Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
We tipped this stock last week at a 1.7p offer. The target to sell is 2.5p + . The shares are a buy at up 1.9p. The tip reads:
Make no mistake, ECR Minerals (LSE:ECR) has, for most of its miserable existence been one of the biggest dogs on AIM. Given how it has diluted shareholders to oblivion over the years, the market still finds it hard to take it seriously. Indeed it is surprising that last year, when it really was at death's door, that someone did not insist on a mercy killing. Perhaps that is why the shares could actually be really cheap.
We certainly think they will fly and should declare that FIML, a company owned by a Winnifrith family trust owns some shares. It will not sell until at least 24 hours after a sell call appears here and we expect that sell call to be at North of 2.5p and soon..
What changed last year? Quite simply, the CEO. In came Craig Brown, an experience miner, battle scarred at Kryso and elsewhere came on board. Craig is a battler and knows what he is doing and is also well connected in China. He is worth backing.
On 27 February ECR announced a placing involving a Chinese company. The RNS reads:
"The Company has conditionally raised gross proceeds of £553,564 pursuant to a subscription by the Shenyang Xinliaoan Machinery Co Ltd based in the People’s Republic of China, for 55,356,391 new ordinary shares of the Company at a price of 1 pence per Subscription Share . Conditional on completion of the Subscription, the Investor will also be issued warrants over 83,034,586 new ordinary shares in total . Of the Investor Warrants, 55,356,391 are exercisable at a price of 2 pence per share and 27,678,195 have an exercise price of 5 pence per share."
The Chinese had to put down a £100,000 deposit which has arrived and the rest of the cash will arrive by the month end. Post placing the markiet cap at the current 1.65p-1.7p is c£3 million and so there is a fair old premium to net cash but the company does have assets
ECR’s wholly owned Australian subsidiary Mercator Gold Australia has acquired 100% ownership of the Avoca and Bailieston gold projects in Victoria, Australia. ECR has earned a 25% interest in the Danglay epithermal gold project, 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, Argentina. Exploration at SLM has focused on identifying small tonnage mesothermal gold deposits which may be suitable for relatively near term production.
These assets, we believe, have enough value to justify a far higher share price. So what will drive that re-rate?
1. The market is hot for small resource juniors. If they have a good storey to tell there is now a real appetite for such plays
2. The 29.9% investment by strategic Chinese investor Shenyang Xinliaoan Machine Tool company adds real credibility but this could be just the first step. We reckon it could follow its money to fund bigger corporate deals which could add real value.
3. Now ECR has cash at can show the value in its assets. An Australian drilling programme to begin shortly at ECR’s licences in Victoria, one of the world’s major gold provinces. Any newsflow there will create real interest.
4. The Argentinian SLM gold project can now be progressed: JORC compliant targets determined and negotiations to acquire nearby processing plant are underway - that could deliver near term cashflows which will be great news.
5. There are some interesting investors notably Wayne Gibson, the share ramper known as Big Gib who has over 4%. If folks like that get promoting the shares could really motor.
The Trade: Buy ECR at up to 1.9p with a target to sell of, at least 2.5p
This article first appeared on HotStockRockets - its always paying customers first. If you missed out on this red hot share tip, fear not there are TWO more on the way within the next three weeks and you can access both and all of our archive for just £5, HERE
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