REG - ECR Minerals PLC - Proposed acquisition of Paleogold Limited
Mon 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260420:nRST0916Ba&default-theme=true
RNS Number : 0916B ECR Minerals PLC 20 April 2026
The information contained within this announcement was deemed by the Company
to constitute inside information as stipulated under the UK Market Abuse
Regulation.
20 April 2026
ECR MINERALS PLC
("ECR Minerals", "ECR" or the "Company")
Proposed acquisition of Paleogold Limited
Acquisition to secure nearer-term gold production and scalable cashflow
Fully funded, staged transaction structure designed to align with expected
future production
Established on-site operational team to oversee development and production
ECR Minerals plc (AIM: ECR), the gold exploration and development company
focused on Australia, is pleased to announce that it has agreed to acquire
Paleogold Limited ("Paleogold") (the "Acquisition").
Via the Acqusition and its associated transactions, through Paleogold, ECR
will have interests in gold projects across Queensland, Western Australia and
South Australia, including most significantly, through the exercise of the
Option (as defined below) to acquire, 50% of Lucky Strike Mining Ventures Pty
Ltd ("Lucky Strike") which holds the hardrock Maddens Flat group of mines
("Maddens Flat Group of Mines") in North Queensland. As part of the exercise
of the Option, ECR will commit to spend A$1,000,000 on the Maddens Flat Group
of Mines to advance gold production.
ECR will also, through Paleogold, acquire 20% of Salt Bush Flat Mines Nominees
Pty Ltd which owns the Salt Bush project in South Australia and, as part of
that investment, is undertaking to spend A$200,000 on the Salt Bush project to
prepare the project for gold production (with the Acquisition, the exercise of
the Option and the Salt Bush project being the "Paleogold Transactions").
The consideration for the Paleogold Transactions will be satisfied via the
issue of new ordinary shares of 0.001 pence each in ECR ("ECR Shares"),
convertible loan notes, warrants and in the case of the initial cash
consideration from ECR's existing cash resources.
HIGHLIGHTS
· Proposed Acquisition of Paleogold and exercise of Lucky Strike Option
and Salt Bush Investment, will add gold assets across Queensland, Western
Australia and South Australia
· Fully funded, staged transaction structure, designed to be aligned
with future cashflow from planned production
· Entire issued share capital of Paleogold to be exchanged for a total
of up to 621,000,000 new ECR Shares, with aggregate of 207,000,000 new ECR
Shares issued on completion
· A further 207,000,000 new ECR Shares to be issued subject to ECR
earning not less than A$5 million of revenues from Lucky Strike, the Salt Bush
project and Tuckanarra (the "Paleogold Projects")
· A final tranche of 207,000,000 new ECR Shares will be issued on the
second anniversary of the Acquisition subject to ECR earning not less than
A$10 million of cumulative revenues from the Paleogold Projects
· Acquisition structured to enable ECR Australia's existing tax losses
to be applied against any future profits generated from the Paleogold
Projects.
· Targeting gold production later this year from 50% interest in
Maddens Flat Group of Mines in North Queensland, which includes an established
processing plant, infrastructure and camp at Maddens Flat Camp
· Historical high-grade production from Maddens Underground Mine
including ~14 g/t Au averages and additional zones of 6-7 oz/tonne
· 50km² Exploration Licence covering the Maddens Flat Group of Mines
is largely unexplored by modern methods but contains six known mine workings
across the tenement
· High-grade quartz vein systems at the Maddens Underground Mine that
have historically produced at 25g/t and above and are characteristic of the
type where continuity at depth and along strike is expected but as yet
untested
· Additional production pathway from Salt Bush project (South
Australia), targeted for 2027
· Exploration upside at Tuckanarra, adjacent to Odyssey Gold Ltd's
reported 407,000 ounce JORC gold resource
· Paleogold operational team to join ECR, providing on-site capability
and continuity to oversee development and production
· Completion of the Paleogold Transactions will transform ECR into a
multi-asset gold company with a portfolio of 10 projects across four
Australian states
· Transaction will deliver ECR's first asset that has a historic JORC
inferred resource (under the JORC Code 1996 Edition)*
· Will transform ECR into a gold exploration and development company
across four Australian states, adding further nearer-term production and
cashflow opportunities
Paleogold Transaction Background
ECR has agreed to acquire the entire issued share capital of Paleogold by the
issue to Paleogold shareholders of up to 621,000,000 new ECR Shares of which
207,000,000 ECR Shares are to be issued on completion of the Acquisition, with
the balance to be issued over two years contingent on certain revenue targets
from gold production being hit.
Simultaneously with the completion of the Acquisition, ECR, via Paleogold,
will exercise Paleogold's option to acquire 50% of Lucky Strike Mining
Ventures Pty Ltd ("Lucky Strike"), owner of the Maddens Flat Group of Mines
(the "Option"). Pursuant to exercising the Option, ECR will pay certain
vendor shareholders A$2 million in cash with the payment being made six months
following completion. ECR will pay certain Lucky Strike vendors A$140,000 on
completion and issue an unsecured convertible loan note ("CLN") for A$3.86
million. The CLN is convertible at 0.26 pence per ECR Share or otherwise
repayable, including associated interest, 18 months following completion.
ECR will also issue 49,603,174 warrants over new ECR Shares exercisable at
0.35 pence to the holders of the CLN. As part of the exercise of the Option,
ECR is investing A$1 million in the Maddens Underground Mine aimed at
accelerating the process for gold production.
Paleogold also held an option to acquire an interest in Salt Bush Flat Mines
Nominees Pty Ltd ("Salt Bush") which owns the Salt Bush project in South
Australia. This has been restructured as part of the Paleogold Transactions
and ECR is acquiring 20% of Salt Bush through the issue of 20,000,000 new ECR
Shares and is undertaking to spend A$200,000 over six months on the Salt Bush
project to prepare the project for gold production (the "Salt Bush
Investment").
The Board considers that the completion of the Paleogold Transactions will
represent a major strategic step-change, positioning ECR as a multi-asset gold
company with initial production from its existing Raglan project, nearer-term
cashflow from Lucky Strike and a significantly expanded exploration pipeline
across Australia, spanning Queensland, Western Australia, South Australia and
Victoria.
Maddens Flat Group of Mines
The Maddens Flat Group of Mines are located in Northern Queensland,
Australia. The camp and mine are set on the banks of the West Normanby
River, 90km by road south of Cooktown and 200km north of Mareeba. Access by
road from Cairns is via the sealed Peninsula Development Road to within 24 km
and then on graded roads. The site also includes access for helicopters
through which journey times are 30 minutes to Port Douglas and 45 minutes from
Cairns.
The Maddens Flat Group of Mines comprises six Mining Lease sites where mining
has previously occurred: The Maddens Underground Mine, The Brothers, The
Sisters, Clyde Underground Mine, Taylors Mine and You-Can-Tell-Us. In addition
there is a Mining Lease ("ML") covering the camp, processing plant, tailings
dam, three freshwater dams, a workshop and storage shedding. A rectangular
shaped Exploration Permit (EPM 12375) of 50 km(2) encompasses the seven MLs.
Mining Licence Tenement Name
ML 20216 Maddens Flat Camp
ML 2916 Maddens Underground Mine or Maddens Mine
ML40060 You-Can-Tell-Us Underground Mine or 'You-Can-Tell-Us'
ML 40044 Clyde Underground Mine
ML 2917 The Brothers Underground Mine or The Brothers
ML 40061 The Sisters Underground Mine or The Sisters
ML 2946 Taylors Mine
Near-mine exploration - the opportunity from the Acquisition for ECR
The Board considers that near-mine exploration across the Maddens Flat
tenements represents a highly significant value creation opportunity for ECR
and will be a primary focus alongside production development.
The 50km² EPM 12375, which encompasses the seven MLs, covers a largely
unexplored district but one which contains six known mine workings, of which
only the Maddens Underground Mine and The Brothers Underground Mine have been
partially developed. In 1999 a historic JORC inferred resource of a total of
6,322oz* (gross to projects) was prepared (under the 1996 edition of the JORC
Code), which is described in further detail below, which was derived entirely
from visible unstoped blocks within existing development headings. To date
there has been no systematic drilling programme across the tenement, and as
such, the Board considers that there is future upside potential across the
district.
The high-grade quartz vein systems at the Maddens Underground Mine, which have
historically produced at average grades of 25g/t Au and above, are
characteristic of structurally controlled deposits where the potential for
grade and continuity at depth and along strike remain open below the area
covered by the JORC inferred resource* at the Maddens Underground Mine.
Together with North Queensland Mining Pty as its partner for the Maddens Flat
Group of Mines, ECR intends to conduct systematic near-mine drilling and
geological investigation targeting depth extensions below existing workings
and along-strike continuity across the undeveloped tenements.
The potential impact of a successful near-mine drilling programme could be
significant. In high-grade narrow vein systems of this type, the Board
believes that a single significant intercept below existing mine workings has
the potential to materially expand the asset base and that this could be
achieved via a portion of the expected cashflow to be generated from ECR's
production plans. The Board views the exploration potential of the Maddens
Flat district as a fundamental part of the investment case and intends to
allocate capital accordingly once initial production cashflow has been
established.
In conclusion, the Board believes that the material cashflows that the Maddens
Underground Mine could generate from the nearer-term production can be
re-invested in a project that has the potential to be of greater scale.
History of the Maddens Flat Group of Mines
The Maddens Flat area was opened up in the early 1980s. Tin was the target
metal at the time. The project was close to commencing production when during
1985 the tin price collapsed, and the project was abandoned. Good potential
for tin and alluvial gold mining still exists in this area.
The owners at that time then proceeded to study the gold prospects in the
area, mainly the Prospector Mine now known as Maddens Undergrond Mine and also
The Brothers Underground Mine that had ceased work in 1910. The present mill
and camps were built and the main adit at the Maddens Underground Mine was put
in and hit the reef at 130 feet below the surface. The reef above the adit was
stoped out and crushed for a recovered average of 14 g/t Au. Ownership changed
in 1989 and then again in 1991 during which the floor of the original crosscut
was mined for gold to finance the start of the decline (the downwards tunnel
to access the ore body). This was started back about 50 metres from the main
reef and exposed an enriched zone of approximately 30 vertical metres. On
continuing the decline around the end of the main stope, a new high grade reef
was found and the ore crushed averaged 6-7 oz/tonne. Extensive development
work and stoping followed through to 1994. During that period the owners also
completed a small decline into the Sisters Mine and drove along the main reef
for approximately 25 metres. A drive was also put into the You-Can-Tell-Us
Mine and a reef exposed.
At the end of 1993 a new decline was started at The Brothers Mine. It was
found that the reef had pinched out in 1910, and that had been why the mine
had closed. After only a few feet of sinking, the reef had regained its former
size.
A historic JORC (1996 Edition) inferred resource estimate* was prepared in
relation to the Maddens Underground Mine, The Brothers Underground Mine and
the You-Can-Tell-Us Underground Mine in 1999 by GR Ryan & Associates. It
was based partly on known unstoped blocks above and below existing development
levels (rather than drilling). A global gold recovery of 85% was applied to
the resource (gravity only) which confirmed high grade stopes and probable
increase in tonnes. It was inferred that a total of 6,322oz* of gold (gross)
was present in future minable production at the Maddens Underground Mine, The
Brothers Underground Mine and the You-Can-Tell-Us Underground Mine, which
would have a total value of nearly A$38 million Au at A$6,000 per oz. Since
the JORC inferred resource estimate* was published in 1999, the operator has
reported mining approximately 1,000 tonnes of ore at a grade of 26 g/t Au in
total from the Maddens Underground Mine's unstoped blocks above the 450m
level.
Inferred Resource tabulation for the Maddens Underground Mine, The Brothers
Underground Mine and the You-Can-Tell-Us Underground Mine (GR Ryan &
Associates, 1999)
Category Gross - JORC report by GR Ryan & Associates 1999* Gross - Current Estimate (reflecting reductions from past mining since 1999) Net Attributable - based on JORC report by GR Ryan & Associates 1999* Net Attributable - Current Estimate reflecting reductions from past mining
(following exercise of the Option) since 1999 (following exercise of the Option)
Mineral resources per asset Tonnes Grade Contained Tonnes Grade Contained Tonnes Grade Contained Tonnes Grade Contained
(g/t) Gold (oz) (g/t) Gold (oz) (g/t) Gold (oz) (g/t) Gold (oz)
Maddens Underground Mine - Inferred* 6,260 22.09 4,446 5,260 21.35 3,610 3,130 22.09 2,223 2,630 21.35 1,805
The Brothers Underground Mine - Inferred* 1,060 38 1,295 1,060 38 1,295 530 38 648 530 38 648
You-Can-Tell-Us Underground Mine - Inferred* 750 24 579 750 24 579 375 24 289 375 24 289
Total 8,070 24.36 6,320 7,070 24.13 5,484 4,035 24.36 3,160 3,535 24.13 2,742
* The historic inferred resource data in this announcement was prepared in
1999 using the 1996 edition of the JORC Code which was applicable at that time
and has not been updated to the standards set forth in the most recent 2012
edition of the JORC Code. Accordingly, the historic inferred resource data
in this announcement will not therefore be comparable to the standards set
forth in the most recent 2012 edition of the JORC Code and therefore has not
been prepared in accordance with the most current version of a Standard as set
out in the AIM Rules - Note for Mining and Oil and Gas Companies.
Notes:
· Source: Report by GR Ryan of GR Ryan & Associates (1999).
· The Inferred Resource estimates are reported in accordance with
the JORC Code (1996 Edition)*
· Current Estimates are illustrative, to reflect a reduction of
1,000 tonnes of ore from the Maddens Underground Mine (on a gross to
projects basis), given that the operator has reported mining approximately
1,000 tonnes of ore in total from the Maddens Underground Mine since the JORC
inferred resource estimate* was published in 1999
· "Gross" are 100% of the Inferred Resource attributable to the
stated projects whilst "Net Attributable" represents the 50% interest
attributable to ECR upon exercise of the Option
· The operator of the Maddens Underground Mine, the Brothers
Underground Mine and the You-Can-Tell-Us Underground Mine is North Queensland
Mining Pty Ltd
Lucky Strike acquired the Maddens Flat Group of Mines some 15 years ago but,
shortly after, its parent company entered into financial difficulties and
funding for the development ceased. In 2016 North Queensland Mining Pty Ltd
("NQM") acquired 50% of Lucky Strike and subsequently evaluated, recapitalised
and refurbished many areas of the project. The Board is of the opinion that
only a small amount of the overall Maddens Flat Group of Mines' potential has
been achieved and there is potential for enrichment zones to exist in most of
the known mines and prospects, as regional geology suggests.
Although mining has taken place historically, the Maddens Flat Group of Mines
have not generated turnover in recent years, due to activity at the mine site
being focused on upgrading facilities in preparation for an expansion of
operations rather than gold production.
Next steps at Maddens Underground Mine
ECR is to invest A$1 million in the Maddens Underground Mine as part of the
exercise of the Option. It is planned for these funds to be used to extend
the Maddens Underground Mine decline another 120m to open up the next level.
Based on historical grades produced and on its discussions with Paleogold, the
Board believes that the next level (20m of backs over a shoot length of 100m)
has the potential to generate around 2,500 oz gold. Operations are to
commence shortly after exercise of the Option and it is expected that it will
take some 3 - 6 months for production to commence.
The Maddens Underground Mine project exhibits a number of structurally complex
high grade quartz veins 0.2m to 4m wide. There are expected to be multiple
zones with significant tonnage and grade available. Past reported production
exceeds 5,560oz gold averaging 25.0g/t Au. Furthermore, additional un-mined
opportunities are believed to exist beyond the current workings in the other
five mines. There is also potential for an alluvial project.
The Brothers Mine
A second mine within the Maddens Flat Group of Mines, The Brothers Mine, is
planned to be opened up following production commencing at the Maddens
Underground Mine. A decline was previously excavated exposing the face where
the high grade ore indicated in the above historic JORC inferred resource* was
found. However, mining was not continued at that time as the focus remained on
the larger Maddens Underground Mine. Since that time the decline has been
flooded and will require de-watering and rehabilitation before ore can be
accessed. While the tonnage generated at The Brothers is expected to be
smaller than at the Maddens Underground Mine, the projected gold grades would
be greater, if they are in line with the historic JORC inferred resource* at
38g/t gold.
By way of illustration, based on information from the operators of the Maddens
Flat Group of Mines the Board believes that a single 20m stope per year in The
Brothers mine has the potential to generate around 1,780 tonnes of mineable
ore for a minimum three years. The ore body is a laminated quartz reef
varying in width between 0.5m - 1.5m. Previous mining and recent test work
have indicated gold grades in excess of 25g/t. Geological investigations
have indicated a second reef within the decline which has the potential to
significantly expand the opportunity. Mined ore would be trucked to the
Maddens Underground Mine for processing as there is no onsite processing at
The Brothers.
Plant infrastructure
This comprises a run of mine pad, a feed bin, integrated crushing circuit,
mill and gravity circuit which has received a recent upgrade including the
inclusion of Knelson concentrators, a wet high pressure rolls crusher, pumps
and a fine micron screen. Current estimated capacity is 15,000 tonnes per
annum, with the ability to scale up to around double that, if required.
There is a sampling circuit including a crusher and gemini table for
instantaneous sampling, testing and concentrate clean up as well as an on-site
smelting capacity.
The site includes an equipped workshop with spare parts inventory for routine
maintenance and fabrication, together with accommodation and support
facilities (common area, mess, office, multiple sheds, five en-suite bedrooms
and laundry).
Salt Bush Flat Gold Project
Salt Bush in South Australia is located on a Mining Lease (ML 4572) which was
granted pre-native title legislation. Development of this into a mine is
intended to be by way of a shallow open cut to 20m depth using vat leach
technology.
Salt Bush has surface outcropping ore at over 6g/t Au with individual assays
previously being recorded as high as 39g/t Au. The ore body strike length is
estimated to be in excess of 800 metres with the ore body enriched in an upper
20m zone. There are multiple parallel mineralised veins which indicate the
potential to expand the mineable area.
Percussion drilling 20m to the east of the decline has shown that the ore body
extends from the surface to 13m at a grade of 7g/t. A second inclined
percussion drill hole approximately 10m further east designed to test the Salt
Bush mineralisation showed an intersection at 6.8g/t from 13m - 18m. As a
result, based on the information provided by the owners, the Board believes
that there is potential for over 10,000oz gold that could be obtained by
mining the estimated ore body to around 20m in depth. Recovery of the gold is
proposed to be by way of a fine crush (<5mm) and then vat leaching with
cyanide with an expected gold recovery of around 65% - 70%. Based on the
information provided by the owners, it is estimated that the project would
have a projected break-even gold price of AU$3,110 which is around half the
current gold price.
Pursuant to its investment in 20% of Salt Bush, ECR is undertaking to spend
A$200,000 on the Salt Bush project over six months to prepare the project for
future gold production. The funds will primarily be used to secure all the
licensing required, plan out the camp and other facilities, including water
supply and electricity, and prepare for vat leach production. These
operations will commence shortly following the completion of the Salt Bush
Investment and the Board believes that a realistic commencement of gold
production would be around the middle of 2027.
Tuckanarra
Paleogold owns an 80% interest in the Tuckanarra Project, an area of 4,030
hectares (9,958 acres), which lies 30km NNE of the town of Cue in the
Murchison Goldfield. The Tuckanarra Project comprises exploration licences
E20/1065 and E20/1109 which straddle the Great Northern Highway and lie
immediately west and south of the historic gold mining centre of Tuckanarra.
The known mineralised zones in the Tuckanarra goldfield are associated with a
zone comprising a series of mafic and inter-banded mafic, ultramafic and
banded iron formations, with a variable component of minor shales. Odyssey
Gold Ltd has announced a total JORC resource of 407,000 oz Au in an area which
is located less than 1.5km east from the boundary of E20/1065. These mafic and
ultramafic units are believed to extend into the NNE of the Paleogold
Tuckanarra Project's licence acreage and are prospective for gold hosted in
the mafic/ultramafic rock sequence. It is intended that geological mapping,
deep ground penetrating radar investigations and detector reconnaissance will
be utilised to explore this prospective zone.
The previous tenement holders undertook a review of exploration on
neighbouring tenements which highlighted the potential for gold in
paleo-drainages. The main drainage system that drains the Tuckanarra
goldfield, which includes Odyssey Gold Ltd's resource, passes onto E20/1065.
Historical drilling by Agricola intersected a possible paleochannel just 1.8
km to the east of the Paleogold Tuckanarra Project's boundary where an
intersection in drill hole assayed 4.31g/t over 3m from 45m which included 1m
@ 8.13g/t. Paleogold's radar survey on its own licence area detected the
channel at shallower depth. Paleogold's licence area also includes
unrecorded old mine shafts, one from which a line of over 100+ gold nuggets
were found in 2024. There is a large area of land immediately south of the
Tuckanarra Project that has yielded large quantities of nuggets which appear
to be shedding from the banded ironstone/quartz zones, potentially within
Paleogold's acreage.
An analysis of aerial magnetics utilising the maghemite footprint (which is
inferred to be within ancient paleochannels) over the NE zone of Paleogold's
exploration licences has highlighted four zones with high potential for the
occurrence of paleochannel hosted gold. These zones extend for more than 700m
each, and if gold bearing, could represent a previously undetected and
significant upside.
Drainage from the mafic rock zone in the SE of Paleogold's exploration
licences also presents a prospective zone for the occurrence of paleochannel
hosted gold. This zone is thought to be characterised by narrow quartz
stockwork zones which contain course gold, and drainage from these areas has
potentially concentrated gold in buried alluvial deposits. Limited drilling in
the general area by Paleogold using an auger drilling rig showed that gold
occurred throughout the alluvial/colluvial profile down to 8m highlighting the
potential for gold concentration zones within the paleo-drainage system in
this area. To investigate these ancient paleo-drainage systems, it is intended
to utilise deep ground penetrating radar which will highlight the channels and
provide focus for drilling and excavation of test pits.
Transaction Overview
ECR, via its wholly owned subsidiary ECR Minerals (Australia) Pty Limited,
will acquire the entire issued share capital of Paleogold through the issue of
up to 621,000,000 new ECR Shares to Paleogold shareholders. An aggregate of
207,000,000 new ECR Shares will be issued on completion of the Acquisition. A
further tranche of 207,000,000 new ECR Shares will be issued on the first
anniversary of the Acquisition subject to ECR earning not less than A$5
million of revenues from Lucky Strike, the Salt Bush project and Tuckanarra
(the "Paleogold Projects"). A final tranche of 207,000,000 new ECR Shares
will be issued on the second anniversary of the Acquisition subject to ECR
earning not less than A$10 million of cumulative revenues from the Paleogold
Projects.
Simultaneously with the completion of the Acquisition, ECR, via Paleogold,
will exercise Paleogold's Option to acquire 50% of Lucky Strike Mining
Ventures Pty Ltd ("Lucky Strike"), the owner of the Maddens Flat Group of
Mines. Pursuant to exercising the Option, ECR will pay certain vendor
shareholders A$2 million in cash with this payment being made six months
following completion (the "Deferred Consideration"). ECR will pay certain
vendor shareholders A$140,000 in cash on completion and issue an unsecured
convertible loan note ("CLN") for a principal value of A$3.86 million. The
principal value and interest of the CLN is convertible at 0.26 pence per ECR
Share or otherwise repayable 18 months following completion. As part of the
exercise of the Option, ECR is investing A$1 million in the Maddens
Underground Mine aimed at accelerating the pathway to gold production.
The vendors of the 50% interest in Lucky Strike that ECR is acquiring via
Paleogold comprise two groups of private investors, with each group holding
their respective shares through four associated persons or entities. The
vendors will have no ongoing involvement in Lucky Strike or the Maddens Flat
Group of Mines following completion.
The CLNs may be redeemed at any time by ECR and are interest-free for the
first three months following completion. Thereafter interest accumulates at
the rate of 3% per annum, rising in a series of prescribed steps to a maximum
of 12% per annum by the first anniversary of completion. ECR has undertaken to
apply a minimum of 50% of EBITDA from its holding in Lucky Strike to repayment
of the CLNs. Should the CLN holders wish to convert, they are capped at a
maximum conversion of A$1 million every 30 days.
The structure of the Deferred Consideration and the CLN are designed to match
future cash flow from expected production at the Paleogold Projects,
especially from Lucky Strike.
Also simultaneously with the Acquisition, ECR is acquiring 20% of Salt Bush
through the issue of 20,000,000 ECR Shares and is undertaking to spend
A$200,000 on the Salt Bush project over time to prepare the project for gold
production.
The Paleogold Transactions can be summarised as follows:
· Acquisition of Paleogold for the issue of up to 621,000,000 new
ECR Shares (up to c. A$3 million at an issue price of 0.26 pence)
· Acquisition of 50% of Lucky Strike for A$6 million, comprising
(i) A$140,000 payable on completion, (ii) the issue of A$3.86 million of CLNs
and (iii) A$2 million of cash payments payable six months following completion
· Issue of 49,603,174 warrants over new ECR Shares exercisable at
0.35 pence to the holders of the CLN, valued at A$0.3 million at the exercise
price
· A$1 million investment in the Maddens Flat Group of Mines to
accelerate gold production
· Acquisition of 20% of Salt Bush for 20,000,000 new ECR Shares (c.
A$100,000 at an issue price of 0.26 pence) and an undertaking to spend
A$200,000 on Salt Bush over time to secure licences and for initial
preparations for gold production
On the basis of the above, the total consideration and investment by ECR, in
cash and shares and CLNs and Warrants, and assuming that all ECR Shares are
issued to Paleogold's shareholders is therefore c. A$10.6 million. This is a
fully funded staged transaction with no equity raise required and, in
particular, the deferred consideration is structured so that it matches the
timing of the expected production at the Maddens Underground Mine, as shown in
the illustrative timeline below.
Time period Production plans Transaction terms
April 2026 · Preparations begin for next phase of production at Maddens Underground · Completion of Acquisition
Mine
· Issue of initial tranche of 207 million new ECR Shares to Paleogold
· Preparations begin at Salt Bush shareholders
Q3 to early Q4 2026 · Maddens Underground Mine production expected to commence
October 2026 · First tranche of deferred consideration due (A$2 million)
Q2 2027 · First phase of Maddens Underground Mine production expected to be · April 2027: Second tranche issue of 207 million new ECR Shares to
concluded Paleogold shareholders (subject to A$5 million revenue)
· Second phase of Maddens Underground Mine production (based on near-mine
exploration) expected to commence
Q2 - Q3 2027 · Salt Bush production expected to have commenced
Q3 2027 · The Brothers production expected to have commenced · October 2027: Latest date for redemption of CLNs (A$3.86 million)
Q2 2028 · Preliminary Salt Bush production expected to be concluded · April 2028: Third tranche issue of 207 million ECR Shares to Paleogold
shareholders (subject to A$10 million cumulative revenue)
· Second phase of Maddens Underground Mine production expected to be
concluded
April 2029 · Latest date for exercise of 49,603,174 warrants
The above table does not take account of ECR's existing production plans at
Raglan and Blue Mountain.
Following completion of the Acquisition, Paleogold will enter into separate
shareholders' agreements with (1) North Queensland Mining Pty Ltd in respect
of Lucky Strike and (2) the other Salt Bush shareholders.
ECR's investment of A$1 million in the Maddens project, undertaking to spend
A$200,000 on Salt Bush and the completion payment of A$140,000 to certain of
the Lucky Strike vendors are to be made out of ECR's existing cash resources,
which will include the use of a portion of the net proceeds from the fundraise
announced on 8 January 2026, although the Board considers that, from
completion of the exercise of the Option, the Company will still be able to
proceed with the primary use of proceeds areas that were stated in the
Company's announcement of 8 January 2026 and that the Company will remain
funded to the end of 2026 even without revenues from projects in production.
Acquisition structure and tax losses
The Acquisition is proposed to be implemented through ECR's wholly owned
subsidiary, ECR Minerals (Australia) Pty Ltd ("ECR Australia") which holds
approximately A$77 million of unutilised tax losses. The acquisitions of the
interests in Lucky Strike and Salt Bush will be effected via Paleogold, which
will be a wholly owned subsidiary of ECR Australia. The objective is to keep
all of ECR's operations within a single tax group. The Board believes that
the structure of the Acquisition should enable ECR Australia's existing tax
losses to be applied against any future profits generated from the Paleogold
Projects.
The Directors consider that the proposed addition of the Paleogold Projects to
ECR's portfolio aligns with the Company's strategy to build a portfolio of
low-capex, potentially high-margin gold operations in Australia.
As Paleogold is an unlisted Australian public company, the Acquisition is
subject to 90% acceptances from the Paleogold shareholders. This process is
already underway and the Paleogold management has already secured over 65%
acceptances, including from the largest of the vendors Ian Ennis, Mike
Mcrae-Williams and Geoff Crothers who are directors of Paleogold and own 62%
of Paleogold. In the unlikely event that the 90% threshold is not reached
then ECR reserves the right to invest directly in Lucky Strike and Salt
Bush. Further updates in relation to the process for the completion of the
Acquisition and other Paleogold Transactions will be provided in due course.
Paleogold reported unaudited total assets of A$0.58 million for the year ended
30 June 2024 and an unaudited total net loss of A$0.04 million for the same
period.
Lucky Strike reported unaudited total assets of A$1.63 million for the year
ended 30 June 2025 but does not produce a formal profit and loss account (as
historically accounting has been undertaken via the operator of the mine). The
difference between Lucky Strike's unaudited balance sheet retained losses as
at 30 June 2025 versus 30 June 2024 implies an unaudited loss for the year to
30 June 2025 of A$0.99 million.
Salt Bush is an inactive single project company that does not produce accounts
but, in its last financial year, incurred $1,970.50 of fees to the Australian
Government (annual administration fees, annual regulation fees and Crown
rent).
Following completion of the Acquisition, Paleogold will be consolidated into
ECR's accounts, although ECR does not anticipate the consolidation of either
Lucky Strike or Salt Bush into its accounts following the exercise of the
Option or its investment, respectively.
Overview - a step-change in scale and an increasingly national footprint
The completion of the Paleogold Transactions will:
· Transform ECR into a gold exploration and development company
across four Australian states
· Add further nearer-term production and cashflow opportunities
· Expand ECR's operations into multiple prospective gold provinces
· Build a scalable multi-asset production and exploration platform
Following completion, ECR will have a diversified, increasingly Australia-wide
gold portfolio, comprising:
· Queensland (Production & Development)
o Raglan (currently initial production phase)
o Maddens Flat (nearer-term production and ongoing exploration)
o Blue Mountain (nearer-term production potential)
o Lolworth (large-scale exploration)
· South Australia (Forthcoming Production & Development)
o Salt Bush project (gold production targeted in 2027)
· Western Australia (Exploration)
o Tuckanarra (neighbouring 407,000oz JORC resources with geological repeats)
· Victoria (Established Exploration Portfolio)
o Creswick (high-grade gold system, JV discussions advancing)
o Bailieston (gold and antimony potential)
o Tambo (large-scale exploration with second licence recently granted)
The Board believes that the Paleogold Transactions position ECR as a
multi-project gold company with both future cashflow and discovery upside
across multiple prospective mining jurisdictions.
Review of Announcement by Qualified Person
This announcement has been reviewed by Michael Parker, Non-Executive Director
of ECR Minerals Plc. Michael Parker has a BSc. In Mining Geology and is a
professional geologist and is a Fellow of the Australasian Institute of Mining
and Metallurgy (FAusIMM). He is a qualified person as that term is defined by
the AIM Note for Mining, Oil and Gas Companies.
ECR Chairman Nick Tulloch commented: "The Acquisition and associated
investments in Lucky Strike and Salt Bush will significantly expand both the
scale and geographic reach of ECR. With 10 projects across four states in
Australia, ECR will be a diversified gold mining business with the potential
for gold production across multiple sites.
"The deferred cash consideration and convertible loan note have been designed
to match future cash flow from expected production to make the Acquisition
fully funded. The exercise of the Lucky Strike Option is expected to add
hard rock gold production at the Maddens Flat Group of Mines to our alluvial
operations in Raglan and in due course Blue Mountain. Production plans for
later in 2026 at the Maddens Underground Mine and Blue Mountain are
anticipated to be followed by Salt Bush next year.
"Also, very significantly, the 50km² Exploration Licence covering the Maddens
Flat Group of Mines is largely unexplored by modern methods. We have six known
mine workings across the tenement but only Maddens and The Brothers have been
developed. The historic JORC inferred resource* of 6,322oz (gross to projects)
was built from visible unstoped blocks and there has never been a systematic
drill programme across the district. The high-grade quartz vein systems that
have historically produced at 25g/t and above are characteristic of the type
where continuity at depth and along strike is expected but untested.
"Our operating team will be expanded by the inclusion of the Paleogold
management and we also intend to work closely with the team at North
Queensland Mining, further increasing our capabilities to operate across
numerous locations. Queensland continues to be our primary focus but our
portfolio of assets will include Western Australia and South Australia, as
well as retaining our strong position in Victoria. In other words, ECR will
be a gold company based over four Australian states, with production,
development and exploration assets.
"From completion of the Paleogold Transactions we will have the foundations of
a scalable gold business with multiple pathways to value creation."
FOR FURTHER INFORMATION, PLEASE CONTACT:
ECR Minerals plc
Nick Tulloch, Chairman Tel: +44 (0) 20 8080 8176 (tel:+442080808176)
Andrew Scott, Director info@ecrminerals.com (mailto:info@ecrminerals.com)
Website: www.ecrminerals.com
(http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ecrminerals.com%2F&esheet=51817334&newsitemid=20180605005810&lan=en-US&anchor=www.ecrminerals.com&index=1&md5=820ad49dc1fc2c84a0538453c017bc1b)
Allenby Capital Limited
Nominated Adviser and Joint Broker Tel: +44 (0) 20 3328 5656
Alex Brearley / Nick Naylor / Vivek Bhardwaj (Corporate Finance) info@allenbycapital.com (mailto:info@allenbycapital.com)
Kelly Gardiner (Sales and Corporate Broking)
OAK Securities
Joint Broker Tel: +44 (0) 203 973 3678
Jerry Keen / Robert Bell
Axis Capital Markets Limited
Joint Broker Tel: +44 (0) 203 026 0320
Lewis Jones
SI Capital Ltd
Joint Broker Tel: +44 (0) 1483 413500
Nick Emerson
Brand Communications
Public & Investor Relations Tel: +44 (0) 7976 431608
Alan Green
ABOUT ECR MINERALS PLC
ECR Minerals is a mineral exploration and development company operating
through three wholly owned Australian subsidiaries ECR Minerals (Australia)
Pty Ltd ("ECR Australia"), ECR Minerals (Queensland) Pty Ltd ("ECR
Queensland") and ECR Minerals (Raglan) Pty Ltd ("ECR Raglan").
ECR Australia owns the Bailieston and Creswick gold projects in central
Victoria, Australia as well as the Tambo gold project in eastern Victoria.
Raglan Resources has a mining lease at the Raglan alluvial gold project in
central Queensland, Australia and ECR Queensland has two approved exploration
permits over the nearby Blue Mountain alluvial gold project. ECR is
currently working to bring both projects into production. ECR Queensland
also has three approved exploration permits covering 946 km(2) over a
relatively unexplored area in Lolworth Range in northern Queensland.
Furthermore, it has also submitted a licence 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) and Au Gold Corp. (TSX: AUGC) respectively, ECR Australia has the
right to receive up to A$2 million in payments subject to future resource
estimation or production from these projects.
ECR Australia also has approximately A$77 million of unutilised tax losses
incurred during previous operations.
GLOSSARY
Au: Gold
g: Grammes (Metric)
g/t: Grammes per tonne
Inferred mineral resource: That part of a mineral resource for which quantity and grade or quality are
estimated from limited geological evidence and sampling. Geological evidence
is sufficient to imply, but not verify, geological and grade continuity. It is
based on exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes. An inferred resource has a lower level of confidence
than that applying to an indicated mineral resource and must not be converted
to an ore reserve. It is reasonably expected that most of an inferred mineral
resource could be upgraded to an Indicated mineral resource with continued
exploration
Indicated mineral resource: An indicated mineral resource is that part of a mineral resource for which
quantity, grade or quality, densities, shape and physical characteristics are
estimated with sufficient confidence to allow the application of modifying
factors in sufficient detail to support mine planning and evaluation of the
economic viability of the deposit. Geological evidence is derived from
adequately detailed and reliable exploration, sampling and testing gathered
through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes, and is sufficient to assume geological and
grade/quality continuity between points where data and samples are gathered.
An indicated mineral resource has a lower level of confidence than that
applying to a measured mineral resource and may only be converted to a
probable ore reserve
JORC: The Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves (JORC Code), is an internationally recognised professional
code of practice which sets minimum standards for the public reporting of
exploration results, mineral resources and ore reserves
kg: Kilogrammes (Metric)
km: Kilometres (Metric)
km²: Kilometre squared (Metric)
M: Metres (Metric)
Measured mineral resource: That part of a mineral resource for which quantity, grade or quality,
densities, shape, and physical characteristics are estimated with confidence
sufficient to allow the application of modifying factors to support detailed
mine planning and final evaluation of the economic viability of the deposit.
Geological evidence is derived from adequately detailed and reliable
exploration, sampling and testing gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes, and is
sufficient to confirm geological and grade/quality continuity between points
where data and samples are gathered. A measured mineral resource has a higher
level of confidence than that applying to either an indicated mineral resource
or an inferred mineral resource. It may be converted to a proved ore reserve
or under certain circumstances to a probable ore reserve
Modifying factors: Modifying factors are considerations used to convert mineral resources to ore
reserves. These include, but are not restricted to mining, processing,
metallurgical, infrastructure, economic, marketing, legal, environmental,
social and governmental factors
Mineral resource: A concentration or occurrence of material of economic interest in or on the
Earth's crust in such form, grade, quality and quantity that there are
reasonable prospects for eventual economic extraction. The location, quantity,
grade, continuity and other geological characteristics of a mineral resource
are known, estimated or interpreted from specific geological evidence and
knowledge, including sampling. Mineral resources are sub-divided in order of
increasing geological confidence into inferred, indicated and measured
categories
Ore reserve: The economically mineable part of a measured or indicated mineral resource. It
includes diluting materials and allowances for losses, which may occur when
the material is mined or extracted and is defined by studies at
pre-feasibility or leasibility level, which Include the application of
modifying factors. Such studies demonstrate that, at the time of reporting,
extraction could reasonably be justified. The key underlying assumptions and
outcomes of the prefeasibility study or feasibility study must be disclosed at
the time of reporting of a new or materially changed ore reserve. Ore reserves
are sub-divided in order of increasing confidence into probable and proved
classifications
oz: Troy ounce (31.1035 grams)
oz/tonne: Troy ounces per tonne
Probable ore reserve: The economically mineable part of an Indicated, and in some circumstances, a
measured mineral resource. The confidence in the modifying factors applying to
a probable ore reserve is lower than that applying to a proved ore reserve. A
probable ore reserve has a lower level of confidence than a proved ore reserve
but is of sufficient quality to serve as the basis for a decision on the
development of the deposit
Proved ore The economically mineable part of a measured mineral resource. A proved ore
reserve implies a high degree of confidence in the modifying factors. A proved
reserve: ore reserve represents the highest confidence category of an ore reserve
estimate. The style of mineralisation or other factors could mean that proved
ore reserves are not achievable in some deposits
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END ACQFZGMDGLZGVZZ
Copyright 2019 Regulatory News Service, all rights reservedRecent news on ECR Minerals
See all newsREG - ECR Minerals PLC - Proposed acquisition of Paleogold Limited
AnnouncementREG - ECR Minerals PLC - Result of Annual General Meeting
AnnouncementREG - ECR Minerals PLC - Update on Royalty of up to A$2 Million
AnnouncementREG - ECR Minerals PLC - Financial Results for Year Ended 30 September 2025
AnnouncementREG - ECR Minerals PLC - Award of Tambo South tenement
Announcement