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ECR Minerals #ECR – High-Grade Drilling Results at Bailieston Gold Project, Victoria Goldfields, Australia

ECR Minerals plc (LON: ECR), the gold exploration and development company, is pleased to announce high-grade drilling results from the Bailieston gold project in the Victoria Goldfields, Australia. The Bailieston project is 100% owned by ECR’s wholly owned Australian subsidiary Mercator Gold Australia (“MGA”).

Craig Brown, Chief Executive Officer of ECR Minerals plc, commented: “These are the first results generated by our new drilling rig, and to our knowledge they are also the first diamond drilling results ever obtained from the HR3 area. The extra geological insight afforded by diamond drilling will be of great use in vectoring further work, and this is an advantage which previous explorers have not had.

As is to be expected with early-stage exploration drilling, not all holes reported today have intersected significant gold mineralisation, but we are very encouraged by the fact that BH3DD001 returned two high-grade intercepts, including one of 0.5 metres at 19 g/t gold, and all holes have provided data which will feed into our evolving geological model for the area. Drilling is continuing and we look forward to reporting the next round of results.

We remain as excited as ever about the potential of the Bailieston gold project, which is located around 30 kilometres from the Fosterville gold mine owned by Kirkland Lake Gold and which includes the Blue Moon gold discovery confirmed by high-grade results from previous drilling by ECR.”

HIGHLIGHTS:

  • Five diamond drillholes across the Historic Reserve #3 (HR3) area covering the Byron and Maori reef lines have been completed for a total of 1082m. Drilling at Byron shows west dipping sediments whereas drilling at Maori intersected all east (and south-east) dipping beds, indicating the possibility of anticline-related gold mineralisation between the two reefs.
  • Drilling of BH3DD006 is currently in progress to test a hypothesised anticline that may exist in the vicinity of the Dan Genders-Scoulers line of workings. Historic shallow gold workings may be small reefs linking and coalescing to a much larger fault related anticline system at depth.
  • Drilling to date has been on the periphery of a central mineralised system (Byron and Maori Reef lines). Drilling has been through mostly shales, however sandy bedding, which is best for brittle vein development is expected to be more likely in the central part of the HR3 goldfield.
  • Drillhole BH3DD001 into the Byron Reef returned a high-grade intersection of 0.5m @ 19 g/t Au from 110.9m downhole. Furthermore, a potentially new mineralised system was intersected at 157m (1m @ 4.25 g/t Au). Rubbly quartz from this same intersection assayed 21.1 g/t Au.
  • Drilling of BH3DD005 into the Maori Reef shows an increase in sandy bedding and sulphide development compared to the Byron Mine area. Final assay results for this hole are pending.
  • Geochemical soil sampling has been completed over half of the HR3 goldfield. Some 720 samples have been taken with 229 samples currently being analysed for key gold pathfinder elements, and these results will assist with drill targeting.

SUMMARY OF DRILLING TO DATE

(fig. 1) – Plan showing locations of 2021 drilling, historical gold workings and reef lines.

https://www.ecrminerals.com/images/0421fig1.jpg

BYRON REEF

908m of the 1082m total drilling to date has been drilled into the Byron Reef surrounding the historic Byron Mine. Production records show the Byron Mine to have produced a total of 8698 tonnes for 4416 oz (average 15.5 g/t Au), indicating it was the biggest producer within the HR3 goldfield. On this basis and considering the relative ease of drilling access at Byron, holes BH3DD001 to BH3DD004 were drilled into this reef.

BH3DD001

This hole was designed to test the down-dip mineralisation underneath the historic Byron Mine and understand the structural context of the orebody. The target (Byron Main Reef) intersected a milky, massive-vuggy quartz reef with laminated margins, 5.3m in apparent thickness. A visible speck of gold was seen when sampling the core. Results show the laminated hanging-wall portion of this reef contains the gold with assay returning (0.5m @ 19.0 g/t Au) from 110.9m. The massive-vuggy portion of the reef did not return gold. Additionally, a newly discovered potential mineralised position occurs in thin, overturned sands containing perpendicular veins that returned (1m @ 4.25 g/t Au) from 157m. Furthermore, cave-in (rubbly quartz) resulting from a drill bit change within these veins at the same depth of 157m returned 21.1 g/t Au. Drilling continued into the footwall of the reef to end of hole at 296.6m depth. The entire hole was drilled down the western limb of a large anticline, likely to exist at an unknown distance to the east. A parallel reef system known as ‘Scoulers Reef’ may be situated on such an anticline.

BH3DD002

BH3DD002 was drilled to test the vertical down-dip extension of the Byron Main Reef intersected in BH3DD001. The reef was drilled through at 144m down hole where the vein had narrowed to 25cm in width. Assay results show no significant intercepts with gold below the detection limit (BDL). There is 40m in vertical difference between the reef intersection in BH3DD001 and BH3DD002. Drilling continued to test the hypothesis that the reef may be bedding-parallel and be dipping back under eastwards, however no additional quartz related mineralisation was intersected. No sulphides were visible and portable XRF (pXRF) readings failed to identify any significant pathfinder elements in the quartz or surrounding wall-rock. This hole ended at 242.5m depth.

(fig. 2) – Geological interpretation and best results are shown.

https://www.ecrminerals.com/images/0421fig2.jpg

BH3DD003

BH3DD003 was designed to test the hypothesised down-plunge shoot extension of the Byron Main Reef to the north of BH3DD001 and BH3DD002. In reference to the deepest known historical workings in the Byron Mine on long-section and the down-dip direction of mined stopes, the productive mineralised portion of the reef, known as a ‘shoot’ possibly plunges to the north (fig. 3). The reef was intersected at 126.3m downhole where flexures in the bedding caused a large body of quartz-sulphide development. This mineralisation continued to 147.5m. Best results were 0.8m @ 1.19 g/t Au from 135.8m depth.

https://www.ecrminerals.com/images/0421fig3.jpg

BH3DD004

BH3DD004 was drilled to test the vertical extent of the large quartz-sulphide dilation intersected in BH3DD003. The conclusion of this drillhole, as with BH3DD002, was that the width of the Byron Reef narrows and has no grade continuity at this depth.

(fig. 4) – Geological interpretation of BH3DD003 and BH3DD004 shown.

https://www.ecrminerals.com/images/0421fig4.jpg

MAORI REEF

BH3DD005

BH3DD005 was designed to test the structural context of the Maori Reef. Bedding is shown to be dipping towards the east and south-east directions. Between 76 and 151 metres the host rocks are more sand dominated and below this zone a 40cm wide laminated quartz vein was intersected. This hole was drilled to a final depth of 174.3 metres. Assays results are pending for this hole.

ANTICLINE HYPOTHESIS

BH3DD006

Drilling to date covers the western and eastern boundaries of the currently known mineralisation within the HR3 goldfield. Geological observations of drilling to date confirms the lithology of the bedding to be more sand dominant in the vicinity of the Maori Reef. Bedding dips towards the west at the Byron Mine and dips east to south-east at the Maori Reef, suggesting a main anticline hinge zone to exist between these two reef lines. It is likely the north-west striking Dan Genders Reef and Scoulers Reef systems may be linked to a potential larger anticline-system at depth. (refer to fig. 1 for reef locations). Similar anticline-related faulting is seen at the nearby old Bailieston open pit (located 2.8km to the north) and characteristic elsewhere in Central Victoria. BH3DD006 is currently being drilled across strike of the Dan Genders Reef to test this hypothesis.

(fig. 5) – Hypothesised Central Anticline Model.

https://www.ecrminerals.com/images/0421fig5.jpg

Table A Details of current drilling and significant intercepts to date (April 2021).

HOLE ID

EASTING (GDA

Zone 55)

NORTHING (GDA

Zone 55)

DIP

AZIMUTH (True North)

TOTAL DEPTH (metres)

SIGNIFICANT INTERCEPTS

BH3DD001

326313

5931394

-60

060

296.6

0.5m @ 19.0 g/t Au from 110.9m

1m @ 4.25 g/t Au from 157m*

*rubbly quartz from this zone re-assayed 21.1 g/t Au

BH3DD002

326313

5931394

-70

060

242.5

No significant intercepts (below detection limit)

BH3DD003

326313

5931394

-60

023

165.6

0.8m @ 1.19 g/t Au from 135.8m

BH3DD004

326313

5931394

-67

023

203

No significant intercepts

All samples were assayed by Gekko Systems Pty Ltd in Ballarat, Australia.

Review of Announcement by Qualified Persons

The Exploration Results in this report have been compiled by Adam Jones and Dr Rodney Boucher.

Adam Jones is a Member of the Australian Institute of Geoscientists (MAIG). Adam Jones has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he is undertaking, 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”. He consents to the inclusion in this report of these matters based on the information in the form and context in which it appears.

This announcement has been reviewed 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 is a Qualified Person as that term is defined by the AIM Note for Mining, Oil and Gas Companies.

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 Regulation (EU) No. 596/2014 (MAR) (as in force in the United Kingdom pursuant to the European Union (Withdrawal) Act 2018). 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

Joint Broker

Nick Emerson

Novum Securities Limited

Tel: +44 (0) 20 7399 9400

Joint Broker

Jon Belliss

ABOUT ECR MINERALS PLC
ECR Minerals 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 two license applications lodged in eastern Victoria for the Tambo Gold project. ECR is currently drilling high priority targets on the Bailieston gold project using the Company’s own diamond drill rig, backed by a support network at the company’s central Victoria HQ at Bendigo. ECR has an experienced exploration team with significant local knowledge in the Victoria Goldfields and wider region.

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

ECR Minerals #ECR – Annual Financial Report & Audited Financial Statements for Y/E 30 September 2020

AUDITED FINANCIAL STATEMENTS FOR YEAR ENDED 30 SEPTEMBER 2020

ECR Minerals plc is pleased to announce its audited financial statements for the year ended 30 September 2020. The information presented below has been extracted from the Company’s Annual Report and Accounts 2020.

Copies of the Annual Report and Accounts 2020 with the notice of annual general meeting will be posted to shareholders tomorrow and will be available on the Company’s website www.ecrminerals.com. The Company intends to holds its annual general meeting at 9am on 19 April 2021 at Chester House, 81-83 Fulham High Street, Fulham Green, London SW6 3JA. As a result of the current crisis of COVID-19 and the UK Government’s restrictions on public gatherings, the holding of the Company’s AGM will be facilitated by the Company to ensure a quorum is present. Shareholders should therefore not attend the meeting in person and instead are strongly encouraged to submit their proxy vote, appointing the Chairman of the meeting as their proxy to ensure that their votes are registered. This can be done by completing their form of proxy which must be received before the proxy voting deadline of 9.00 a.m. on 15 April 2021.

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)207 220 1666

Nominated Adviser

Katy Mitchell/James Sinclair-Ford

SI Capital Ltd

Tel: +44 (0)1483 413500

Joint Broker

Nick Emerson

Novum Securities Limited

Tel: +44 (0)2073 999400

Joint Broker

Jon Belliss

ABOUT ECR MINERALS PLC

ECR Minerals 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 two license applications lodged in eastern Victoria for the Tambo Gold project. ECR is currently drilling high priority targets on the Bailieston gold project using the Company’s own diamond drill rig, backed by a support network at the company’s central Victoria HQ at Bendigo. ECR has an experienced exploration team with significant local knowledge in the Victoria Goldfields and wider region.

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.

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 2020 for ECR Minerals plc (“ECR”, the “Company” or the “Parent Company”) and on a consolidated basis (the “Group”)

Chairman’s Statement

Despite the COVID-19 pandemic, the financial year ended 30 September 2020 and the period since the year-end have been a time of much progress for ECR. The centre of the Group’s operations remains the state of Victoria in Australia, where ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) is concentrating on two highly promising gold exploration projects: Bailieston and Creswick.

As I write, MGA is drilling at the Baillieston gold project using its newly purchased diamond drill rig. The focus of initial drilling activity is the Historic Reserve #3 (HR3) area, which comprises at least four closely-spaced lines of reef, including the Byron, Dan Genders, Scoulars and Maori Reefs, plus numerous cross-structures. This provides a number of drill-ready targets, with Byron the first to be tested.

With the benefit of the Group’s strong cash position, which at the date of this report is approximately £3.955m, the intention is that in-house drilling activity will be sustained for a long period and the Directors believe this programme has the potential to generate transformational results for the Group. We therefore look to the future with great optimism.

MGA disposed of several non-core projects in Victoria during the year but retains exposure to potential upside from those projects by way of contingent payments of up to A$2 million in total. We remain open to the possibility of further transactions in relation to MGA’s assets in Victoria, and we have also taken steps to add to MGA’s Victorian gold project portfolio by applying for two exploration licences in eastern Victoria, which will comprise the Tambo project, and by applying for a licence surrounding the operating Ballarat gold mine.

Finally, I am pleased to welcome Adam Jones as a non-executive director of the Company. Adam, is an experienced gold geologist who is based in Victoria within easy reach of the Bailieston and Creswick gold projects. He already has detailed knowledge of these projects, having assisted MGA as a consultant since 2018, and I am sure as a director of ECR he will make a significant contribution to the success of our activities.

Weili (David) Tang

Chairman

23 March 2021

Chief Executive Officer’s Report

With the gold price having exceeded USD 2,000/oz last year and trading largely in a range between USD 1,700 and USD 1,900 in recent months, these are exciting times for gold explorers such as ECR. We are also fortunate to have experienced no significant operational disruption as a result of the COVID-19 pandemic, which has not affected Australia to the same extent as, for example, the UK.

As in the previous year, the centre of the Group’s operations was Victoria, Australia, with activities concentrated on the Bailieston and Creswick gold projects. Several non-core projects in Victoria were disposed of by ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”), and a number of new exploration licences were applied for in order to rejuvenate MGA’s project portfolio and maintain a pipeline of opportunities for the future.

Interest from a number of third parties in joint venture or earn-in type transactions in relation to either Bailieston or Creswick was explored extensively during the financial year under review, and the Company continues to consider opportunities as they arrive.

Following the year under review, in January 2021, MGA commenced drilling in the Historic Reserve #3 (HR3) area of the Bailieston project, having taken delivery of a new Cortech CSD1300G diamond drill rig in November 2020. Drilling can now continue on a bespoke basis, supported by ECR’s strong cash position.

Exploration at Bailieston and Creswick Projects

Notable outcomes of exploration work during the year ended 30 September 2020 included positive findings of an alteration study on reverse circulation (RC) drill cuttings from the Creswick project, announced in March 2020, and confirmation of high-grade gold mineralisation at Creswick by the completion of ‘full bag’ testing, announced in November 2019.

At Bailieston, work during the year has included field mapping and geochemistry across numerous gold prospects, which has enabled MGA’s geologists to define a number of drill-ready targets. Drilling has now commenced at the Byron prospect in the HR3 area, and after Byron, it is planned that drilling will continue in the same area to test the Maori, Dan Genders, Scoulars and Hard-Up reefs. This drilling will aim to provide for the first time a framework of the geological structures hosting the reefs, which will be used to attempt to target coalescing reef intersections.

From HR3, it is currently planned that the rig will be moved to test the Cherry Tree prospect, or for further drilling at the Blue Moon discovery. Cherry Tree and Blue Moon are also within the Bailieston project. The results of 2019 drilling at Blue Moon by MGA included intersections of 15 metres at 3.81 g/t gold and 11 metres at 2.42 g/t gold (announced on 14 March 2019).

MGA is also keen to follow up on previous drilling results at Creswick, where individual samples returned assays as high as 80.97 g/t gold over one metre (announced on 5 November 2019). Further drill sites at Creswick have already been determined and approval has been received from the relevant government authorities. In addition, after the end of the period under review, in the final quarter of calendar year 2020, MGA completed a soil geochemistry survey of the Jackass Reef prospect at Creswick, the results of which, the Directors believe, will assist drill targeting in that area at the appropriate time.

Overview of Victorian Exploration Licence Portfolio

At the end of the financial year under review, MGA held six granted mineral exploration licences in Victoria (EL5387, EL5433, EL006184, EL006280, EL006278 and EL006913).

In April 2020 MGA entered into an agreement for the sale of exploration licences EL5387 (the Avoca project), EL006278 (the Timor project), plus EL006280 and EL006913 (the Moormbool project), and after the end of the period under review, these licences were formally transferred to Currawong Resources Pty Ltd.

At the time of this report, MGA has a total of eight exploration licence applications pending in Victoria, and holds two granted exploration licences (EL5433 and EL006184), which respectively forms part of the Bailieston and Creswick projects. These are augmented, in the case of Bailieston, by exploration licence applications EL006911, EL006912 and EL007296; and in the case of Creswick, exploration licence applications EL006713 and EL006907.

In November 2020, MGA lodged exploration licence application EL007537 for an area which surrounds mining licences MIN5396 and MIN4847. These mining licences, which are not held by MGA, contain the operating Ballarat gold mine. The area of EL007537 includes the southern extension of the Dimocks Main Shale, which is the principal target of exploration at MGA’s Creswick gold project located a short distance to the north, the northern extension of the Ballarat East line and the depth extensions of the Ballarat West line. EL007537 is a competitive bid with three other applicants.

New Gold Project: Tambo

In September 2020, MGA lodged two new exploration licence applications in eastern Victoria, EL007484 and EL007486, to comprise the Tambo gold project, which covers a sizeable area of prospective geology near historic goldfields and has received little contemporary exploration.

The applications cover portions of the historic Swifts Creek/Omeo and Haunted Stream goldfields. These goldfields have recorded historical gold production of 205,000 and 25,000 oz respectively, according to figures published by the Geological Survey of Victoria. MGA considers the application areas to be prospective for orogenic reef gold and additionally for intrusion-related gold and base metal systems.

Sale of Exploration Licences to Currawong Resources Pty Ltd

In April 2020 MGA entered into an agreement for the sale of exploration licences EL5387, EL006280, EL006913 and EL006278 in Victoria (the “Licences”) to Currawong Resources Pty Ltd, a wholly owned subsidiary of Fosterville South Exploration Ltd (“Fosterville South”), which listed on the TSX Venture Exchange in April 2020, for the following consideration:

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.

All of the Licences had been formally transferred to Currawong by January 2021.

In February 2021, Leviathan Gold Ltd (“Leviathan”) listed on the TSX Venture Exchange. Leviathan is a ‘spin-out’ from Fosterville South, and has acquired rights to EL5387 (the Avoca project) and EL006278 (the Timor project) from Currawong. MGA still has the right to further payments in respect of EL5387 and/or EL006278 based on resource estimation or production, as set out above.

Disposal of Ochre Mining SA and 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. The sale allows ECR to focus on its core gold exploration activities in Australia. The purchaser, Hanaq Argentina SA (“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 NSR royalty of up to 2% to a maximum of USD 2.7 million in respect of future production from the SLM gold project. The Directors believe 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.

Danglay Gold Project, Philippines

ECR is entitled to a 25% interest in the Danglay gold project in the Philippines, which is held by a Philippine corporation called Cordillera Tiger Gold Resources, Inc. (“Cordillera Tiger”) under an Exploration Permit, the renewal of which is pending. The issuance of a 25% shareholding in Cordillera Tiger to the Company is expected in due course, but has been delayed since 2016, largely due to a court case filed by an individual who is a minority shareholder and former director of Cordillera Tiger. The court issued a decision in the case in June 2020 which is discussed in the Strategic Report.

The Directors believe the political climate for the minerals industry in the Philippines is on course to improve in future, and consider that the Danglay gold project, which is located in a prolific gold and copper mining district in the north of the country, has potential for further exploration to build upon the existing inferred mineral resource estimate of 63,500 ounces of gold at 1.55 g/t gold. This resource was reported by ECR in 2015 to the Canadian NI43-101 standard, based on exploration carried out at Danglay by ECR during 2014 and 2015. In addition to the resource, an NI43-101 target for further exploration (conceptual potential quantity and grade of mineralisation expressed as ranges) of 95,000 to 170,000 ounces of gold at 5 to 7.5 g/t was reported. Further information regarding Cordillera Tiger and the Danglay gold project is provided in the Strategic Report.

FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2020

For the year to 30 September 2020 the Group recorded a total comprehensive loss of £2,595,002, compared with £762,586 for the year to 30 September 2019.

The largest contributor to the total comprehensive loss was the loss on disposal of Ochre Mining SA and the SLM gold project which amounted to £1,986,469. Excluding the loss on disposal of Ochre Mining SA and the SLM gold project the loss for the year to 30 September 2020 was less than the total comprehensive loss for the year to 30 September 2019. Although the disposal resulted in a loss the Group has the potential to recover more than this loss through future royalty payments from Ochre Mining SA.

The Group’s net assets at 30 September 2020 were £3,563,819, in comparison with £3,640,604 at 30 September 2019. The decrease is due to the disposal of Ochre Mining and SLM gold project during the year. The increase is due to increased exploration assets as a result of the capitalisation of exploration expenditure during the year, and an increase in cash as a consequence of the sale of projects by MGA to Currawong Resources Pty Ltd and the exercise of share warrants issued by the Company in previous years. At the time of writing, the Group cash position is approximately £4m.

Craig Brown

Chief Executive Officer

23 March 2021

Independent Auditor’s Report

For the year ended 30 September 2020

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 2020 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements 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 international accounting standards in conformity with the Companies Act 2006 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 2020 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 international accounting standards in conformity with the Companies Act 2006;
  • the parent company financial statements have been properly prepared in accordance with international accounting standards in conformity with the Companies Act 2006 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 £55,000 (2019: £60,000) based upon 2% of gross assets. We consider gross assets to be the main driver of the business as the group is still in the exploration stage and therefore no revenues are currently being generated, and that current and potential investors will be most interested in the recoverability of the exploration and evaluation assets. The parent company materiality was £45,000 (2019: £40,000) based upon an average of 2% of gross assets and 5% of adjusted loss before tax.

Whilst materiality for the financial statements as a whole was set at £55,000, each significant component of the group was audited to an overall materiality ranging between £40,000 – £45,000 with performance materiality set at 70% for all entities.

We agreed with the audit committee that we would report to the committee all audit differences identified during the course of our audit in excess of £2,750 (2019: £3,000) as well as differences below these thresholds that, in our view, warranted reporting on qualitative grounds.

An overview of the scope of our audit

In designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas requiring the directors to make subjective judgements, for example in respect of significant accounting estimates including the carrying value of intangible assets and the consideration of future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

An audit was performed on the financial information of the group’s operating entities which for the year ended 30 September 2020 were located in the United Kingdom and Australia. The Argentine operations which were previously held by the group were disposed of during the year. The audit work on each significant component was performed by us as group auditor based upon materiality or risk profile, or in response to potential risks of material misstatement to the group.

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. These matters were 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 these matters.

Key Audit Matter

How the scope of our audit responded to the key audit matter

Recoverability of intangible assets – exploration and evaluation assets (refer to note 10)

The group as at 30 September 2020 had ongoing early stage exploration projects in the Philippines and Australia.

There is a risk that the expenditure is not correctly capitalised in accordance with IFRS 6. There is also a risk that the capitalised exploration costs are not recoverable and should be impaired. The carrying value of intangible exploration and evaluation assets as at 30 September 2020, which is tested annually for impairment, is £1,869,184. The impairment assessment requires management judgement and estimation of a range of applicable factors.

Specifically, there is an ongoing dispute over the Danglay Project (Philippines) where ECR believe they have fulfilled the criteria of the Earn-in and JV Agreement such that ECR has earned a 25% interest.

Relevant disclosures in the financial statements are made in Note 2 surrounding critical accounting judgements, and in Note 10 for Intangible assets.

Our work in this area included:

▪ Sample testing of exploration and evaluation expenditure to assess their eligibility for capitalisation under IFRS 6 by corroborating to the original source documentation.

▪ Inspection of the current exploration licences to verify they remained valid and that the group held good title.

▪ Review of correspondence (where applicable) with licensing authorities to ensure compliance and assess the risk of non-renewal. We assessed the sampling results and progress of the projects and whether they indicate the existence of commercially viable projects.

▪ Review and challenge of management’s documented consideration of impairment by individual project.

▪ Establishing the intention of the Board to undertake future exploration work.

▪ Review of any internal / external resource estimates produced during the year.

▪ Discussion of status of all projects with management.

As disclosed in Note 10 to the financial statements, the group has not yet 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 £1,185,297 as at 30 September 2020.

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: 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) 15 Westferry Circus

For and on behalf of PKF Littlejohn LLP Canary Wharf

Statutory Auditor London E14 4HD

23 March 2021

Consolidated Income Statement

For the year ended 30 September 2020

Year ended

Year ended

30 September 2020

30 September 2019

Note

£

£

Proceeds from disposal of licenses

275,701

Less: expenditure on licences disposed

(169,509)

Gain on disposal

106,192

Continuing operations

Other administrative expenses

(799,585)

(833,203)

Currency exchange differences

(33,497)

(6,051)

Gain from hyperinflation adjustment

113,310

Total administrative expenses

(833,082)

(725,944)

Operating loss

3

(726,890)

(725,944)

Other financial assets – fair value movement

9

13,683

(8,112)

Aborted transaction option fee

(25,000)

(713,207)

(759,056)

Financial income

7

478

1,846

Other income

8,316

Finance income and costs

8,794

1,846

Loss for the year before taxation

Income tax

5

(704,413)

(757,210)

Loss for the year from continuing operations

(704,413)

(757,210)

Loss on disposal of subsidiary

(1,986,469)

Loss for the year from discontinued operations

(1,986,469)

Loss for the year – all attributable to owners of the parent

(2,690,882)

(757,210)

Earnings per share – basic and diluted

On continuing operations

4

(0.14)p

(0.18)p

On discontinued operations

(0.39)p

The notes set out below are an integral part of these financial statements.

Consolidated Statement of Comprehensive Income

For the year ended 30 September 2020

Year ended

Year ended

30 September 2020

30 September 2019

£

£

Loss for the year

(2,690,882)

(757,210)

Items that may be reclassified subsequently to profit or loss

Gain/(Loss) on exchange translation

95,880

(5,375)

Other comprehensive gain/(loss) for the year

95,880

(5,375)

Total comprehensive loss for the year

(2,595,002)

(762,586)

Attributable to: –

Loss on continuing operations

(608,533)

(762,586)

Loss on discontinued operations

(1,986,469)

The notes set out below are an integral part of these financial statements.

Consolidated & Company Statement of Financial Position

At 30 September 2020

Group

Company

30 September

30 September

30 September

30 September

Note

2020 £

2019

£

2020 £

2019

£

Assets

Non-current assets

Property, plant and equipment

8

183,539

1,041

2,737

548

Investments in subsidiaries

9

852,728

Intangible assets

10

1,869,184

3,295,996

1,333,282

2,272,553

Other receivables

11

1,029,067

983,864

2,052,723

3,297,037

2,365,086

4,109,694

Current assets

Trade and other receivables

11

108,617

108,654

726,689

616,190

Financial assets at fair value through profit or loss

9

26,870

13,187

26,870

13,187

Cash and cash equivalents

12

1,497,231

268,517

1,207,190

227,508

1,632,718

390,358

1,960,749

856,885

Total assets

3,685,441

3,687,395

4,325,835

4,966,578

Current liabilities

,

Trade and other payables

14

121,622

46,791

93,848

22,990

121,622

46,791

93,848

22,990

Total liabilities

121,622

46,791

93,848

22,990

Net assets

3,563,819

3,640,604

4,231,987

4,943,589

Equity attributable to owners of the parent

Share capital

13

11,286,928

11,284,845

11,286,928

11,284,845

Share premium

13

47,090,048

45,391,202

47,090,048

45,391,202

Exchange reserve

531,453

(394,876)

Other reserves

440,706

742,698

440,706

742,698

Retained losses

(55,785,316)

(53,383,265)

(54,585,695)

(52,475,157)

Total equity

3,563,819

3,640,604

4,231,987

4,943,589

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 £2,399,369 (2019: £623,683 loss).

The notes set out below are an integral part of these financial statements. The financial statements were approved and authorised for issue by the Directors on 23 March 2021 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 2020

Share capital

Share premium

Exchange reserve

Other reserves

Retained reserves

(Note 13)

(Note 13)

Total

£

£

£

£

£

£

Balance at 30 September 2018

11,283,756

44,460,171

(389,501)

1,381,998

(53,084,878)

3,651,546

Loss for the year

(757,120)

(757,120)

Loss on exchange translation

(5,375)

(5,375)

Total comprehensive loss

(5,375)

(757,120)

(762,586)

Shares issued

1,039

737,745

738,784

Share issue costs

(38,040)

(38,040)

Lapsed or expired share-based payments

180,476

(639,300)

458,824

Shares issued in payment of creditors

50

50,850

50,900

Total transactions with owners,

recognised directly in equity

1,089

931,031

(639,300)

458,824

751,644

Balance at 30 September 2019

11,284,845

45,391,202

(394,876)

742,698

(53,383,264)

3,640,604

Loss for the year

(2,690,882)

(2,690,882)

Gain on exchange translation

95,880

95,880

Total comprehensive loss

95,880

(2,690,882)

(2,595,002)

Shares issued

2,067

1,754,986

1,757,053

Share issue costs

(77,000)

(77,000)

Share based payments

13,161

(301,992)

288,831

Recycled through profit or loss on disposal of subsidiary

830,449

830,449

Share issued in payment of creditors

15

7,699

7,714

Total transactions with owners, recognised directly in equity

2,083

1,698,846

830,449

(301,992)

288,831

2,518,216

Balance at 30 September 2020

11,286,928

47,090,048

531,453

440,706

(55,785,316)

3,563,819

The notes set out below are an integral part of these financial statements.

Company Statement of Changes in Equity

For the year ended 30 September 2020

Share capital

Share premium

Other reserves

Retained reserves

(Note 13)

(Note 13)

Total

£

£

£

£

£

Balance at 30 September 2018

11,283,756

44,460,171

1,381,998

(52,310,297)

4,815,628

Loss for the year

(623,682)

(623,682)

Total comprehensive expense

(623,682)

(623,682)

Shares issued

1,039

737,745

738,784

Share issue costs

(38,040)

(38,040)

Lapsed or expired share based payments

180,476

(639,300)

458,824

Shares issued in payment of creditors

50

50,850

50,900

Total transactions with owners, recognised directly in equity

1,089

931,031

(639,300)

458,824

751,644

Balance at 30 September 2019

11,284,845

45,391,202

742,698

(52,475,156)

4,943,589

Loss for the year

(2,399,369)

(2,399,369)

Total comprehensive expense

(2,399,369)

(2,399,369)

Shares issued

2,067

1,754,986

1,757,054

Share issue costs

(77,000)

(77,000)

Share based payment

13,161

(301,992)

288,831

Shares issued in payment of creditors

15

7,699

7,714

Total transactions with owners, recognised directly in equity

2,083

1,698,846

(301,992

) 288,831

1,687,768

Balance at 30 September 2020

11,286,928

47,090,048

440,706

(54,585,695)

4,231,987

The notes set out below are an integral part of these financial statements.

Consolidated & Company Cash Flow Statement

For the year ended 30 September 2020

Group

Company

Year ended 30 September

Year ended 30 September

Year ended 30 September

Year ended 30 September

Note

2020

£

2019

£

2020

£

2019

£

Net cash used in operations

20

(668,377)

(773,318)

(694,408)

(761,915)

Investing activities

Purchase of property, plant & equipment

8

(186,307)

(5,963)

Increase in exploration assets

10

(180,653)

(436,522)

(16,244)

Proceeds from disposal of licenses

275,701

R&D tax credits on exploration

307,818

Loan to subsidiary

(455,370)

Interest income

7

478

1,846

1,268

Net cash generated from / (used in) investing activities

217,037

(434,676)

(5,963)

(460,346)

Financing activities

Proceeds from issue of share capital (net of issue costs)

1,680,054

700,744

1,680,054

700,744

Net cash from financing activities

1,680,054

700,744

1,680,054

700,744

Net change in cash and cash equivalents

1,228,714

(507,250)

979,682

(521,517)

Cash and cash equivalents at beginning of the year

268,517

781,142

227,508

749,025

Effect of changes in foreign exchange rates

(5,375)

Cash and cash equivalents at end of the year

12

1,497,231

268,517

1,207,190

227,508

Non-cash transactions:

1. Settlement of creditors of £7,715 (2019: £89,684) with ordinary shares.

The notes on pages 28 to 44 are an integral part of these financial statements.

Notes to the Financial Statements

For the year ended 30 September 2020

1 General information

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

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 119, Chester House, 81-83 Fulham High Street, Fulham Green, London SW6 3JA. The Company is quoted 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

a) Statement of compliance

The consolidated financial statements have been prepared in accordance with international accounting standards in conformity with the Companies Act 2006. The financial statements are prepared on the historical cost basis or the fair value basis where the fair valuing of relevant assets or liabilities has been applied.

b) (i) New and amended standards, and interpretations issued and effective for the financial year beginning 1 October 2019

There were no new standards, amendments or interpretations effective for the first time for periods beginning on or after 1 October 2019 that had a material effect on the Group or Company financial statements

(ii) New standards, amendments and interpretations in issue but not yet effective

At the date of approval of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not been adopted by the EU):

  • Amendments to References to Conceptual Framework in IFRS Standards – effective 1 January 2020
  • Definition of Material (Amendments to IAS 1 and IAS 8) – effective 1 January 2020
  • Amendment to IFRS 3 Business Combinations – effective 1 January 2020
  • Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate Benchmark Reform – effective 1 January 2020
  • Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform – Phase 2 – effective 1 January 2021*
  • Amendment to IFRS 3 Business Combinations – Reference to the Conceptual Framework – effective 1 January 2022*
  • Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets – effective 1 January 2022*
  • Annual Improvements to IFRS Standards 2018-2020 Cycle – effective 1 January 2022*
  • Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Amendments to IAS 1: Classification of Liabilities as Current or Non-current – Deferral of Effective Date – effective 1 January 2023*

*subject to EU endorsement

The Group and Company intend 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 Company.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and one of its subsidiaries made up to 30 September 2020. 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 15 March 2021, the Group has cash and cash equivalents of £3,954,919 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 21 to the financial statements.

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 continued good title to relevant assets being held (or, in the case of the Company’s interest in the Danglay gold project, to good title being secured), 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

Assets and liabilities arising from a lease are initially measured on a present value basis. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset. Lease payments are allocated between principal and finance cost. All other short term 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 e 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 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 awards share options to certain Company Directors and employees to acquire shares of the Company. Additionally, the Company has in previous years issued warrants to providers of equity 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

Financial assets

The Group’s financial assets comprise equity investments held as financial assets at fair value through profit or loss as required by IFRS 9, and financial assets at amortised cost, being cash and cash equivalents and receivables balances. Financial assets are assigned to the respective categories on initial recognition, based on the Group’s business model for managing financial assets, which determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Financial assets at amortised cost are non–derivative financial assets with fixed or determinable payments that are not quoted in an active market. These assets are initially measured at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment under the expected credit loss model.

The Group’s receivables fall into this category of financial instruments. Discounting is omitted where the effect of discounting is immaterial.

Equity investments are held as financial assets at fair value through profit or loss. These assets are initially recognised at fair value and subsequently carried in the financial statements at fair value, with net changes recognised in profit or loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:

• The rights to receive cash flows from the asset have expired

Or

• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

The Group recognises an allowance for ECLs for all debt instruments not held at fair value through profit or loss.

The amount of the expected credit loss is measured as the difference between all contractual cash flows that are due in accordance with the contract and all the cash flows that are expected to be received (i.e. all cash shortfalls), discounted at the original effective interest rate (EIR).

For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date.

Financial liabilities

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables and are held at amortised cost. After initial recognition, trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process.

Derecognition

A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income.

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 and Company are those requiring the greater degree of subjective or complete judgement. These relate to:

Capitalisation and recoverability of exploration costs (Note 10):

Capitalised exploration and evaluation costs consist of direct costs, licence payments and fixed salary/consultant costs, capitalised in accordance with IFRS 6 “Exploration for and Evaluation of Mineral Resources”. The group and company recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral assets. Exploration and evaluation assets are initially measured at cost. Exploration and evaluation costs are assessed for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. Any impairment is recognised directly in profit or loss.

Recoverability of investment in subsidiaries including intra group receivables (Note 9 and 11)

The recoverability of investments in subsidiaries, including intra group receivables, is directly linked to the recoverability of the exploration assets in those entities, which is subject to the same estimates and judgements as explained above.

3 Operating loss

Year ended

30 September 2020

Year ended
30 September
2019

The operating loss is stated after charging:

£

£

Depreciation of property, plant and equipment

3,809

1,701

Operating lease expenses

23,768

23,746

Auditors’ remuneration – fees payable to the Company’s auditor for the audit of

the parent company and consolidated financial statements

25,750

21,500

4

Earnings per share

Basic and Diluted

Year ended 30 September

2020

Year ended 30 September

2019

Weighted number of shares in issue during the year

512,411,527

423,047,928

£

£

Loss from continuing operations attributable to owners of the parent

(704,413)

(757,210)

Loss from discontinued operations attributable to owners of the parent

(1,986,469)

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 1.

ECR Minerals #ECR – Drilling at Victoria Goldfields reveals visible gold in first drill

ECR Minerals plc (LON: ECR), the gold exploration and development company focussed on Australia

is pleased to announce a drilling update from the HR3 area (“HR3”) of the Company’s 100% owned Bailieston Project in the Victoria Goldfields, Australia.

Craig Brown, Chief Executive Officer of ECR Minerals plc, commented: “I am pleased to announce the completion of our first diamond drill hole utilising the Company’s in-house drilling equipment, which is a notable event for the Company.

The hole was completed efficiently and safely and we are now pushing on with further drilling with the commencement of the second hole. We intend to continue drilling across various target areas within ECR license areas in the coming weeks and months.

The presence of a 5.3 metre wide reef (drilled thickness) with visible gold in the first drill hole core is a positive development and we look forward to receipt of assay results from the laboratory as soon as possible.”

HIGHLIGHTS:

This first diamond drill hole at HR3 was undertaken utilising the Company’s recently acquired drill rig and has reach a total depth of 300 metres. The drill rig has now commenced a second hole in the same location. The hole intersected the Byron Main Reef at 110 m and the information from this hole will allow us to establish the structural architecture and controls for the obvious gold mineralisation in this reef (and adjacent reefs) and in the wider HR3 prospect. The Byron Main Reef is 5.3 m wide (drilled thickness, true thickness unknown) and is milky, vuggy quartz with laminated margins. 1.3 m of core was lost drilling through the reef.

The current exploration drill programme was originally announced on 12 January 2021 and this announcement may be viewed through the following link:

https://polaris.brighterir.com/public/ecr_minerals_plc/news/rns/story/wvp81vw

The drill core from the first hole was transferred to the Company’s processing shed in Bendigo, Australia where the core was cut and analysed following which samples have been delivered to the laboratory today for assay analysis. The samples will be processed by the Gekko’s Assay Laboratory facilities in Ballarat, Australia and the assay results are expected in the coming weeks.

https://www.gekkos.com/en/solutions/lab-testwork/assay-lab

Preliminary core inspection has identified visible gold in the core and the Company has been utilising a portable x-ray fluorescence (“pXRF”) as part of the preliminary examination process. The pXRF has confirmed the gold content of a small speck seen in the core at 111.0 m.

https://www.ecrminerals.com/images/2021/BH3DD001_Byron_Main_Reef.pdf

Review of Announcement by Qualified Person

This announcement has been reviewed 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 is a Qualified Person as that term is defined by the AIM Note for Mining, Oil and Gas Companies.

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 Ltd has 100% ownership of the Bailieston and Creswick gold projects in central Victoria, Australia. ECR is currently drilling high priority targets on the Bailieston gold project using the Company’s own diamond drill rig. ECR has an experienced exploration team with significant local knowledge in the Victoria Goldfields.

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.

Proactive’s Andrew Scott talks to ECR Minerals #ECR CEO Craig Brown

ECR Minerals’ (LON:ECR) Craig Brown caught up with Proactive’s Andrew Scott following the news their newly acquired drill rig, Midas, is now in operation at its inaugural drill site at the Bailieston Project in Victoria, Australia. It’s the first of a number of drill locations which will be coordinated from ECR’s central exploration facility compound in the Victoria Goldfields. Brown says the work will be funded from ECR’s existing cash resources, which amount to around £2.95 million.

ECR Minerals #ECR – Drilling kicks off at Bailieston in Victoria Goldfields

 

ECR Minerals plc (LON: ECR), the gold exploration and development company focussed on Australia, is pleased to provide the following update on its activities in the Victoria Goldfields, Australia, which are carried out through the Company’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”).

Craig Brown, Chief Executive Officer of ECR Minerals plc, commented:

“ECR’s wholly owned Australian subsidiary MGA has built a strategic portfolio of exploration ground in the Victoria Goldfields with granted and application licences totalling some 1,175 square kilometres.

Our newly acquired drill rig, named “Midas”, is now in operation at its inaugural drill site the Byron prospect in the HR3 area of the Bailieston Project. This is the first of numerous planned drill locations which will be coordinated from ECR’s central exploration facility compound in the Victoria Goldfields.

The extensive drilling we plan to undertake will be funded from ECR’s existing cash resources and the Company can confirm that cash resources currently amount to circa £2.95 million providing a considerable forward cash runway for operational and corporate activities.

We expect to provide regular drilling updates to the market including results from assay testing of drilling samples.”

ECR Minerals Victoria Goldfields Footprint

Please see the following link for a map showing all MGA’s current exploration licences and applications in Victoria:

https://www.ecrminerals.com/images/2021/Location_map-1.jpg

Commencement of Drilling – Bailieston Gold Project

The drill rig has been set up on a site adjacent to the Byron shaft in the HR3 area of the Bailieston project. Please see the following links for plans and sections of the planned drilling from the first site:

https://www.ecrminerals.com/images/2021/BH3DD001-006_Plan.jpg

https://www.ecrminerals.com/images/2021/BH3DD001-004_Section-A.jpg

https://www.ecrminerals.com/images/2021/BH3DD005-006_Section-B.jpg

There are two possible drill sections from this first site, labelled A and B. The first planned hole (HR3DDH001) is highlighted in purple. The plans and sections are based on assumptions largely derived from historical data compilations/reports. They are provided for guidance purposes only and no reliance should be placed on them. As work proceeds, the planned drill holes are open to modification as the geology becomes clearer.

HR3DDH001 will aim to follow the continuation of the reef below the depth of the historic workings of the Byron mine. Subject to favourable results from the first hole, several follow-up holes have been designed to test extensions of the reefs. Section B holes have been designed to target the vein at similar depths as Section A, but to the south side of the Byron shaft.

After Byron, drilling will continue at HR3 to test the Maori, Dan Genders, Scoulars and Hard-Up reefs and will aim to provide for the first time a framework of the geological structures hosting the reefs, which will be used to attempt to target coalescing reef intersections.

From HR3, it is currently planned that the rig would be moved to test the Cherry Tree prospect, or for further drilling at the Blue Moon discovery. Cherry Tree and Blue Moon are also within the Bailieston project. The results of 2019 drilling at Blue Moon by MGA included intersections of 15 metres at 3.81 g/t gold and 11 metres at 2.42 g/t gold (announced on 14 March 2019).

A map of the eastern Bailieston project area showing some of the prospects and features referred to in this announcement can be viewed at:

https://www.ecrminerals.com/images/2020/09/09/prospectsreefs-eastern-bailieston-tenement-area.jpg

Creswick Gold Project

MGA is also keen to follow up on previous drilling results at Creswick, where individual samples returned assays as high as 80.97 g/t gold over one metre (announced on 5 November 2019). Drill sites have been determined and approval has been received from the relevant government authorities. . In Q4 2020, MGA completed a soil geochemistry survey of the Jackass Reef prospect at Creswick, the results of which will be of significant value for drill targeting in that area at the appropriate time. Alongside exploration work at Creswick, ECR is continuing discussions in respect of potential corporate transactions including potential joint venture arrangements. There can, however, be no certainty that any transaction or agreement will occur.

Exploration Licence Application Surrounding the Ballarat Gold Mine

MGA’s exploration licence application EL007537 is for an area which surrounds mining licences MIN5396 and MIN4847 (which in turn contain the operating Ballarat gold mine). The application area includes the southern extension of the Dimocks Main Shale, which is the principal target of exploration at MGA’s Creswick gold project located a short distance to the north, the northern extension of the Ballarat East line and the depth extensions of the Ballarat West line. EL007537 is a competitive bid with three other applicants. Further information on EL007537 will be announced if MGA’s application is successful.

Review of Announcement by Qualified Person

This announcement has been reviewed 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 is a Qualified Person as that term is defined by the AIM Note for Mining, Oil and Gas Companies.

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 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.

ECR Minerals #ECR Victoria Goldfields Operational Update

ECR Minerals plc (LON: ECR), the gold exploration and development company focussed on Australia, is pleased to provide the following update on its activities in Victoria,  Australia, which are carried out through the Company’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”).

HIGHLIGHTS

  • MGA has taken delivery of its new Cortech CSD1300G diamond drill rig and a new operational base is being established in Bendigo, Victoria.
  • All necessary permissions are in place for drilling at the HR3 prospect within the Bailieston project area, where drilling operations will commence as soon as the drill rig is ready.
  • Soil geochemistry and geological mapping completed at the Cherry Tree prospect in the Baillieston project area.

Craig Brown, Chief Executive Officer of ECR commented:

“With the arrival of the ECR owned drill rig in Victoria we are now in a position to accelerate our exploration work and significantly, drilling of key targets.   Our initial target HR3 is already permitted for drilling and therefore we anticipate an expeditious start to operations.

Alongside the new drill rig we have also been undertaking a range of operational work including the soil geochemistry and mapping at Cherry Tree, the results of which have provided valuable information to guide our ongoing exploration.

I look forward to providing further information from Victoria in the near term as our operational activities continue.”

DRILL RIG AND NEW OPERATIONAL BASE

Further to the Company’s announcement dated 14 September 2020, the new drill rig has been delivered and is now being set up for work under the supervision of MGA’s highly experienced drilling manager Graeme Noble.

MGA is establishing a new operational facility in Bendigo, Victoria, where the rig will be based. The facility includes more than 1,000 square metres of shed, office and storage space. MGA intends to carry out cutting and sampling of diamond drill core on site as well as using the facility for maintenance and storage of the new drill rig and other equipment. The facility is within easy driving distance of both the Bailieston and Creswick projects.

DRILLING PLANS – BAILIESTON HISTORIC RESERVE #3 (HR3)

All necessary permissions are in place for drilling at the HR3 prospect, which comprises at least four closely-spaced lines of reef, including the Byron, Dan Genders, Scoulars and Maori Reefs, plus numerous cross-structures. This provides a number of drill-ready targets, and it is planned that drilling will commence at HR3 as soon as the new drill rig has been made ready for operations.

RESULTS OF GEOCHEMISTRY AND FIELD MAPPING AT CHERRY TREE

The Cherry Tree prospect lies on the Bailieston Trend within Historic Reserve #4 (HR4) and is located 1.5 kilometres south of HR3 (Fig. 1). The workings at Cherry Tree continue to the south to the Cherry Tree South workings. Cherry Tree and Cherry Tree South are separated by an alluvial gully. Some 30 large and numerous small shafts were sunk by the historic miners at Cherry Tree. The main zone of workings at Cherry Tree is surrounded by alluvial cover and there may be some scope for shallow extensions under the cover.

Cherry Tree geochemistry and field mapping results:

Fig. 1

Fig_1_Cherry_Tree_As_map.jpeg

Fig. 2

Fig_2_Cherry_Tree_As_model.jpeg

Detailed portable XRF (pXRF) geochemical sampling was conducted to better define the surface expression of the mineralisation and to seek extension to shoots. Some 920 readings were taken, on average 10 metres apart but sometimes as close as 2 metres to attempt to follow and define trends.

The Cherry Tree workings mostly lie on the westerly limb of a N-S elongate anticlinal dome (Fig. 2). The pXRF results show numerous zones of anomalism, mostly close to the historic workings. The anomalism increases towards the top of the dome and towards the northwest. The increasing anomalism towards the northwest is lost under cover indicating there may be some potential for remanent mineralisation at shallow depths. Overall, the programme has provided MGA with new insight into the controls on mineralisation at Cherry Tree, which is relevant to the selection of drill targets at Cherry Tree itself and potentially to other parts of the Bailieston Trend including HR3.

Review of Announcement by Qualified Person

This announcement has been reviewed 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 is a Qualified Person as that term is defined by the AIM Note for Mining, Oil and Gas Companies.

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 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.

HotStockRockets – ECR Minerals #ECR – a speculative buy?

Shares in gold-focused ECR Minerals (ECR) have recently risen strongly to a current 1.7p offer price but that follows not having previously joined in with the gold surge – they having commenced this year at 0.725p and the market cap is still comfortably below £10 million…

Recently-announced results for the company’s half-year ended 31st March 2020 showed administrative expenses of £0.37 million on nil revenue, with both cash and current assets over total liabilities of £0.17 million. However, “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”. The latter also includes; “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; 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.” In February the company also completed the sale of interests in Argentina – retaining a NSR royalty of up to 2% to a maximum of $2.7 million in respect of future production from the SLM gold project – to focus on gold exploration activities in Australia.

The above is with results from exploration activities in Victoria, Australia having recently included positive findings of an alteration study on RC drill cuttings from the Creswick project (in March), and confirmation of very high grade gold mineralisation at Creswick by the completion of ‘full bag’ testing (November 2019). It emphasises its “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”. There is also particularly Bailieston, where “ECR is considering a number of potential exploration programmes… including further drilling at the Blue Moon prospect, where 2019 reverse circulation drilling… returned an intercept of 2 metres at 17.87 g/t gold within a zone of 15 metres at 3.81 g/t gold from 51 metres in BBM007, and soil and stream sediment sampling in the Cherry Tree South and Ponting’s areas”.

This is still early-stage stuff but is in one of the ‘hottest’ geographic areas of interest currently – and the results statement noted “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”. There are COVID 19-related international travel restrictions but the team on the ground continues work and we expect the restrictions to relatively soon be eased, potentially facilitating the “potential commercial transactions”.

Therefore, at 1.7p and up to 1.8p, targeting 2.7p+ (a £15 million market cap) on continuing Victoria, Australia gold and deal excitement, Buy.

Link here to the full HotStockRockets article on ShareProphets

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

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