Ariana Resources Share Discussion Threads

[johncasey] 06/7/2020 06:57

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MININGMAVEN on: 02 July 2020
ECR Minerals – right at the heart of Australia’s second gold rush (ECR)
The goldfields in Victoria, South Australia are grabbing the world’s attention for the second time in history.

Upon the first discovery of the precious metal in the 1850s, we saw this desert area become a major international mining centre.

As you can probably imagine, technology has moved on from the hand-dug pits, wooden ladders and dynamite that marked these times.

Today, 3D-mapping, drone-based mineralogical studies, and vast national resources devoted to seismic, geochemical and geochronological surveys are unearthing a deeper, second layer to Victoria’s gold rush.

The Geological Survey of Victoria now estimates that 75 million ounces of high-grade gold is currently sitting under the earth in Australia’s most southern state.



Tax no dampener on gold rush

The scale of finds being made in Victoria are so enormous that the local government is even keen to cash in.

In January 2020, it announced that mines recovering more than 2,500 ounces of gold a year would be subject to a 2.75% tax.

But this has done little to dampen exploration interest.

Not least because the state government has been handing out multi-million-dollar grants to mining companies to get their projects underway.

What the tax development does mean, however, is that the cost of mining an ounce of gold has risen to the point where only the most well-capitalised projects with licenses to boot will succeed.

Enter ECR Minerals (LSE:ECR).

ECR has more than a few strings to its bow in Australia.

The firm’s main area of interest is the Victoria boom.

In Bailieston and Creswick, ECR boasts two enormously exciting and prospective Victoria gold projects.

Bailieston is found in the major orogenic Lachlan Fold Belt, while Creswick sits on the Dimocks Main Shale that extends to Ballarat then miles to the south.



Bailieston’s location within Victoria

Recreating Kirkland Lake’s success

Kirkland Lake Gold (TSX.KL) (NYSE:KL) has become the poster child for success in the current wave of Victoria gold interest.

In the last five years, the firm’s share price has exploded 2,263% thanks to its ownership of the Fosterville Gold Mine.

This has made the company and its investors rich by any standard.

Fosterville is the largest gold producer in Victoria, increasing annual gold production by 315% between 2014 and 2018 while also seeing a 540% jump in gold head grade from 4.6g/t to 24.8g/t, according to the national geological survey.

Operating cash costs of $130 to $150 per oz are laughably small for a world-class deposit, and the spot price of gold hitting new eight-year highs of $1,759 per oz has done nothing to dampen enthusiasm for the precious metal.

ECR’s key tenement of Bailleston sits just 18 miles east of Fosterville and on the same rich seam of gold that has made millionaires of Kirkland’s investors.

Trading volume has started to pick up in ECR since it won licences at the start of 2020.

But with wider equity markets consumed by Covid-19, attention has been diverted away from a potential goldmine.

With the ECR share price trading in a range at around 0.7p, there is huge upside potential to be had.



The Blue Moon prospect at Bailieston, Victoria

Firms flocking to Victoria

ABC Australia reported in May 2020 that more than 80 mineral exploration applications are now underway in Victoria.

And it is the UK and Canada-listed companies that have got there first.

Top names include Power Metal Resources (LSE:POW), Red Rock Resources (LSE:RRR) and Fosterville South (TSX.V:FSX).

The latter of these has this week spun off two of its gold projects at Avoca and Timor in Victoria — bought from none other than ECR — to create a new company, Leviathan Gold, with FSX shareholders receiving shares in Leviathan on a one-to-one basis.

Shares in FSX rose by nearly 30% to an all-time high of CAD$4.35 on the news.

ECR’s sale of Avoca and Timor to Fosterville South means that – as well as an upfront $500,000 to fund its Bailieston and Creswick exploration – ECR will receive $1 for every ounce of gold discovered, up to a maximum of $2,000,000.

Multinational miners are now converging on Victoria, but they have been beaten to the punch to by their nimbler rivals.

As a relatively small AIM-listed exploration, the results here could be a kingmaker for ECR.

[rjwoodrjwood] 05/7/2020 17:27

What would be really nice, is when the special divi comes, the record date is July 3rd.....after confirmation of intent for the deal.

[thanksamillion] 05/7/2020 11:36

actonovator,

In the event of a company open market buyback how many share do you expect would be for sale at 4p?

Really cannot see it anywhere near £5m/4p=125m if indeed any at all.

[bigglesbingham] 05/7/2020 10:01

Correct and divis is a way of rewarding long term holders without them having to cash in

[thanksamillion] 04/7/2020 22:27

If I recall correctly the share buy back you speak of was the Board wanting to purchase a small number of shares held by Ariana workers in order to help them out. Whatever the reason I dont think it was that many relatively speaking.

[actonovator] 04/7/2020 20:05

Soul, you telltale :)

I was merely pointing out that the creation of an accounting profit on the sale of jv assets would allow share buyback, which was the company's avowed intention last year - but which they promptly shelved upon discovering it was not immediately feasible.

I'm neutral about the share buy-back - though I would prefer they spent 5 million on open market buy back of shares than a one-off 5 million dividend payout, which seems pointless. You could argue that its not great to buy shares at 4p issued at 1p - or you could argue buy shares at 4p you believe will soon be 16p and a premier force in Turkish goldmining.

But I'm more interested in Dogu and the Kizilcuker royalty. Surely if it was worthy of an rns announcement, then deciding not to proceed should also have been rns-ed?

[soulsauce] 04/7/2020 18:31

There are probably too many shares in issue but much of that is due to historically poor raisings, probably the only area where Kerim & Co dropped the ball.

But I don't see the point of using good money to buy back shares at 4p that were issued at a penny piece.
I am not sure I like the idea of consolidation either.

[thanksamillion] 04/7/2020 17:28

I took it the buyback related to actonovators mention of too many shares. Personally I thought he meant a consolidation say 1 for 10. Me, I have no view on it.

[soulsauce] 04/7/2020 17:22

actonovator unless I have misread it.

[bigglesbingham] 04/7/2020 17:10

Who mentioned buy back?

[soulsauce] 04/7/2020 16:49

We do not want a share buy back, this is a growth stock and we will have plenty to do with the money.

[bigglesbingham] 04/7/2020 15:16

Under promise over deliver in true AAU way

[actonovator] 04/7/2020 14:56

And final comment from me this weekend - I thought I noticed KS in that last interview put a bit of emphasis on - besides Cyprus - other opportunities within Turkey. This clearly ties in with the announcement last Oct of the acquisition of Dogu from Kefi and its significant exploration database. That was only a month before the JV announcement and he probably already knew there was an inlow of capital about to happen. Exciting times!

edit - staged payments till the end of 2019 - can we assume Dogu happened?

last edit - from Kefi final ye dec 209 accounts released last week:

Post year end the company started taking the steps to voluntary liquidate Dogu

[actonovator] 04/7/2020 14:52

Does anyone know if the profit made on the sale to Ozaltin would wipe out the accumulated loss and allow the share buy-back to proceed?

[actonovator] 04/7/2020 14:45

Biggles you are right but also part of the issue here is the 1 billion number of shares and the at times modest trade volume - which means the churn takes that much longer.

We will get to 10p+ eventually but getting more punters in would quicken it.

[renniks2016] 04/7/2020 14:40

And very likely that our Christmas present form KS will be a special dividend, that alone should see us past 6 without anything untoward happening, and we all know that will not be the case, news flow from Cyprus to come, Salinbas to come, resource updates, re-modelling, investor presentations, and re-rating by PG once pen is put to paper in Turkey. At some point this could explode, but just as likely to keep ticking along building value and wealth GLA

[plasybryn] 04/7/2020 14:31

Preliminaries mid month.

[a.fewbob] 04/7/2020 14:29

6p is still too cheap.

[bigglesbingham] 04/7/2020 14:22

My explanation of the current stock price quite simplistically but logically. To me you look at fundamentals and ascertain target price but on the road to this price you have supply demand . Now we know here we have a very loyal personal share base many who have been invested a long time. Because the price has been so far below expectation many have loaded up disproportionately to their other holdings. In recent times we've seen an increase from 1.17 to 4 over 20 months (I bought some at 1.17 October 18 when I visited mine). So I believe some would have taken opportunity to crystallise small portion of holdings. So we are at a point in time where the target value has increased dramatically for reasons we are all familiar with and the price is suppressed creating what I see as an exceptional buying opportunity and based on this I'm steadily adding as I feel at Christmas if no hiccups we will be well above 6p. Some will disagree but that's my view and my simple rational for adding.

[bigglesbingham] 04/7/2020 14:10

Full year accounts and drilling results also

[jimsyone] 04/7/2020 13:11

Goldman Sachs - Berenberg - Peel Hunt - Liberum - Cannaccord give the top fund managers picks

[a.fewbob] 04/7/2020 13:02

Why is this stock soooo cheap???

I bought FF First mining gold just two or three weeks ago after mentioning them here and they are already up 80% on a deal with one of their properties.

They are years away from having an operating mine and have a market cap of 280m Canadian.

I just don’t get it....

[actonovator] 04/7/2020 10:55

Looks like we are still churning in the 4p band - events that might propel us out in the next couple of weeks?

- Announcement of drilling in Cyprus perhaps

- Gold breaking through $1800, which should generate further publicity and impetus

Might the start of the US Q2 earnings season next week be the caatalyst?

[bigglesbingham] 04/7/2020 10:39

I got the impression they are chomping at the bit on Cyprus

[renniks2016] 04/7/2020 08:44

I think you only need to look at where KSs has his other interests to see where he might be spending, Venus is a done deal, I wouldn't rule out an earn in with Panther, takes us into new jurisdictions, one of which he knows very well! but WTFDIK what I do know is, where ever it is, it will be exciting and adding to the growth of Ariana and not the JV! ++++