Shares in ECR Minerals (ECR) jumped by more than 20% after it announced the acquisition, from existing cash resources, of the Raglan gold project in Australia for A$1.01 million. 

The Raglan project includes a granted mining lease over approximately 300 acres and 2.9 kilometres of main creek systems, and includes a near-new 60 tonne per hour wash plant, gold room, water supply, camp, mobile mining fleet and supporting facilities.

ECR estimates that the second hand value of this equipment alone may be around the A$1.01 million purchase price.

These assets may also be redeployed to ECR's nearby and larger Blue Mountain project at a later date, which is expected to add long-term flexibility and value to ECR's broader alluvial mining operations in Queensland.

Raglan offers the prospect of nearer-term production for ECR, as well as exploration upside.

Bulk sampling during a previous site visit confirmed coarse nuggety gold and grades that may be consistent with ECR's Blue Mountain project, with potential for both further alluvial resources and a hard-rock source.

Raglan lies approximately 40 minutes west of Gladstone, Queensland, close to mechanical services and infrastructure. The lease has historically produced coarse, nuggety gold, and test pits from ECR's due diligence confirmed recoveries from both upper gravels and deeper bedrock wash.

Mining at the Raglan project to date has been largely small scale with several untested areas and depths within the property area.

ECR estimates that the cost of operations at the Raglan project, inclusive of diesel and personnel, would be around A$3,000 per day which, at the current gold price, would require production of only around 0.6 ounces per day to cover overheads.

In addition, ECR believes that the structure of its acquisition of Raglan should enable it to apply existing tax losses of some A$75 million against any profits generated from future production, meaning that operations are expected to be effectively tax-free. 

Raglan Resources also has A$1.2 million of tax losses which will likewise be expected to be applied against future profits.

Once the acquisition of the Raglan project has completed, ECR will look to start production in the new year. Preparations for this are already underway, initial mining locations are being determined and discussions have commenced with production partners.  

"Investors will be well aware of how important the Raglan project is for ECR,” said ECR's chairman, Nick Tulloch.  

“It is very literally a turnkey operation with a mining lease and all equipment in place. Our due diligence confirmed what we consider to be an economic mining plan as well as exploration upside. As a standalone asset, Raglan is an exciting project but its proximity to our Blue Mountain project further adds to its value.  As we conclude our plans to bring Blue Mountain into production, there will very likely be sharing between the two projects of the production team, plant and equipment and technical know-how. It is too early to talk about economies of scale, but we have no doubt that the joint operation of the two projects should lead to significant benefits for ECR. "We now expect to enter the new year with a clear and identified path to nearer-term revenue generation. We believe that 2026 will mark the transformation of ECR from an explorer into a production company."

 

View from Vox

 

Gold production now looms large for ECR as 2026 approaches and, with the gold price consolidated comfortably above US$4,200 an ounce, the timing couldn’t be better. The company has shown itself to be nimble in the past 12 months or so when it comes to deal-making. The next step will be to establish a track record of production.