ECR Minerals (ECR ) has met with and identified a proposed offtake partner for gold production from its Raglan gold project in Australia.
Members of ECR's board of directors have visited the proposed offtake partner's processing and refining facility, engaged in discussions regarding commercial terms and operational processes and completed site-level due diligence.
Formal documentation and contractual agreements are now being progressed and should be finalised this month.
Separately, ECR has also completed an internal valuation assessment for insurance purposes of the plant, equipment and site infrastructure at the Raglan project. This process covered the wash plant, gold room, mobile mining fleet, power generation, camp facilities and associated infrastructure.
The replacement value, on a like-for-like basis, of the plant and equipment has been assessed at approximately A$1.9 million, materially exceeding the consideration paid by ECR for the Raglan project.
This is considered by the board to be further validation of the Raglan Project acquisition and demonstrates the quality of the Raglan Project's facilities.
"Identifying the proposed offtake partner and visiting their facility is an important step as the Raglan project's production plan is being implemented,” said ECR’s chairman.
“Detailed discussions and proposed terms have been discussed, and we expect to finalise the formal documentation this month. This provides confidence that there is a clear and established route to market for the Raglan project's gold. The insurance valuation of the inventory, plant and equipment has been equally encouraging. Having visited the site, I have seen first-hand the high quality of the operations and equipment. The fact that the replacement value is close to double what we paid reinforces the value embedded in the acquisition. Together, these developments further de-risk the Raglan project at exactly the right time. Despite recent volatility, gold prices remain at historically strong levels and with all infrastructure in place and commercial arrangements moving to being finalised, we believe that the Raglan project is well positioned to deliver early cashflow and support the continued build-out of ECR's Queensland portfolio."
View from Vox
Production is getting underway at Raglan and now ECR has a buyer for its product too. These are transformational times for ECR Minerals, one of London’s longest-standing explorers. The move to production at Raglan will likely be followed by production from Blue Mountain too, providing the company with a steady income stream for the first time.