A Question and Answer session with ECR Minerals PLC
The TMS Team catch up with ECR Minerals Managing Director Mike Whitlow after this weeks exciting news and discuss Antimony, Blue Mountain, Lolworth, Tambo, Maximus and of course…the tax losses.
Interviewer – Throughout the day, I’ve come across a number of questions that have been circulating, and I truly appreciate your willingness to take them on, even if they come in no particular order. Apologies in advance for the somewhat scattered nature of how they’re being presented—I’m simply passing them along as I’ve received or noted them. With that said, here’s the first one to get us started ; It was suggested that BM would be producing Q2. How likely is Q2 production now? Will we start on 100 ounces per month and build from there?
Mike – 100 ounces per month equates to around $300,000 in gross revenue, which is not realistic immediately and was never presented this way, it was presented as guidance of where we thought we could be towards the end of the year. We’ve stated our intention to begin trial mining in early summer under advanced exploration permissions. A full mining licence is not required for this stage, and we are permitted to process up to 1,000 tonnes of ore without additional approvals under advanced exploration. This remains our target and intention for Q2, however we expect to ramp up and potentially expand on the guided $3.6m p/y. With more than one wash plant, the production figures could grow significantly, but lets take this one step at a time as suggested.
Interviewer – Tax loss sale generated a lot of interest amongst SHs, and it looked like you had made real progress where previous execs failed. Are there genuinely interested parties still? What is your expectation of negotiating a deal in the near future? What do you think that deal would look like?
Mike – Yes, several new parties have entered the data room, and discussions are ongoing. We’ve made significant progress, confirming the sale is viable and securing an independent valuation, validated by Argonaut and a tax advisor. We withdrew from a prior deal (Octo) as it would have stalled our Antimony project, and the other party lacked a firm completion date. We’ve since shifted focus to other parties while advancing the Antimony opportunity.
Interviewer – Over the last six months, there have been a number of pivots in direction. Helium seemed to be an option when helium was popular. Now it’s antimony. SHs are interested to know if there is a genuine intention to pursue one of these options. What are the economics of these deals and why should SHs be excited given we are still operating on multiple fronts?
Mike – We made it clear we wouldn’t pursue any deal the market didn’t support. When it was evident the market wasn’t interested, even at a modest premium, we held to our word and stepped away. That said, the asset was revenue-generating, and in the current market environment, generating revenue is more critical than ever. Look, when we get to being cash flow positive, do we look to acquire gold assets (?) in say Australia, Canada or the US then when maybe markets are booming or now when we see huge opportunities?
Interviewer – The board are focussing on so many different projects. Would it be better to focus on one and see it through?
Mike – We do have multiple opportunities, and placing all our hopes on a single project doesn’t feel like a prudent strategy. However, we have refined our approach, prioritising spend based on a ranked system, focusing on assets that can generate revenue or have the potential to significantly impact the share price, feels right.
Interviewer – Maximus – it’s well known that the execs have some connection and possibly shareholding with this asset. There is also a history of failed deals with this asset. Why do you perceive this to be a good transaction for shareholders? What is the situation with the license? What are the economics? What is the roadmap to production or sale, and how much will it cost to get there?
Mike – Any potential conflict under AIM rules would be disclosed at the appropriate time. There’s no material interest influencing this decision. The asset was previously intended to list at a significantly higher valuation than the one we’re accessing. If it doesn’t progress satisfactorily, we’ll walk away. If it continues to look compelling, we’ll announce our position as discussions develop.
Small-cap Copper, gold, and zinc markets are unlikely to stay down forever. The deal was highlighted at 0.33p, which is a notable premium to our current share price, and the shares are locked in for one year.
We can update the CPR for a relatively modest cost. Advancing to a full resource will cost more, but it’s within ECR’s reach and doesn’t need to be completed all at once. We can proceed at a manageable pace as the value of our asset exposure builds.
Interviewer – Creswick Gold Project? What’s happening?
Mike – A third party has shown strong interest in the asset and our 2024 drilling results. We’ve been deliberate, sticking to our strategy of ranking and progressing the assets the market supports. Our Head Geo, AJ, personally took the interested party on-site following a few Zoom meetings with them, Mike, and Mike P. It’s not yet RNS-worthy, but when the time is right, we’ll update the market. The interested party had just completed a transaction of a size.
If we update too much, we are saying too much; if we are not updating enough, we are not saying enough…
Interviewer – Tambo Gold Project – what’s happening? Timelines?
Mike – We’ll follow up on Tambo and provide clearer timelines as funding allows. We’re pleased with our findings so far.
Interviewer – Lolworth Range Project (three exploration permits) what’s happening? Timelines?
Mike – As outlined in our latest release, we plan to run a fairly extensive shallow drilling campaign during Q2–Q3. This may include 50–100 holes using a 4×4-mounted rig we’ve secured. Focus will be around Gorge Creek and GC West, where results have been particularly encouraging.
Interviewer – 25% interest in the Danglay Gold Project, Philippines – what’s happening? Dead?
Mike – This asset was written down in our accounts. I’ve had little to no involvement with it since joining. It’s a legacy issue from prior management.
Interviewer – Royalty on the SLM Gold Project, Argentina – Should we get excited? Do we anticipate further royalties anytime soon?
Mike – We do have a royalty agreement in place, but the operator previously informed us operations had ceased. We’ll notify the market if that changes.
Interviewer – Leviathan gold – core prospecting were completing drilling and supposedly a resource estimate by end of Jan according to their agreement. Do you have any further news on this asset? Have core prospecting finished? Do we have an idea of what a resource estimate could look like?
Mike – The agreement with Core Prospecting gives them until April 2025. We’ll update the market once the resource report is ready. Their qualification for the enlarged interest depends on this report being completed. We have a capped opportunity of earning up to $1m on resource and $1m on production.
Interviewer – They have a deal in place to buy the asset out – do you know if ECR will receive royalties upfront if that deal is completed? Or is the royalty passed on to core prospecting?
Mike – We’ll provide an update when we’re in a position to do so.
Interviewer – Mike, thank you for your time on these questions. I appreciate you are in a very busy period at the moment and it really does look an exciting time to be a shareholder.
TMS recently covered the Maximus Minerals deal in more detail : A premium transformational acquisition for ECR to maximise shareholder value with Maximus Minerals
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