisation is hosted by vein or stockwork structures, typically
within anticlinal trap structures within the sediments.
The Bailieston area has a modest historical production history
from alluvial and vein quartz mines. It has a more recent history
of exploitation of low-grade, bulk mining stockwork or layered vein
structures such as the Bailieston open cut mine which was operated
by Perseverance Corporation Ltd (Perseverance) in the 1990s. Other
modern nearby open cut gold operations which operated include Hill
158 at Nagambie, Red Hill at Heathcote and the various pits at
Fosterville and Costerfield. These latter two continue to operate
as higher-grade underground mining operations and Fosterville has
recently produced its one millionth ounce.
1.3Summary of exploration concept
MGA proposes to explore the tenements using conventional
geophysical, geochemical and mapping techniques, utilising
appropriate local contractors under the supervision of MGA
officers. Preliminary target identification may be followed by
conventional drilling, to be undertaken in accordance with an
appropriate reporting code.
MGA identifies three exploration concepts on Currawong's assets
and Snowden considers that there is sufficient evidence available
to support these concepts:
1) Remnant gold contained in mine dumps at Avoca and other
places. A second source of potential revenue is construction
materials sourced from the dumps, for which Currawong has conducted
preliminary investigations.
2) Quartz vein hosted gold and related placer-style "deep lead"
mineralisation at Avoca. This concept is premised on the
considerable mining history of such deposits at Avoca and a
significant historically identified potential gold accumulation
within buried river channels, derived from drilling conducted in
the 1930s.
3) Epithermal "Carlin" style disseminated or sheeted vein hosted
gold mineralisation at Bailieston. This concept is premised on the
presence of such a deposit that was recently exploited at
Perseverance's Bailieston mine, immediately north of the tenement
and considerable evidence that the structure that hosts this
deposit is repeated within the Bailieston project area.
MGA seeks to establish short-term cash flow through retreatment
for gold of historic mine dumps at Avoca, with opportunities for
sale of by-products as construction material, in order to provide
funding for progress on longer-term opportunities.
In this regard Snowden has conjecturally derived Exploration
Targets, as defined by the JORC Code, for each project area, based
on the relevant geology and the proximity and tenor of nearby known
mineralisation (Table 1.1). Snowden cautions that these Exploration
Targets are conjectural and speculative only and serve to indicate
the scale of potential mineralisation within the project areas,
based on current geological understanding. These Exploration
Targets do not imply economic viability.
The information in this report that relates to Exploration
Targets is based on information compiled by Mr Jeremy Peters, a
Competent Person who is a Fellow of The Australasian Institute of
Mining and Metallurgy and Chartered Professional Mining Engineer
and Geologist of that organisation.
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Table 1.1 Summary of Exploration Targets
Tonnage (Mt) Grade Commodity Comments
From To From To
Avoca 0.20 0.25 0.50 g/m3 1.50 g/m3 Au Refer Section
15.2
10 20 0.14 g/m3 0.20 g/m3 Au Refer Section 13.1
0.1 0.5 Saleable material Refer Section 15
0.03 0.5 10 g/t 30 g/t Au Refer Section 13.1
Bailieston 1 5 1.0 g/t 4.0 g/t Au Refer Section 13.2
1.4Summary of status of exploration, development and
operations
Snowden considers the Currawong assets to be at a basic level of
exploration, with no identified Mineral Resources, as defined by
the JORC Code. The assets enjoy ease of access and the presence of
significant infrastructure.
MGA proposes to manage the projects through the engagement of
suitable local contractors and consultants, under the direct
supervision of MGA.
1.5Summary of assets
Snowden identifies MGA's interests as comprising a Deed of
Assignment and Assumption of 100% ownership of two Exploration
Licences in Australia (Table 1.2).
Table 1.2 MGA summary of assets
Asset Holder Interest Status Expiry date Licence Comments
(%) area
(km2)
Avoca Currawong 100 Exploration 24 Jan 2017 115 Exploration
- Resources Target
Australia Pty Ltd
EL5387
Bailieston Currawong 100 Exploration 27 Mar 2018 79 Exploration
- Resources Target
Australia Pty Ltd
EL5433
1.6Conclusions and recommendations
1.6.1Conclusions
Snowden concludes that MGA has rights to acquire prospective
exploration tenements and projects in Australia and that these
tenements are prospective for gold.
Snowden considers the projects to be at an early stage of
exploration and that their prospectivity is identified through the
geology of the projects themselves, indicative exploration results
from previous explorers, and the presence of significant
mineralisation that has been commercially exploited historically or
currently within the tenement areas themselves or on adjacent
properties.
MGA's strategy is focused on identifying mineralisation that can
be economically exploited in the short term, to provide funding for
progress on longer-term opportunities. Snowden notes the presence
of suitable infrastructure that could be made available, by
arrangement, to advance these short-term projects.
1.6.2Recommendations
Snowden recommends that MGA continue to develop a coherent
exploration strategy with the aim of generating short-term cash
flow from the assets.
Snowden further considers that the re-processing for gold of
historic mine dumps at Avoca presents an obvious source of
short-term cash flow and recommends that MGA devote appropriate
resources to obtaining the necessary licences and metallurgical
testwork to progress this.
Snowden recommends that any exploration activities undertaken by
MGA be carried out in accordance with an appropriate reporting
code, the JORC Code seeming the most applicable.
13EXPLORATION TARGETS
The JORC Code defines an Exploration Target as being a statement
of the exploration potential of a mineral deposit in a defined
geological setting, quoted as a range of tonnes and a range of
grade for which there has been insufficient exploration to estimate
a Mineral Resource. Such a target does not in any way constitute a
Resource Estimate, as defined by the JORC Code and is entirely
conceptual in nature. Snowden presents its Exploration Targets for
Currawong's projects along with commentary on activities and
timeframes to realise this potential (refer to Section 14
below).
13.1Avoca
MGA targets both alluvial mineralisation and Early Devonian
mesothermal quartz-gold vein deposits and identifies opportunities
for short-term historic mine dump retreatment for gold (Table
13.1), with associated industrial mineral production as a
by-product. Snowden considers that there is geological and
historical evidence to support this view.
Mesothermal veins are typical of Victoria and vary widely in
style and metallogenesis (Figure 13.4). Quartz veins may extend for
several kilometres but are economically mineralised at discrete
intervals, termed "shoots".
These veins are found throughout the western part of Central
Victoria, from the Moyston Fault to the Mt William Fault, known as
the Stawell and Bendigo zones (Figure 8.2 and Figure 8.4). They
represent deeper mineralisation than the Middle Devonian (380 Ma)
epizonal mineralisation, found largely east of the Mt William Fault
(the Melbourne Zone, refer Section 8.1 above), with the exception
of the Fosterville mine, amongst others.
Victorian mesothermal gold mineralisation is confined to vein
selvedge contacts as a result of the formation depth and
physico-chemical constraints. Gold precipitation often occurs as
coarse grains or nuggets, which are formed where the host rock has
a reducing chemical nature, such as carbon rich slates, causing the
gold to precipitate en masse.
Table 13.1Avoca Exploration Targets
Volume (Mm3) Grade Commodity Comments
From To From To
0.20 0.25 0.50 g/m3 1.50 g/m3 Au Homebush dumps
10 20 0.14 g/m3 0.20 g/m3 Au Avoca alluvials, 1930s, New Pyrenees resource estimate
0.1 0.5 Saleable raw material Homebush dumps, estimated volumes
Tonnage (Mt)
0.03 0.5 10 g/t 30 g/t Au Avoca primary mineralisation, considering past production and identified veining
13.1.1Avoca secondary mineralisation
Avoca waste dump project
Currawong considers there to be potential for short term cash
flow from retreatment for gold of the EL5387 historic mining dumps
and sale of by-products from this activity as industrial
minerals:
* The Homebush deep lead system mines were worked for many years
and there remain large waste dumps on each site, suitable for gold
production, with by-products of gravel and sand. Inspection of some
of these dumps shows large sections of quartz cobbles and boulders
previously screened out during processing. Many of these large
waste dumps throughout Victoria retain economic gold grades and
have been successfully reprocessed for gold at various times in the
20th century
* Recent enquiries by Currawong of nearby concrete producers
indicate a market for sand and gravel for building and construction
purposes, particularly in the city of Ballarat, about 60 km from
Avoca.
Currawong's 2015 statutory Annual Report to the GSV describes a
resource estimation exercise undertaken in 2014/2015 on the five
dumps present at Homebush.
Surface auger drilling was carried out and a database created.
An electronic wireframe was developed for each deposit, based on
the drilling and extended to mapped dump extents. These wireframes
were then used to create a block model and a resource estimate was
generated for both the uncut and top-cut gold assays.
Snowden does not consider that the result of this exercise
(Table 13.2) comprises a Mineral Resource estimate that in any way
complies with the guidelines of the JORC Code, but it does provide
basis for the generation of an Exploration Target. Snowden
considers that Currawong's results support an Exploration Target of
between 200,000 and 250,000 BCM of treatable material at a grade of
between 0.5 g/m3 and 1.5 g/m3 (Table 13.1).
Further work is required in relation to bulk sampling to inform
a Resource estimate. Snowden considers that an appropriate means of
informing a Resource estimate would be to process a suitable number
of samples of known volume through a gravity test plant and derive
grades expressed in grams per cubic metre, as is the practice with
alluvial deposits. Consideration should be given to the use of a
"Ditch Witch" excavator to sample the dumps in a controlled manner,
cutting sections through the dumps at appropriate intervals.
Snowden recommends that the dump volume be professionally
surveyed.
Table 13.2Currawong Homebush dumps sampling results
Deposit Volume (BCM) Au (ppm)
Golden Lake 9,900 0.74
Golden Lake East 5,950 1.37
New North Homebush 80,550 0.27
Working Miners 67,450 0.31
Working Miners United 56,200 0.07
Total 220,050 0.28
MGA proposes to assess these waste dumps with physical and
chemical tests to determine suitability for industrial use and/or
gold production. Currawong has previously investigated a simple
washing plant, with a possible cyanide section to treat fine
material, appropriate to produce the various sized by-products and
gold (refer Section 15 below).
Avoca alluvial mineralisation
Historical alluvial gold production at Avoca is reportedly in
the order of 740,000 ounces and the Avoca Lead has contributed a
large portion of this production. MGA considers that for an area
that has had such extensive alluvial gold production and relatively
little drilling, further exploration is appropriate.
At the Working Miners Group, three neighbouring mines produced
102,000 ounces from the Homebush Lead. The Homebush Lead was
targeted further downstream by two companies who both failed to
sink a production shaft to target depth, following extensive
drilling. Historical drilling identified a large gold structural
"trap" or sump, where several buried gullies flow into a local
basement depression or ancient lake (refer Section 8.3 above).
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Currawong considers that this ancient lake has a potential area
of 500 ha. Snowden considers that there is geological and
historical evidence to support this view, but cautions that it can
be difficult to define Mineral Resources and Ore Reserves of this
nature under the JORC Code.
Gutter gradient or slope is a key factor in collection of
alluvial gold. Steeper sloped gutters have historically returned
better gold grades because of the natural concentrating process and
MGA considers that targeting of steeper gutters is attractive
(Figure 13.1). Gradients are established by drilling as well as
geophysical techniques such as seismic, GPR and resistivity.
Figure 13.1 Victorian basement gutter gradient against grade
[SEE REPORT]
Currawong has devised an exploration strategy such that a
combination of GPR or shallow three-dimensional (3D) seismic
geophysics will identify alluvial gutters and large diameter
percussion/aircore drilling is expected to establish the location
of potentially economic gold deposits. Previous, untargeted probe
drilling has traversed the valleys searching for gutters or leads
and much effort has been expended in identifying the location of
the gutter rather than sampling the gutter itself.
Currawong has developed alluvial gold models through research of
historic Victorian mining activity, incorporating local basement
downstream gradients and valley widths. This effort has identified
the following:
* Steeper basement floor gradients return better gold grades
than flatter sections.
* Narrow and more defined gutters return better gold grades than
broad and flat basement zones.
* Modelling of the buried basement topography by geophysical
techniques, such as GPR and shallow seismic refraction profiling,
in 3D or 2D, results in adequate target definition for drilling. An
example of a GPR traverse section generated by explorers elsewhere
is presented in Figure 13.2.
Figure 13.2 Typical GPR section[SEE REPORT]
Currawong has reviewed historic and current mining practices and
concludes that:
* Strip mining is more expensive than dredging, but is more
selective, being visual and specifically targets the ore zone.
Strip mining processes only that which is determined to be ore.
* Dredging processes all of the material mined, facilitated by
pre-stripping overburden and is therefore better suited to thicker
sequences of auriferous gravels. Dredging mines blind and there is
potential to lose mineralisation at the bedrock interface if the
bedrock is undulating or jagged.
Currawong considers that each technique has a potential
application at Avoca, subject to the successful implementation of
the exploration strategy devised by Currawong. Snowden concurs with
this view.
1930s bucket-wheel dredges were prone to mechanical breakdown
and high maintenance. Modern dredges are of a suction or cutter
suction type, which have less moving parts and rely on large pumps
to mobilise sand and gravel into the floating plant.
Suction dredge sand mining is applied to mineral sand mines in
Victoria (Figure 13.3) and is a known technology. In Figure 13.3,
the mine is operating to the left and waste material is placed to
the right, with mining progressing to the left. The suction dredge
is floating on the far left, and this pumps ore slurry to a
trailing barge for separation. Progressive rehabilitation can be
seen in the right of Figure 13.3.
Figure 13.3 Mineral sand mining operation in north-western
Victoria[SEE REPORT]
13.1.2Avoca primary mineralisation
Avoca primary mineralisation is associated with large and medium
scale faults which have been mineralised by Early Devonian
quartz-carbonate-gold veins (Figure 13.4, "Redbank" mineralisation)
proximal to the north striking Avoca Fault (refer Section 8.1
above).
At Percydale, immediately west of the tenement, the quartz veins
are moderately rich in pyrite-pyrrhotite-galena-chalcopyrite and
sphalerite and Currawong observes that gold grades generally
improve with sulphide content. Currawong considers that this is
applicable to EL5387 and provides a geochemical means of target
definition.
Later granite intrusives introduced base metals such as bismuth,
tellurium and tungsten and overprints the earlier gold
mineralisation. Currawong considers that polymetallic type deposits
generated in this way represent further potential for exploration,
such as those historically identified within EL5387 at Surprise and
Henry's Hill.
Currawong identifies more than 20 hard rock gold-quartz
prospects within EL5387, none of which (except Surprise, refer
Section 10.1 above) have been drilled. Many of the quartz veins
show lengths greater than 1,000 m as well as widths of 2 m to 10 m.
MGA proposes to target these types of deposits as open pit or high
grade underground projects. Snowden concurs with this view.
13.2Bailieston
Currawong has targeted epizonal or epithermal gold
mineralisation of the Melbourne Zone (Table 13.3). This forms at
lower confining lithostatic pressures and allows brecciation of the
host rock and better permeation of the gold rich hydrothermal
fluids into the host. Snowden concurs with this view.
Table 13.3Bailieston Exploration Target
Tonnage (Mt) Grade Commodity Comments
From To From To
1.0 5.0 1.0 g/t 4.0 g/t Au Extrapolation of recent Bailieston and operating Fosterville and Costerfield mines (refer Section
11.2 above), considering EL5387 "Carlin style" geology and structural extensions
The same lithological-structural characteristics apply as for
the flysch type host rocks, but at a lower greenschist or
prehnite-pumpellyite metamorphic grade, which has allowed the
sandstones to remain more permeable. When mineralised, the
sandstones form silica saturated quartzites and often have
disseminated auriferous pyrite. Silicate alteration assemblages are
more widely spread around the quartz veins, in the form of
muscovite(sericite)-chlorite-ankerite/volcanic, while sulphide vein
assemblages are pyrite-arsenopyrite-stibnite.
Gold mineralisation zones may be quartz vein poor and may occur
solely as silicification, sericitisation and disseminated pyrite.
This mineral assemblage and metallogenesis is similar to the
"Carlin style" large scale gold deposits of Nevada, USA and can be
subtle and overlooked in the field. Past explorers were not
searching for these types of low grade large scale deposits. MGA
considers this to be an attractive, high priority Exploration
Target. Snowden concurs with this view.
Figure 13.4 Victorian quartz vein mineralisation
[SEE REPORT]
13.2.1Bailieston "Carlin style" project
Fine grained disseminated gold has been recently mined in
Victoria from silicified and quartz veined sediments. Currawong
considers that this mineralisation is geologically similar to the
economically significant "Carlin style" of epithermal gold
mineralisation, in Nevada, USA.
These modern Central Victorian open cut mines utilised heap
leach techniques to process oxide ore and include Fosterville,
Heathcote, Costerfield (part of the Redcastle structural corridor),
Nagambie and Bailieston, immediately north of EL5433 (Figure 8.6).
These structures are considered to be mineralised by the same
underlying Strathbogie Mid-Devonian granitic intrusive complex
(Figure 13.5).
Figure 13.5 Central Victorian disseminated gold mineralisation
(schematic section)
[SEE REPORT]
The Fosterville mine has continued its operations underground,
processing sulphide ore with a flotation bacterial oxidation
cyanide-in-pulp (CIP) plant. On 2 February 2016, Newmarket Gold
announced that Fosterville has produced 1 Moz over 11 years'
continuous operation. Newmarket reported hard rock Mineral
Resources of 2.1 Moz (as at 31 December 2015).
Fosterville is located in the Ordovician Bendigo Zone, but the
mineralisation has been established to be part of the dominant
epithermal regime of the Melbourne Zone that overlaps the Bendigo
Zone (refer Section 8.1 above).
EL5433 lies within the Melbourne Zone (refer Section 8.1) and
Currawong considers that the gold-arsenopyrite-stibnite mineral
occurrences are similar structurally and geologically to the
Fosterville setting. The subtle but recognisable alteration
presents an opportunity to identify similar deposits through
structure, geochemistry and alteration mapping.
Within EL5433, MGA proposes to further examine the:
* Immediate targets established in Section 7.2.2 above
* Extensions of the Cherry Tree Anticline toward and including
Mitchellstown
* Black Cat Fault.
Snowden endorses this approach.
14MGA PROPOSED EXPLORATION PROGRAM
MGA's strategy is to rank the projects according to the
likelihood of preliminary cash flow and initially focus its
resources on these areas, while simultaneously progressing those
areas that present more substantial targets at an appropriate
pace.
MGA proposes that resource definition at Avoca's Homebush dumps
be the first priority, with Avoca preliminary regional surveys to
be concluded thereafter. Trenching or drilling of some prospects at
Avoca (No. 2 Creek), Bailieston (HR3 and Black Cat) is contemplated
and further prospect assessment and target generation will occur,
with numerous prospects to be assessed, some of which have been
discussed in this report.
The Homebush resource estimation will require metallurgical,
engineering and market studies to support a feasibility study. MGA
proposes that these be handled by a local mining engineering
consultancy. Snowden endorses this approach.
14.1Avoca
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MGA proposes to examine the Homebush dumps as a remnant gold
extraction project, with potential for commercial sale of gravel
and sand by-products. Currawong has undertaken a preliminary
examination of this concept and considers that it offers potential
low capital cost and rapid development. Besides the Homebush dumps,
MGA considers that the No. 2 Creek alluvial gold deposit presents
the most immediate gold target. Currawong has contemplated drilling
this using the ODEX drilling system, which is considered
appropriate to return a sample of suitable volume for testing.
Snowden endorses this approach and recommends a concurrent
prospect-scale geochemical assessment of the various hard rock
targets. Follow-up sampling may occur to further refine the results
of the first phase, with prospects that return positive results
then being ready for preliminary drilling.
14.2Bailieston
MGA proposes to initially examine the Byron and Black Cat
prospects for potential as open cut gold operations. These projects
have returned positive results to date and the Byron-Maori
structures contain identified high grade gold mineralisation which
requires definition through drilling.
MGA considers that these prospects offer potential low capital
cost development through utilisation of existing contract mining
and toll treatment facilities. MGA proposes to concurrently explore
the Dan Genders and Cherry Tree areas. Success at these prospects
may present a stand-alone mining and processing operation.
Other known hard rock prospects will concurrently be
geochemically and geologically mapped, particularly in the Cherry
Tree Anticline/volcanic corridor. Positive preliminary results may
be followed up with scout drilling, particularly on strike to the
Cherry Tree-Bailieston known workings.
15AVOCA DUMPS CONCEPT STUDY
Currawong has conducted preliminary examinations of the Avoca
historic mining dumps, to assess the economics of extracting
remnant gold mineralisation and in developing an Exploration Target
(refer Section 13.1 above). Currawong considers that the gravel and
sand by-product of gold extraction represents a potential source of
saleable construction material.
Snowden considers that this examination approaches a "Scoping
Study", as defined by the JORC Code and indicates a positive
economic return under the assumed conditions.
Snowden cautions that the results of this study are preliminary
only and do not present absolute economic viability or return.
15.1Homebush dumps
MGA proposes to initially examine the dumps present at Homebush
group of mines where Currawong's work indicates approximately
220,000 m3 of material (refer Section 13.1 above). The dumps
include the Golden Lake, Working Miners, Working Miners United,
Working Miners No. 2 and New North Homebush mines, all being less
than 1 km apart.
Preliminary sampling by Currawong indicates the presence of
potentially economic gold and commercially saleable construction
materials.
Currawong conducted sieve tests on material from four separate
dumps (Figure 15.1), weighing and assaying each size fraction. Dump
volumes have been geometrically estimated from tape and compass
survey and require formal survey, but Snowden considers the
approach to be appropriate for a preliminary study.
Snowden cautions that these tests are preliminary only and do
not incorporate the considerations of the JORC Code, Table 1. The
test results indicate the possible presence of economic material.
Currawong has not yet performed gravity gold recovery tests and
assumes a dry weight density of 1.5 t/m3.
Figure 15.1 Screened Homebush dump quartz[SEE REPORT]
Currawong identifies in the order of 0.33 Mt of auriferous
gravelly sand that its most recent work indicates to have an
average grade of 0.28 g/t Au (Table 13.2). Currawong has previously
performed sieve tests which indicate that an average of 45% of the
sieved sand passes 600 µm.
Table 15.1Currawong Homebush dump preliminary sampling
Quantity Comments
Volume of material (Mm3) 0.22 Currawong estimate
Tonnage of material (Mt) 0.33 Assumes SG of 1.5
Indicative Au grade (g/t) 0.28 Average grade of material
sampled from five dumps
Indicative % passing 600 µm 45 Based on preliminary
investigations only
The silicon content of screened and washed >5 mm material was
determined by total acid digest and the four gravelly sand dumps
tested yielded silica assays of >98% SiO2. Currawong
consequently considers that a screening plant will return a product
that is suitable for commercial sale.
Table 15.2Indicative Homebush dump silica assays and
tonnages
Dump location SiO2% Indicative tonnage
Working Miners United 99.45 84,000
New North Homebush 99.48 120,000
Working Miners 98.85 100,000
Golden Lake 99.34 15,000
15.1.1Processing concept
Currawong has investigated establishing a mobile gravel washing
and screening plant at the Homebush dump site, utilising water from
existing mineshafts as process water. Such plants are manufactured
in Australia and are readily available new or second-hand.
Investigations indicate capital cost of between A$50,000 and
A$200,000, depending on size and condition.
Figure 15.2 Commercial gravel washing plant[SEE REPORT]
Currawong has investigated the local gravel market and
established a potentially significant requirement in the nearby
city of Ballarat (refer Section 13.1 above) and considers that
various sized screened products can be produced to satisfy market
demands. Preliminary investigations indicate that sand suitable for
concrete with sized gravel aggregate bring a premium to un-sized
material.
Currawong has provisionally assumed A$250,000 capital to
establish a sand washing operation, including water supply and
waste storage. Environmental considerations are at a conceptual
stage, with recognition that slurry dams are required for waste
storage and water recycling.
15.1.2Gravity and CIP processing
Currawong has investigated CIP processing of auriferous fine
material (<600 µm) and identified a commercially-produced,
modular 25 tonnes per hour (t/hr) CIP plant. The specifications for
this unit have been used in its examination of the project, with
local suppliers of CIP equipment claiming construction of
comparable plants for in the order of A$1 million.
Manufacturer specifications of the modular plant indicate that
75,000 tonnes of <600 µm dump material could be processed in
around six months, allowing a CIP residence time of 12 hours.
Snowden cautions that no metallurgical recovery testwork has
been undertaken to date and revenue from gold recovery has been
excluded from the base case of the Currawong concept study, which
considers sale of gravel products only.
MGA will focus its initial efforts on modern and efficient gold
gravity recovery techniques in preference to a commitment to more
capital and operating cost intensive CIP techniques. Snowden
supports this approach.
15.2Snowden commentary
In relation to gold production from the Avoca dumps and
irrespective of construction material potential, Snowden advises
that a suitable strategy would be to:
1) Professionally survey the dump volumes.
2) Bulk sample the dumps for gold recovery. Snowden's experience
with alluvial projects (which are broadly comparable to the dumps)
has been to collect a suitable number of samples of known volume
from regularly and appropriately spaced sections. Snowden
recommends use of a "Ditch Witch" or small excavator. The number of
samples taken is dependent on the variability identified in the
dump, but various nomograms have been published that can assist in
informing the initial sampling campaign.
3) Process the samples through a pilot gravity wet separation
plant. Snowden's experience with such plants has been with
trailer-mounted units comprising a small grizzly feeding a trommel,
two jigs and a small Knelsen concentrator, all in series (Figure
15.3). This arrangement is capable of collecting any commercially
meaningful gold and is calibrated using lead shot. This plant is
capable of commercial production.
4) The above sampling exercise is, in Snowden's opinion,
suitable for informing a Mineral Resource estimate, if performed in
a disciplined manner. Snowden strongly recommends that any Mineral
Resource be estimated by a suitably qualified specialist Resource
Geologist and suitable parameters be identified to express the
Mineral Resource as in-situ grams per cubic metre.
Figure 15.3 Gravity test plant[SEE REPORT]
16RECOMMENDATIONS AND CONCLUSIONS
16.1Conclusions
Snowden concludes that MGA has agreed to acquire prospective
exploration tenements and projects in Australia and that these
tenements are prospective for gold.
Snowden considers the projects to be at an early stage of
exploration and that their prospectivity is identified through the
geology of the projects themselves, indicative exploration results
from previous explorers and the presence of significant
mineralisation that has been commercially exploited historically or
currently within the tenement areas themselves or on adjacent
properties.
MGA's strategy is focused on identifying mineralisation that can
be economically exploited in the short term, to provide funding for
progress on longer-term opportunities. Snowden notes the presence
of suitable infrastructure that could be made available, by
arrangement, to advance these short-term projects.
16.2Recommendations
Snowden recommends that MGA continues to develop a coherent
exploration strategy for the projects.
Snowden further considers that the reprocessing for gold of
historic mine dumps in Victoria presents an obvious source of
short-term cash flow and recommends that MGA devote appropriate
resources to obtaining the necessary licences and metallurgical
testwork to progress this.
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Snowden recommends that any exploration activities undertaken by
MGA be carried out in accordance with an appropriate reporting
code, the JORC Code seeming the most applicable.
18JORC CODE TABLE 1 - REPORTING OF EXPLORATION RESULTS
Snowden has completed the relevant section of Table 1 of the
JORC Code and considers that the other sections are not relevant,
due to the preliminary nature of the projects in question.
The Competent Person for the Exploration Targets described in
this CPR is Mr Jeremy Peters, FAusIMM CP (Min, Geo), a full-time
employee of Snowden Mining Industry Consultants, of Perth, Western
Australia.
Table 18.1JORC Code Table 1 - Reporting of exploration
results
Criteria Comment
Mineral tenement and The status of Currawong's projects
land tenure status is clearly explained in Section
4 of the Competent Person's Report.
Exploration done by other parties Exploration by other parties
on the projects
in question is sketchy
and this has
been described in Sections
7, 8, 9 and
10 of the Competent
Person's Report.
Geology The geology of the projects has
been described in in Sections
7, 8 and 10 of the Competent
Person's Report.
Drillhole information Drilling by other parties
is sketchy
and this has been explained
and described in Section 9 of
the Competent Person's Report.
Data aggregation methods Data has not been aggregated and
is reported as it appears in
the source reports,
with appropriate
cautionary language.
Relationship between Not relevant, with consideration of
mineralisation data aggregation comments above.
widths and intercept lengths
Diagrams Snowden considers that the diagrams
adequately illustrate
the concepts presented
in the text.
Balanced reporting Snowden has included
suitable cautionary
language at appropriate
locations in the Competent
Person's Report.
Other substantive exploration data Snowden has appropriately
referenced
sources of data and opinions.
Further work Snowden has made recommendations
for further work in
Section 14 of the Competent
Person's Report.
ABOUT ECR
ECR is a mineral exploration and development company with 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.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
ECR Minerals plc Tel: +44 (0)20 7929 1010
William (Bill) Howell, Non-Executive Chairman
Stephen Clayson, Director & CEO
Richard (Dick) Watts, 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
Alteration A physical or chemical change to original rock minerals.
Alluvial Sediment deposited by rivers and streams.
Anticline A fold or fold system in geological strata in the form of an arch.
Arsenopyrite An iron arsenic sulphide, FeAsS.
Avoca Lead A particular deep lead in the Avoca area; see definition of "deep lead" below.
Basalt Fine-grained volcanic igneous rock composed primarily of plagioclase and pyroxene.
Breccia A coarse-grained rock composed of broken, angular
rock fragments in a fine-grained matrix.
Carbonate A type of mineral composed of various elements combined
with carbon and oxygen in the form CO3.
Deep lead Buried auriferous river bed deposits that usually occur as gutters
cut into the bedrock and are known as "deep leads".
Dip Geological measurement - the angle at which bedding
or a structure is inclined from the horizontal.
Dyke A sheet like body of igneous rock which cuts across the
bedding or structural planes of the host rock.
Epithermal Mineralisation produced by near surface hydrothermal fluids related to igneous
activity; originally defined as having formed in the range 50-300°C.
Exploration Target An Exploration Target is a statement or estimate
of the exploration potential of a mineral
deposit in a defined geological setting where the statement or estimate, quoted
as a range of tonnes and a range of grade (or quality), relates to mineralisation for
which there has been insufficient exploration to estimate a Mineral Resource.
Fault A fracture plane in the rock which may displace rock units.
Footwall Zone or rock below a geological feature.
Galena Lead sulphide.
Geochemical The study of abundance of chemical elements in overburden or rock.
Granite Coarse-grained, felsic igneous plutonic rock composed
primarily of feldspar, plagioclase and quartz.
g/t Grammes per tonne.
Hanging wall Zone or rock above a geological feature.
Hydrothermal processes The name given to any processes associated with igneous
activity which involve heated or superheated water.
JORC Code Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves.
Limonite The omnibus term used for a range of mixtures of
hydrated iron oxides and iron hydroxides.
Mesothermal Mesothermal gold deposits are formed from hot water that precipitates gold under
high temperatures and pressure, generally at great depths in the earth's crust.
Metamorphism Change in minerals and/or texture due to changes in
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temperature and pressure over geological time.
Mineralisation This term is used almost exclusively for the introduction
of ore minerals and gangue minerals
into pre-existing rocks whether by veins, replacement, or in a disseminated fashion.
Mineral Reserve An Ore Reserve is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting
materials and allowances for losses, which may occur when
the material is mined or extracted and is defined
by studies at Pre-Feasibility or Feasibility level as appropriate
that include application of Modifying Factors.
Such studies demonstrate that, at the time of reporting,
extraction could reasonably be justified.
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.
Open pit A mine working or excavation open to the surface.
Orogeny A period of mountain building.
Outcrop A rock exposure.
Oxidised Decomposition near surface by exposure to the atmosphere and water.
ppb Parts per billion.
Primary deposit Valuable minerals deposited during the original period or periods of mineralisation,
as opposed to those deposited as a result of alteration or weathering.
Pyrite An iron sulphide mineral (FeS2).
ppm Parts per million.
Quartz The mineral silicon dioxide (SiO2).
Reverse circulation (RC) drilling Commonly percussive drilling method in which cuttings are raised to
surface by a stream of compressed air inside the drill rods.
Sedimentary rocks Pertaining to rocks formed from particles of rock or minerals
deposited from suspension in water, wind or ice.
Sericite An alternation description term for fine grained white
micas such as muscovite mica or paragonite mica.
Shale A fine grained sedimentary rock with graphite (carbon).
Sometimes referred to as "black shale".
Silicification The process whereby silica is introduced into a non-siliceous rock either
by the filling of pore spaces or by replacement of existing minerals.
Silurian The geological period extended from 435 to 395 million
years ago, a duration of 40 million years.
Shear zone A plane (up to tens of metres wide) along which
ductile deformation (shearing) has occurred.
Soil anomaly Zone of soils that contain anomalous or above ordinary concentrations of an element.
Stockwork A network of veins.
Strike The direction of bearing of a bed or layer of rock in the horizontal plane.
Sulphides A type of mineral composed of metal or metals combined with sulphur.
Sulphide disseminations Where sulphide minerals are disseminated or dispersed throughout a rock.
Syncline A basin shaped fold in which rock are younging upwards.
Stratigraphic unit Layered sedimentary or metamorphic rocks, especially their
relative ages and correlation between different areas.
Trenches Linear excavations typically used by geologists
to expose rock beneath shallow overburden.
Turbidite The sedimentary deposit of a turbidity current, typically showing graded
bedding and sedimentary structures on the undersides of the sandstones.
Vein A relatively thin (millimetres up to 10 m scale) sheet of quartz or other
minerals which fill a fracture cutting across pre-existing rocks.
Weathering The process by which rocks are broken down and decomposed by the
action of wind, rain, changes in temperature, plants and bacteria.
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