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ECR Minerals PLC

Half-year Report

--(BUSINESS WIRE)--LONDON

ECR MINERALS plc

(“ECR Minerals”, “ECR” or the “Company”)

AIM: ECR

US OTC: MTGDY

UNAUDITED HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED AND UPDATE31 MARCH 2016

- The directors of (the “Directors”) are pleased to announce the Company’s unaudited half-yearly results for the six months to , along with the following update.:LONDON30 JUNE 2016ECR Minerals plc31 March 2016

CHIEF EXECUTIVE OFFICER’S REPORT

Since my last report to shareholders, published on alongside ECR’s annual financial statements, the Company’s focus has been on the Avoca and Bailieston gold projects in , of which ECR’s wholly owned Australian subsidiary (“MGA”) has agreed to acquire 100% ownership.7 March 2016Victoria, AustraliaMercator Gold Australia Pty Ltd

MGA is prioritising the Avoca project, where the potential to generate relatively short-term cash flow from the reprocessing of historical waste dumps to extract remnant gold is being evaluated. MGA is well placed to act as the corporate vehicle for this activity, on the basis of its estimated tax losses of approximately AUD 66M as at , which may be available, subject to certain conditions (as described in the Company’s announcement of ), to reduce MGA’s future taxable profits.30 June 20154 December 2015

has become a more attractive operating environment for gold projects following the substantial depreciation in the Australian dollar against the US dollar which occurred during 2015. The Australian dollar gold price is at close to record highs. In addition, fuel, labour, consultants and other key mining inputs have fallen significantly in price.Australia

The acquisition of the Avoca and Bailieston projects represents a strategic shift for ECR towards operations in through MGA, and the plan to establish relatively short-term production at Avoca is a key element of this strategy.Australia

The consideration for the acquisition of the Avoca and Bailieston projects by MGA comprises up to AUD 250,000 in ECR shares (based on certain milestones), and a net profits interest royalty of 20% in respect of mine dumps and 10% in respect of other deposits (royalty capped at AUD 3.5M). The structure of the transaction has the effect of aligning the interests of the vendors with those of MGA/ECR.

The acquisition of the projects remains conditional on the necessary Victorian government authorisations and registration of the transfer of the projects to MGA, and on issuance of the Initial Consideration Shares (as defined in the Company’s announcement).3 March 2016

COMPETENT PERSON’S REPORT AND EXPLORATION TARGETS

On , the Company released a JORC Code-compliant technical report in relation to the Avoca and Bailieston projects (the “CPR”). The CPR was prepared by Mr , BEng, FAusIMM CP (Min, Geo), who is employed by , and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the type of activity being undertaken. The CPR described the history and potential of the two projects in great detail, and determined Exploration Targets for the projects, in accordance with the JORC Code.20 April 2016Jeremy Peters BScSnowden Mining Industry Consultants

The Exploration Targets are set out in Table 1 below and have been extracted from the CPR, which is available on the Company’s website (). ECR confirms it is not aware of any new information or data that materially affects the information included in the original announcement of the Exploration Targets and confirms that the form and context in which the competent person’s findings are presented have not been materially modified from the original announcement.www.ecrminerals.com

Table 1: Summary of JORC Exploration Targets* - Avoca and Bailieston

* The ranges of tonnage and grade stated above are conceptual in nature, are not estimates of a Mineral Resource or Ore Reserve, and pertain to mineralisation where there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The basis on which the above Exploration Targets have been determined is set out in the CPR.

** Conversion of the ranges of tonnage and grade for the “deep lead alluvial” and “waste dumps” Exploration Targets to ounces assumes a specific gravity of 1.5; figures in ounces are rounded to the nearest 500 oz.

AVOCA AND BAILIESTON PROJECT ACTIVITIES

Following finalisation of the CPR, MGA initiated a number of work programmes, including:

AVOCA PROJECT

* Completion of a mineral resource estimate for the dumps, entailing additional augur sampling. The necessary sampling was completed in . Gold resource estimates encompassing four waste dumps within the Avoca project area have been compiled in draft form, and are being refined with additional data as it becomes available.April 2016

* Metallurgical testwork on samples from the dumps, with a focus on gravity recovery options. A bulk sample for metallurgical testwork has now been despatched to the laboratory, and testwork results are expected during .July 2016

* Preparation of an economic study of the proposed reprocessing of the dumps, setting out the capital requirements and projected returns from the operation, and the timescale which would be required to reach production. Completion of the study is targeted for .July 2016

BAILIESTON PROJECT

* Rock chip and soil sampling at various prospects within the Bailieston Exploration Licence. A programme of rotary air blast (RAB) percussion drilling at Bailieston had been planned to commence in late , but has now been deferred until later in the year in order to allow key personnel to concentrate on the Avoca project.June 2016

NEW EXPLORATION LICENCE APPLICATIONS,AUSTRALIA

Two new Exploration Licences (ELs) have been applied for in by MGA. One EL application is in the vicinity of the Avoca project, and the other is in the vicinity of the Bailieston project. Both EL applications have been accepted by the Victorian government, and issuance of the ELs, if granted, is expected in the second half of 2016.Victoria

The EL application in the vicinity of Avoca contains a number of significant historical waste dumps originating from ‘deep lead’ alluvial gold mining activities, as is the case within EL5387 (the EL which currently comprises the Avoca project). Historical production from the main alluvial mines within the area of the new application is reported by the to have exceeded 272,000oz gold.Geological Survey of Victoria

MGA’s intention is to assess the suitability of the resulting waste dumps for reprocessing in order to extract remnant gold, and the new EL application can be considered an enlargement of the Avoca project. The Exploration Target in Table 1 above does not take account of the new EL which has been applied for.

The EL application near Bailieston is intended to expand MGA’s exploration footprint in the district, which currently hosts two significant producing gold mines (Costerfield and Fosterville) within approximately 30km of the Bailieston project.

DANGLAY GOLD PROJECT,PHILIPPINES

As announced on , (“Cordillera Tiger”), the holder of the Exploration Permit (the “EP”) comprising the Danglay project, was recently invited by the (MGB) to sign the renewed EP in quadruplicate. All signed copies have been returned to the MGB, and ECR expects the final renewed EP to be issued in due course.13 June 2016Cordillera Tiger Gold Resources, Inc.Philippine Mines & Geosciences Bureau

An announcement regarding ECR’s intentions for further exploration at Danglay will be made at or around the time the final renewed EP is received by Cordillera Tiger.

SLM GOLD PROJECT,ARGENTINA

It remains the preference of the Directors for the SLM project to be advanced in partnership with a local group, and discussions in this regard are taking place under confidentiality.

FINANCIAL RESULTS

For the six months ended the financial statements of the Company as consolidated with its subsidiaries (the “Group”) record a total comprehensive expense of £533,170, the largest component of which is other administrative expenses of £296,286, which relate primarily to the development of the Company’s projects. The Group reported a total comprehensive expense of £896,320 for the six months ended .31 March 201631 March 2015

The Group’s net assets were £1,907,983 at compared with £4,515,381 at , primarily reflecting the decision at 30 to make an impairment provision against the carrying value of the MGA deferred tax asset. Exploration assets at were £2,224,024, versus £1,766,779 at , reflecting the investments made in the Company’s projects.31 March 201631 March 2015September 201531 March 201631 March 2015

Stephen Clayson

Chief Executive Officer

Review of announcement by Qualified Person

This announcement has been reviewed by (Hons), FAusIMM, FSEG, ECR’s Non-Executive Chairman. is a geologist with 49 years of experience in the minerals industry, and is a Qualified Person as that term is defined by the AIM Note for Mining, Companies.William (Bill) Howell BScMr HowellOil and Gas

ABOUT ECR

ECR is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia (MGA) has agreed to acquire 100% ownership of the Avoca and Bailieston gold projects in . Mercator Gold Australia is estimated to have tax losses of approximately AUD 66M as at , which may be available, subject to certain conditions (as described in ECR’s announcement dated ), to reduce MGA’s future taxable profits. This is considered particularly significant in view of an opportunity which may exist at Avoca to establish relatively near term gold production from the reprocessing of historical mine dumps, with the potential for sale of gravel and sand by-products. A competent person’s report in relation to the Avoca and Bailieston projects is available for download from ECR’s website.Victoria, Australia30 June 20154 December 2014

ECR has the right to earn a 50% interest in the Danglay epithermal gold project in . Danglay is an advanced exploration project located in a prolific gold and copper mining district in the north of . An NI43-101 technical report was completed in respect of the Danglay project in , and is available for download from ECR’s website.the Philippinesthe PhilippinesDecember 2015

ECR’s wholly owned subsidiary Ochre Mining has a 100% interest in the SLM gold project in , . Exploration at SLM has focused on identifying small tonnage mesothermal gold deposits which may be suitable for relatively near term production.La Rioja ProvinceArgentina

FOR FURTHER INFORMATION, PLEASE CONTACT:

plc Tel: +44 (0)20 7929 1010ECR Minerals

, Non-Executive ChairmanWilliam (Bill) Howell

, Director & CEOStephen Clayson

, Finance DirectorCraig Brown

, Non-Executive Technical DirectorRichard (Dick) Watts

Email:info@ecrminerals.com

Website:www.ecrminerals.com

Cairn Financial Advisers LLP Tel: +44 (0)20 7148 7900

Nominated Adviser

/Emma EarlJo Turner

Vicarage Capital Ltd Tel: +44 (0)20 3651 2910

Broker

/Rupert WilliamsJeremy Woodgate

Blytheweigh Tel: +44 (0)20 7138 3204

Public Relations

/Tim BlytheCamilla Horsfall

FORWARD LOOKING STATEMENTS

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

Notes to the Condensed Half-Yearly Financial Statements

For the six months ended31 March 2016

1.Basis of preparation

The condensed consolidated half-yearly financial statements incorporate the financial statements of the Company and its subsidiaries (the “Group”) made up to . The results of the subsidiaries are consolidated from the date of acquisition, being the date on which the Company obtains control, and continues to be consolidated until the date such control ceases.31 March 2016

These condensed half-yearly consolidated financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended . They have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 . The report of the auditors on those accounts was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006, but did include a reference to matters which the auditors drew attention to by way of emphasis without qualifying their report.30 September 2015September 2015

The accounting policies have been applied consistently throughout the Group for the purpose of preparation of these consolidated half-yearly financial statements.

The financial information in this statement does not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended and is unaudited. The comparative figures for the period ended were derived from the Group’s audited financial statements for that period as filed with the Registrar of Companies. They do not constitute the financial statements for that period.31 March 201631 March 201530 September 2015

2.Going concern

The Directors are satisfied that the Company has sufficient resources to continue its operations and to meet its commitments for the immediate future. The Group therefore continues to adopt the going concern basis in preparing its condensed half-yearly financial statements.

3.Cash and cash equivalents

Cash includes petty cash and cash held in bank current 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.

4.Loss per share

The disclosure of the diluted loss per share is the same as the basic loss per share as the conversion of share options decreases the basic loss per share thus being anti-dilutive.

5.Income tax

No charge to tax arises on the results and no deferred tax provision arises or deferred tax asset is identified.

6.Related party transactions

The Directors are the only key management.

Directors’ remuneration during the period was as follows:

There were no other related party transactions during the period.

7.Share issues during the period

On the Company announced the issue of 124,095,238 ordinary shares of 0.001p each in the Company following the partial conversion of a convertible loan amounting to at a price of £0.000525 () per share, with an additional 20,908,800 ordinary shares issued at the same price in settlement of accrued interest on the convertible loan.12 October 2015US$100,0000.0525 pence

On the Company announced the issue of 186,309,751 ordinary shares of 0.001p each in the Company following the partial conversion of a convertible loan amounting to at a price of £0.000523 () per share, with an additional 715,430 ordinary shares issued at the same price in settlement of accrued interest on the convertible loan.26 October 2015US$150,0000.0523 pence

On the Company announced the issue of 244,293,785 ordinary shares of 0.001p each in the Company following the partial conversion of a convertible loan amounting to at a price of £0.000531 () per share, with an additional 20,330,132 ordinary shares issued at the same price in settlement of accrued interest on the convertible loan.4 November 2015US$200,0000.0531 pence

On the Company announced it had received firm commitments in respect of a placing and subscription of 1,250,000,000 new ordinary shares of the Company of 0.001p at a price of 0.02p each to raise gross proceeds of £250,000. Subscribers in the placing were issued one warrant per placing share (the “Warrants”). Each Warrant will entitle the holder to subscribe for one ordinary share of 0.001p in the Company at a price of 0.04p per ordinary share (the “Exercise Price”). Each Warrant shall be valid for three years from the date the corresponding placing shares were admitted to trading on AIM. In the event the Company announces that the total mineral resources estimated at the Danglay gold project in have exceeded 500,000oz contained gold equivalent in accordance with a Standard, the Exercise Price of the Warrants shall be increased to 0.06p per ordinary share. The term “Standard” is defined by the AIM Note for Mining and Oil & Gas Companies.18 November 2015the Philippines

On the Company announced the issue of 455,907,336 ordinary shares of 0.001p each in the Company following the partial conversion of a convertible loan amounting to at a price of £0.000227 () per share, with an additional 58,039,184 ordinary shares issued at the same price in settlement of accrued interest on the convertible loan.12 January 2016US$150,0000.0227 pence

On the Company announced the issue of 537,618,001 ordinary shares of 0.001p each in the Company following the partial conversion of a convertible loan amounting to at a price of £0.000193 () per share, with an additional 2,945,868 ordinary shares issued at the same price in settlement of accrued interest on the convertible loan.10 February 2016US$150,0000.0193 pence

On the Company announced the issue of 323,904,939 ordinary shares of 0.001p each in the Company following the partial conversion of a convertible loan amounting to at a price of £0.000215 () per share, with an additional 4,880,775 ordinary shares issued at the same price in settlement of accrued interest on the convertible loan.31 March 2016US$100,0000.0215 pence

8.Consolidated Cash Flow Statement

The figure s in this note for interest paid on convertible loans include the deemed cost of warrants issued with each convertible loan tranche, as well as implementation fees paid in respect of each tranche.

9.Post period end events

On the Company announced the publication of a JORC Code-compliant technical report prepared in relation to the Avoca and Bailieston gold projects in .20 April 2016Victoria, Australia

On the Company announced details of immediate plans to advance the Avoca and Bailieston gold projects in .27 April 2016Victoria, Australia

On the Company announced the appointment of Brown as Finance Director with immediate effect.3 May 2016Craig William

On the Company announced the issue of 415,402,731 ordinary shares of 0.001p each in the Company as follows (i) 61,163,435 ordinary shares at a price of per share in settlement of consulting fees payable by the Company totaling £13,800 and (ii) 348,510,371 ordinary shares following the partial conversion of a convertible loan amounting to at a price of £0.000198875 () per share. An additional 5,728,925 ordinary shares were issued at a price of £0.000198875 () per share in settlement of accrued interest on the convertible loan.11 May 20160.0225625 penceUS$100,0000.0198875 pence0.0198875 pence

On , the Company announced an update on activities which included details of applications for two new Exploration Licences by its wholly owned Australian subsidiary13 June 2016Mercator Gold Australia Pty Ltd.

ECR Minerals plc

Source:ECR Minerals plc

Project Target style Tonnage Grade Troy ounces**
 From ToFrom ToFrom To
AvocaWaste dumps0.20 Mt0.25 Mt0.5 g/m31.5 g/m32,000

oz

8,000

oz

 Deep lead alluvial10 Mt20 Mt0.14 g/m30.20 g/m330,000 oz85,500

oz

Gravel and sand0.1 Mt0.5 Mt    
Mesothermal qtz vein0.03 Mt0.5 Mt10 g/t30 g/t9,500

oz

482,500

oz

BailiestonEpithermal ‘Carlin’1 Mt5 Mt1 g/t4 g/t32,000 oz643,000

oz

Totals74,000 oz1,219,000 oz
Consolidated Income Statement
For the six months ended31 March 2016
 Six months ended

31 March 2016

 Six months ended

31 March 2015

 Year ended

30 September 2015

Continuing operations£££
 
Exploration expenses(65,990)
 
Other administrative expenses(296,286)(629,183)(941,359)
Currency exchange differences(95)18,542(22,356)
Impairment of other current assets(780)
Total administrative expenses(297,161)(610,641)(1,029,705)
Operating loss(297,161)(610,641)(1,029,705)
Loss on disposal of available for sale financial assets(609)(138,590)(137,131)
Reclassification of fair value movements on disposal of available for sale assets(88,381)(14,750)
(297,770)(837,612)(1,181,586)
Finance income211928
Finance costs(135,370)(166,150)(321,180)
Finance income and costs(135,349)(166,131)(321,152)

Loss for the period before taxation

(433,119)(1,003,743)(1,502,738)
Income tax(3,217,484)
Loss for the period(433,119)(1,003,743)(4,720,222)
 
Loss attributable to:
Owners of the parent(433,119)(1,003,743)(4,720,222)
 
 
Loss per share – basic and diluted(0.01)p(0.03)p(0.13)p
Consolidated Statement of Comprehensive Income
For the six months ended31 March 2016   
 
Six months ended

31 March 2016

Six months ended

31 March 2015

Year ended

30 September 2015

£££
Loss for the period(433,119)(1,003,743)(4,720,222)
 
Items that may be reclassified subsequently to profit or loss
 
Reclassification of fair value movements to Income Statement on disposal of available for sale assets88,38114,750
Gain/(losses) on exchange translation(100,051)19,04222,193
Other comprehensive income/(expense) for the period(100,051)107,42336,943
 
Total comprehensive expense for the period(533,170)(896,320)(4,683,279)
 
Attributable to:
Owners of the parent(533,170)(896,320)(4,683,279)
Consolidated Statement of Financial Position
At31 March 2016
 As at

31 March 2016

 As at

31 March 2015

 As at

30 September 2015

Assets£££
Non–current assets
Property, plant and equipment6,2379,3607,705
Exploration assets2,224,0241,766,7792,132,224
Deferred tax asset3,218,173
Total non-current assets2,230,2614,994,3122,139,929
 
Current assets
Trade and other receivables4,712135,49174,233
Available for sale financial assets39,27748,29639,277
Taxation36,2822,6912,514
Other current assets2,6722,6722,672
Cash and cash equivalents103,883302,75490,398
186,826491,904209,094
Total assets2,417,0875,486,2162,349,023
 
 

 

 

Current liabilities

Trade and other payables409,886247,932351,850
Interest bearing borrowings99,218722,903451,104
Total liabilities509,104970,835802,954

Net assets

1,907,9834,515,3811,546,069
 
Equity attributable to owners of the parent
Share capital11,103,90110,782,87811,071,602
Share premium41,443,50740,297,90340,802,469
Exchange reserve(169,700)(72,800)(69,649)
Other reserves1,067,423821,320845,677
Retained losses(51,537,149)(47,313,920)(51,104,030)

Total equity

1,907,9834,515,3811,546,069
Consolidated statement of changes in equity
For the six months ended 31March 2016
 Share capital Share premium Exchange

reserves

 Other

reserves

 Retained

reserves

 Total

Equity

££££££
At1 October 201410,483,16640,131,118(91,842)485,160(46,398,558)4,609,044
Loss for the period(1,003,743)(1,003,743)
Gain on disposal of available for sale assets88,38188,381
Gain on exchange translation19,04219,042

Total comprehensive income/(expense)

19,042(915,362)(896,320)
Conversion of loan notes274,741153,130427,871
Share based payments288,831288,831
Warrants issued in lieu of finance cost47,32947,329
Shares issued in payment of creditors24,97113,65538,626
      
At31 March 201510,782,87840,297,903(72,800)821,320(47,313,920)4,515,381
Loss for the period(3,716,479)(3,716,479)
Reclassification of fair value movements to Income Statement14,75014,750
Gain on exchange translation3,1513,151
Total comprehensive expense3,151(3,701,729)(3,698,578)
Conversion of loan notes273,803203,925477,728
Shares issued6,556288,444295,000
Warrants issued in lieu of finance cost24,35724,357
Shares issued in payment of creditors8,36512,19720,562
Gain on disposal of available for sale assets(88,381)(88,381)

At30 September 2015

11,071,60240,802,469(69,649)845,677(51,104,030)1,546,069

 

Loss for the period(433,119)(433,119)
Loss on exchange translation(100,051)(100,051)
Total comprehensive income /(expense)(100,051)(433,119)(533,170)
Conversion of loan18,721550,480569,201
Share issue costs(4,500)(4,500)
Shares issued12,50059,19771,697
Warrants issued178,303178,303
Share based payments43,44343,443
Shares issued in payment of creditors1,07835,86136,939

At31 March 2016

11,103,90141,443,507(169,700)1,067,423(51,537,149)1,907,983

Consolidated Cash Flow Statement

For the six months ended31 March 2016
 
 Six months ended31 March 2016 Six months ended

31 March 2015

 Year ended

30 September 2015

£££
 
Net cash flow used in operations(202,513)(400,151)(654,704)
Investing activities
Increase in exploration assets(191,851)(331,393)(719,108)
Investment in available for sale asset(39,276)(39,276)
Proceeds from sale of available for sale financial assets119,97468,022
Cash introduced on regaining control of subsidiary10,21810,125
Interest received211928
   
Net cash generated in investing activities(191,830)(240,458)(680,209)

Financing activities

Proceeds from issue of shares and warrants250,000295,000
Proceeds from convertible loan174,801300,623494,774
Finance costs on fundraising(4,500)(38,956)
Interest paid and other financing costs(12,222)(1,384)
Net cash from financing activities408,079300,623749,434
 
Net change in cash and cash equivalents13,736(339,986)(585,479)
Cash and cash equivalents at beginning of the period90,398642,056642,056
Effect of change in exchange rates(251)68433,821
Cash and cash equivalents at end of the period103,883302,75490,398
 Six months ended

31 March 2016

 Six months ended

31 March 2015

 Year ended

30 September

2015

Weighted number of shares in issue during the year6,540,043,5603,414,964,9253,744,400,803
    
£££
Loss for the period attributable to owners of the parent

(433,119)

(1,003,743)

(4,720,222)

 Six months ended 31 March

2016

 Six months ended 31 March

2015

 Year ended

30 September

2015

£££
 
Directors’ emoluments106,500114,139226,200
Share-based payments182,697182,697
Total emoluments106,500296,836408,897
 Six months ended 31 March

2016

 Six months ended 31 March

2015

 Year ended

30 September

2015

£££
Operating activities
Loss for the period, before tax(433,119)(1,003,743)(1,502,738)
Adjustments:

Depreciation expense, property, plant and equipment

1,4681,4693,111
Provision and impairment of investment and loans88,38114,750
(Gain)/loss on available for sale financial assets(135,590)137,131
Interest income(21)(19)(28)
Interest on convertible loans135,118166,094319,796
Interest expense – other252561,384
Share based payments288,831288,831
Shares issued in lieu of expense payments8,874
(Increase) /decrease in accounts receivable69,521(46,469)6,539
Increase/(Decrease) in accounts payable58,036(38,030)67,103
(Increase)/decrease in taxation(33,768)(311)543
   
Net cash flow used in operations(202,513)(400,151)(654,704)
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