REG - ECR Minerals PLC - Update on Potential Sale of Tax Losses

ECR MineralsAnnouncement

13/02/2025 07:00

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RNS Number : 9277W  ECR Minerals PLC  13 February 2025

13 February 2025

 

ECR MINERALS plc

 

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

Update on Potential Sale of Tax Losses and Confidentiality Agreements

 

ECR Minerals plc (AIM: ECR), the exploration and development company focused
on gold in Australia, provides an update on ongoing discussions regarding the
potential sale of its wholly-owned subsidiary, Mercator Gold Australia Pty Ltd
("MGA"), which holds its Australian tax losses.

 

ECR remains engaged in advanced discussions with Octo Holdings Pty Ltd
("Octo") regarding the proposed sale of the entire issued share capital of MGA
for a total cash consideration of A$4.5 million as most recently announced on
3 February 2025. In addition to these ongoing discussions, ECR has experienced
a notable increase in interest in MGA from additional parties. As announced on
23 December 2024, under the contemplated proposed disposal structure, it is
anticipated that the Bailieston gold and antimony exploration project will
remain in MGA and therefore would be included in a proposed disposal of MGA.
The Directors believe that this heightened interest in MGA comes amid rising
antimony prices in certain markets and growing global interest in the
strategic importance of the metal.

 

Several new parties have recently joined the data room, and the Company
continues to receive unsolicited enquiries, both directly and indirectly
through its advisers. Following the Company's announcement on 3 February 2025,
ECR confirms that additional confidentiality agreements have been signed with
two interested parties this week, bringing the total number of such agreements
to six.

 

Notwithstanding this increased interest in MGA from other parties, the Company
confirms that ECR and Octo are actively working towards finalising the
proposed disposal, on the basis announced on 3 February 2025, of MGA ahead of
Octo's proposed target completion date of 28 February 2025.

 

The heads of terms between ECR and Octo are not exclusive and are not binding
in relation to the terms of the proposed disposal of MGA, and that this would
be subject, among other things, to due diligence by Octo and the execution of
a legally binding agreement governing the transaction.

 

Whilst there can be no guarantee as to the conclusion of any agreement for the
disposal of MGA, nor as to the timing or final terms or value of any such
transaction, the board of directors of ECR remains encouraged by the
significant interest shown in this potentially valuable asset.

 

As previously announced, any disposal of MGA may be considered to be a
fundamental change of business pursuant to Rule 15 of the AIM Rules for
Companies. If applicable, this would require, amongst other items, the
proposed disposal of MGA to be conditional on the consent of the Company's
shareholders being given in a general meeting, the publication of a
shareholder circular detailing the terms of the transaction and certain other
disclosures as set out in the AIM Rules.  The Company will provide further
updates as appropriate.

 

Background to Tax Losses

 

The Company's tax losses are held within MGA and have been accumulated since
2006. Any transaction involving these tax losses would be coupled with a
restructuring of MGA, as indicated in the Company's announcement of 23
December 2024.

 

ECR Chairman, Nick Tulloch, commented: "While our discussions with Octo remain
advanced and our priority, the increasing number of parties seeking to engage
with us highlights the significant potential of these assets. We believe that
the pricing of antimony and heightened global demand is driving fresh
attention to the Bailieston gold and antimony exploration project in Victoria.
We remain committed to securing the best possible outcome for our
shareholders."

 

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
 (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                                                                                                                                                                                                                                              Tel: +44 (0) 3328 5656
 Nominated Adviser                                                                                                                                                                                                                                                    info@allenbycapital.com (mailto:info@allenbycapital.com)

 Nick Naylor / Alex Brearley / Vivek Bhardwaj

 Axis Capital Markets Limited                                                                                                                                                                                                                                         Tel: +44 (0) 203 026 0320
 Broker
 Ben Tadd / Lewis Jones

 SI Capital Ltd                                                                                                                                                                                                                                                       Tel: +44 (0) 1483 413500
 Broker
 Nick Emerson

 Brand Communications                                                                                                                                                                                                                                  Tel: +44 (0) 7976 431608
 Public & Investor Relations
 Alan Green

 

 

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 km2 over a
relatively unexplored area in Lolworth Range, Queensland, Australia. The
Company has also submitted a license application at Kondaparinga which is
approximately 120km2 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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