Shares in ECR Minerals PLC (LON:ECR) eased on Wednesday as it revealed consultant Snowden had completed its competent person's report on the recently acquired Avoca and Bailieston gold projects in Australia.
As reported last month, the group's subsidiary Mercator Gold bought the two gold projects, which have the potential to generate near term revenue from processing historic dumps at Avoca.
In keeping with Snowden's recommendations, ECR said Mercator will continue to develop a careful exploration strategy for the properties, while prioritising short term cash flow from the proposed reprocessing of historical mine dumps at Avoca to produce gold, with saleable gravel and sand as by-product.
The report also noted the availability of suitable infrastucture to advance these short term projects.
Stephen Clayson, chief executive of ECR, noted that reprocessing of the Avoca dumps remained subject to the outcome of the necessary studies, and to the availability of the required permits, including a mining licence and that to apply for a mining licence, there must also be a resource estimate.
Both projects lie less than 200km from the Victorian state capital Melbourne, with good road access, and are in the major orogenic Lachlan Fold Belt (LFB).
"A further announcement regarding MGA’s immediate activities in relation to the Avoca and Bailieston projects will be made in the near future, once plans have been finalised," said Clayson.
The acquisition remains conditional on, among other things, the necessary Victorian government authorisations.
As consideration, ECR must pay up to A$250,000 worth of its shares, based on certain milestones being reached, and a net profits interest royalty of 20% in respect of mine dumps and 10% in respect of other deposits, capped at A$3.5mln.
ECR shares dropped 15% to 0.0213p in early deals.