ECR is a mineral exploration and development company, incorporated in the UK.

ECR’s wholly owned Australian subsidiary Mercator Gold Australia (MGA) has agreed to acquire 100% ownership of the Avoca and Bailieston gold projects in Victoria, Australia. Mercator Gold Australia is estimated to have tax losses of approximately AUD 66M as at 30 June 2015, which may be available, subject to certain conditions (as described in ECR’s announcement dated 4 December 2014), to reduce MGA’s future taxable profits.

ECR has the right to earn a 50% interest in the Danglay epithermal gold project in the Philippines. Danglay is an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines. An NI43-101 technical report was completed in respect of the Danglay project in December 2015, and is available for download from ECR’s website.

ECR’s wholly owned subsidiary Ochre Mining has a 100% interest in the SLM gold project in La Rioja Province, Argentina. Exploration at SLM has focused on identifying small tonnage mesothermal gold deposits which may be suitable for relatively near term production.


ECR shares are listed on the AIM market of the London Stock Exchange with the symbol ECR.


COPPER FLAT PROJECT – A Former Producing Mine in a Secure Jurisdiction

On 12 August 2009, after two months of due diligence, Mercator acquired an exclusive option over a 100% interest in the Copper Flat copper-molybdenum-gold-silver project in New Mexico, USA.  Copper Flat is a former producing mine which management considers to be an advanced stage project that could be returned to production within a relatively short timeframe.

Historic Reserve & Infrastructure

Key infrastructure from previous mining operations remains in place at Copper Flat. A full pre-strip of the ore body has been completed, which along with the infrastructure established, represents a substantial proportion of the capital investment required to bring the project into production.

Extensive feasibility studies on the restart of production at Copper Flat were carried out during the 1980s by highly reputable technical consultants. The most recent Pincock, Allen & Holt study envisaged the mining of 5.8 million short tons of ore and two million short tons of waste annually for 11.6 years. In order to restart production, a suitable processing plant would need to be procured and commissioned.

The Copper Flat deposit has historical reserves of 45.5 million metric tons grading 0.45% Cu, 0.015% Mo, 0.15g/t Au and 2.25g/t Ag (cut-off grade 0.23% Cu), equivalent to 50.2 million short tons @ 0.45% Cu, 0.015% Mo, 0.14g/t Au and 2.04g/t Ag (cut-off grade 0.23% Cu).

The deposit appears to have excellent continuity and consistency of grade, with a low estimated stripping ratio of approximately 0.9:1, based on previous mining plans. A total of 181 reverse circulation and core drill holes have previously been completed (equating to approximately 39,000m) along with approximately 300m of underground drifting.

Detailed metallurgical test work has been completed and has consistently shown a recovery of 92% copper and the production of highly marketable concentrates with an average copper grade of 28%. These results were confirmed during actual production in 1982.

Preliminary Economic Analysis of the Restart of Production at Copper Flat

On the basis of current historic reserves and assuming prices of US$2/lb copper, US$10/lb molybdenum, US$900/ounces gold and US$13/ounces silver, the Copper Flat project has an NPV of US$117 million and an IRR of 24%.

Assuming prices of US$3/lb copper, US$10/lb molybdenum, US$900/ounces gold and US$13/ounces silver, the Copper Flat project has an NPV of US$348 million and an IRR of 45%.

These figures are based on an owner mining scenario, initial capital costs of US$115 million and a discount rate of 8%. The current price of copper is in excess of US$3/lb.

During the course of Mercator’s due diligence, it became apparent that the Copper Flat project, despite being very profitable at today’s copper prices, would became marginal should copper prices fall to approximately 50% of those currently prevailing (assuming an 11 year mine life at historic reserve grade and cut-off).

However with a modest increase in reserves (approximately 20%), the project would be very profitable at US$2/lb copper and still robust at US$1.50/lb copper.

Steps to Add Value to the Copper Flat Project

On the basis of the preliminary economic analysis outlined above, Mercator is seeking to add value to Copper Flat through the expansion of the project’s reserves by means of further drilling and through the acquisition of various government permits required for a restart of production. It is expected that the permitting process will take 20-36 months to complete, and the terms of Mercator’s option over the project are structured to reflect this timeframe.

An initial drilling programme due to commence during January 2010 will indicate whether an expansion of reserves is likely, and the documentation necessary to complete the permitting process is planned to be ready to submit to the relevant authorities in New Mexico by the end of 2010 or early in the first quarter of 2011.

During 2010, Mercator will consider its options for the financing of the project.

Terms of Mercator’s Option

Mercator acquired its option over the Copper Flat project for consideration of US$150,000. In order to exercise this option, Mercator may make payments to the vendors as follows: US$1 million by 14 February 2010; US$1.85 million by 14 August 2010; and US$7 million by 14 February 2011. All these payments are discretionary, and Mercator can elect not to proceed with the exercise of the option at any stage. The final payment may be deferred until 16 May 2011 for an additional payment of US$150,000. The vendors would retain a net smelter return (NSR) of 3.25%.