REG - ECR Minerals PLC - Proposed acquisition of Maximus Minerals Ltd

ECR MineralsAnnouncement

03/03/2025 07:15

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RNS Number : 0432Z  ECR Minerals PLC  03 March 2025

This announcement contains inside information for the purposes of Regulation
11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.

 

 

3 March 2025

 

ECR MINERALS PLC

 

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

 

Proposed acquisition of Maximus Minerals Ltd

 

Proposed amendment of Maximus' Option to acquire the Cat Key Project

 

ECR Minerals plc (AIM: ECR), the exploration and development company focused
on gold in Australia, announces that it has entered into an exclusivity
arrangement and non-binding agreement to potentially acquire the entire share
of capital of Maximus Minerals Ltd ("Maximus") (the "Proposed Acquisition").
The Proposed Acquisition is subject to the satisfactory conclusion of ECR's
due diligence and completion of underlying transaction documentation by 31 May
2025.

 

Maximus is the owner of three properties in Ontario, Canada and has an option
to acquire a license over a fourth property also in Ontario (the "Cat Key
Project").

 

Highlights

 

·        Proposed Acquisition of Maximus for £500,000 which owns 100%
of three base metal projects in Ontario, Canada with copper, zinc and gold
showings

·        Proposed that following completion of the Proposed
Acquisition, ECR will also exercise Maximus' option to acquire the Cat Key
Project for an additional C$600,000 (c. £329,000)

·        Work to date on the Cat Key Project would provide ECR with a
drill ready opportunity at economic cost to progress towards a resource
estimate

·        Total area of 71.36 sq km across the four properties, all of
which are accessible by road all year-round

·        Proposed activities on the Maximus properties and the Cat Key
Project are not expected to materially alter ECR's existing budgeted
expenditure or change funding requirements

·        Exclusivity granted until 31 May 2025 to conclude due
diligence and complete transaction documentation

·        Consideration for both the Proposed Acquisition and the
exercise of the option to acquire the Cat Key Project is to be satisfied
through the issue of new ordinary shares of 0.001 pence each in ECR ("Ordinary
Shares")

·        All new Ordinary Shares are to be issued at not less than
0.33 pence each, being the price equal to the issue price of the Company's
subscription announced on 25 November 2024

·        C$406,245 (c. £223,000) of exploration credits at the Cat
Key Project will transfer to ECR in the event that the option is exercised

 

Nick Tulloch, Chairman of ECR, said: "We have voiced our ambition to expand
ECR on several occasions and, alongside developing our own projects, we have
examined several potential opportunities, always adopting strict criteria to
ensure that we best position ECR to strive to deliver value to shareholders.

 

"Maximus, with its three existing base metal projects and the option over the
advanced high-grade gold Cat Key Project, fulfils these criteria. Completion
of the Proposed Acquisition will provide ECR with both a geographical and
project expansion, taking our assets beyond Australia and beyond gold, whilst
still utilising the skills of the team. The Proposed Acquisition will provide
ECR with a ready-made vehicle to commence operations in Canada.

 

"Importantly the work done to date on Maximus' properties provides
considerable guidance for near term operations, which we believe can be
carried out with little change to our existing budgeted plans.  The Cat Key
Project in particular would provide an opportunity for the Company to develop
a gold resource based on the results from historic drilling.

 

"The Proposed Acquisition and the associated option over the Cat Key Project
have been structured via all-equity consideration, consistent with our policy
of preserving our cash resources for ongoing development of our projects."

 

Further information on Maximus

 

Maximus, through its wholly owned Canadian subsidiary Maximus Minerals Inc,
owns licences over three properties - Cavern Lake, Silver Lake, Chapman Copper
- and an option (the "Option") to acquire a fourth licence, being the Cat Key
Project, from NuVision Resources ULC ("NuVision").  Maximus is currently
owned by a number of shareholders, with the largest being Stirling Bridge
Resources Limited.

 

Cat Key Project

 

The Cat Key Project, which is considered by the board of directors of ECR (the
"Board" or the "Directors") to be the most attractive asset within Maximus via
the Option, is a 27.76 sq. km property consisting of 243 single-cell claims
accessible via the east-west paved Highway 11 and is located 280 km west of
Thunder Bay, Ontario and 50 km east of Fort Frances near the village of Mine
Centre.

 

Mine Centre has been a focus of gold, base metal (Cu-Zn and Cu-Ni-PGM) and
iron-titanium exploration since the 1890s having produced 25,000 ounces of
gold and 3,000 ounces of silver from mining activities at the turn of the
century.

 

The previous operator of the Cat Key Project property has outlined the 350
metre 'Bush Rat' zone.  This consists of a 3-15 metre wide silicate-ankerite
alteration envelope within a magnetite bearing quartz gabbro sill near the
upper contact with dacitic flows and tuffs. The auriferous alteration zone is
host to 2-5% sulphides primarily as disseminated pyrite plus minor pyrrhotite.

 

To date, the Bush Rat zone has only been tested to a vertical depth of 125
metres in three drilling campaigns but multiple zones have been identified at
surface including:

 

·    2014: 7 diamond drill holes over 1,942 metres in aggregate

·    2016: 18 diamond drill holes over 4,923 metres in aggregate

·    2017: 46 diamond drill holes over 8,045 metres in aggregate

 

This past drilling of the Bush Rat zone has produced near surface intercepts
of:

 

·    525 g/t Au over 0.5 metres

·    5.15 g/t Au over 10.5 metres

·    2.39 g/t Au over 19.44 metres

·    1.89 g/t Au over 10.0 metres

·    1.6 g/t Au over 8.0 metres

·    1.18 g/t Au over 4.5 metres

·    1.06 g/t Au over 7.5 metres

 

The Bush Rat remains open at depth and strike.  With 11 km of potential
strike, the Maximus management believe there is potential for the Cat Key
Project to host in excess of 1 million ounces of gold. A National Instrument
43-101 ("NI 43-101") report has been previously prepared on the property in
2014.

 

This extended exposure to prospective large-scale deposits which are already
advanced to being drill ready and fully permitted, upon exercise of the
Option, would provide ECR with a near term opportunity that the Directors
believe can be completed at economic cost. A future work programme could
include:

 

·    The continued drill delineation of the Bush Rat zone  to a vertical
depth of 200 metres - a minimum of eighteen 250 metres drill holes

·    Drill testing of a new zone for structural interpretation - four 200
metres drill holes

·    Review and planned exploration of the other 12 high priority Induced
Polarisation (IP) targets across the Cat Key Project

·    Locate, map and sample many other untested Au-Ag, Cu-Zn &
Cu-Ni-PGM mineral showings across the Cat Key Project

 

The core from the historic drilling campaigns (around 18,000 metres in total)
is stored nearby so can be readily accessed for analysis as part of future
exploration programmes.

 

Additional targets remain to be tested on the property including a 10 km long
Cu-Pb-Zn horizon that has seen little gold exploration.

 

The Cat Key Project benefits from excellent year-round road and rail
infrastructure and is located 120 km from a producing mill.

 

Further information on the Cat Key Project is available on NuVision's website:
https://www.nuvisionres.com/projects/cat-key/.

 

Cavern Lake

 

Cavern lake is a 7.6 sq. km zinc project, consisting of 38 single-cell claims
in two separate blocks, situated 10 km north-east of Dorion, Ontario and
located in the Thunder Bay Mining District. It is 10 km northwest of the
Trans-Canada highway and accessible all year round.

 

The Cavern Lake property lies within Ontario's Superior Province and has no
underlying royalties.  The Archean basement rocks of the property are part of
the Quetico Subprovince. Unconformably overlying the Quetico basement are
sedimentary rocks of the Sibley Group, an approximately 950 metres thick
succession of weakly metamorphosed sedimentary rocks that were deposited in
the Sibley Basin. The lower-most units of the Sibley Group, Pass Lake
Formation, the Rossport Formation and the Kama Hill Formation, were mapped
along the unconformity with Archean basement granites.

 

The Cavern Lake property contains a past producing zinc and lead mine which
the Maximus management consider remains under explored with high grade zinc
potential. A historical geological report indicates the potential for a 10
million tonne Zinc-rich ore body across a 1.4 km strike length.

 

Historical hand grab samples from the Dorion mine within the property have
been tested at up to 35.4% Zn and 12.6% Pb and the nearby Bishop Shaft within
the property recorded a 22% Zn assay. Maximus conducted an extensive
prospecting programme in May 2024 including sampling, mapping and prospecting
with grab sample values up to 16.9% Zn and 20.6% Pb. A four-person crew
collected 53 samples for assay and recorded 386 outcrops over two weeks.

 

This prospecting illustrated that the barite-carbonate-base metal vein system
exists along the known unconformity that hosts the Dorion and Bishop
showings.  Glacial deposits and the Nipigon diabase obscures the host
unconformity elsewhere on the property or it does not exist due to erosion.
Copper-lead-zinc mineralization is typically course-grain and may be
accompanied by barite within a metre-scale dolomite alteration halo.  The
rock is typically brecciated and vuggy where hosted in sandstone and may also
host amethyst. Sampling indicates that there is significant Zn sulphide
mineralization situated in the granitic footwall to the high-grade
mineralisation.

 

There are also believed to be targets for platinum-group element (PGE)
mineralisation within the Cavern Lake footprint.

 

Silver Lake

 

Silver Lake is a 9.6 sq. km zinc and gold project consisting of 48 single-cell
claims situated approximately 55 km east of Savant Lake, Ontario.

 

The Silver Lake footprint lies within a metal-abundant greenstone belt,
featuring numerous conductors that the Maximus management consider are worthy
of exploration, drilling and technical assessment. It is believed that the
conductors are associated with the nearby Pride Lake Au-Ag-Zn-Pb
mineralisation.  As with the other properties owned by Maximus, there are no
underlying royalties.

 

Maximus conducted a detailed aeromagnetic survey in June 2024, which verified
the presence of multiple conductors, highlighting them as key exploration
targets. The 138.6 line-km gradient magnetic survey was designed to help
interpret the bedrock geology including the identification of structures that
influence the base-metal mineralisation present on the property.  The
levelled magnetic data of the Silver Lake property is active and shows several
anomalous features including several NE and NW breaks in the east-west
magnetic fabric that suggest a complex fault pattern. The magnetic fabric
bends around and is interrupted by a granitic intrusion with very low magnetic
signature.  The zinc showing and associated schist unit occur within a strong
magnetic low between iron rich interflow sediments.

 

Historically, a high-grade grab sample revealed 8.4 g/t Au, 41.7 g/t of Ag,
9.5% Zn and 2.6% Pb.

 

Chapman Copper

 

Chapman Copper is a 31.4 sq. km copper project consisting of 157 single-cell
claims situated approximately 200 km east of Thunder Bay, Ontario.

 

There are no underlying royalties and the property benefits from promising
geological features that the Maximus management consider are suitable for
further exploration through surface sampling. The area reveals indications of
copper, silver and zinc, with historic drilling verifying the presence of
minerals such as sphalerite, a zinc-based mineral similar to that found at the
Winston Lake mine, as well as chalcopyrite and pyrite (copper) associated with
copper.

 

Maximus undertook Initial sampling, mapping and prospecting completed during
the third quarter of 2023. Historic assays of 1% Cu over 5.8 metres and 0.54%
over 17.3 metres highlighted further areas of interest for future exploration.

 

Terms of the Proposed Acquisition and Option

 

Maximus has accepted a non-binding offer letter delivered by ECR pursuant to
which ECR has agreed to acquire the entire issued share capital of Maximus for
£500,000 to be payable to the shareholders of Maximus entirely via the issue
of new Ordinary Shares. In addition, as part of the Proposed Acquisition, ECR
and NuVision will amend the Option to acquire the Cat Key Project. The
C$600,000 (c.£329,000) which is payable to NuVision as consideration for the
exercise of the Option is to be settled entirely by the issue of new Ordinary
Shares.  Maximus has granted ECR exclusivity until 31 May 2025 to conclude
its due diligence and complete the relevant transaction documentation.

 

The Proposed Acquisition will be satisfied by the issue of up to 151,515,151
new Ordinary Shares to Maximus' shareholders. The new Ordinary Shares in ECR
will be issued at the higher of 0.33 pence per share, being the price of the
subscription completed by ECR in December 2025 or the volume weighted average
price ("VWAP") of an Ordinary Share calculated over the previous 10 trading
days.

 

As explained above, Maximus also currently holds the Option over the Cat Key
Project and ECR intends to exercise the Option on conclusion of the Proposed
Acquisition. In return for this commitment, ECR has indicated to NuVision that
the Option should be amended such that it can be exercised by ECR issuing to
NuVision, on behalf of Maximus, C$600,000 in the form of new Ordinary Shares
in ECR.  Those Ordinary Shares will also be issued at the higher of 0.33
pence per Ordinary Share or the VWAP of an Ordinary Share calculated over the
previous 10 trading days.  NuVision has confirmed that it is agreeable to
that amendment. There may be some foreign exchange impact on the number of
Ordinary Shares that may be issued, but ECR has determined that the maximum
number of Ordinary Shares that ECR will issue pursuant to the exercise of the
Option will be no more than 106,060,606.

 

Accordingly, upon completion of the Proposed Acquisition and exercise of the
Option, ECR would issue in aggregate a maximum of 257,575,757 new Ordinary
Shares, which would represent up to 10.4% of the Company's as enlarged
ordinary share capital.

 

It is expected that all recipients of new Ordinary Shares pursuant to these
arrangements will enter into an orderly market agreement with ECR.  Under the
orderly market agreements, the recipients will agree not to dispose of any
Ordinary Shares for a period of twelve months from issue, provided that
disposals may be made if the VWAP of an Ordinary Share calculated over the
previous 10 trading days to any disposal is not less than 0.5 pence.

 

It is noted that, while Maximus has granted ECR exclusivity until 31 May 2025
to conclude its due diligence and complete the relevant transaction
documentation, the terms in relation to both the Proposed Acquisition and the
amendment of the Option to ECR are not binding, as described above, and that
both the Proposed Acquisition and the amendment of the Option to ECR will be
subject, among other things, to due diligence by ECR and the execution of a
legally binding agreement governing the transactions. There can therefore be
no certainty that final binding terms will be agreed, nor as to the timing or
final terms, value or conditions of the Proposed Acquisition or the final
position in respect of the Option.

 

Financial information on Maximus

 

Maximus reported unaudited total assets of £115,141 for the year ended 30
November 2023.  Since that period, it has recorded an unaudited loss before
tax of approximately £12,000.

 

NuVision values the Cat Key Project at an unaudited book value of C$406,245
(c. £223,000) which represents the level of exploration credits on the
property (which transfer with ownership).

 

Review of Announcement by Qualified Person

 

This announcement has been reviewed by Adam Jones, Chief Geologist at ECR
Minerals Plc. Adam Jones is a professional geologist and is a Member of
the Australian Institute of Geoscientists (MAIG). He is a qualified person
as that term is defined by the AIM Note for Mining, Oil and Gas Companies.

 

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 

 ECR Minerals Plc                                                                                                                                                                                                                                                     Tel: +44 (0) 1738 317 693
 Nick Tulloch, Chairman

 Andrew Scott, Director

 Email:

 info@ecrminerals.com
 Website: www.ecrminerals.com
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 Nick Naylor / Alex Brearley / Vivek Bhardwaj

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 Public & Investor Relations
 Alan Green

 

Glossary

 

 Ag:    Silver
 Au:    Gold
 Cu:    Copper
 g/t:   Grammes per Tonne (Metric)
 IP:

        Induced Polarisation, a geophysical imaging technique used to identify the
        electrical chargeability of subsurface materials
 km:    Kilometres (Metric)
 km²:   Kilometre squared (Metric)
 M:     Metres (Metric)
 Nb:    Niobium
 Ni:    Nickel
 Pb:    Lead
 PGM:   Platinum Group Metals
 ppm:   Parts per million (Metric)
 Sq:    Square (Metric)
 Ta:    Tantalum
 Zn:    Zinc

 

ABOUT ECR MINERALS PLC

 

ECR Minerals is a mineral exploration and development company. ECR's wholly
owned Australian subsidiary Mercator Gold Australia Pty Ltd ("MGA") has 100%
ownership of the Bailieston and Creswick gold projects in central Victoria,
Australia, has six licence applications outstanding which includes one licence
application lodged in eastern Victoria (Tambo gold project).

 

ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd ("LUX")
which has three approved exploration permits covering 946 km(2) over a
relatively unexplored area in Lolworth Range, Queensland, Australia. The
Company has also submitted a license application at Kondaparinga which is
approximately 120km(2) in area and located within the Hodgkinson Gold
Province, 80km NW of Mareeba, North Queensland.

 

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), MGA has the right to receive up to A$2 million in payments
subject to future resource estimation or production from projects sold to
Fosterville South Exploration Limited.

 

MGA also has approximately A$75 million of unutilised tax losses incurred
during previous operations.

 

 

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accessible from hyperlinks in this announcement are not incorporated into and
do not form part of this announcement.

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