ECR Minerals plc Unaudited Half-Yearly Results for the Six Months Ended 31 March 2017

 
TIDMECR 
 
 

ECR MINERALS plc

("ECR Minerals", "ECR" or the "Company")

AIM: ECR

US OTC: MTGDY

UNAUDITED HALF-YEARLY RESULTS FOR THE SIX MONTHSED 31 MARCH 2017 AND UPDATE

LONDON: 30 JUNE 2017 - The directors of ECR Minerals plc (the "Directors") are pleased to announce the Company's unaudited half-yearly results for the six months to 31 March 2017, along with an update on the Group's activities.

CHIEF EXECUTIVE OFFICER'S REPORT

This report is written at an exciting time for ECR as it recommences it's drilling activities. In the past few weeks, the Company has completed an initial drilling programme in the Byron area, the first of a number of targets planned for testing at its 100%-owned gold projects in Victoria, Australia. ECR is also looking to commence drilling at its Argentinian projects in the near future. Following the success of our recent fundraising activities, ECR is, for the first time in several years, in a strong financial position and able to look to the future with confidence.

AVOCA, BAILIESTON AND TIMOR GOLD PROJECTS - Victoria, Australia

The Company's immediate focus is on the Byron area at the Bailieston project (EL5433). A 592 m reverse circulation (RC) drilling programme was recently completed at Byron. The programme comprised 7 holes intended to target extensions to the high-grade mineralisation mined historically and intersected by drilling in the 1980s.

Numerous high grade drilling results have recently been reported from the Fosterville gold mine, which is located around 30km from the Bailieston project and owned by Kirkland Lake Gold. The Costerfield gold mine owned by Mandalay Resources also lies 30km from Bailieston. With the existence of these modern producing mines in the district, the Directors believe that drilling success at Bailieston by ECR should generate a significant degree of market interest. The results of the drilling are expected to be available within the next 1-2 months.

In March 2017, ECR's wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd ("MGA") was granted a new exploration licence (EL6278) in Victoria, covering 228 square kilometres and encompassing a large number of historical hard rock and deep lead (buried alluvial) mining areas. The Company's initial strategy for this licence, which is known as the Timor project, is to use historical records and on-the-ground reconnaissance to prioritise the main exploration prospects and identify primary targets for drilling.

The approval and registration of the transfer of the Avoca project licence (EL5387) from Currawong Resources to MGA is still in process, and the Company will further refine its plans for exploration at Avoca once this licence has been transferred. ECR has already identified nine initial hard-rock targets for drilling at Avoca, with deep lead gold deposits confirmed as an additional target type warranting further evaluation.

SLM GOLD PROJECT - Argentina

Preparations have been made in recent months for drilling at the JV and El Abra prospects, after the determination of JORC Exploration Targets for these two prospects in January 2017. The preparations have included the establishment of drill pads, as well as permitting activities and liaison with the provincial government.

For details of the Exploration Targets, please refer to the Company's announcement dated 27 January 2017. A programme of approximately 2,000m of RC drilling has been designed for the JV prospect, with an additional 300m planned for El Abra. The aim of the drilling will be to enable the estimation of Mineral Resources compliant with the JORC Code for both prospects. Drilling is planned to commence in August 2017.

DANGLAY GOLD PROJECT - Philippines

Further to the updates announced by the Company on 24 February and 31 March 2017 in relation to the Danglay gold project, having been advised on 31 March 2017 that the board of Cordillera Tiger Gold Resources, Inc. ("CTGR") had resolved to issue a 25% shareholding in CTGR to ECR, the Company was disappointed to become aware of a legal challenge to the issuance of the shares which has been initiated in the Philippines by Tiger International Resources, Inc. ("TGR"). As a result, ECR has not yet been issued shares in CTGR. ECR is entitled to a 25% interest in CTGR under the Earn-In & Joint Venture Agreement between the Company, CTGR and TGR, and considers TGR's legal challenge to be without merit.

ECR is in dialogue with both CTGR and TGR, and although there can be no guarantee, it is hoped that an amicable solution can be reached. In addition, Ivor Jones, a director of ECR and its Chief Operating Officer, visited the Danglay project earlier this month and following this visit, the Directors continue to believe that significant exploration potential exists at the project. An initial NI43-101 Mineral Resource was estimated for the project in December 2015, following extensive exploration carried out by ECR during 2014 and 2015. A copy of the corresponding NI43-101 technical report is available for download from the Company's website.

With the removal in May 2017 of Regina Lopez as Secretary of the Philippine Department of Environment & Natural Resources (DENR), the political outlook for the mining industry in the Philippines has improved, although uncertainty remains. In view of the disruption caused by the tenure of Ms. Lopez as DENR Secretary, it is unsurprising that the renewal of the Exploration Permit (EP) comprising the Danglay project has yet to be received by CTGR. The Directors remain of the view that the EP is likely to be renewed in due course, and ECR is ready to work with all parties to preserve the value of Danglay as a significant exploration opportunity in the prolifically gold-copper mineralised Baguio District.

FINANCIAL RESULTS AND RECENT FUNDRAISING

For the six months ended 31 March 2017 the financial statements of the Company as consolidated with its subsidiaries (the "Group") record a total comprehensive expense of GBP432,339, the largest component of which is other administrative expenses of GBP431,492, which relate primarily to the development of the Company's projects, but which cannot be capitalised under applicable accounting standards. The Group reported a total comprehensive expense of GBP533,170 for the six months ended 31 March 2016.

The Group's net assets were GBP2,382,561 at 31 March 2017 compared with GBP1,907,983 at 31 March 2016.

Since the 31 March 2017, the Group's financial position has strengthened considerably following the completion this month of an oversubscribed placing through Optiva Securities raising gross proceeds of GBP1,000,000 and a subscription with Shenyang Xinliaoan Machinery Co Ltd ("Shenyang") which raised gross proceeds of GBP553,564. Following completion of the subscription and placing, Shenyang has a 22% shareholding in ECR, and importantly, the Shenyang shares are subject to a 12-month lock-up. The Directors are pleased to welcome Shenyang as strategic, long-term investors in ECR.

Craig Brown

Chief Executive Officer

ABOUT ECR

ECR is a mineral exploration and development company. ECR's wholly owned Australian subsidiary Mercator Gold Australia has 100% ownership of the Avoca, Bailieston and Timor gold projects in Victoria, Australia. ECR has earned a 25% interest in the Danglay epithermal gold project, an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines. An NI43-101 technical report was completed in respect of the Danglay project in December 2015, and is available for download from ECR's website.

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

FOR FURTHER INFORMATION, PLEASE CONTACT:

 
ECR Minerals plc                                Tel: [phone] 
William (Bill) Howell, Non-Executive Chairman 
Craig Brown, Director & CEO 
Ivor Jones, Director & COO 
Email: 
[e-mail] 
Website: www.ecrminerals.com 
Cairn Financial Advisers LLP                    Tel: [phone] 
Nominated Adviser 
Emma Earl / Jo Turner 
Optiva Securities Ltd                           Tel: [phone] 
Broker 
Graeme Dickson 
FlowComms                                       Tel: [phone] 
Investor Relations 
Sasha Sethi 
 
 

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.

 
Consolidated 
Income 
Statement 
For the six 
months 
ended 
31 March 2017 
                 Six months ended  Six months ended  Year ended 
                 31 March 2017     31 March 2016     30 September 2016 
Continuing       GBP                 GBP                 GBP 
operations 
Other            (431,492)         (296,286)          (677,873) 
administrative 
expenses 
Currency         (1,335)           (95)               9,399 
exchange 
differences 
Impairment       -                 (780)              - 
of other 
current assets 
Total            (432,827)         (297,161)          (668,474) 
administrative 
expenses 

Operating loss   (432,827)         (297,161)          (668,474) 
Other income                                          34,688 
Loss             -                 (609)              - 
on disposal 
of available 
for 
sale financial 
assets 
Fair value       (1,108)           -                  (18,893) 
movements 
- available 
for 
sale financial 
asset 
                 (433,935)         (297,770)          (652,679) 
Finance income   131               21                 484 
Finance costs    -                 (135,370)          (267,511) 
Finance income   131               (135,349)          (267,027) 
and costs 
Loss for the     (433,804)         (433,119)          (919,706) 
period 
before 
taxation 
Income tax       -                 -                  - 
Loss for the     (433,804)         (433,119)          (919,706) 
period 
Loss 
attributable 
to: 
Owners of the    (433,804)         (433,119)          (919,706) 
parent 
Loss per share   (0.33)p           (1.32)p            (2.00)p 
- basic 
and diluted 
 
 
Consolidated 
Statement of 
Comprehensive 
Income 
For the six 
months 
ended 
31 March 2017 
                   Six months ended  Six months ended  Year ended 
                   31 March 2017     31 March 2016     30 September 2016 
                   GBP                 GBP                 GBP 
Loss for the       (433,804)         (433,119)         (919,706) 
period 
Items that 
may be 
reclassified 
subsequently to 
profit or loss 
Gain/(losses)      1,465             (100,051)         (96,886) 
on exchange 
translation 
Other              1,465             (100,051)         (96,886) 
comprehensive 
income/(expense) 
for the period 
Total              (432,339)         (533,170)         (1,016,592) 
comprehensive 
expense 
for the period 
Attributable 
to: 
Owners of the      (432,339)         (533,170)         (1,016,592) 
parent 
 
 
Consolidated Statement 
of Financial Position 
At 31 March 2017 
                           As at          As at          As at 
                           31 March 2017  31 March 2016  30 September 2016 
Assets                     GBP              GBP              GBP 
Non-current assets 
Property, plant            11,483         6,237          6,237 
and equipment 
Exploration assets         2,556,688      2,224,024      2,437,608 
Deferred tax asset         -              -              - 
Total non-current assets   2,568,171      2,230,261      2,443,845 
Current assets 
Trade and other            9,927          4,712          5,470 
receivables 
Available for sale         19,906         39,277         21,014 
financial assets 
Taxation                   70,816         36,282         38,059 
Other current assets       -              2,672          2,672 
Cash and cash              107,508        103,883        471,809 
equivalents 
                           208,157        186,826        539,024 
Total assets               2,776,328      2,417,087      2,982,869 
Current liabilities 
Trade and other payables   393,767        409,886        302,242 
Interest bearing           -              99,218         - 
borrowings 
Total liabilities          393,767        509,104        302,242 
Net assets                 2,382,561      1,907,983      2,680,627 
Equity attributable to 
owners of the parent 
Share capital              11,281,695     11,103,901     11,281,628 
Share premium              42,508,217     41,443,507     42,441,553 
Exchange reserve           (165,070)      (169,700)      (166,535) 
Other reserves             1,215,259      1,067,423      1,147,717 
Retained losses            (52,457,540)   (51,537,149)   (52,023,736) 
Total equity               2,382,561      1,907,983      2,680,627 
 
 
Consolidated statement of changes in equity 
For the six months ended 31March 2017 
 
 
                Share capital  Share premium  Exchange   Other      Retained      Total 
                                              reserves   reserves   reserves      Equity 
                GBP              GBP              GBP          GBP          GBP             GBP 
At              11,071,602     40,802,469     (69,649)   845,677    (51,104,030)  1,546,069 
1 
October 
2015 
Loss for        -              -              -          -          (433,119)     (433,119) 
the 
period 
Loss            -              -              (100,051)  -          -             (100,051) 
on 
exchange 
translation 
Total           -              -              (100,051)  -          (433,119)     (533,170) 
comprehensive 
income 
/(expense) 
Conversion      18,721         550,480        -          -          -             569,201 
of loan 
Share           -              (4,500)        -          -          -             (4,500) 
issue 
costs 
Shares          12,500         59,197         -          -          -             71,697 
issued 
Warrants        -              -              -          178,303    -             178,303 
issued 
Share           -              -              -          43,443     -             43,443 
based 
payments 
Shares          1,078          35,861         -          -          -             36,939 
issued 
in 
payment 
of 
creditors 
At              11,103,901     41,443,507     (169,700)  1,067,423  (51,537,149)  1,907,983 
31 March 
2016 
Loss for        -              -              -          -          (486,587)     (486,587) 
the 
period 
Loss            -              -              3,165      -          -             3,165 
on 
exchange 
translation 
Total           -              -              3,165      -          (486,587)     (483,422) 
comprehensive 
income 
/(expense) 
Conversion      15,952         (48,898)       -          -          -             (32,946) 
of loan 
Share           -              (51,250)       -          -          -             (51,250) 
issue 
costs 
Shares          135,000        893,303        -          -          -             1,028,303 
issued 
Share           -              -              -          80,294     -             80,294 
based 
payments 
Shares          26,775         204,891        -          -          -             231,666 
issued 
in 
payment 
of 
creditors 
At              11,281,628     42,441,553     (166,535)  1,147,717  (52,023,736)  2,680,627 
30 
September 
2016 
Loss for        -              -              -          -          (433,804)     (433,804) 
the 
period 
Loss            -              -              1,465      -          -             1,465 
on 
exchange 
translation 
Total           -              -              1,465      -          (433,804)     (432,339) 
comprehensive 
income 
/(expense) 
Share           -              -              -          67,542     -             67,542 
based 
payments 
Shares          67             66,664         -          -          -             66,731 
issued 
in 
payment 
of 
creditors 
At              11,281,695     42,508,217     (165,070)  1,215,259  (52,457,540)  2,382,561 
31 March 
2017 
 
 
Consolidated 
Cash 
Flow 
Statement 
For the 
six 
months 
ended 
31 
March 
2017 
               Six months ended 31 March 2017  Six months ended  Year ended 
                                               31 March 2016     30 September 2016 
               GBP                               GBP                 GBP 
Net            (241,445)                       (202,513)         (494,118) 
cash 
flow 
used 
in 
operations 
Investing 
activities 
Increase       (191,080)                       (191,851)         (319,580) 
in 
exploration 
assets 
Purchase       (3,776)                         -                 - 
of 
property, 
plant 
& 
equipment 
Interest       -                               21                484 
received 
Net            (122,856)                       (191,830)         (319,096) 
cash 
used 
in 
investing 
activities 
 
Financing 
activities 
Proceeds       -                               250,000           1,100,000 
from 
issue 
of 
shares 
and 
warrants 
Proceeds       -                               174,801           418,463 
from 
convertible 
loan 
Repayment      -                               -                 (248,332) 
of 
convertible 
loan 
notes 
Finance        -                               (4,500)           (55,750) 
costs 
on 
fundraising 
Interest       -                               (12,222)          (31,385) 
paid 
and 
other 
financing 
costs 
Net            -                               408,079           1,182,996 
cash 
from 
financing 
activities 
Net            (364,301)                       13,736            369,782 
change 
in 
cash 
and 
cash 
equivalents 
Cash           471,809                         90,398            90,398 
and 
cash 
equivalents 
at 
beginning 
of 
the 
period 
Effect         -                               (251)             11,629 
of 
change 
in 
exchange 
rates 
Cash           107,508                         103,883           471,809 
and 
cash 
equivalents 
at end 
of the 
period 
 
 

Notes to the Condensed Half-Yearly Financial Statements

For the six months ended 31 March 2017

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 31 March 2017. 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.

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 30 September 2016. They have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 September 2016. 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.

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 31 March 2017 and 31 March 2016 is unaudited. The comparative figures for the period ended 30 September 2016 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.

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

 
                          Six months ended  Six months ended  Year ended 
                          31 March 2017     31 March 2016     30 September 
                                                              2016 
Weighted number           130,179,729       32,700,218        45,909,477 
of shares in 
issue during the period 
                          GBP                 GBP                 GBP 
Loss from continuing      (433,804)         (433,119)         (919,706) 
operations 
attributable 
to owners of the parent 
 
 

For the purpose of presenting a fair comparison the weighted number of shares in issue in previous periods has been divided by 200 to reflect the consolidation approved by shareholders on 21 November 2016.

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:

 
                        Six months ended  Six months ended  Year ended 
                        31 March          31 March          30 September 
                        2017              2016              2016 
                        GBP                 GBP                 GBP 
Directors' emoluments   108,885           106,500           213,167 
Share-based payments    67,542            -                 - 
Total emoluments        176,427           106,500           213,167 
 
 

There were no other related party transactions during the period.

7.Shares and options transactions during the period

On 21 November 2016 the shareholders approved a 200:1 consolidation of the ordinary share capital of the company.

On 27 February 2017 the Company announced that it had conditionally raised gross proceeds of GBP553,564 ("Gross Proceeds") pursuant to a subscription by the Shenyang Xinliaoan Machinery Co Ltd ("Shenyang" or the "Investor") based in the People's Republic of China, for 55,356,391 new ordinary shares of the Company ("Subscription Shares") at a price of 1 pence per Subscription Share ("Subscription Price") (the "Subscription"). Conditional on completion of the Subscription, it was agreed that the Investor would also be issued warrants over 83,034,586 new ordinary shares in total (the "Investor Warrants"). Of the Investor Warrants, 55,356,391 are exercisable at a price of 2 pence per share and 27,678,195 have an exercise price of 5 pence per share. The Subscription Shares were not issued and the Gross Proceeds were not received until after 31 March 2017.

In addition to the Subscription, the directors of ECR announced that the Company had issued 6,673,021 new ordinary shares in the Company ("Ordinary Shares") at a price of 1 pence per Ordinary Share (being the same price as the Subscription Price) in lieu of salary and fees owed to certain directors, consultants and suppliers to the Company.

On 27 February 2017 the Company announced the grant of 8,153,968 share options (the "Options") to two executive directors. The Options have been granted under the Company's unapproved share option plan (the "Option Plan"). Each Option is exercisable to acquire one ordinary share of the Company at a price of 1.725 pence per share. The Options will remain valid, subject to the rules of the Option Plan, until the fifth anniversary of the date of grant. The Options will vest immediately. The exercise price of the Options equates to a premium of 50% to the closing mid-market price of the Company's shares on AIM on 24 February 2017.

8.Consolidated Cash Flow Statement

 
                       Six months ended  Six months ended  Year ended 
                       31 March          31 March          30 September 
                       2017              2016              2016 
                       GBP                 GBP                 GBP 
Operating 
activities 
Loss for the           (433,804)         (433,119)         (919,706) 
period, 
before tax 
Adjustments:           (1,470)           1,468             1,468 
Depreciation 
expense, 
property, 
plant and equipment 
Provision and          1,108             -                 - 
impairment 
of investment 
and loans 
Impairment of other    2,672             -                 - 
current assets 
Loss on available      -                 -                 18,263 
for sale 
financial assets 
Loss                   -                 -                 30,486 
on extinguishment 
of debt by equity 
Interest income        -                 (21)              (484) 
Loss on revaluation    1,465             -                 - 
of investments 
Interest               -                 135,118           200,924 
on convertible 
loans 
Interest expense       -                 252               - 
- other 
Share based            67,542            -                 123,737 
payments 
Shares issued          66,731            -                 13,800 
in lieu 
of expense payments 
(Increase) /decrease   (4,457)           69,521            (12,941) 
in 
accounts receivable 
Increase/(Decrease)    91,525            58,036            58,565 
in 
accounts payable 
(Increase)/decrease    (32,757)          (33,768)          (8,230) 
in taxation 
Net cash flow used     (241,445)         (202,513)         (494,118) 
in operations 
 
 

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 26 May 2017 the Company announced the issue of 793,832 ordinary shares of the Company (the "Further Shares") to Currawong Resources Pty Ltd ("Currawong"), the vendor of the Avoca and Bailieston projects. The Further Shares have been issued at a price of 1.8 pence, being the mid-price on AIM at the close of trading on 18 May 2017, giving them a value of GBP14,288.98 or approximately AUD 25,000.

On 31 May 2017 the Company announced that it had received the full amount of the Gross Proceeds of GBP553,564 from Shenyang Xinliaoan Machinery Co Ltd, following the previously announced subscription on 27 February 2017. Completion of the Subscription and the issue of the Subscription Shares and associated Investor Warrants remains conditional upon the relevant parties entering into a relationship agreement.

On 2 June 2017 the Company announced that it has raised gross proceeds of GBP1,000,000 by way of an oversubscribed placing (the "Placing") for 55,555,556 new ordinary shares in the Company (the "Placing Shares") at a price of 1.8 pence each ("Issue Price"). The net proceeds of the Placing will be used to support the ongoing activities of the Company in Australia and to explore new opportunities.

On 6 June 2017 the Company announced that it has completed the subscription with Shenyang Xinliaoan Machinery Co Ltd ("Shenyang") raising gross proceeds of GBP553,564 from the issue of 55,356,391 ordinary shares at a price of 1 pence per share. As a result, Shenyang was granted warrants over 83,034,586 new ordinary shares in total. Of these warrants, which are valid for five years, 55,356,391 warrants are exercisable at a price of 2 pence per share and 27,678,195 warrants have an exercise price of 5 pence per share.

On 15 June 2017 the Company announced that its planned exploration drilling programme at its Bailieston licence located in Victoria, Australia has now commenced.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170629005989/en/

 
This information is provided by Business Wire 
 
 

(END) Dow Jones Newswires

June 30, 2017 02:00 ET (06:00 GMT)