ECR Minerals (LON:ECR) is contemplating a collaboration with Esperanza Resources that could satisfy the gold processing needs of its SLM project in Argentina.
The SLM project is in La Rioja province, where Esperanza has constructed a mineral processing plant that is in the process of being commissioned.
The plant was visited last week by Stephen Clayson, chief executive (CEO) of ECR, and a non-binding memorandum of understanding (MoU) was signed between Esperanza and Ochre that provides for the parties to hold discussions aimed at forming a joint venture or other commercial arrangement for the processing of ore from ECR’s licence areas by Esperanza.
The licence areas are actually owned by ECR's wholly-owned Argentinian subsidiary, Ochre Mining, and ECR cautioned that there is no certainty the MOU will lead to a formal agreement; as such, Ochre will continue to explore other potential processing options.
Notwithstanding the cautionary statement, the ECR directors believe the possibility of collaboration with Esperanza represents "a significant opportunity in the context of the company’s stated exploration strategy for the SLM project, which is to delineate multiple medium to high grade, low tonnage deposits suitable for advancement to production on a relatively low capital, near term basis". A further announcement will be made in due course, following the conclusion of discussions with Esperanza.
Ochre has been advised that the plant is targeting total processing capacity of 50 tonnes of ore per day by the end of year, though there is no guarantee that even if this target is achieved that capacity will be available to process ore from Ochre’s licence areas.
“It is encouraging to see the development of a modern processing plant close to Ochre’s gold prospects. The plant is not located immediately adjacent to any deposit and has good road access for the trucking of feed material from various sources," Clayson said.
Shares in ECR were down a shade at 0.123p from last night's close of 0.125p.