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.

MERCATOR GOLD plc
(“Mercator Gold”, “Mercator” or “the Company”)

AIM: MCR

US OTC: MTGDY

 

LONDON: 20 JUNE 2007 - Mercator Gold Plc has finalised mining and metallurgical studies on its previously reported resources of Bluebird, Surprise, Prohibition and Vivian – Consols, all located in the Meekatharra region of Western Australia.

The Company is pleased to announce:

  • Probable reserves of 432,000 ounces of gold;
  • First production from the Surprise Open Pit scheduled late June 2007;
  • Yaloginda processing plant on track to treat initial ore 1 July 2007;
  • All key personnel to manage the Meekatharra Gold Operations have been sourced;
  • Mining contract awarded to Mining and Civil Australia.

 

Managing Director, Patrick Harford, commented:

“The Reserve base underpins our decision to recommence production at Meekatharra with 432,000oz of Reserves. In addition, the ongoing Resources to Reserve work currently being undertaken at a number of locations will further strengthen the company’s growth platform. We look forward to a truly profitable and sustainable future.”

 

Table 1

OPEN PIT PROBABLE RESERVES

TONNES

GRADE

OUNCES

Bluebird

1,461,000

2.53g/t

119,000

Surprise

827,000

2.35g/t

63,000

Subtotal

2,288,000

2.46g/t

182,000

UNDERGROUND PROBABLE RESERVES

     

Prohibition

1,372,000

4.06g/t

179,000

Vivian – Consols

233,000

9.54g/t

71,000

Subtotal

1,605,000

4.85g/t

250,000

TOTAL

   

432,000

 

Grade is grammes per tonne. Ounces are Troy ounces. Small numeric differences may occur due to number rounding. This applies throughout this release.

 

Table 2

CURRENT RESOURCE

INDICATED & INFERRED

TONNES

GRADE

OUNCES

Mudlode

(3.0 g/t cut-off)

446,000

5.46g/t

78,000

Fatts

(3.0 g/t cut-off)

180,000

3.65g/t

21,000

TOTALS

626,000

 

99,000

Note: Mudlode and Fatts remain in the Resource category pending further access and stope design.

MINING OPEN PIT

Surprise

The Surprise open pit lies within 800 metres of the Yaloginda Carbon in Leach (CIL) processing plant. Pit Optimisations were conducted on the resource models resulting in the pit being deepened from 55 metres to 120 metres.

Geomechanical studies were conducted by Coffey Mining to determine wall slope designs. As this open pit lies in close proximity to a major arterial highway, statutory requirements necessary to ensure wall stability integrity is maintained have resulted in a reduction of ounces mined from previously reported reserves.

A mining contract has been awarded to Mining and Civil Australia, which has mobilised a fleet of equipment ready to commence mining within the next few weeks subject to DOCEP (Department of Consumer and Employment Protection) approvals.

A grade control program has been completed for the first 30 metres and has returned positive variance to the reserve model.

 

Bluebird

The Bluebird open pit has been optimised to a total depth of 180 metres, which extends the existing pit 100 metres below floor. The proximity of Bluebird to the Yaloginda processing plant (less than 1,000 metres) and the proximity to ideal waste dump locations have had positive impacts on mining costs. Detailed geomechanical studies have been completed by Coffey Mining to determine wall slope design parameters, which become more critical with the open pit being extended a further 100 metres in depth.

Mining costs have been received from Mining and Civil Australia utilising larger, higher capacity earthmoving equipment for this larger open pit. The larger equipment reduces the unit mining costs, whilst ensuring the productivity rates required to meet the overall schedule.

 

Table 3

OPEN PIT PROBABLE RESERVES

TONNES

GRADE

OUNCES

Bluebird

1,461,000

2.53g/t

119,000

Surprise

827,000

2.35g/t

63,000

TOTAL

   

182,000

 

Mining Schedule

Open pit mining commences with Surprise. Low grade ore will be used first to build up gold inventory over the initial three-month period, followed by higher grade ore over the ensuing six months. Pre-stripping of the Bluebird open pit will commence once final approvals have been received from the statutory authorities (expected timing of three to four months). Bluebird ore would then be blended with Surprise to smooth monthly gold outputs.

Subject to the scheduling of the open pits, ore production from Bluebird and Surprise over an 18 month period will rise to an annualised gold output of 120,000ozs at an expected process rate of 1,250,000 tonnes per annum.

 

Mining Underground

The Prohibition orebody will be accessed and serviced by a 5.0m x 5.5m decline. The mining methods will be predominantly large mechanised sub level open stopes. Geomechanical studies of the rock types, conducted by Peter O’Brien and Associates have confirmed the methods proposed and identified the support mechanisms for decline and stope development.

Red Rock Engineering, a specialist underground mining consultant has provided all decline access and stope design, inclusive of schedules, operating and capital costs.

Prohibition lies within 250 metres of the Eastern line of lodes known as Vivian-Consols and Mudlode. These lodes were historically mined as narrow vein high grade orebodies. Access and services to these lodes will be shared with Prohibition.

Ventilation and second egress will be provided from an existing threecompartment shaft that lies within 400 metres of the Decline Portal.

Initial access will target Prohibition to 300 metres below surface and Vivian-Consols to 250 metres below surface.

Reserve development from the identified resources at Mudlode and Fatts will be notified following the completion of the detailed stope design presently being undertaken.

The Prohibition, Vivian - Consols and Mudlode orebodies remain open along strike and at depth. The Company believes that considerable Resources and thereafter Reserves remain to be delineated once access to drilling locations has been established.

The table below outlines the stoping profiles expected over the initial development phases before additional underground drilling programs are undertaken.

 

Table 4

STOPING

LOM

OUNCES

Prohibition tonnes

1,372,000 tonnes@ 4.06g/t

179,000

Vivian-Consols tonnes

233,000 tonnes @ 9.54g/t

71,000

TOTAL

 

250,000

 

Metallurgy

A number of metallurgical studies have been conducted on the projects specified above by highly regarded metallurgical consultants AMMTEC, Bateman Minerals and Metals and Orway Mineral Consultants. Since the Yaloginda CIL plant previously treated some of the ore types represented above and was designed to treat variable ore types no new circuits are required in the initial production phases other than the addition of a gravity circuit.

The following table highlights the respective ore characteristics identified from metallurgical test work.

 

Table 5

PROJECT NAME

BOND MILL

Work Index kwhrs/t

GRAVITY GOLD

% rec

CIL GOLD

% rec

LEACH

hours

Surprise

12 to 15

14.5 to 34

93.5

12 to 24

Bluebird

12 to 15.3

14 to 40

93.5 to 98

12 to 48

Vivian

15 to 18

19.7

97.9

24

Consols

15 to 18

53

93.6

24

Prohibition

18 to 23

25

83.5*

24

*Prohibition ore requires additional flotation and ultra-fine grinding to liberate gold. Recoveries of 90 to 95% are then achievable. Testwork was undertaken by Bateman Minerals and Metals.

Competent Persons Report – Consent for release

The information in this report, which relates to the Surprise, Bluebird, Prohibition, and Vivian - Consols Ore Reserves, is based on information compiled by Alan Coles and Denis Geldard.

Alan Coles and Denis Geldard are full time employees of Mercator Gold Australia Pty Ltd and are Members of the Australasian Institute of Mining and Metallurgy.

Alan Coles and Denis Geldard have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.

Alan Coles and Denis Geldard consent to the inclusion in the report of the matters based on this information in the form and context in which it appears.

 

For further information please contact:

Mercator Gold plc    
Patrick Harford, Managing Director Tel: +44 (0) 20 7929 1010
Email:This email address is being protected from spambots. You need JavaScript enabled to view it.    
   
   
   
Bankside Consultants Ltd Tel: +44 (0) 20 7367 8888
Simon Rothschild    
Keith Irons    
Oliver Winters    

 

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