ECR Minerals agrees to assign it’s A$2m gold royalty to new owner of Timor project

ECR Minerals (ECR ) has consented to an assignment of the royalty interest that it holds over the Timor gold project in Australia, as part of a wider transaction that involves the sale of Timor by its owner Leviathan to Au Gold Corp. 

ECR retains a royalty interest of up to A$2 million over the Avoca and Timor licences in Victoria.

These royalty payments are linked to future resource estimates and gold production.

ECR's royalty interest over the Timor Gold project licence is being assigned by Leviathan Metals to Havelock Gold, a subsidiary of Au Gold Corp.

The royalty originates from ECR's 2020 sale of certain gold projects in Victoria through which ECR's wholly owned subsidiary, ECR Minerals (Australia) Pty Ltd, is entitled to receive A$1 per ounce of gold or gold-equivalent defined within a measured, indicated or inferred mineral resource estimate within the licences, capped at A$1 million, and A$1 per ounce of gold or gold equivalent produced from the licences, capped at A$ million.

Aside from providing consent for the assignment of the royalty, the company is not directly involved in the transaction. 

 "We consider that the Avoca and Timor royalty represents a potentially valuable legacy asset within ECR's portfolio which could deliver up to A$2 million to the company,” said Nick Tulloch, chairman of ECR Minerals.

“Importantly, this royalty sits alongside our core Australian portfolio and requires no further capital investment from ECR, meaning any future payments would represent a direct financial benefit to the company. With strong gold prices and renewed exploration interest in Victoria, we look forward to engaging with Havelock Gold to better understand their plans for the licence and the potential to unlock this value for our shareholders."

View from Vox

A timely reminder that ECR’s upside doesn’t derive only from its ongoing production and near-term production efforts at its alluvial projects. With gold at around US$5,000 an ounce, this royalty looks even more likely to deliver value into the company than it did in 2020.