Key points:
- ECR Minerals shares spiked 23.8% higher on high-grade gold deposits.
- The miner reported excellent drilling results from one of four holes.
- However, the company is still a long way from producing gold commercially.
The ECR Minerals PLC (LON: ECR) share price surged 23.8% after revealing that it had encountered high-grade gold deposits at its HR3 prospect within the larger Bailieston Project in Western Australia.
Investors cheered the news, confirming the presence of significant gold deposits within the hole BH3DD034 after the company discovered physical gold deposits on the surface in March this year before starting the drilling campaign.
Also read: The Five Best Gold &Gold Mining Stocks To Buy Now.
ECR Minerals has drilled four holes as part of its follow-up drilling campaign after completing the drilling of hole BH3DD019 in March this year and encountering significant gold deposits. The mining company is waiting for the assay results from the remaining three drill holes known as BH3DD032, BH3DD033 and BH3DD035.
Some high-grade gold intercepts encountered during the drilling included 0.3m @20.34 g/t Au from 18.2m, 0.3m @ 10.59 g/t Au from 97.9m, and 0.65m @ 13.02 g/t Au from 54.2m. These high-grade intercepts were discovered at depths of less than 100 metres, with the first intercept located just 18.2 metres below the surface.
The drilling of hole BH3DD034 occurred between 4th and 11th April 2022, with the hole drilled to a maximum depth of 176.5 metres. Investors eagerly await the assay results from the remaining three holes, with many expecting similar results.
ECR Minerals shares look attractive given today’s impressive drilling results. However, investors should remember that the gold mining company is still a long way from commencing the commercial extraction of gold.
Furthermore, gold prices are under significant pressure and may fall as the US dollar remains strong due to the hawkish Federal Reserve monetary policies. Therefore, the miner may have to sell its gold at lower prices than current prices.
Should you buy ECR shares? The answer largely depends on your investment timelines. The company is likely to generate excellent results over the long term once it starts producing gold. But, until then, the price will oscillate between gains and losses.
*This is not investment advice. Always do your due diligence before making investment decisions.
ECR Minerals share price.
The ECR Minerals share price spiked 23.8% higher to trade at 1.30p, rising from Tuesday’s closing price of 1.05p.