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REG - ECR Minerals PLC - Update on the potential sale of non-core assets

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RNS Number : 5893N  ECR Minerals PLC  26 November 2024

26 November 2024

ECR MINERALS PLC

 

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

 

Update on the potential sale of non-core assets in Victoria, including A$75
million of tax losses

 

ECR Minerals plc (LON: ECR), the exploration and development company focused
on gold in Australia, announces that, further to the Company's announcement on
1 November 2024, discussions with the potential buyer of ECR's subsidiary,
Mercator Gold Australia Pty Ltd ("MGA"), have progressed well over the past
month.

 

The proposed transaction concerns the sale of certain non-core assets within
the Company's portfolio in Victoria, in order to effect a sale of the
Company's A$75 million of tax losses. The potential buyer has engaged
consultants to advise on the optimum structure of the proposed transaction.
Once this structuring work has been completed, the next stage, provided that
the parties agree mutually acceptable terms, would be to prepare the formal
sale documentation. As previously announced, the proposed transaction is
likely to necessitate a restructuring of MGA as such that it comprises only
non-core assets.

 

Given the level of process and complexity that is likely to be involved, to
allow time for these workstreams to conclude, ECR has extended the period of
exclusivity with the potential buyer to 31 January 2025.  As announced on 1
November 2024, the board of ECR continues to believe that the sale, if
realised, would be for a material cash consideration.

 

Notwithstanding this positive progress, discussions remain at an early-stage
and there can be no certainty that final binding terms will be agreed, nor as
to the timings or final terms, structure or quantum of the potential disposal
of MGA.

 

Depending on the final terms that are agreed for any transaction to realise
the tax losses, as well as the structure of the transaction, it is possible,
but not guaranteed, that the potential disposal of MGA may 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 transaction to be
conditional on the consent of shareholders being given in a general meeting; a
shareholders circular detailing the terms of the transaction and certain other
disclosures as set out in the AIM Rules. Further updates on the way forward
will be provided in due course as matters are progressed.

 

Nick Tulloch, ECR's Chairman, said: "We are pleased to report positive
progress on the proposed sale of MGA, including its A$75 million of tax
losses, in what is potentially a very complex transaction.  With a number of
different workstreams, it is likely that the forthcoming holiday period will
slow the pace down as we get into the second half of December 2024 and so we
have agreed a longer extension to exclusivity with the potential buyer to
allow time for its advisers to complete the due diligence and their
structuring work.  I intend to travel to Australia in the second half of
January 2025 to hopefully conclude the process."

 

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

 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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