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(Sharecast News) - ECR Minerals reported significant progress at its Blue Mountain Project in Queensland, Australia on Monday, where initial reconnaissance drilling had identified a potentially mineable gold-bearing zone.
The AIM-traded company also confirmed a short delay to drilling at its Lolworth Project, with operations now expected to begin in mid-August.
ECR said it was currently leasing a percussion drill rig that had been used to conduct shallow, rapid drilling across Blue Mountain, yielding positive indications of visible gold over an unmined area measuring approximately 200 metres by 27 metres and up to three metres deep.
Samples from the site were now being prepared for laboratory analysis, with the results to inform trenching design and further exploration.
Based on a project grade assumption of 0.6 grams of gold per bank cubic metre and a gold spot price of $3,290 per ounce, the company estimated potential in-situ gold value at over $1.1m for the area alone.
ECR said it was also assessing the use of higher-capacity wash plants, which could significantly increase monthly revenue potential.
A 25-tonne-per-hour plant could generate monthly revenues of AUD 544,000 (265,300), scaling up to over AUD 1.3m with a 60-tonne-per-hour plant, subject to water availability and permitting.
"Our decision to bring a drill rig onto the site has immediately paid off with our understanding of the Blue Mountain Project already considerably increased," said chairman Nick Tulloch.
"This has been an efficient and accurate means of making preparations for the location of trenches and is enabling us to map out the scale of the opportunity.
"Our findings to date continue to support our confidence in the Blue Mountain Project and its potential to be a very significant generator of revenue for ECR."
Due to extended work at Blue Mountain, ECR said drilling at the Lolworth Project had been delayed, but was expected to begin mid-August and conclude in early September.
The programme would target four locations with 40 to 80 metre drill holes, and ECR would explore the viability of applying alluvial mining methods similar to those at Blue Mountain.
Separately, ECR announced that 212.7 million previously allotted shares would be admitted to trading on AIM on 5 August, with total issued share capital remaining unchanged at 2.27 billion shares.
At 1246 BST, shares in ECR Minerals were up 9.5% at 0.22p.
Reporting by Josh White for Sharecast.com.