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ECR Minerals’ Craig Brown updates Andrew Scott at Proactive on talks with potential partners for key gold assets in Australia

ECR Minerals PLC’s (LON:ECR) Craig Brown tells Proactive London’s Andrew Scott they’re in active discussions with potential partners on its Bailieston and Creswick projects in Victoria, Australia. ECR’s recently sold licences comprising the Avoca, Moormbool and Timor gold exploration projects in Victoria, Australia to Fosterville South Exploration Ltd for a total potential cash consideration of up to A$2.5mln.

ECR Minerals #ECR – Unaudited Half-Yearly Results for the Six Months Ended 31 March 2020

ECR Minerals plc, the gold exploration and development company, is pleased to announce unaudited half-yearly financial results for the six months to 31 March 2020 for the Company as consolidated with its subsidiaries (the “Group”), along with a review of significant developments during the period and subsequently.

HIGHLIGHTS

  • Victoria, Australia continues to enjoy a gold exploration boom and interest from third parties in ECR’s projects in Victoria is strong, with several discussions taking place in respect of potential commercial transactions over our Bailieston and Creswick projects.
  • Announced results from exploration activities in Victoria included positive findings of an alteration study on RC drill cuttings from the Creswick project (March 2020), and confirmation of very high grade gold mineralisation at Creswick by the completion of ‘full bag’ testing (November 2019).
  • In January 2020, MGA, ECR’s 100% owned Australian subsidiary, received a research and development expenditure refund of A$555,212 (approximately £295,515) from the Australian government.
  • The Company completed the sale of its Argentine subsidiary Ochre Mining SA in February 2020 and retains an NSR royalty of up to 2% to a maximum of USD 2.7 million in respect of future production from the SLM gold project.
  • Post-period end, the Company sold licences comprising the Avoca, Moormbool and Timor gold exploration projects in Victoria, Australia to Fosterville South Exploration Ltd for total potential cash consideration of up to A$2.5 million announced in April 2020.
  • Post-period end, the Company’s cash position was strengthened by a £500,000 equity financing and the receipt of A$500,000 from Fosterville South Exploration Ltd in April 2020.
  • Group comprehensive expense of £1,846,202 for the six months ended 31 March 2020 (£480,368 for the six months ended 31 March 2019) and net assets of £2,206,211 at 31 March 2020 (£3,876,921 at 31 March 2019).
  • The Group Operating Loss for the six months ended 31 March 2020 reduced to £369,102, compared with £438,145 for the six months ended 31 March 2019.
  • Despite the effect of the COVID-19 pandemic on the global economy, the Directors’ believe ECR is in a robust financial position and continues to provide shareholders with exposure to an exciting range of gold projects.

FINANCIAL RESULTS
For the six months ended 31 March 2020 the unaudited financial statements of the Group record a total comprehensive expense of £1,846,202, including, a one off exceptional item of (£1,602,539) which pertains to the disposal of the Company’s Argentine subsidiary Ochre Mining SA. This amount cannot remain capitalised under applicable accounting standards, although this amount could be recovered from future royalty payments in relation to the SLM gold project in Argentina, which is owned by Ochre Mining SA, if they progress to production.

The Group’s net assets were £2,275,479 at 31 March 2020, compared with £3,876,921 at 31 March 2019. The reduction in net assets has occurred largely due to the disposal of Ochre Mining SA, as explained above.

The Group held £166,852 of cash and cash equivalents at 31 March 2020, compared with £622,457 at 31 March 2019. The current cash position of the Group today is £742,379.

In January 2020, Mercator Gold Australia Pty Ltd (“MGA”), ECR’s 100% owned Australian subsidiary, received a research and development (R&D) refund of A$555,212 (approximately £295,515) from the Australian government. This refund relates to qualifying expenditure incurred by MGA in the year ended 30 September 2019. The qualifying R&D activities pertain to research into turbidite-hosted gold deposits within MGA’s exploration licences in Victoria. Post the period end, the Group’s cash position benefited from a £500,000 equity financing completed by the Company and the receipt of AUD$500,000 from the sale of licences in April 2020.

The financial information included in the 31 March 2019 announcement have been restated due to a change in the accounting treatment of the R&D refunds received by MGA. As well as the refund noted above, a refund of A$318,971.73 (approximately £175,188) was received in May 2019. This was previously categorised as other income in the interims to 31 March 2019. The amount received has been offset against exploration assets following the restatement.

REVIEW OF PRINCIPAL DEVELOPMENTS DURING THE PERIOD AND SUBSEQUENTLY

Sale of Avoca, Moormbool and Timor gold exploration projects (the “Licences”) in Victoria, Australia to Fosterville South Exploration Ltd

In April 2020, ECR announced that Fosterville South Exploration Ltd, which listed on the TSX Venture Exchange that same month, had agreed to acquire MGA’s 100% ownership of the Licences by way of Currawong Resources Pty Ltd, a wholly owned subsidiary of Fosterville South, for total potential cash consideration of up to A$2.5 million, as follows:

  1. A$500,000 in cash, which was paid to MGA immediately;
  2. A further payment of A$1 for every ounce of gold or gold equivalent of measured resource, indicated resource or inferred resource estimated within the area of one or more of the Licences in any combination or aggregation of the foregoing, up to a maximum of A$1,000,000 in aggregate;
  3. A further payment of A$1 for every ounce of gold or gold equivalent produced from within the area of one or more of the Licences, up to a maximum of A$1,000,000 in aggregate.

ECR considered the Avoca, Moormbool and Timor licences to be high-potential but non-core to the Company, and the Company maintains exposure to upside from the projects as a result of future resource estimation or production, through a royalty arrangement as set out above.

Alteration Study – Creswick Gold Project
In February 2020, MGA commissioned Dr Dennis Arne to carry out an alteration study of cuttings (chips) generated by the RC drilling at the Creswick project in 2019. Dr Arne is a preeminent consulting geochemist in Victoria, whose experience includes previous and on-going reviews of geochemistry at the highly successful Fosterville gold mine in Central Victoria owned by Kirkland Lake Gold.

The results of the study were announced on 27 March 2020, and showed good indications of hydrothermal fluid flow related to gold mineralisation in a number of drill holes at Creswick. Importantly, the variation in the results, with some areas ‘lighting up’ and others not, is potentially useful for identifying gold-bearing shoots.

‘Full Bag’ Sampling – Creswick Gold Project
In February 2019 MGA completed a total of 1,687 metres of reverse circulation (RC) drilling in 17 holes at Creswick, targeting multiple quartz vein orientations within the Dimocks Main Shale (“DMS”). The drilling identified more extensive quartz than anticipated, in a zone exceeding 60 metres in width (more than twice the 25 metres expected), with quartz identified in more than one third of the 1,687 metres drilled. Gold mineralisation was identified in the majority of holes, with grades in nine holes ranging from 0.6 g/t gold to 44.63 g/t gold (1.44 oz/t).

MGA’s geologists hypothesised an extreme nuggety distribution of gold based on the results of drilling and other observations, including capturing a small 0.27 g nugget in gravity tests conducted on a single sample bag. In order to assess the significance of this effect, MGA’s consultants devised a testing program using gravity and electrostatic concentration (GEC) on full bags of RC drill cuttings, which would constitute the whole sample recovered from each metre of drilling (less sub-samples obtained at the time of drilling via a splitter mounted on the drill rig). In nuggety gold systems, increasing sample size increases the chance of nuggets being captured in the sample, and thus being appreciated as part of the gold endowment of the system.

Using the GEC method on the full bags, MGA was able to subject larger, more representative sample sizes to analysis. A total of 129 ‘full-bag’ samples were analysed using the GEC process. In parallel, 74 duplicate sub-samples obtained at the time of drilling via the rig-mounted splitter were analysed by the Leachwell method at Gekko Systems. This was done to enable comparison with the assay results (obtained by the same method) for the first set of sub-samples, to assist in classifying the nugget effect as extreme, major or minor.

Grade variability due to the nugget effect was demonstrated by the results of the exercise, which were announced in November 2019, but some consistency between results was also seen, and indicates the nugget effect may be less severe than initially thought. Overall, the programme confirmed the presence of nuggety gold mineralisation in the Dimocks Main Shale (DMS) at Creswick, some of which is very high grade.

MGA’s tenement position at Creswick covers approximately 7 kilometres of the DMS trend, and the 2019 drilling only tested approximately 300 metres of this. ECR therefore believes there is significant potential upside in the project.

Sale of SLM Gold Project
In February 2020, the Company sold its wholly owned Argentine subsidiary Ochre Mining SA, which holds the SLM gold project in La Rioja, Argentina, to Hanaq Argentina SA (“Hanaq”). The sale allows ECR to focus on its core gold exploration activities in Australia.

Hanaq is a Chinese-owned company engaged in lithium, base and precious metals exploration in Northwest Argentina including Salta, Jujuy and La Rioja, with a highly experienced management team.

ECR retains an Net Smelter Return (“NSR”) royalty of up to 2% to a maximum of USD 2.7 million in respect of future production from the SLM gold project. ECR believes that Hanaq has the operational capabilities and access to Chinese investment capital necessary to put the SLM project into production, subject to the usual prerequisites such as further exploration and feasibility studies being successfully completed (if deemed necessary by Hanaq) and to the necessary permits for production being obtained.

The founder and CEO of Hanaq Group, of which Hanaq Argentina SA is part, is Mr Xiaohuan (Juan) Tang, who has a substantive track record in Latin America, including responsibility for the successful permitting of the Pampa de Pongo iron ore project in Peru in his former capacity as General Manager of Jinzhao Mining Peru. Pampa de Pongo is one of the largest iron ore deposits in Latin America. Mr Tang has degrees from Tsinghua University in China, and Imperial College, Cambridge University and Oxford University in the UK.

Outlook, Future Prospects and COVID 19
The Directors’ of ECR Minerals plc are very positive regarding the outlook for the Company, gold and the prospectively of the Company’s projects in Victoria, Australia.

As a consequence of COVID 19, governments around the world have imposed restrictions on international travel; restrictions have also been imposed on domestic travel within Australia. These restrictions have meant that the board have been unable to visit the assets. However, the team on the ground in Australia continue the work at site without interruption. Accordingly, there has been no significant negative impact on the Group from the coronavirus.

FOR FURTHER INFORMATION, PLEASE CONTACT:

ECR Minerals plc

Tel: +44 (0)20 7929 1010

David Tang, Non-Executive Chairman

Craig Brown, Director & CEO

Email: info@ecrminerals.com

Website: www.ecrminerals.com

WH Ireland Ltd

Tel: +44 (0)161 832 2174

Nominated Adviser

Katy Mitchell/James Sinclair-Ford

SI Capital

Tel: +44 (0)1483 413500

Broker

Nick Emerson

FORWARD LOOKING STATEMENTS
This announcement may include forward looking statements. Such statements may be subject to a number of known and unknown risks, uncertainties and other factors that could cause actual results or events to differ materially from current expectations. There can be no assurance that such statements will prove to be accurate and therefore actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements. Any forward looking statements contained herein speak only as of the date hereof (unless stated otherwise) and, except as may be required by applicable laws or regulations (including the AIM Rules for Companies), the Company disclaims any obligation to update or modify such forward looking statements as a result of new information, future events or for any other reason.

ABOUT ECR MINERALS PLC
ECR is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd has 100% ownership of the Bailieston and Creswick gold projects in central Victoria, Australia.

Following the sale of the Avoca, Moormbool and Timor gold projects in Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX), ECR has the right to receive up to A$2 million in payments subject to future resource estimation or production at those projects.

ECR has earned a 25% interest in the Danglay gold project, an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines, and holds a royalty on the SLM gold project in La Rioja Province, Argentina.

Link here for financial statements

Monetary Stimulus = Currency Devaluation = Increasing Gold Demand

As the world starts to emerge from the first wave of the COVID-19 crisis, the implications for the unprecedented monetary stimulus measures employed by Governments around the globe to support citizens in lockdown are becoming ever clearer.

As stock markets roar back from the coronavirus-led rout, advisers to the world’s wealthy are urging them to hold more gold, questioning the strength of the rally and the long-term impact of global central banks’ cash splurge, Reuters writers commented.

In a note for Kitco News, Allen Sykora noted Gold had started a new week on firmer footing amid worries about the rising number of COVID-19 cases. “The price of gold jumped to its highest in more than a month this morning ($1,757), after surging coronavirus cases heightened concerns over a delay in global economic recovery,” said a research note from commodities brokerage SP Angel. Analysts cited news reports showing that while social distancing in March and April slowed the spread of the virus, reopening in a number of U.S. states and European nations has coincided with a new wave of infections.

Commerzbank believes the U.S. economic recovery is “hanging in the balance” with a likelihood of “increasing calls for the U.S. government to implement further stimulus measures, especially as [Federal Reserve Chair Jerome] Powell had already called for more fiscal stimulus during his virtual testimony before the U.S. Congress last week,” Commerzbank also believes the U.S. Fed is “likely to keep the pedal to the metal – i.e. to expand its balance sheet”… and thus the issue of currency debasement/inflation ..”will remain high in the minds of market participants.”

Geologists speculating with fees for professional services

This ‘pedal to the metal’ approach to monetary easing and the conseqential strength in gold continues to drive investor interest in junior gold explorers. Increasingly this sector is seeing mining geologists taking fees for their work in shares as well as cash, as armed with knowledge and experience, a successful drilling campaign can have a transformational effect the valuations of small cap explorers with quality projects, meaning that professional fees can potentially multiply in value. The majority of small mining companies however only have one or two key projects in their asset portfolio, so micro-cap explorers that own a broad spread of assets are particularly sought after.

AIM listed ECR Minerals (AIM: ECR) is firmly in the latter category. The company 100% owns the Bailieston and Creswick projects in Central Victoria, Australia, and also has financial interests in the Avoca, Moormbool and Timor projects following the sale of those licenses, detailed below. In addition ECR has earned a 25% interest in the Danglay epithermal gold project in the north of the Philippinesand and holds a net smelter royalty on the SLM gold project in Argentina.

Creswick

Creswick has long been viewed as a potential pivot project for ECR after the highest grade duplicate result of 80.97 g/t gold came from a 1 metre interval that originally assayed 44.63 g/t, confirming the original findings announced on 8 May 2019. Referred to by ECR as ‘nuggety gold mineralisation’, a study by pre-eminent consulting geochemist Dr Dennis Arne, whose experience includes extensive consultancy at the highly successful Fosterville gold mine in Central Victoria, underlined the significant gold exploration potential at Creswick

Bailieston

Bailieston is also at the centre of the current gold exploration boom in Victoria, located close to the highly successful Fosterville mine owned by Kirkland Lake Gold. The project potential was underlined by the arrival of mining giant Newmont Exploration with a license application for ground immediately to the north of ECR’s Black Cat prospect. The Fosterville mine is located approximately 50km west of the Bailieston project.

Flagship Projects Set to Deliver Value

The focus on Creswick and Bailieston prompted the board decision in April 2020 to sell three further Victoria licences (the Avoca, Moormbool and Timor gold exploration projects) to TSX-V listed Fosterville South Exploration Ltd for an upfront cash payment of A$500,000, plus additional potential of a further A$2 million based on resource estimates and gold production.

This, added to the two recent R&D cash refunds and the GB£500,000 placing at 0.5p mean that ECR are fully funded and ready to spend on further developing the two flagship assets.

And with external parties currently reviewing data on the Bailieston and Creswick gold projects with a view to potential commercial transactions and joint venture opportunities, the ECR board believes that both projects “hold considerable potential and inherent value for the Company.”

Currently valued at just GB£3.9m, there are great expectations for ECR in the coming months despite the restrictions resulting from the COVID-19 lockdown. Given the compelling backdrop in the Gold market and the ‘pedal to the metal’approach to monetary easing by Governments around the world, ECR shareholders could be set for a bonanza if Creswick and Bailieston come good.

References:

Reuters: https://www.reuters.com/article/us-health-coronavirus-gold-wealth-analys/worlds-ultra-wealthy-go-for-gold-amid-stimulus-bonanza-idUSKBN23P253

Kitco: https://www.kitco.com/news/2020-06-22/Gold-prices-trade-to-one-month-high-on-COVID-19-concerns-analysts.html?sitetype=fullsite

 

 

 

ECR Minerals #ECR – Sale of Exploration Licences for total potential cash consideration of up to A$2.5 million

ECR Minerals plc (LON: ECR), the gold exploration and development company focussed on Australia, is pleased to announce the sale by ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) of the licences comprising the Avoca, Moormbool and Timor gold exploration projects (the “Licences”) in Victoria, Australia to Fosterville South Exploration Ltd (“Fosterville South”) for total potential cash consideration of up to A$2.5 million.

Fosterville South, which recently listed on the TSX Venture Exchange with the code FSX, has agreed to acquire MGA’s 100% ownership of the Licences by way of Currawong Resources Pty Ltd, a wholly owned subsidiary of Fosterville South, for the following consideration:

1. A$500,000 in cash to be paid to MGA immediately;

2. A further payment of A$1 for every ounce of gold or gold equivalent of measured resource, indicated resource or inferred resource estimated within the area of one or more of the Licences in any combination or aggregation of the foregoing, up to a maximum of A$1,000,000 in aggregate;

3. A further payment of A$1 for every ounce of gold or gold equivalent produced from within the area of one or more of the Licences, up to a maximum of A$1,000,000 in aggregate.

Craig Brown, Chief Executive Officer of ECR, commented: “We are delighted to sell these non-core but high-potential licences to Fosterville South, while maintaining exposure to upside from the Licences as a result of future resource estimation or production.

We believe Fosterville South is well placed to advance the Licences with its strong local exploration team and backing from North American high-net worth and institutional investors, while ECR will continue to concentrate its resources on our core projects in Victoria, Bailieston and Creswick.

The initial cash to be received from this disposal, in addition to the recently announced placing for £500,000, puts ECR in a robust working capital position which we can apply toward development of our core projects.

It is worth noting that other external parties are currently reviewing data on our Bailieston and Creswick gold projects with a view to potential commercial transactions, including joint venture opportunities, although there can be no guarantee that any transaction will occur. In addition, whilst ECR remains open to transactions on these licence areas, the ECR board believe both to hold considerable potential and inherent value for the Company.”

Further Information

The Licences comprise exploration licences EL5387 (Avoca project), EL006280 and EL006913 (Moormbool project), and EL006278 (Timor project) in Victoria, Australia.

The book value of the Licences as derived from ECR’s unaudited management accounts for the period ended 30 March 2020 was approximately A$282,000, which is the equivalent of approximately £144,000, based on £1 = A$1.9626*. No turnover, profits or losses are attributable to the Licences.

The maximum potential cash consideration receivable by MGA in respect of the sale of the Licences is A$2.5 million, which is the equivalent of approximately £1.275 million, based on £1 = A$1.9626*

The Company intends that the consideration to be received immediately, and any future consideration received, will be applied by ECR to augment its ongoing working capital position as well as towards its exploration and development activities.

MARKET ABUSE REGULATIONS (EU) No. 596/2014

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.

*Exchange rate derived from closing price on Bloomberg at 17 April 2020.

FOR FURTHER INFORMATION, PLEASE CONTACT:

ECR Minerals plc

Tel: +44 (0)20 7929 1010

David Tang, Non-Executive Chairman

Craig Brown, Director & CEO

Email:

info@ecrminerals.com

Website: www.ecrminerals.com

WH Ireland Ltd

Tel: +44 (0)161 832 2174

Nominated Adviser

Katy Mitchell/James Sinclair-Ford

SI Capital Ltd

Tel: +44 (0)1483 413500

Broker

Nick Emerson

ABOUT ECR MINERALS PLC

ECR is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd has 100% ownership of the Bailieston and Creswick gold projects in central Victoria, Australia and the Windidda project in the Yilgarn region, Western 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.

Junior Gold Explorers Continue to Shine Amid Global Market Volatility

The year 2020 has already delivered what HM Queen Elizabeth would refer to in her end of year speech as an Annus Horribilis. It is still only April 2020, and Covid-19 continues to wreak almost biblical levels of havoc and human tragedy across the globe. In our previous article on junior gold explorers, we stated that it seemed trite to discuss investment opportunities in the midst of the ongoing battle against CoronaVirus. But life does go on, and so does mining exploration, even with the movement restrictions currently in place.

Gold Set To Rebound Following Monetary Stimulus Measures

Although gold has retreated from the late March highs of $1700 oz, at $1646 the yellow metal still sits close to year highs, well above the 2019 highs of $1277 last August.

Kitco, a website dedicated to gold and metals believes a major rebound in gold is just around the corner as prices look ready to surge on massive global monetary policy stimulus and unprecedented fiscal policies. United Overseas Bank (UOB) head of markets strategy Heng Koon said their forecast is “for gold to rebound significantly in the quarters ahead to USD $1,650 in 2Q20, $1,700 in 3Q20, $1,750 in 4Q20 and $1,800 in 1Q21.”

“Once the USD funding crunch potentially dissipates across 2Q20, massive global monetary policy easing coupled with unprecedented fiscal policy stimulus will light the fuel for further gold strength.”

Heng also added that global central banks “have not only floored rates near zero but many have also entered into large Quantitative Easing programs. These significant stimuli bode well for gold and will be the fuel for gold’s rally once the USD funding crunch abates across 2Q.”

This compelling backdrop continues to drive healthy levels of investor interest in junior gold explorers. Across the globe, the focus on gold is manifesting itself in investor speculation into small cap explorers with quality projects. Most small explorers however only have one or two key project in their asset arsenal, leaving little room for any disappointment. However, there are a handful of micro-cap gold exploration plays offering a broad spread of assets, and consequentially an attractive risk profile with significant upside potential.

Once such company is AIM listed ECR Minerals (AIM: ECR), which has 100% ownership of five gold exploration projects in Central Victoria, Australia, and four exploration licences in the north-eastern Yilgarn region of Western Australia.

ECR’s Bailieston at the Centre of the Current Gold Exploration Boom

ECR’s Victoria projects include Bailieston, Avoca, Timor, Creswick and Moormbool. Indeed Bailieston, which targets epizonal / epithermal gold mineralisation of the Melbourne Zone, is at the epicentre of the current gold exploration boom in Victoria, being located close to the highly successful Fosterville mine owned by Kirkland Lake Gold. Recently, Australian mining giant Newmont arrived in the district with an application for ground immediately to the north of the Black Cat prospect.

Study Data Endorses Creswick Potential

During Q4 2019, ECR reported ‘nuggety gold mineralisation’ in the Dimocks Main Shale prospect at Creswick, some of which proved to be exceptionally high grade. Creswick has long been viewed as a potential pivot project for ECR after the highest grade duplicate result of 80.97 g/t gold came from a 1 metre interval that originally assayed 44.63 g/t, confirming the original findings announced on 8 May 2019.

On March 27th, ECR announced the results of a study carried out by Dr Dennis Arne, a pre-eminent consulting geochemist in Victoria, whose experience includes extensive consultancy at the highly successful Fosterville gold mine in Central Victoria owned by Kirkland Lake Gold.

The well-regarded Dr Arne’s involvement was seen as a solid endorsement of Creswick’s potential, and indeed the results did not disappoint, as ECR CEO Craig Brown pointed out.

“We are very pleased with the results of this study, which show good indications of hydrothermal fluid flow related to gold mineralisation in a number of drill holes at Creswick. Importantly, the variation in the results, with some areas ‘lighting up’ and others not, is potentially useful for identifying gold-bearing shoots.”

Brown added that the results “underline the significant gold exploration potential that we believe exists at Creswick, where our tenement position covers approximately seven kilometres of the Dimocks Main Shale (DMS) trend, of which our 2019 drilling tested only approximately 300 metres.”

Windidda Progress

ECR’s Windidda Gold Project, based in the Yilgarn region of Western Australia originally consisted of a package of nine exploration licence applications covering a 1,600 square kilometre area with the potential to host komatiite hosted nickel-copper-PGE (platinum group element) mineralisation, as well as orogenic gold. Five exploration licences have been granted, and in its full year results statement at the end of March 2020, ECR said the remaining four licence applications had been withdrawn, in light of objections to the expedited grant procedure from native title parties and the findings of preliminary desktop work to assess the prospectivity of the licence areas.

Consolidation, R&D Cash Refund and Focus

A micro-cap gold explorer can only operate so many projects and licenses, and indeed with the burgeoning potential of Creswick now at front and centre, the board took the decision to sell its wholly owned Argentine subsidiary Ochre Mining SA, which holds the SLM gold project in La Rioja, Argentina.  The sale to Hanaq Argentina SA still sees ECR retain a Net Smelter Royalty of up to 2% to a maximum of US$2.7m in respect of future production from the SLM gold project, while removing ongoing costs associated with acquiring and running an exploration license.

There has been further good news on the funding front too, as the group also received a significant cash refund under the Australian government’s R&D Tax Incentive scheme. A$318,972 (approximately £171,000) was received in relation to the financial year ended 30 June 2018, and received a further refund of A$555,212 (approximately £295,515) in relation to the fifteen month period ended 30 September 2019.

The qualifying R&D activities relate to research into turbidite-hosted gold deposits within the Company’s exploration licences in Victoria. It goes without saying that these two refunds have also provided a significant boost to ECR’s cash position.

The biggest boost however came on Monday 6 April 2020, when, in the midst of the upheaval and disruption caused by COVID-19, ECR announced that it had raised a further GB£500,000 in a placing at 0.5p. That ECR was able raise funds in some of the most challenging stock market conditions in living memory more than anything else underscores the quality of the asset portfolio.

Still trading on a miserly GB£2.5m capitalisation, the market has ascribed little more than the value of the administrative work undertaken to secure the licenses, with no premium whatsoever for the results from Creswick or any of the other work undertaken to ascertain the prospectivity and value of ECR’s projects.

Selected Junior Gold Explorers Offer Great Value

Amid unprecedented efforts to limit the spread of CoronaVirus, the fiscal and monetary stimulus measures announced by the world’s major economies over the past month are global policy events without precedent in peacetime. Gavyn Davies of the FT pointed out that the increase in fiscal spending and loans in the US this year alone “will reach more than 10 percent of GDP, larger than the rise in the federal deficit through 2008 and 2009.”

This wholly supports the UOB / Kitco view that the gold price is set for a major rebound in the months ahead. As such, this rebound is likely to be reflected in the valuations of junior gold mining explorers with strong project portfolios. Fully funded for the coming year, and with nine projects and licenses in key territories across Australia, ECR Minerals should be integral to any junior gold explorer portfolio as the world grapples with the challenges and uncertainties of the Covid-19 pandemic.

References:

Kitco – Here’s how gold prices will get to $1800 in the next three quarters – https://www.kitco.com/news/2020-04-01/Here-s-how-gold-prices-are-going-to-1-800-in-the-next-three-quarters-UOB.html

FT – Gavyn Davies: Can the world afford fiscal and monetary stimulus on this scale? –  https://www.ft.com/content/0f289d20-6e97-11ea-89df-41bea055720b

PBOC Easing Boosts Gold Price & Investment Case for Junior Gold Explorers

Investors seeking to capitalise on a bullish gold market in 2020, and in particular the next raft of discoveries, will no doubt be aware of the impact that the easing in monetary policy by the Peoples Bank of China (PBOC) has had across markets in China, still reeling from the CoronaVirus.

With the yellow metal long viewed as the definitive safe haven investment, markets have also seen a surge in interest at the more speculative end of the gold spectrum, most specifically across junior gold explorers. AIM listed ECR Minerals (AIM: ECR) is one such company currently in focus.

Creswick Potentially Transformational for ECR

Prior to the recent surge in the gold price, ECR had already seen a transformational 2019 in regard to developments across it’s six flagship projects.The final quarter saw developments across the explorer’s key Creswick project in Victoria, Australia, with ‘nuggety gold mineralisation’ confirmed in the Dimocks Main Shale (DMS) prospect at Creswick, some of which proved to be exceptionally high grade.

Creswick is viewed as a potentially transformational project for the company, particularly given that the highest grade duplicate result of 80.97 g/t gold came from a 1 metre interval that originally assayed 44.63 g/t, confirming the original findings announced on 8 May 2019.

On February 20th, ECR announced it had appointed Dr Dennis Arne to carry out a lithogeochemical study of cuttings (chips) generated by reverse circulation (RC) drilling at Creswick in 2019. Dr Arne is a preeminent consulting geochemist in Victoria, whose experience includes extensive consultancy at the highly successful Fosterville gold mine in Central Victoria owned by Kirkland Lake Gold. Bringing someone of this calibre in to review the drilling samples is a solid endorsement of Creswick’s potential, and has set tongues wagging amongst the investing cognoscenti across social media channels. In typical understated fashion, ECR said the results of the study “are anticipated to be valuable for the purposes of future exploration at the Creswick.”

Elsewhere in Central Victoria

Activity continues across ECR’s other projects in Central Victoria, with a number of potential exploration programmes for the Bailieston project, (including further drilling at the Blue Moon prospect), are under consideration, along with soil and stream sediment sampling in the Cherry Tree South and Ponting’s areas.

ECR Interests Realigned

With six key projects across Australia, a country estimated to have the largest gold reserves globally, ECR’s CEO Craig Brown and the board have taken the decision to realign the group’s many interests to focus on Victoria Gold Projects, (Creswick, Bailieston, Avoca, Timor & Moormbool) and the Western Australia Windidda Project.

In this regard, on February 5th the group announced the sale of the SLM Gold Project in Argentina to Hanaq Argentina SA, a Chinese-owned company engaged in lithium, base and precious metals exploration.

The move sees ECR retain an NSR (Net Smelter) royalty of up to 2% to a maximum of US$2.7 million in respect of future production from the SLM gold project. Craig Brown stated that he was.. pleased to retain exposure to potential upside from the SLM gold project in the form of a royalty on future production..we believe that Hanaq has the operational capabilities and access to Chinese investment capital necessary to put the SLM project into production. And more importantly, it aligns the group’s operational activities exclusively across the six key Australian projects.

Windidda Progress

While activities across the Victoria projects are well documented, (not least because of the the Bailieston project is adjacent to a prospect territory acquired in 2018 by global mining giant Newmont), ECR has been pushing ahead its Windidda Gold Project based in the Yilgarn region of Western Australia. This consists of a package of nine exploration licence applications covering a 1,600 square kilometre area with the potential to host orogenic gold deposits. At the end of January ECR published an update on Windidda, stating that four exploration licences had been granted in the north-eastern Yilgarn, and announced a further license award on February 20th.

Aside from Gold, the region is also highly prospective for nickel-copper-PGE (platinum group element) mineralisation, so consequently ECR has commissioned a consultant to complete additional geophysical modelling and a review of historical activity reports for areas to the south of Windidda to better understand the potential prospectivity of the project.

Undervalued

The sale of the SLM Gold project has certainly saved ECR from the ongoing costs associated with acquiring and running an exploration license. There was further good news on the funding front too, as the group also received a cash refund for research and development (R&D) expenditure of AU$555,212 (approx GB£295,515), added to which for the year to 30 September 2019, the group carried forward corporate income tax losses of AU$ 66,341,587 (approximately GB£35.3 million) which are expected to be available for offset against future taxable gains.

Despite this, the current market capitalisation of GB£3.6 million reflects little more than the value of the administrative work undertaken to secure the licenses, with no premium whatsoever for the results from Creswick or any of the other work undertaken to ascertain the prospectivity and value of ECR’s projects.

Safe haven

While it seems trite to discuss investment opportunities in the midst of the shock, havoc and terrible human cost wrought on China and the world by CoronaVirus, the event has already significantly impacted on many of the larger resource and energy groups who provide raw materials to satisfy China’s enormous burgeoning economy.

As already highlighted, the impact on the China stock market (and global markets) has to some degree been mitigated by quantitative easing measures by the PBOC, but the consequential weakness in resource and energy stocks has inevitably driven investors to seek returns elsewhere, i.e. gold. So on February 20th, Beijing cut the one-year loan prime rate to 4.05% from 4.15%, prompting China’s banks to further lower the benchmark borrowing costs for new corporate and household loans.

On the subject of rate cuts and easing, Neils Christensen, a journalist at leading bullion website Kitco stated on February 17th that analysts “remain optimistic that (gold) prices can push higher as easing from the People’s Bank of China could ignite a further drop in global interest rates.”

This view is backed by other pundits too. Ole Hansen, head of commodity strategy at Saxo Bank, said that economists are still trying to estimate the full impact the spreading virus will have on the global economy. He added that this uncertainty will continue to support gold prices. “We have seen monumental demand destruction this past month and that won’t be resolved anytime soon,” he said. “Central banks will be forced to ease again, but the question is just how much impact further easing will have.”

As China and the world struggles to get to grips with limiting the spread of CoronaVirus, the strength in the gold price looks likely to be sustained throughout the year. This strength is likely to be reflected in across junior gold mining explorers with strong project portfolios. With the raft of project developments and drilling updates scheduled for early 2020, ECR is likely to benefit from this continued focus.

by Alan Green

ECR Minerals #ECR – Australian Gold – Business Update

ECR Minerals plc (LON:ECR), the precious metals exploration and development company, is pleased to provide a business update for shareholders covering the Company’s Australian gold interests.

Craig Brown, Chief Executive Officer commented: “During the summer months the ECR team have been heads down and working hard across multiple areas of the business and we expect to be able to provide multiple updates in respect of field exploration and corporate development activities across our business in the near future.

“Given the extent of activities and to keep shareholders informed we felt it would be opportune to provide an update of the key areas of progress, notably in respect of the Company’s Western Australia Windidda gold project and also in respect of progress at Creswick gold project which is within our large and strategic landholding in the heart of the Victoria Goldfields and where the Company has highly active operations.”

HIGHLIGHTS:

Windidda Gold Project (Western Australia)

  • The Company’s wholly owned Australian subsidiary has submitted applications over 1,600 sq km of the Yilgarn Craton as announced on 2 January 2019;
  • The application process is progressing, with all 9 exploration licence applications having now been advertised in line with local requirements;
  • The Company is closely monitoring the tenement application process, which is being handled through a local tenement management consultant;
  • ECR has been approached by a listed mineral exploration company seeking to farm into the project, and although we have not decided to proceed with this farm-in proposal at this time, we are encouraged to see the interest being shown by third parties at such an early stage.

Creswick Gold Project (Victoria)

  • Whole-of-bag testing process has now been completed successfully and remaining samples have been sent to the laboratory for assay testing;
  • Partial assay results released on 27 August 2019 demonstrated a substantial increase in gold grade on average in respect of the 17 samples tested;
  • A further 113 samples, which for completeness included samples believed to be of lower grade, have been sent to the laboratory for assay testing with results expected to be received in the near future.

Other Gold Projects (Victoria)

The Company is highly proactive across its Victorian Goldfields projects, with the current key activities summarised below.

Blue Moon Prospect, Bailieston Gold Project

  • Following a reverse circulation drilling programme at Blue Moon prospect resulting in gold grades of up to 17.87g/t ECR formally announced a new gold discovery on 1 May 2019. Blue Moon is a flagship project for the Company and we are working to agree access with landowners to enable us to continue drilling to the west where our work indicates gold mineralisation may intensify.

HR3 Area, Bailieston Gold Project

  • Preparation of a detailed 3D geological model for the HR3 area has been undertaken over the summer months and is nearing completion. When complete the model is expected to generate numerous high priority drilling targets.

Henry’s Hill Gold Prospect – Avoca Project

  • Geological mapping and soil geochemistry has been completed in line with the Company’s announcement of 14 August 2019 with approximately 200 samples collected during the field exploration. Geochemical analysis of the samples is to be undertaken shortly.

Timor Gold Project

  • On 6 August 2019 the Company announced the results of rock chip sampling with grades of up to 22.6 g/t. The data gathered from the rock chip sampling programme, together with historic exploration data, has confirmed the prospectivity of the Timor gold project and the Company is now reviewing a potential drill programme over the key target areas.

MARKET ABUSE REGULATIONS (EU) No. 596/2014

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.

FOR FURTHER INFORMATION, PLEASE CONTACT:

ECR Minerals plc

Tel: +44 (0)20 7929 1010

David Tang, Non-Executive Chairman

Craig Brown, Director & CEO

Email: info@ecrminerals.com

Website: www.ecrminerals.com

WH Ireland Ltd

Tel: +44 (0)161 832 2174

Nominated Adviser

Katy Mitchell/James Sinclair-Ford

SI Capital Ltd

Tel: +44 (0)1483 413500

Broker

Nick Emerson

ABOUT ECR MINERALS PLC

ECR is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Limited has 100% ownership of the Avoca, Bailieston, Creswick, Moormbool and Timor gold exploration licences in central Victoria, Australia and the Windidda Gold Project in the Yilgarn Region, Western 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 Argentine subsidiary Ochre Mining has 100% ownership of 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.

Time to Fillyaboots with ECR Minerals (AIM:ECR) as Victoria Gold Projects continue to evolve and gold attracts record investments.

Time to Fillyaboots with ECR Minerals (AIM:ECR) as Victoria Gold Projects continue to evolve and gold attracts record investments.  

  • High grade assays at Timor
  • Exploration underway at Avoca
  • Whole of bag testing results at Creswick
  • Record breaking month for gold
  • Time to Fillyaboots

 For those keen on regular progress updates, Australia-focussed mining company ECR Minerals (AIM: ECR) hits the mark by keeping investors up to date with their every move on Twitter. Of late, the three major developments over August at Timor, Avoca and Creswick projects have focussed attention, driven as much as anything by the rising demand for gold amid dwindling macroeconomic conditions.

1) High grade assay results demonstrate potential for Timor Gold Project to follow in the footsteps of Maryborough goldfield

The first of these was an impressive set of rock chip sampling results at the Timor project, which gave ECR investors plenty to smile about at the beginning of the month.

High grade gold assays of 22.6 g/t and 26.3 g/t were recorded respectively from Shaw’s Reef and Anglo-Saxon Reef prospects.

Mined to 152m depth, ECR revealed that Shaw’s Reef had produced 11,465 ounces at a grade of 20.93 g/t Au. Meanwhile, four samples from the Anglo-Saxon Reef averaged 8.12 g/t Au.

Not bad eh? Well on top of that, the reconnaissance had also “discovered the Brilliant / Northumbria reef and its extensive gold workings, including an old open cut” ..according to CEO Craig Brown.

“This prospect area extends over a length of approximately 500m and is up to 80m wide and assays from 13 samples indicate widespread low-grade gold mineralisation.”

These results indicate that Timor may well follow on from the historical success of the Maryborough Goldfield.

Maryborough, which lies within the area covered by the Timor license, previously produced over 640,000 ounces of gold from hard-rock and alluvial sources, with 220,000 ounces mined from hard-rock operations at an average grade of 14g/t gold.

Northumbria Reef open cut

2) Avoca Exploration Underway

In addition to Timor, there was plenty of news forthcoming from ECR’s other Victoria sites. On the 14th of August the Company announced it had begun exploration at Henry’s Hill within the Avoca gold project license area.

The company now has active exploration works underway at four projects within the Victorian goldfields region, including Bailieston, Creswick, Timor and now Avoca.

“We are delighted to be highly active in the Victoria Goldfields region, at a time when the area is attracting considerable interest from larger companies and investors” commented Craig Brown.

Previously seven samples have been taken from the roadside reserve at Henry’s Hill, with three of these returning 5.1, 1.4 and 1.3 g/t gold.

With land access permission secured from the landowner and ever keen to keep the ball rolling, ECR will be commencing soil geochemistry and field mapping imminently.

3) Whole of bag testing results at Creswick:

Now for Creswick, the one we’ve all been waiting on. This is ECR’s strategic priority, with potential to be a multi-million ounce gold deposit.

Craig Brown and his team have been quick to try to progress the project and understand the impact of the nuggety nature of it’s gold deposits – conducting whole-of-bag testing in order to gain more representative results than from the original 2 kg assays.

Despite delays due to inclement weather at Victoria, ECR were happy to announce that work was underway and generating important results from the gravity and electrostatic concentration (GEC) of gold process, constructed under the guidance of the highly accredited resource geologist Keith Whitehouse.

GEC uses the dual processes of gravity and chargeability, which not only sounds rather impressive, but is capable of removing coarse, fine and ultrafine particles of gold from the RC samples.

According to Craig Brown.. “the results so far have demonstrated significant variability from the original assays, demonstrating that the small sample size can overstate and understate results.”

“Notably the original 44.63 g/t assay from the 2 kg sample from CSR006 (15-16 m) is increased to 63.03 g/t.”

To help support the process, ECR have appointed mining geologist and geometallurgist Dr Simon Dominy. With over 25 years’ experience Dr Dominy looks to be the man to help ECR evaluate their results, review the sampling process and guide future exploration & project development work at Creswick.

Gold sets record breaking highs

From a timing standpoint, ECR have hit the metaphorical bullseye considering the rapid rise in demand for safe-haven gold. Investors ploughed almost $5bn into the precious metal in August amid ongoing trade tensions and diminishing macroeconomic conditions, taking it to its highest level since April 2013.

Prices have remained high moving into September, with levels closing at US$1,551 a troy ounce on Wednesday the 4th of September. Analysts see no sign of prices dipping either.

Bloomberg Intelligence (BI) have said that US gold prices could be set for new record highs. Meanwhile Goldman Sachs upgraded its 6-month gold forecast at the beginning of August to $1,600 an ounce as trade tensions continue to escalate.

According to BI senior commodity strategist Mike McGlone:

“The dollar price of gold is on far more stable ground than it was about a decade ago. Some combination of sustained greenback strength and rapid stock-market appreciation should be necessary to suppress the metal’s price … Bottoming with the Federal Reserve’s interest-rate hike in 2015, the gold price appears to be situated for brighter days,” McGlone said in a September update.

Worsening economic data and the fast approaching Brexit deadline have also pushed the price of gold in British Pounds and Euros to new record highs.

The UK gold price in Pounds per ounce was up more than 50% from the eve of the UK’s vote to leave the EU back in June 2016, hitting £1279 on Tuesday the 3rd of September.

Time to Fillyaboots

All said, while ECR could be accused of being slightly trigger happy with their posts on Twitter, the reality is that the company have a lot to talk about.

As well as gold’s strength, with active exploration underway at four sites in Victoria and with nine exploration licences in the highly prospective Yilgarn region, ECR Minerals are certainly a company worth your attention if you’re looking to join the gold rush.

Each month the company continues to materially progress its projects, with August no exception. Timor’s high grade assay results give plenty of hope, putting a solid floor under the Company valuation, whilst recent exploration at Avoca demonstrates yet again that ECR are not resting on their laurels.

Finally, and of most importance thorough testing appears to be fully underway at Creswick, meaning ECR are moving ever closer to understanding the true value of their potential multi million ounce gold deposit. And with a market cap at just GBP3.5m, there has never been a better time to fillyaboots with this ambitious gold explorer.

By Harry Dacres-Dixon

 

Sources:

Gold Prices To Hit $1,575 In 3 Months, $1,600 In 6 Months – Goldman Sachs

Gold prices to pick off U.S. dollar high next – Bloomberg Intelligence

Investors pile into gold as trade conflict rumbles on

Gold Price Hits Fresh UK and Euro Highs as Brexit Rebels Fight No.10, German Factories Prepare for ‘No Deal’

ECR Minerals #ECR – High Grade Gold Assays – Timor Gold Project – Australia

ECR Minerals #ECR – Exploration Commences at Henry’s Hill – Avoca Gold Project – Australia

ECR Minerals plc (ECR) Progress Update – Creswick Gold Project Australia

ECR Minerals #ECR – Exploration Commences at Henry’s Hill – Avoca Gold Project – Australia

ECR Minerals plc (LON:ECR), the precious metals exploration and development company, is pleased to announce the commencement of gold exploration at Henry’s Hill within the Company’s Avoca gold project.

Craig Brown, Chief Executive Officer commented: “The ECR team are excited to feed Henry’s Hill at the Avoca gold project, into the pipeline of projects under exploration in Victoria.

The Avoca Gold Project is one of five projects held by ECR in the Victorian Goldfields region, with four projects at Avoca, Bailieston, Creswick and Timor now the subject of active exploration or project development operational activity.

We are delighted be highly active in the Victoria Goldfields region, at a time when the area is attracting considerable interest from larger companies and investors.”

Highlights:

  • Previously, ECR geologists have taken 7 rock chip samples from the roadside reserve at Henry’s Hill. The samples were taken approximately 5m from each other at various intervals across shallow pits on the roadside reserve. All seven samples were independently tested by Onsite Laboratory Services.
  • Three of these samples returned 5.1, 1.4 and 1.3 g/t gold;
  • ECR have secured land access permission from the landowner and will commence soil geochemistry and field mapping imminently;
  • The soil geochemistry will be undertaken in an attempt to locate the loci of the mineralised shoot/s;
  • In addition, the work will examine the potential for the mineralisation to extend under cover to the east and the potential continuation of mineralisation to the west;
  • Geological mapping conducted in conjunction with the soil geochemistry will attempt to better define the controls on the shoots.

Henry’s Hill Background

Henry’s Hill is located within EL5387 and is 10 km north of Avoca in central Victoria.

The area to be explored is historically known as Henry’s Hill but is also known to the locals as Wolfram Hill due to the presence of the tungsten-bearing ore that was mined along with gold.

Within Henry’s Hill there are shallow historic workings in a zone over 800 m long and up to 100 m wide and which can be seen through the link below:

https://www.ecrminerals.com/images/Projects/AHH_Henrys_Hill_Google_Earth.jpg

The zone has been worked to alluvial cover to the east and so may extend an additional 200 m to the tenement boundary. The workings die out to the west potentially as the influence of the faults diminishes.

The area was mapped in 1950 by government geologist D Thomas, who identified a series of north-dipping faults dissecting NW trending sediments. The most likely geological reconstruction has these faults intersecting a north-plunging anticline under cover to the east. This relationshipis hypothesised to explain the faults diminishing to the west and will be investigated during field mapping.

The presence of tungsten is a good indicator of the influence of magmatic fluids. Granites occur at the surface to the north. Further evidence for granite-related mineralisation will be sought during the exploration work.

COMPETENT PERSON STATEMENT

The information in this announcement that relates to Exploration Results is based on information compiled by Dr Rodney Boucher of Linex Pty Ltd. Linex Pty Ltd provides geological services to Mercator Gold Australia Pty Ltd, including the services of Dr Boucher, who has a PhD in geology, is a Member and RPGeo of the Australian Institute of Geoscientists and is a Member of the Australasian Institute of Mining and Metallurgy. Dr Boucher has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Boucher consents to the inclusion in the announcement of the material based on his information in the form and context in which it appears.

MARKET ABUSE REGULATIONS (EU) No. 596/2014

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.

FOR FURTHER INFORMATION, PLEASE CONTACT:

ECR Minerals plc

Tel: +44 (0)20 7929 1010

David Tang, Non-Executive Chairman

Craig Brown, Director & CEO

Email:

info@ecrminerals.com

Website: www.ecrminerals.com

WH Ireland Ltd

Tel: +44 (0)161 832 2174

Nominated Adviser

Katy Mitchell/James Sinclair-Ford

SI Capital Ltd

Tel: +44 (0)1483 413500

Broker

Nick Emerson

ABOUT ECR MINERALS PLC

ECR is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Limited has 100% ownership of the Avoca, Bailieston, Creswick, Moormbool and Timor gold exploration licences in central Victoria, Australia and the Windidda Gold Project in the Yilgarn Region, Western 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 Argentine subsidiary Ochre Mining has 100% ownership of 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.

ECR Minerals #ECR – Annual Financial Report & Notice of AGM

ECR Minerals plc is pleased to announce its audited financial statements for the year ended 30 September 2018. The information presented below has been extracted from the Company’s Annual Report and Accounts 2018.

Copies of the Annual Report and Accounts 2018 together with a notice of annual general meeting will be posted to shareholders today and will be available shortly on the Company’s website www.ecrminerals.comand from the Company’s registered office at Unit 117, Chester House, 81-83 Fulham High Street, Fulham Green, London SW6 3JA. The text of the notice of annual general meeting is provided below.

Market Abuse Regulations (EU) No. 596/2014

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.

FOR FURTHER INFORMATION, PLEASE CONTACT:

ECR Minerals plc Tel: +44 (0)20 7929 1010
David Tang, Non-Executive Chairman
Craig Brown, Director & CEO
Email:info@ecrminerals.com
Website: www.ecrminerals.com
WH Ireland Ltd Tel: +44 (0)161 832 2174
Nominated Adviser
Katy Mitchell/James Sinclair-Ford
SI Capital Ltd Tel: +44 (0)1483 413 500
Broker
Nick Emerson

FORWARD LOOKING STATEMENTS

This announcement may include forward looking statements. Such statements may be subject to numerous known and unknown risks, uncertainties and other factors that could cause actual results or events to differ materially from current expectations. There can be no assurance that such statements will prove to be accurate and therefore actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements. Any forward-looking statements contained herein speak only as of the date hereof (unless stated otherwise) and, except as may be required by applicable laws or regulations (including the AIM Rules for Companies), the Company disclaims any obligation to update or modify such forward-looking statements because of new information, future events or for any other reason.

The Directors of ECR Minerals plc (the “Directors” or the “Board”) present their report and audited financial statements for the year ended 30 September 2018 for ECR Minerals plc (“ECR”, the “Company” or the “Parent Company”) and on a consolidated basis (the “Group”)

Chairman’s Statement

Over the past year, ECR has continued to advance and augment its portfolio of gold exploration projects in Australia, which is one of the world’s principal gold producers and one of the foremost destinations for global mining investment.

During the financial year ended 30 September 2018 and since the year-end the Company’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) has carried out extensive exploration work in the state of Victoria, with drilling completed at two prospects in the Avoca gold project area during calendar year 2018, followed by drilling at the Creswick gold project in February 2019, and at the Blue Moon and Black Cat prospects in the Bailieston gold project area later the same month. The results of these programmes are discussed in the Chief Executive Officer’s report, to the extent which they are available. I am pleased to note that drilling results announced to date have included some significant intercepts at Blue Moon, the most exciting being 2 metres at 17.87 g/t gold from 57 metres downhole in BBM007, within a zone of 15 metres at 3.81 g/t gold from 51 metres.

In late 2018, the Group moved into another world-class Australian gold province, the Yilgarn Craton in Western Australia. MGA has made nine exploration licence applications over a 1,600 square kilometre land package which has been identified as a potential greenstone-hosted orogenic gold exploration opportunity with significant potential to contain Archaean greenstones buried beneath Permian cover sequences of the Canning Basin.

Importantly, ECR is moving forward from a position of financial strength, having raised £1.35 million (before costs) during calendar year 2018, and with the potential for more than £2 million of further funding to come into the Company through the exercise of warrants issued to investors as part of those fundraisings.

I would like to welcome Sam Garrett to the Board as a non- executive director. Mr Garrett, who is a resident of Australia, holds a Bachelor of Science degree with First Class Honours in Geology and a Master of Economic Geology degree, both from the University of Tasmania. He also holds a Master of Applied Finance degree from Macquarie University in Australia. Mr Garrett has over 30 years of exploration management, project assessment and operational experience working for large multi-national and junior mining and exploration companies in ten countries including Australia, Argentina and the Philippines. I am sure that Sam has a valuable contribution to make as a director of ECR.

Christian Dennis resigned as a non-executive director of the Company in July 2018, to focus on his other business interests. The Board would like to thank Christian for his service as a director of ECR and wish him well for the future.

Pleasingly, the gold price has made a healthy start to 2019 by returning to levels in excess of USD 1,300 per troy ounce, and we are hopeful that macroeconomic conditions will see the price rise further in the near future. Regardless, the Board remains confident in ECR’s strategic objective of discovering a multi-million ounce gold deposit, and we look forward to reporting further progress towards this goal.

Chairman

28 March 2019

Chief Executive Officer’s Report

The Group’s concentration on gold exploration in the state of Victoria, Australia, continued apace during the year, as did the exploration boom across the Victorian gold province as a whole. The latter has been driven in large part by the success story which has unfolded at the Fosterville gold mine, which produced more than 350,000 ounces of gold in 2018 and is firmly established as Victoria’s largest gold producer.

At the same time, we have expanded our footprint to Western Australia by applying for a package of nine exploration licences in the Yilgarn Craton, which comprise the Windidda gold project, and maintained our presence in Argentina at the SLM gold project in La Rioja Province.

We are also continuously evaluating potential new opportunities and will engage with those, such as the Windidda project, that we determine may have the potential to enable the achievement of ECR’s primary strategic objective, which is to generate value for shareholders through the discovery of a multi-million ounce gold deposit.

By convention, much of this Chief Executive Officer’s Report relates to activities which have taken place after 30 September 2018. Diamond drilling at the Bung Bong, Monte Christo and Blue Moon prospects was completed prior to the year-end, as was rock-chip sampling in the Byron and Cherry Tree areas. Reverse circulation (RC) drilling at Blue Moon and the Creswick project and rotary air blast (RAB) drilling at the Black Cat prospect has taken place in the current financial year.

GOLD EXPLORATION IN VICTORIA, AUSTRALIA

In Victoria, ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) has 100% ownership of six exploration licences: Avoca (EL5387), Bailieston (EL5433), Creswick (EL006184), Moormbool (EL006280 and EL006913) and Timor (EL006278).

MGA has pending applications for four further exploration licences, two south and south west of the existing licence at Creswick; and two others in the vicinity of the Bailieston and Moormbool project areas, to secure available ground south and south east of a licence applied for by Newmont Exploration Pty Ltd.

In early February 2019, MGA commenced a reverse circulation (RC) drilling programme at Creswick, which was followed by a second RC programme at the Blue Moon prospect in the Bailieston gold project area. In parallel, a rotary air blast (RAB) programme was carried out at the Black Cat prospect, which is also within the Bailieston gold project area.

The Company announced assay results in respect of three holes drilled at Blue Moon on 14 March 2019, with results from a further nine holes expected to be announced soon. Assay results from drilling at Black Cat and Creswick are also expected to be announced in the near future. From the announced Blue Moon results, significant intersections included 2 metres at 17.87 g/t gold from 57 metres down hole in BBM007, within a zone of 15 metres at 3.81 g/t gold from 51 metres.

Bailieston Gold Project – EL5433

The Bailieston project is at the epicentre of the current gold exploration boom in Victoria, being located close to the highly successful Fosterville mine owned by Kirkland Lake Gold. This point is underlined by the arrival of Newmont Exploration in the district with an application for ground immediately to the north of the Black Cat prospect.

Blue Moon Prospect

The focus of activities in the Bailieston project area for the past year has been the Blue Moon prospect. This was identified as a high priority prospect in early 2018 when Dr Rodney Boucher, an experienced Victorian gold geologist, commenced a review of all available data on MGA’s exploration licences (at that time numbering four licences), complemented by geological mapping and geochemical surveys in selected areas. The purpose of this work was to help define targets for a diamond drilling programme extending across a number of MGA’s prospects.

The geochemical surveys utilised a portable XRF to delineate proxy minerals associated with gold. An arsenic- anomalous zone up to 40 metres wide and more than 200 metres long was identified at Blue Moon, and previous work showed anomalism over a further 150 metres to the west. Previous rock chip samples included results of 12.1, 10.1 and 7.0 g/t gold, and previous soil surveys identified gold to 5.0 g/t.

The diamond drilling at Blue Moon was intended to test the arsenic and antimony anomalies identified by the soil geochemical survey completed by MGA in early 2018. Positive results from the drilling were announced in July 2018.

Diamond drill holes BBM001 and BBM002 were designed to establish the dip of the host sandstones and assess the potential for gold mineralisation. Intercepts of 5.45 metres at 0.12 g/t gold from 33.95 metres and 10.0 metres at 0.16 g/t Au from 43.8 metres were obtained in BBM001 and BBM002, respectively. Upon drilling faulted, stockworked sandstone in the first two holes, BBM003 was drilled down dip to test the nature of the cross-cutting faults and veins and to obtain a large number of samples for analysis. An intercept of 39.5 metres at 0.3 g/t gold from 24.2 metres, including 2.7 metres at 1.12 g/t gold from 60 metres, was obtained in BBM003. Intersections given in this paragraph are apparent width.

The gold mineralisation intersected is hosted in an approximately 5.5 metre wide medium-grained sandstone within a thick bioturbated shale. Diorite sills have intruded along the margins of the sandstone. The sandstone is metamorphosed to quartzite and the brittle host showed stockwork vein development in each of the three holes. Small iron-oxide pseudomorphs thought to be of arsenopyrite and pyrite were disseminated throughout the quartzite. Deep weathering of the sandstone meant that no samples of fresh rock could be obtained from the diamond drill holes to verify the minerals.

The high repeatability of the assay results from MGA’s diamond drilling at Blue Moon supports the hypothesis that the prospect is a disseminated gold occurrence comparable to some of the mineralisation exploited at the Fosterville mine approximately 50km away.

Given the deep weathering and the potential for gold depletion in the oxidised sulphides, it was considered possible that higher grades would be encountered at depth in the fresh (un-weathered) rock. Obtaining samples from fresh rock was a key objective of the drilling completed at Blue Moon in February 2019.

The twelve reverse circulation (RC) holes (BBM004-15) completed at Blue Moon by MGA aimed to intercept the sandstone on 50 metre spacing across three sections and to gain samples from beneath the oxide zone.

Assay results have been announced for holes BBM007, BBM006 and BBM004, and have shown both high grade intervals and significant widths of anomalous gold grades. As well as 2 metres at 17.87 g/t gold from 57 metres down hole in BBM007, within a zone of 15 metres at 3.81 g/t gold from 51 metres, an intersection of 3 metres at 3.88 g/t gold from 170 metres down hole within a zone of 11 metres at 2.42 g/t gold from 169 metres in hole BBM006 has been announced. Intersections given in this paragraph are apparent width.

These results indicate that a high grade zone exists within the target sandstone host. Further drill results and interpretation will be required to understand any concentration of mineralisation within shoots.

The base of the oxide zone was at 64 metres in BBM007 within the host sandstone. Visible gold was seen in three samples (3 metres at 13.4 g/t gold from 57-60 metres) and it is possible these are elevated gold values as a result of supergene enrichment close to the base of the oxide zone. BBM004 & 6 intercepted the host sandstone beneath the oxide zone. Logging recorded estimates of up to 4% pyrite and 2% arsenopyrite with minor quartz. No visible gold was seen in these samples.

In addition to Blue Moon, two further prospects with similar characteristics at surface, namely anomalous arsenic and broad areas of quartz float, have been identified within an approximately 3km radius. MGA will be further assessing these prospects, referred to as Red Moon and Yellow Moon, in the months to come.

Black Cat Prospect

Black Cat is among the high priority targets identified by the geophysical interpretation and targeting study completed for MGA by Terra Resources in late 2017 and has not been previously drilled. The prospect is immediately south of ground recently applied for by Newmont Exploration and contains 220 metres of historical workings along three known lines of quartz reef. Strong gold-in-soil anomalism in some areas indicates unworked reefs may remain to be discovered, and rock chip sampling of quartz-poor material indicates potential for disseminated gold. Rock chip samples at Black Cat have returned encouraging grades up to 11.3 g/t gold.

Rotary air blast (RAB) drilling is a low cost method well suited to the first pass testing required at Black Cat, and a 450 metre RAB programme commenced in February 2019.

Other Prospects at Bailieston

Away from Black Cat and the ‘Moon’ prospects, exploration work at Bailieston included 151 surface rock chip samples to help assess targets in the Byron and Cherry Tree areas, which contain numerous northwest trending quartz reefs, including the Byron, Scoulars and Maori reefs that were drilled by MGA in 2017. Of these samples, 51 returned gold grades in excess of 0.5 g/t, with the highest being 67.4 g/t. Of the high grade samples, 26 were re-assayed in accordance with common QA/QC practice, and the repeat assays demonstrated good consistency with the first round of assays.

Creswick Gold Project – EL006184

The Creswick project targets gold mineralisation hosted within the Dimocks Main Shale (DMS), which extends over a 15km trend from the mining centre of Ballarat to the south, approximately 7km of which is covered by EL006184 and MGA’s two exploration licence applications. In the project area, the DMS is an approximately 25 metre wide shale containing bedding and cleavage-parallel auriferous quartz veins. Only two holes have previously been drilled to test the DMS within EL006184, both in the 1990s. The results of this drilling included an intercept of 2 metres at 12.28 g/t gold. The best previous drill intercept into the DMS elsewhere is 2 metres at 176 g/t gold.

Avoca Gold Project – EL5387

MGA drill-tested two gold prospects in the Avoca project area in April and May 2018, also following Dr Boucher’s data review, mapping and geochemical surveying. Five holes were completed at the Bung Bong prospect using a diamond core rig. Thereafter, the rig moved to the Monte Christo prospect, where two holes were drilled. Assay results were announced in early June 2018.

All five holes at Bung Bong and the two holes at Monte Christo fulfilled their intended purpose, which was to test the structural architecture of the target areas. The holes were the first ever drilled at both Bung Bong and Monte Christo, and gold mineralisation was intersected at both prospects, although no high-grade shoots were encountered.

WESTERN AUSTRALIA

Windidda Gold Project

In December 2018, MGA submitted nine contiguous exploration licence applications covering a 1,600 square kilometre package of ground prospective for gold mineralisation in the Yilgarn region of Western Australia, east of the town of Wiluna. The application package is to be known as the Windidda gold project.

Archaean greenstones host many of Western Australia and the world’s most prolific gold deposits, and the Windidda applications cover a significant proportion of an identified gravity-magnetic trend with known gold prospects along trend in outcropping greenstone to the south (outside the application areas).

The under-cover greenstone gold exploration model has been successfully tested by Greatland Gold (LON:GGP) at its Ernest Giles project located approximately 125km east of the Windidda project.

Previous exploration within the Windidda project area has targeted base metal and manganese deposits within the cover sequences. Gravity and magnetic anomalies interpreted to be hosted in greenstone units beneath the cover have not been targeted. These targets are expected to be amenable to aircore drilling to enable rapid assessment of potential for gold mineralisation, after the exploration licences are granted.

Iceberg Gold Project

The Company secured an option over the Iceberg project in Western Australia in August 2018, but after completing its due diligence, elected not to proceed with the acquisition.

FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2018

For the year to 30 September 2018 the Group recorded a total comprehensive expense of £721,460, compared with £562,649 for the year to 30 September 2018.

The largest contributor to the total comprehensive expense was the line item “other administrative expenses”, which represents the costs of operating the Group and carrying out exploration at its projects, where these costs are ineligible for capitalisation under applicable accounting standards.

The Group’s net assets at 30 September 2018 were £3,651,545, in comparison with £3,735,225 at 30 September 2017. The decrease is due to increased exploration assets as a result of the capitalisation of exploration expenditure during the year being offset by a reduction in cash and cash equivalents.

Craig Brown

Chief Executive Officer

Independent Auditor’s Report

For the year ended 30 September 2018

Independent Auditor’s Report to the Members of ECR Minerals Plc

Opinion

We have audited the financial statements of ECR Minerals Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 September 2018 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statement of Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

In our opinion:

  • the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 30 September 2018 and of the group’s and parent company’s loss for the year then ended;
  • the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
  • the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
  • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

  • the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
  • the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Our application of materiality

The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures. Group materiality was £60,000 based upon gross assets and the loss before tax. The Parent Company materiality was £55,000 based upon gross assets and the result for the year. For each component in the scope of our group audit, we allocated a materiality that is either equal to or less than our overall group materiality.

An overview of the scope of our audit

As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas involving significant accounting estimates and judgement by the Directors and considered future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. The Australian and Argentinian subsidiary undertakings represent the principal business units within the Group, upon which we performed audit procedures directly on significant accounts based on size or risk profile to the Group. A full scope audit was undertaken on the financial statements of the Parent Company.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. This matter was addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Key Audit Matter How the scope of our audit responded to the key audit matter
Recoverability of intangible assets – exploration and development costs (refer note 10)

The carrying value of intangible assets as at 30 September 2018 is £2,859,474 which comprises exploration and development projects in Australia, Argentina and the Philippines. The carrying value of these intangible assets are tested annually for impairment. There is a risk that the carrying value of these early stage projects is impaired and that the exploration and development expenditure

capitalised during the year is not in accordance with IFRS 6.

The carrying value of all early stage exploration and development projects were assessed and tested in accordance with the following criteria:

  • The Group holds good title to the licence areas;
  • The Group has planned and budgeted for further expenditure for mineral resources in the licence areas; and
  • Exploration and development work undertaken to date has indicated the existence of commercially viable quantities of mineral resource.

We undertook substantive testing on capitalised expenditure during the year to ensure it satisfied the criteria under IFRS 6.

We discussed with management the scope of their future budgeted and planned expenditure on each licence area.

As disclosed in note 10 to the financial statements, the Group has not formally acquired title to its 25% interest in Cordillera Tiger Gold Resources, Inc (“Cordillera”) which is the holder of the exploration permit for the Danglay gold project in the Philippines. The conditions for the

earn-in have been satisfied but the relevant shareholding has yet to be issued, despite the Board of Cordillera authorising the issue. In addition, the exploration permit for the Danglay gold project held by Cordillera expired on 30 September 2015. Cordillera is currently waiting

for the Philippine authority to formally grant its renewal application. This indicates the existence of a material uncertainty over the recoverability of the carrying value of the Danglay gold project, which amounted to £1,176,729 as at 30 September 2018.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

  • the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
  • the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

  • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
  • the parent company financial statements are not in agreement with the accounting records and returns; or
  • certain disclosures of directors’ remuneration specified by law are not made; or
  • we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the group and parent company financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

David Thompson (Senior statutory auditor)

For and on behalf of PKF Littlejohn LLP

Statutory auditor

28 March 2019 Consolidated Income Statement

For the year ended 30 September 2018

Year ended Year ended
30 September 2018 30 September 2017
Note £ £
Continuing operations

Other administrative expenses

(544,521)

(509,545)

Currency exchange differences (6,912) (3,186)
Total administrative expenses (551,433) (512,731)

Operating loss

3

(551,433)

(512,731)

Loss on disposal of investment (1)
Fair value movements – available for sale financial asset 9 (971) 1,255
(552,404) (511,477)

Financial income

7

1,386

353

Financial expense 1,000
Finance income and costs 2,386 353

Loss for the year before taxation

Income tax

5

(550,018)

(511,124)

Loss for the year from continuing operations (550,018) (511,124)
Loss for the year – all attributable to owners of the parent (550,018) (511,124)

Earnings per share – basic and diluted

On continuing operations

4

(0.21)p

(0.31)p

The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent company profit and loss account. The loss for the parent company for the year was £373,149 (2017: £208,774 loss).

Consolidated Statement of Comprehensive Income

For the year ended 30 September 2018

Year ended Year ended
30 September 2018 30 September 2017
£ £
Loss for the year (550,018) (511,124)
Items that may be reclassified subsequently to profit or loss

Loss on exchange translation

(171,442)

(51,524)

Other comprehensive expense for the year (171,442) (51,524)
Total comprehensive expense for the year (721,460) (562,648)

Attributable to:- Owners of the parent

(721,460)

(562,648)

The notes on pages 26 to 41 are an integral part of these financial statements.

Consolidated & Company Statement of Financial Position

At 30 September 2018

Group

Company

30 September

30 September

30 September

30 September

Note

2018

£

2017

£

2018

£

2017

£

Assets
Non-current assets
Property, plant and equipment 8 3,033 8,694 1,764 7,020
Investments in subsidiaries 9 852,728 852,170
Intangible assets 10 2,859,474 2,668,747 2,256,309 2,180,312
Other receivables 11 538,494 240,970
2,862,507 2,677,441 3,649,295 3,280,472

Current assets

Trade and other receivables 11 79,413 54,888 471,670 281,901
Available for sale financial assets 9 21,299 22,269 21,299 22,269
Cash and cash equivalents 12 781,142 1,082,994 749,025 1,046,787
881,854 1,160,151 1,241,994 1,350,957
Total assets 3,744,361 3,837,592 4,891,289 4,631,429

Current liabilities

Trade and other payables 14 92,816 102,367 75,662 80,432
92,816 102,367 75,662 80,432
Total liabilities 92,816 102,367 75,662 80,432
Net assets 3,651,545 3,735,225 4,815,627 4,550,997
Equity attributable to owners of the parent
Share capital 13 11,283,756 11,282,812 11,283,756 11,282,812
Share premium 13 44,460,171 43,823,335 44,460,171 43,823,335
Exchange reserve (389,501) (218,059)
Other reserves 1,381,998 1,381,998 1,381,998 1,381,998
Retained losses (53,084,879) (52,534,860) (52,310,298) (51,937,148)
Total equity 3,651,545 3,735,225 4,815,627 4,550,997

The financial statements were approved and authorised for issue by the Directors on 28 March 2019 and were signed on its behalf by:

Weili (David) Tang Craig Brown
Non–Executive Chairman Director & Chief Executive Officer

Consolidated Statement of Changes in Equity

For the year ended 30 September 2018

Share capital Share premium Exchange reserve Other reserves Retained reserves
(Note 13) (Note 13) Total
£ £ £ £ £ £
Balance at 30 September 2016 11,281,628 42,441,553 (166,535) 1,147,717 (52,023,736) 2,680,627
Loss for the year (511,124) (511,124)
Loss on exchange translation

(51,524) (51,524)

Total comprehensive expense

(51,524) (511,124) (562,648)

Shares issued

1,109

1,552,455 1,553,564

Share issue costs

(84,878) (84,878)

Share based payments

(166,739) 234,281 67,542

Shares issued in payment of creditors

75

80,944

81,019

Total transactions with owners,

recognised directly in equity

1,184

1,381,782

234,281

1,617,247

Balance at 30 September 2017

11,282,812

43,823,335 (218,059)

1,381,998

(52,534,860)

3,735,226

Loss for the year

(550,018)

(550,018)

Gain/loss on exchange translation

(171,442)

(171,442)

Total comprehensive expense

(171,442)

(550,018)

(721,460)

Shares issued

929

649,071

650,000
Share issue costs

(27,220)

(27,220)
Warrants issued in lieu
of finance cost

Shares issued in payment
of creditors
15

14,985

15,000

Total transactions with owners, recognised directly in equity

944

636,836

637,780

Balance at 30 September 2018 11,283,756 44,460,171

(389,501)

1,381,998

(53,084,878)

3,651,546

Company Statement of Changes in Equity

For the year ended 30 September 2018

Share capital Share premium Other reserves Retained reserves
(Note 13) (Note 13) Total
£ £ £ £ £
Balance at 30 September 2016 11,281,628 42,441,553 1,147,717 (51,728,374) 3,142,524
Loss for the year (208,774) (208,774)
Total comprehensive expense (208,774) (208,774)
Shares issued 1,109 1,552,455 1,553,564
Share issue costs (84,878) (84,878)
Share based payments (166,739) 234,281 67,542
Shares issued in payment of creditors 75 80,944 81,019
Total transactions with owners, recognised directly in equity

1,184

1,381,782

234,281

1,617,247

Balance at 30 September 2017 11,282,812 43,823,335 1,381,998 (51,937,148) 4,550,997
Loss for the year (373,149) (373,149)
Total comprehensive expense (373,149) (373,149)
Shares issued 929 649,071 650,000
Share issue costs (27,220) (27,220)
Shares issued in payment of creditors 15 14,985 15,000
Total transactions with owners, recognised
directly in equity 944 636,836

637,780

Balance at 30 September 2018 11,283,756 44,460,171

1,381,998

(52,310,297)

4,815,628

Consolidated & Company Cash Flow Statement

For the year ended 30 September 2018

Group

Company

Year ended 30 September

Year ended 30 September

Year ended 30 September

Year ended 30 September

Note

2018

£

2017

£

2018

£

2017

£

Net cash flow used in operations 21 (563,850) (569,016) (547,730) (511,307)
Investing activities
Purchase of property, plant & equipment (6,174) (4,082)
Increase in exploration assets 10 (302,794) (231,140) (75,998) (104,209)
Investment in subsidiaries (558) (112,070)
Loan to subsidiary (297,524) (133,629)
Interest income 1,386 353 1,268 233
Net cash used in investing activities (301,408) (236,961) (372,812) (353,757)
Financing activities
Proceeds from issue of share capital 622,780 1,468,686 622,780 1,468,686
Net cash from financing activities 622,780 1,468,686 622,780 1,468,686
Net change in cash and cash equivalents (242,478) 662,709 (297,762) 603,622
Cash and cash equivalents at beginning of the year 1,082,994 471,809 1,046,787 443,165
Effect of changes in foreign exchange rates (59,374) (51,524)
Cash and cash equivalents at end of the year 12 781,142 1,082,994 749,025 1,046,787

Non-cash transactions:

1. Settlement of creditors of £15,000 (2017: £80,994) with ordinary shares.

Notes to the Financial Statements

For the year ended 30 September 2018

1 General information

The Company and the Group operated mineral exploration and development projects. The Group’s principal interests are located in Argentina, the Philippines and Australia.

The Company is a public limited company incorporated and domiciled in England. The registered office of the Company and its principal place of business is Unit 117, Chester House, 81-83 Fulham High Street, Fulham Green, London SW6 3JA. The Company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange.

2 Accounting policies

Overall considerations

The principal accounting policies that have been used in the preparation of these consolidated financial statements are set out below. The policies have been consistently applied unless otherwise stated.

Basis of preparation

The financial statements of both the Group and the Parent Company have been prepared in accordance with International Financial Reporting Standards (IFRSs) and Interpretations issued by the IFRS Interpretations Committee (IFRIC) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. These are the standards, subsequent amendments and related interpretations issued and adopted by the International Accounting Standard Board (IASB) that have been endorsed by the European Union at the year end. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial instruments. The Directors have taken advantage of the exemption available under Section 408 of the Companies Act 2006 and have not prepared an Income Statement or a Statement of Comprehensive Income for the Company alone.

The Group and Parent Company financial statements have been prepared on a going concern basis as explained in the Directors’ Report.

New accounting standards and interpretations

Effective during the year

During the year the Group has adopted the following standards and amendments:

  • Annual Improvements to IFRSs 2014–2016 Cycle
  • Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses
  • Amendments to IAS 7: Disclosure Initiative

The adoption of these standards and amendments did not have any impact on the financial position or performance of the Group.

Not yet effective

At the date of authorisation of these Group Financial Statements and the Parent Company Financial Statements, the following Standards, amendments and interpretations were endorsed by the EU but not yet effective:

IFRS 15 Revenue from Contracts with Customers including amendments to IFRS 15

  • Clarifications to IFRS 15 Revenue from Contracts with Customers
  • IFRS 9 Financial Instruments
  • IFRS 16 Leases
  • Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions
  • IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration
  • IFRIC 23 Uncertainty over Income Tax Treatments
  • Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures

In addition to the above there are also the following standards and amendments that have not yet been endorsed by the EU:

  • Annual Improvements to IFRS Standards 2015-2017 Cycle
  • Amendments to IFRS 3 Business Combinations
  • Amendments to IAS 1 and IAS 8 Definition of Material

The Group intends to adopt these standards when they become effective. The introduction of these new standards and amendments is not expected to have a material impact on the Group or Parent Company.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and two of its subsidiaries made up to 30 September 2018. Subsidiary undertakings acquired during the period are recorded under the acquisition method of accounting and their results consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date such control ceases.

The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Going concern

It is the prime responsibility of the Board to ensure the Group and Company remains a going concern. At 30 September 2018, the Group had cash and cash equivalents of £781,142 and no borrowings. The Group’s financial projections and cash flow forecasts covering a period of at least twelve months from the date of approval of these financial statements show that the Group will have sufficient available funds in order to meet its contracted and committed expenditure. Further details are included in Note 19 to the financial statements. The Directors are confident in the ability of the Group to raise additional funding, if required, from the issue of equity and/or the sale of assets.

Based on their assessment of the financial position, the Directors have a reasonable expectation that the Group and Company will be able to continue in operational existence for the next 12 months and continue to adopt the going concern basis of accounting in preparing these Financial Statements.

Cash and cash equivalents

Cash includes petty cash and cash held in current bank accounts. Cash equivalents include short–term investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and any provision for impairment losses.

Depreciation is charged on each part of an item of property, plant and equipment so as to write off the cost of assets less the residual value over their estimated useful lives, using the straight–line method. Depreciation is charged to the income statement. The estimated useful lives are as follows:

Office equipment 3 years
Furniture and fittings 5 years
Machinery and equipment 5 years

Expenses incurred in respect of the maintenance and repair of property, plant and equipment are charged against income when incurred. Refurbishments and improvements expenditure, where the benefit is expected to be long lasting, is capitalised as part of the appropriate asset.

An item of property, plant and equipment ceases to be recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on cessation of recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset ceases to be recognised.

Exploration and development costs

All costs associated with mineral exploration and investments are capitalised on a project–by–project basis, pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general overheads. If an exploration project is successful, the related expenditures will be transferred to mining assets and amortised over the estimated life of the commercial ore reserves on a unit of production basis. Where a licence is relinquished or a project abandoned, the related costs are written off in the period in which the event occurs. Where the Group maintains an interest in a project, but the value of the project is considered to be impaired, a provision against the relevant capitalised costs will be raised.

The recoverability of all exploration and development costs is dependent upon the discovery of economically recoverable reserves, the ability of the Group to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition thereof.

Impairment testing

Individual assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may exceed its recoverable amount, being the higher of net realisable value and value in use. Any such excess of carrying value over recoverable amount or value in use is taken as a debit to the income statement.

Intangible exploration assets are not subject to amortisation and are tested annually for impairment.

Provisions

A provision is recognised in the Statement of Financial Position when the Group or Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre–tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Leased assets

In accordance with IAS 17, leases in terms of which the Group or Company assumes substantially all the risks and rewards of ownership are classified as finance leases. All other leases are regarded as operating leases and the payments made under them are charged to the income statement on a straight line basis over the lease term.

Taxation

There is no current tax payable in view of the losses to date.

Deferred income taxes are calculated using the Statement of Financial Position liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future.

In addition, tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets.

Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the Statement of Financial Position date.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity, in which case the related current or deferred tax is also charged or credited directly to equity.

Investments in subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The investments in subsidiaries held by the Company are valued at cost less any provision for impairment that is considered to have occurred, the resultant loss being recognised in the income statement.

Equity

Equity comprises the following:

  • “Share capital” represents the nominal value of equity shares, both ordinary and deferred.
  • “Share premium” represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issues.
  • “Other reserves” represent the fair values of share options and warrants issued.
  • “Retained reserves” include all current and prior year results, including fair value adjustments on available for sale financial assets, as disclosed in the consolidated statement of comprehensive income.
  • “Exchange reserve” includes the amounts described in more detail in the following note on foreign currency below.

Foreign currency translation

The consolidated financial statements are presented in pounds sterling which is the functional and presentational currency representing the primary economic environment of the Group.

Foreign currency transactions are translated into the respective functional currencies of the Company and its subsidiaries using the exchange rates prevailing at the date of the transaction or at an average rate where it is not practicable to translate individual transactions. Foreign exchange gains and losses are recognised in the income statement.

Monetary assets and liabilities denominated in a foreign currency are translated at the rates ruling at the Statement of Financial Position date.

The assets and liabilities of the Group’s foreign operations are translated at exchange rates ruling at the Statement of Financial Position date. Income and expense items are translated at the average rates for the period. Exchange differences are classified as equity and transferred to the Group’s exchange reserve. Such differences are recognised in the income statement in the periods in which the operation is disposed of.

Share–based payments

The Company operates equity–settled share–based remuneration plans for the remuneration of some of its employees. The Company awards share options to certain Company Directors and employees to acquire shares of the Company. Additionally, the Company has issued warrants to providers of loan finance.

All goods and services received in exchange for the grant of any share–based payment are measured at their fair values. Where employees are rewarded using share–based payments, the fair values of employees’ services are determined indirectly by reference to the fair value of the instrument granted to the employee. The fair value is appraised at the grant date and excludes the impact of non–market vesting conditions. Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non–transferability, exercise restrictions, and behavioural considerations.

All equity–settled share–based payments are ultimately recognised as an expense in the income statement with a corresponding credit to “other reserves”.

If vesting periods or other non–market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior years if share options ultimately exercised are different to that estimated on vesting.

Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital and, where appropriate, share premium.

A gain or loss is recognised in profit or loss when a financial liability is settled through the issuance of the Company’s own equity instruments. The amount of the gain or loss is calculated as the difference between the carrying value of the financial liability extinguished and the fair value of the equity instrument issued.

Financial instruments

The Group’s financial assets comprise cash and cash equivalents, investments and loans and receivables. Financial assets are assigned to the respective categories on initial recognition, depending on the purpose for which they were acquired. This designation is re–evaluated at every reporting date at which a choice of classification or accounting treatment is available.

The Group’s loans, investments and receivables are non–derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are measured at fair value on initial recognition. After initial recognition they are measured at amortised cost using the effective interest rate method, less any provision for impairment. Any change in their value is recognised in profit or loss. The Group’s receivables fall into this category of financial instruments. Discounting is omitted where the effect of discounting is immaterial. All receivables are considered for impairment on a case–by–case basis when they are past due at the Statement of Financial Position date or when objective evidence is received that a specific counterparty will default.

Investments that are held as available for sale financial assets are financial assets that are not classified in any other categories. After initial recognition, available for sale financial assets are measured at fair value. Any gains or losses from changes in the fair value of the financial asset are recognised in equity, except that impairment losses, foreign exchange gains and losses on monetary items and interest calculated using the effective interest method are recognised in the income statement.

Where there is a significant or prolonged decline in the fair value of an available for sale financial asset (which constitutes objective evidence of impairment), the full amount of the impairment, including any amount previously charged to equity, is recognised in the consolidated income statement. The Directors consider a significant decline to be one in which the fair value is below the weighted average cost by more than 25%. A prolonged decline is considered to be one in which the fair value is below the weighted average cost for a period of more than twelve months.

If an available for sale equity security is impaired, any further declines in the fair value at subsequent reporting dates are recognised as impairments. Reversals of impairments of available for sale equity securities are not recorded through the income statement. Upon sale, accumulated gains or losses are recycled through the income statement.

Financial liabilities, which are measured at amortised cost, and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Any instrument that includes a repayment obligation is classified as a liability.

Where the contractual liabilities of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities, and are presented as such in the Statement of Financial Position. Finance costs and gains or losses relating to financial liabilities are included in the income statement. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any features meeting the definition of a financial liability then

such capital is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Critical accounting estimates and judgements

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on–going basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.

The most critical accounting policies and estimates in determining the financial condition and results of the Group are those requiring the greater degree of subjective or complete judgement. These relate to:

  • capitalisation and recoverability of exploration costs (Note 10);
  • share–based payments (Note 6 and Note 13).

3

Operating loss

Year ended
30 September
2018

Year ended
30 September
2017

The operating loss is stated after charging: £ £
Depreciation of property, plant and equipment 5,662 4,653
Operating lease expenses 22,875 24,213
Share–based payments 67,542
Auditors’ remuneration – fees payable to the Company’s auditor for the audit of
the parent company and consolidated financial statements 21,500 21,500

4

Earnings per share

Basic and Diluted

Year ended
30 September

2018

Year ended
30 September

2017

Weighted number of shares in issue during the year 263,542,617 166,559,125

£

£

Loss from continuing operations attributable to owners of the parent (550,018) (511,124)

Basic earnings per share has been calculated by dividing the loss attributable to equity holders of the company after taxation by the weighted average number of shares in issue during the year. There is no difference between the basic and diluted earnings per share as the effect on the exercise of options and warrants would be to decrease the earnings per share.

Details of share options and warrants that could potentially dilute earnings per share in future periods is set out in Note 13.

PLEASE NOTE THAT THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to what action you should take, please consult your stockbroker or other independent adviser authorised under the Financial Services and Markets Act 2000 immediately. If you have recently sold or transferred all of your ordinary shares in ECR Minerals PLC, please forward this document, together with the accompanying documents, as soon as possible either to the purchaser or transferee or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares. If you have sold or transferred only part of your holding of ordinary shares in ECR Minerals PLC, you are advised to consult your stockbroker, bank or other agent through whom the sale or transfer was effected.

ECR MINERALS PLC

(the “Company”)

(Registered in England and Wales No 05079979)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the Annual General Meeting of the Company will be held at the offices of Charles Russell Speechlys LLP, 5 Fleet Place, London EC4M 7RD on 23 April 2019 at 9.00 a.m. for the purpose of considering and, if thought fit, passing Resolutions 1 to 5 as ordinary resolutions, and Resolutions 6 and 7 as special resolutions:

Ordinary Resolutions

1 To receive, consider and adopt the annual accounts of the Company for the year ended 30 September 2018, together with the reports of the directors and auditors thereon.

2 That Samuel James Melville Garrett, a director retiring in accordance with article 79.1.1 of the Company’s articles of association, be elected as a director of the Company.

3 To re-appoint PKF Littlejohn LLP as auditors of the Company, to hold office until the conclusion of the next general meeting at which accounts are laid before the Company.

4 To authorise the audit committee to determine the remuneration of the auditors of the Company.

5 That the directors be generally and unconditionally authorised pursuant to and in accordance with section 551 of the Companies Act 2006 (the “CA 2006”) to exercise all the powers of the Company to allot shares or grant rights to subscribe for, or to convert any security into, shares in the Company up to an aggregate nominal amount of £10,000 provided that this authority shall, unless renewed, varied or revoked by the Company, expire on 30 June 2020 or, if earlier, the date of the next annual general meeting of the Company, save that the Company may, before such expiry, make offers or agreements which would or might require equity securities to be allotted (or treasury shares to be sold) after the authority expires and the directors may allot equity securities (or sell treasury shares) in pursuance of any such offer or agreement as if the authority had not expired.

Special Resolutions

6 That, subject to the passing of Resolution 5, the directors be empowered to allot equity securities (as defined by section 560 of the CA 2006) pursuant to the authority conferred by Resolution 5 for cash, and/or sell treasury shares for cash, as if section 561(1) of the CA 2006 did not apply to any such allotment, provided that this power shall be limited to the allotment of equity

securities of up to an aggregate nominal value of £10,000. The authority granted by this resolution will expire at the conclusion of the Company’s next annual general meeting after this resolution is passed or, if earlier, at the close of business on 30 June 2020 save that the Company may, before such expiry, make offers or agreements which would or might require equity securities to be allotted (or treasury shares to be sold) after the authority expires and the directors may allot equity securities (or sell treasury shares) in pursuance of any such offer or agreement as if the authority had not expired.

7 That the Company be generally and unconditionally authorised for the purposes of section 701 of the CA 2006 to make one or more market purchases (as defined in section 693(4) of the CA 2006) of its ordinary shares with nominal value of £0.00001 each in the Company, provided that:

7.1 the Company does not purchase under this authority more than 44,584,078 ordinary shares;

7.2 the Company does not pay less than £0.00001 for each ordinary share; and

7.3 the Company does not pay more per ordinary share than the higher of (i) an amount equal to 5 per cent. over the average of the middle-market price of the ordinary shares for the five business days immediately preceding the day on which the Company agrees to buy the shares concerned, based on share prices published in the Daily Official List of the London Stock Exchange; and

(ii) the amount stipulated by the regulatory technical standards adopted by the European Commission pursuant to Article 5(6) of the Market Abuse Regulation (EU) No. 596/2014.

This authority shall continue until the conclusion of the Company’s annual general meeting in 2020 or 30 June 2020, whichever is the earlier, provided that if the Company has agreed before this date to purchase ordinary shares where these purchases will or may be executed after the authority terminates (either wholly or in part) the Company may complete such purchases.

By order of the board

Craig Brown

Director and Company Secretary

Registered Office:

Unit 117, Chester House 81-83 Fulham High Street Fulham Green

London, SW6 3JA 29 March 2019

NOTES ON RESOLUTIONS

The following paragraphs explain, in summary, the resolutions to be proposed at the annual general meeting (the “Meeting”).

Resolution 1: Receipt of the annual accounts

Resolution 1 proposes that the Company’s annual accounts for the period ended 30 September 2018, together with the reports of the directors and auditors on these accounts, be received, considered and adopted.

Resolution 2: Election of Samuel James Melville Garrett

Resolution 2 proposes that Mr Garrett, who was appointed since the last Annual General Meeting of the Company and is retiring in accordance with article 79.1.1 of the Company’s articles of association, be elected as a director of the Company.

Resolution 3: Re-appointment of auditor

Resolution 3 proposes the reappointment of the Company’s existing auditor to hold office until the end of the next annual general meeting.

Resolution 4: Remuneration of auditor

Resolution 4 is to authorise the audit committee of the Company to determine the remuneration of the Company’s auditors.

Resolution 5: Authority to allot shares

Resolution 5 is to renew the directors’ power to allot shares in accordance with section 551 of the CA 2006. The authority granted at the annual general meeting on 24 April 2018 is due to expire on 23 April 2019 (i.e. the proposed date of the forthcoming annual general meeting).

If passed, the resolution will authorise the directors to allot equity securities up to a maximum nominal amount of £10,000, which represents approximately 224% of the Company’s issued ordinary shares as at 28 March 2019 (being the latest practicable date before publication of this document).

If given, these authorities will expire at the annual general meeting in 2020 or on 30 June 2020, whichever is the earlier.

The directors have no present intention to issue new ordinary shares, other than pursuant to the exercise of options or warrants. However, the directors consider it prudent to maintain the flexibility to take advantage of business opportunities that this authority provides.

As at the date of this document the Company does not hold any ordinary shares in the capital of the Company in treasury.

Resolution 6: Disapplication of pre-emption rights

Resolution 6 is to grant the directors the authority to allot equity securities for cash or sell any shares held in treasury otherwise than to existing shareholders pro rata to their holdings, as there may be occasions where it is in the best interests of the Company not to be required to first offer such shares to existing shareholders.

Accordingly, resolution 6 will be proposed as a special resolution to grant such a power and will permit the directors, pursuant to the authority granted by resolution 5, to allot equity securities (as defined by section 560 of the CA 2006) or sell treasury shares for cash without first offering them to existing shareholders in proportion to their existing holdings up to a maximum nominal value of £10,000 representing approximately 224% of the Company’s issued ordinary shares as at 28 March 2019 (being the latest practicable date before publication of this document). If given, this authority will expire at the annual general meeting in 2020 or on 30 June 2020, whichever is the earlier.

Resolution 7: Purchase of own shares

Resolution 7 will be proposed as a special resolution and will give the Company authority to purchase its own shares in the markets up to a limit of 10 per cent. of its issued ordinary share capital. The maximum and minimum prices are stated in the resolution. Your directors believe that it is advantageous for the Company to have this flexibility to make market purchases of its own shares.

Your directors will exercise this authority only if they are satisfied that a purchase would result in an increase in expected earnings per share and would be in the interests of shareholders generally. In the event that shares are purchased, they would either be cancelled (and the number of shares in issue would be reduced accordingly) or, in accordance with the CA 2006, be retained as treasury shares.

If given, this authority will expire at the annual general meeting in 2020 or on 30 June 2020, whichever is the earlier.

As at 28 March 2019, the total number of outstanding options and warrants over ordinary shares in the Company was 309,179,606, which represents approximately 69 per cent. of the Company’s voting rights at that date. If the Company were to purchase its own ordinary shares to the fullest possible extent of its authority from shareholders (existing and being sought), this number of outstanding options and warrants could potentially represent 82 per cent. of the voting rights of the Company as at 28 March 2019.

END.

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