Annual Report
and Accounts 2016
The Directors of ECR Minerals plc (the “Directors” or the “Board”) present their report
and audited financial statements for the year ended 30 September 2016 for ECR Minerals
plc (“ECR”, the “Company” or the “Parent Company”) and on a consolidated basis (the
“Group”)
Chairman’s Statement
Chief Executive Officer’s Report
Directors’ Biographies
Strategic Report
Report of the Directors
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated & Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated & Company Cash Flow Statement
Notes to the Financial Statements
Notice of Annual General Meeting
Company Information
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Chairman’s Statement
The period since my address to shareholders in last year’s
annual report has been one of substantial change for ECR.
The long bear market phase in the mining industry exacted a
heavy toll on the Company, as did adverse political changes
during 2016 in the Philippines, which for the preceding two
years was the focus of ECR’s operations.
However, as things stand today, ECR has been rejuvenated.
Moreover, widespread positive sentiment has returned to
the mining markets, and the ECR team is doing its utmost
to capitalise on these more favourable conditions to deliver
lasting appreciation in the Company’s share price.
Since March 2015, ECR’s exploration focus was mainly
on its interests in the Danglay Project in the Philippines.
This culminated in December 2015, when the Company’s
consultants finalised a Mineral Resource and NI 43-101
Technical Report. However, there was a sense of political
change for the worse for the mining industry in the
Philippines, and ECR decided to change its direction.
ECR subsequently entered into an agreement to acquire
the Avoca and Bailieston gold projects areas in Victoria,
Australia.
Primarily, ECR was attracted to the Australian projects for
the following reasons:
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the significant exploration potential of the Avoca and
Bailieston project areas;
an improved political climate for mining investment in
Victoria;
the presence of successful modern gold mining
operations nearby, particularly at the Fosterville and
Costerfield mines;
the reduction in recent years of the costs of key mining
inputs in Australia, such as skilled labour rates and
consulting charges; and
the comparative weakness of the Australian dollar
against the US dollar, meaning that the Australian dollar
gold price is currently only around 10% below a record
high set in 2016, whereas the US dollar gold price
remains around 35% below a record high set in 2011.
Much of 2016 was spent prioritising the multiple
opportunities presented by the Avoca and Bailieston gold
projects, to which the Group’s wholly owned Australian
subsidiary has 100% ownership rights, as well as
restructuring ECR and its management team.
Touching upon the Philippine licences – the Group
announced in February 2017 that the Board of ECR were
considering an impairment against the carrying value of
the investment in Danglay within the financial statements
for the year ended 30 September 2016. Having considered
the project in detail and in particular taking into account the
relevant expertise and knowledge of Ivor Jones who has a
wealth of experience in the Philippines, the ECR Board has
decided that whilst the project has a number of material
risks (described below), impairment of this investment is not
required at this time as we believe that the Danglay assets
have significant potential. Whilst noting that the mining
industry in the Philippines continues to face an uncertain
operating environment which of course presents risks to the
Group’s operations there, the Board is also aware that there
is a significant gold industry in the Philippines and there
continue to be many mines in production.
Shareholders should also note that although the exploration
permit renewal for Danglay has not been issued, it was
forwarded by the Philippine Mines and Geosciences Bureau
on 30 May 2016 to ECR’s local partner Cordillera Tiger Gold
Resources Inc. (“Cordillera Tiger”) who signed and returned
it. Accordingly although it cannot be guaranteed, the Board
of ECR is confident that if pursued the exploration permit
renewal would be granted.
Additionally, the Group is pleased to advise shareholders
that in relation to Tiger International Resources Inc.’s
claims that ECR has not fulfilled its obligations under the
earn-in and joint venture agreement as announced on 24
February 2017 to the market, on 31 March 2017 Cordillera
Tiger confirmed to the Group that they had passed a board
resolution to issue the 25% shareholding to ECR.
In addition to switching the Group’s operational focus
to the Australian and Argentinian assets, the year under
review also saw a period of restructuring of ECR and its
management team as further described below.
In August 2016, Stephen Clayson resigned as a Director
and CEO of the Company, having served in that role since
2013, dealing with numerous legacy issues and tending to
ECR’s operations and administration. In addition, Richard
(Dick) Watts also left the Board as a non-executive director
in October 2016.
Both were enthusiastic about the potential of the Avoca and
Bailieston projects, but felt it was time for fresh thinking to
take the Company forward. On behalf of the Board, I would
like to thank Stephen and Dick for their service to ECR
through a difficult period.
In their place, I am pleased to welcome Craig Brown,
Christian Dennis and Ivor Jones as, respectively, director &
CEO, non-executive director, and director & COO.
Craig Brown, a Chartered Accountant with more than 20
years’ experience in senior management and finance roles in
the mining industry, joined ECR as Finance Director in May
2016. Craig had previously worked with Stephen Clayson
in relation to Kryso Resources plc (“Kryso”), which is now
known and listed on AIM as China Nonferrous Gold Ltd
(“CNG”). Craig was appointed as CEO of ECR in September
2016.
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ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Chairman’s Statement continued
Craig was a co-founder of Kryso, an executive director from
its listing on AIM in 2004 until 2013, and as a consultant for
several years thereafter. He was instrumental in advancing
Kryso/CNG through the process of defining a five million
ounce JORC Mineral Resource at the Pakrut gold project
in Tajikistan, completing a bankable feasibility study for
the project, obtaining debt and equity finance for mine
development, and commencing construction of the mine
and infrastructure. The first gold pour at the Pakrut mine
took place in 2015.
Ivor Jones is a professional geologist with 30 years’ global
experience across all aspects of exploration and mining,
including project evaluation, resource estimation and the
preparation of JORC and NI43-101 reports, in relation to
both precious and base metals deposits. Ivor joined ECR in
November 2016. His previous roles include Group General
Manager of Geosciences with Snowden Mining Industry
Consultants from 2009 until 2014. More recently, he has
been practicing as an independent geological consultant.
Ivor is based in Australia and has a key role to play in
helping ECR maximise the value of its existing projects
and interests, and in evaluating new opportunities for the
Company.
Christian Dennis is the CEO and founder of Optiva
Securities Ltd, a well-known London stockbroking and
investment management firm. Christian has more than
25 years’ experience advising, financing and investing in
exploration and mining companies, and is well placed to
provide his expertise to ECR as it grows and develops.
At the same time as Christian joined the Board in
September 2016, Optiva arranged equity financing of
£500,000 for ECR, which enabled the Group to repay and
retire the Yorkville Advisors convertible loan note facility. In
a further element of financial restructuring, the Company
completed a capital reorganisation in November 2016 to
bring the number of ordinary shares in issue into line with
AIM market norms.
Turning to the future, ECR announced details of planned
exploration programmes for the Bailieston gold project
in Australia in November 2016 and the SLM gold project
in Argentina in February 2017, and we look forward to
implementing these exciting programmes in the coming
months. The Group will also continue to evaluate potential
new projects and business areas.
We look forward to providing further updates on these
endeavours, and on behalf of the Board, I would like
to thank all ECR shareholders for their support and
confidence.
William Howell
Chairman
31 March 2017
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ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Chief Executive Officer’s Report
As noted in the Chairman’s Statement, the past year
has seen many changes at ECR. The composition of the
Board has changed almost completely; and in terms of
activities, the Group is now primarily focused on the Avoca
and Bailieston gold projects in Australia and the SLM gold
project in Argentina, and is no longer the operator of the
Danglay gold project in the Philippines.
I was appointed as the Chief Executive Officer of ECR in
September 2016. This appointment was shortly followed
by the appointment to the Board of Ivor Jones and
Christian Dennis.
Prior to co-founding Kryso, I worked in senior roles for Gulf
International Minerals and Nelson Gold, both of which also
successfully put gold mines into production during my
tenure. I very much hope to have similar success at ECR.
It is very difficult to develop a mine without supportive
shareholders and financiers, and I am pleased to say that
since my appointment as CEO of ECR, we have been
supported by:
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Optiva Securities Ltd, the Company’s broker, who
arranged an equity financing of £500,000 (before costs)
in September 2016.
Shenyang Xinliaoan Machinery Co Ltd (“Shenyang”),
who in February 2017 conditionally agreed to subscribe
for a 29.9% shareholding in the Company at a price of
1p per share to raise proceeds for ECR (before costs) of
approximately £553k (“Subscription”).
Crucially, Shenyang, who are based in the People’s
Republic of China, have agreed to a twelve-month lock-up
in respect of subscription shares to be issued to them,
which is a real vote of confidence in ECR and its strategy.
In addition, upon completion of the Subscription, Shenyang
will receive warrants exercisable at 2p and 5p, which is
indicative of the level of share price appreciation Shenyang
believes is possible.
Pending completion of the Shenyang Subscription, a
£100,000 non-refundable deposit has been received, to be
converted into ordinary shares at a price of 2p per share in
the event the Subscription is not completed by 31 March
2017. Following completion of the Subscription, Shenyang
will be able to recommend up to two directors who may be
appointed as members of the Board.
The proceeds of the Shenyang investment will be utilised
for our planned drilling programmes in Australia and
Argentina, and for working capital, including as necessary
for the review of potential new projects and business
areas.
AVOCA AND BAILIESTON GOLD
PROJECTS, AUSTRALIA
It was announced on 3 March 2016 that ECR’s wholly
owned subsidiary Mercator Gold Australia Pty Ltd (“MGA”)
had agreed to acquire 100% ownership of two Exploration
Licences in Victoria, EL5387 (Avoca project) and EL5433
(Bailieston project) from Currawong Resources Pty Ltd
(“Currawong”).
The process of transferring the licences from Currawong to
MGA has not yet been finalised, but the transfer of EL5433
has now been completed and the transfer of EL5387 is
near completion. In the meantime, the Directors consider
MGA’s rights in respect of the licences to be secure under
the terms of the agreement with Currawong, and for
practical purposes, consider MGA to be the owner of the
licences.
In addition, MGA has applied for two new Exploration
Licences in Victoria. EL6278 (the Timor Project) is adjacent
to the Avoca project and has now been granted, and
EL6280 (the Moormbool Project) is in the vicinity of the
Bailieston project and is in the process of being reviewed
for Native Title considerations. More details of the Group’s
exploration strategy for these licences will be announced in
due course.
The Avoca and Bailieston projects are located in the
Australian state of Victoria, one of the world’s major
historical gold producing regions. Following a re-evaluation
of the Group’s strategy for the Victorian projects, the
Directors decided to prioritise the drilling of selected
targets, initially at the Bailieston project. Bailieston is
located near two significant operating gold mines, including
the Fosterville mine, which is 30km from Bailieston and
which produced its one millionth ounce of gold in 2016.
The Fosterville mine is now owned by TSX-listed
Kirkland Lake Gold following its merger with Newmarket
Gold, which was also listed on the TSX. We consider
this transaction to be indicative of a healthy level of
international interest in the Victorian gold sector, which
benefits from the state’s prospective geology, security of
tenure, improvements in the state’s political climate for
mining, ready availability of skills and services, and ease of
access.
The Bailieston Project has a history of producing high-
grade material from underground workings, including
from the historic workings in the Byron area, which ECR
has selected as its initial drilling target. The Group is in
possession of a basic dataset encompassing the original
nineteenth and early twentieth century production records
for the Byron Shaft as well as the results of relatively
recent exploration work, including drilling and trenching,
carried out since 1980.
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ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Chief Executive Officer’s Report continued
A reverse circulation (“RC”) drilling programme of
approximately 550 metres is planned for the Byron area,
which is one of three high priority hard-rock drilling targets
identified at Bailieston. Drilling is intended to commence
as soon as practicable after finalising certain government
requirements.
At the Avoca Project, the Group has identified nine initial
hard-rock targets for drilling, with the highest ranked target
being the mineralisation near the old Pyrenees mine.
The Pyrenees Mine has never been drilled, but historic
production reported relatively high grades over the strike
length. Deep lead (buried alluvial) gold deposits have been
confirmed as an additional target type warranting further
evaluation at Avoca.
The Timor Project is ECR’s most recent acquisition, and
presents a series of old mines which the Board considers
has very good prospectivity. The primary target at this
early stage of review is the Leviathin group of mines. The
old hard rock mines recovered good grades on the mined
mineralisation, and importantly the mineralisation was not
a single vein, but multiple veins. In addition, the trend is
directly upstream from one of the state’s most significant
deep lead alluvial gold mines, inferring that the source of
the gold was from the Leviathin area. ECR is very excited
about the potential of this exploration opportunity.
Further information regarding the drilling targets at the
Bailieston Project is available in the Group’s announcement
dated 9 November 2016.
MGA is estimated to have tax losses of approximately
AUD 66 million as at 30 June 2016. These tax losses
may be available, subject to certain conditions, including
compliance at all relevant times with the “continuity of
ownership test”, as that term is used in the context of
Australian taxation, to offset against MGA’s future taxable
profits which would otherwise be taxable; for example
such profits as might arise from future mining activities at
the Group’s Australian projects.
SLM GOLD PROJECT, ARGENTINA
Following a visit to Argentina by three of the Directors in
December 2016, it was decided to recommence ECR’s
on-the-ground activities to advance SLM, which had been
paused since mid-2015. The SLM project is 100% owned
by ECR’s wholly owned Argentine subsidiary Ochre Mining
SA and comprises three key gold prospects in La Rioja
Province: the El Abra prospect, the JV prospect (particularly
the JV14 zone) and the Maestro Agüero prospect.
Exploration Targets have been determined for the El Abra
prospect and JV14 zone in accordance with the JORC
Code, and drilling at El Abra and JV14 is planned for 2017.
The objective of the drilling will be to enable the estimation
of Mineral Resources for both El Abra and JV14.
Further information and explanation regarding the
Exploration Targets and planned drilling, details of which
were announced on 27 January 2017, is provided in a
technical report entitled ‘Exploration Target - Sierra de las
Minas’ which is available on ECR’s website.
The change in the national government which occurred in
late 2015 has made Argentina a more attractive destination
for investment, and it is evident from the recent site visit
by the Directors, and review of the results of previous
exploration by ECR and other parties, that the El Abra
prospect and JV zone remain highly prospective.
DANGLAY GOLD PROJECT, PHILIPPINES
The Danglay (formerly Itogon) gold project was the main
focus of ECR’s activities during 2014 and 2015. The project
is an intermediate sulphidation epithermal gold deposit
situated within the prolifically gold-copper mineralised
Baguio District in the northern Philippines.
The Exploration Permit (the “EP”) comprising the Danglay
project expired on 30 September 2015, and an application
for renewal of the EP is pending. A new government
took office in the Philippines on 30 June 2016, and
unfortunately, the new administration has adopted a far
from supportive stance towards the mining industry.
Despite this, the Group is not currently aware of any reason
that the pending application for renewal of the Danglay EP
would not be granted, although there can be no guarantee
that it will be granted, and no certainty as to the likely
timeframe.
In 2013, ECR entered into an Earn-in and Joint Venture
Agreement (the “Agreement”) in respect of the Danglay
project with TSXV-listed Tiger International Resources,
Inc. (“Tiger International”) and Cordillera Tiger Gold
Resources, Inc. (“Cordillera Tiger”), which is a subsidiary
of Tiger International. The original terms of the Agreement
were announced by ECR on 29 April 2013, with a further
announcement on 20 October 2015 in respect of certain
subsequent amendments to the Agreement.
In August 2016, ECR gave notice to terminate the
Company’s Earn-in Option, as that term is defined in the
Agreement, in respect of the Danglay project. Following
the termination of the Earn-in Option, ECR is no longer
the operator of the project. However, the Company has
earned a 25% interest in Cordillera Tiger and in turn the
project, regardless of the termination of the Earn-in Option.
As provided in the Agreement, ECR has contributed more
than US$500,000 of expenditures in relation to Danglay
and completed a Mineral Resource estimate which has
been disclosed by Tiger International in accordance with
Canadian NI 43-101. In fulfilling these two conditions, ECR
has earned a 25% interest in Cordillera Tiger.
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ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 The Group’s net assets as at 30 September 2016 were
£2,680,627, in comparison with £1,546,069 at 30
September 2015. The increase is due to the capitalisation
of exploration expenditure during the year, leading to
increased exploration assets, and the larger cash balance
of £471,809 held by the Group at 30 September 2016, in
comparison with £90,398 at the previous year-end.
OUTLOOK
Looking forward, we expect to generate significant news
flow and market interest as we progress to drilling in
Australia and Argentina. We are striving to advance ECR’s
current projects, but will not hesitate to think ‘outside the
box’ in considering other projects and opportunities that the
Board considers to be in line with the Group’s strategy and
which will add value for shareholders.
I would like to thank my fellow Directors along with our
key consultants and staff and, most importantly, our
shareholders, for their commitment to the reinvigorated
ECR.
Craig Brown
Chief Executive Officer
31 March 2017
Since the termination of the Earn-in Option, attempts to
establish a meaningful dialogue with Tiger International
regarding the future of the project, including the possibility
of seeking a third party to provide funding for further
exploration activities at Danglay, have met with a very
disappointing response.
Tiger International presently refuses to acknowledge ECR’s
25% interest in Cordillera Tiger and the Danglay project,
and have made a number of inaccurate public statements
regarding the project and ECR. In particular, Tiger
International has criticised the adequacy of the exploration
data produced by the Group in its past work programmes
at Danglay. The Directors consider these criticisms to be
without basis.
In January 2017, ECR appointed legal counsel to begin the
process of enforcing the Company’s rights in relation to
Danglay either in court or through arbitration. In parallel, the
Company has submitted a proposal to Tiger International
to encourage an amicable resolution of the dispute. On
31 March 2017, Cordillera Tiger confirmed to the Group
that they had passed a board resolution to issue the 25%
shareholding to ECR.
Danglay, with its NI 43-101 Mineral Resource and target for
further exploration, remains a project of intrinsic interest,
and the Directors are hopeful that the political situation
for the mining industry in the Philippines may improve in
future. We are also confident that the dispute with Tiger
International is capable of being resolved in ECR’s favour.
However, depending on the outcome of the current
uncertainties, the Directors may need to fully impair the
carrying value of ECR’s investment in the Danglay project in
the Group’s next set of financial statements. The carrying
value of the investment in the Group’s audited financial
statements for the year ended 30 September 2016 is
£1,164,982.
FINANCIAL RESULTS FOR THE YEAR
ENDED 30 SEPTEMBER 2016
For the year to 30 September 2016 the Group recorded a
total comprehensive expense of £1,016,592, compared
with £4,683,279 for the year to 30 September 2015.
Some £3,217,484 of the prior year’s expense occurred
due to an impairment provision against the carrying value
of the deferred tax asset in the Company’s wholly owned
subsidiary Mercator Gold Australia Pty Ltd. In the audited
financial statements for the year ended 30 September
2016, the largest contributor to the total comprehensive
expense was the line item “other administrative
expenses”, which represents the costs of operating
the Group and carrying out exploration at its projects,
whose cost is ineligible for capitalisation under applicable
accounting standards.
5
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Directors’ Biographies
William John Selwood Howell
Non-Executive Chairman
(aged 72)
Ivor William Osborne Jones
Director and Chief Operating Officer
(aged 57)
Bill Howell is a geologist with 50 years of experience
in mineral exploration, project evaluation and feasibility
studies. He is a Fellow of the Australasian Institute of
Mining & Metallurgy and Fellow of the Society of Economic
Geologists. Bill was formerly Exploration Director of
AIM-listed Triple Plate Junction plc 2004-2011, having co-
founded that company. He was also a former Chairman of
TSXV-listed Asian Mineral Resources Ltd during the 2012
reorganisation of the company, which led to production at
the Ban Phuc nickel sulphide mine in Vietnam. In a long
career, Bill held senior roles with BHP, Normandy Mining
Ltd and Newmont Mining Corporation, including heading
up BHP’s overseas exploration 1975-1981, and Managing
Director of South East Asia exploration for Normandy and
Newmont 1995-2003. In these roles, he led teams through
the stages of exploration to feasibility of major copper/
gold deposits in Papua New Guinea (OK Tedi), Indonesia
(Martabe) and Laos (Phu Kham).
Craig William Brown
Director and Chief Executive Officer
(aged 46)
Craig Brown was appointed as ECR’s Finance Director
in May 2016 before becoming Chief Executive Officer
in September 2016. Previously, he was a founding
shareholder of Kryso Resources plc, now known as China
Nonferrous Gold Ltd. Craig acted as Finance Director and
Company Secretary of Kryso before becoming Managing
Director in 2010 and stepping down from the board in
September 2013. During this period, Kryso/CNG delineated
a 5 million ounce JORC Mineral Resource at the Pakrut
gold project in Tajikistan, completed a bankable feasibility
study for the project, obtained debt and equity finance for
mine development, and commenced construction of the
mine and infrastructure. Prior to his roles with Kryso/CNG,
Craig held positions with Gulf International Minerals Ltd
and Nelson Gold Ltd, both of which also successfully put
gold mines into production during his tenure.
Ivor Jones is a geologist with 30 years’ experience in the
industry and is currently practising as an independent
consultant based in Australia. Ivor holds a BSc (Hons)
in Geology from Macquarie University and an MSc in
Resource Evaluation from the University of Queensland.
He is a Fellow and Chartered Professional (Geology) of the
Australasian Institute of Mining & Metallurgy (AusIMM) and
a Member of the Joint Ore Reserves Committee (JORC).
Ivor has extensive expertise in all aspects of geology,
including project evaluation, resource estimation and the
preparation of JORC and NI43-101 technical reports, across
both precious and base metals. His previous roles have
included numerous positions with leading consultancy
Snowden Mining Industry Consultants (“Snowden”),
including as Group General Manager of Geosciences from
2009 until 2014. Mr Jones has also held positions at
operating mines, including as Manager of Mine Geology
at the Leinster Nickel Operations of WMC Resources Ltd
in Western Australia, and as Group Resource Geologist
for Anvil Mining Ltd with operations in the Democratic
Republic of Congo. He has experience of working in
Australia, Africa, North and South America, Europe and the
Philippines.
Christian Gabriel St. John-Dennis
Non-Executive Director
(aged 52)
Christian Dennis is a highly experienced stockbroker and
is currently the CEO and a major shareholder of Optiva
Securities Ltd (“Optiva”), a member of the London Stock
Exchange. Mr Dennis holds a BSc. (Hons) from the
University of Birmingham, is an associate member of the
Chartered Institute for Securities & Investment (CISI), and
is an FCA approved person. During his career Christian
has worked for a number of major investment firms both
in London and New York. He has been involved with
advising and arranging funding for a large number of mining
companies across a wide range of commodities, working
with companies at varying stages of development from
seed funding through to IPO, and has assisted in bringing
a number of those companies along the value curve from
project development through to production.
6
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Strategic Report
The Directors of the Company present their Strategic
Report for the year ended 30 September 2016.
Principal Activities
The principal activity of the Group is the identification,
acquisition, exploration and development of mineral
projects. The principal activity of the Company is that of a
holding company for its subsidiaries and other investments,
although project development activities may also be
undertaken directly. Whilst the Group’s historical focus has
been on gold, it is also open to considering opportunities in
other mineral commodities.
Current areas of project activity are in Argentina, Australia
and the Philippines, and the Group continues to review
potential new investments on a highly selective basis, with
a concentration on precious, base and strategic metals
projects in Asia, Australia and South America.
Organisation Review
The Company is incorporated in England but it operates in
other countries through foreign subsidiaries and contractual
arrangements. Craig Brown, Director & Chief Executive
Officer, and Christian Dennis, Non-Executive Director,
are based in the United Kingdom while Bill Howell, Non–
Executive Chairman, and Ivor Jones, Director & Chief
Operating Officer, are based overseas. The corporate
structure of the Group reflects its present and historical
activities and the requirement, where appropriate, to have
incorporated entities in particular countries.
The Group’s exploration activity in Argentina is undertaken
through an Argentinian wholly–owned subsidiary, Ochre
Mining SA. There are two dormant subsidiaries, both
registered in the USA, which relate to past projects.
The Company has a wholly–owned Australian subsidiary
named Mercator Gold Australia Pty Ltd (“MGA”), which
was released from external administration in December
2014. MGA has accumulated tax losses estimated to total
approximately AUD 66 million from its past trading, and
MGA is therefore a suitable vehicle for any future profit–
generative activities of the Group in Australia.
The Group’s activities in the Philippines are undertaken
under the auspices of an earn–in and joint venture
agreement (the “Agreement”) between the Company,
Cordillera Tiger Gold Resources, Inc. (“Cordillera
Tiger”) and Tiger International Resources, Inc. (“Tiger
International”). Tiger International is incorporated in
British Columbia, Canada and its shares are traded on the
TSX Venture Exchange. Tiger International is the parent
company of Cordillera Tiger. Further details of the Group’s
operations in Argentina and the Philippines can be found
under “Operating Review” below and in the Chairman’s
Statement and Chief Executive Officer’s Report.
The Directors aim to ensure that the Group operates with
as low a cost–base as is practical in order to maximise the
amount spent on mineral exploration and development,
in which activities the expertise and experience of the
Directors and the other personnel of the Group are
employed to add value to the Group’s projects. The
Company has four male Directors and one female
administrative staff.
The Group’s activities are financed through periodic
capital raisings, principally through the placement of
the Company’s ordinary shares. As the Group’s projects
become more advanced, other forms of project finance
appropriate to the stage of development and potential of
each project may be considered.
Financial & Performance Review
The Group’s on–going activities are solely in mineral
exploration and development. It is not in production at any
of its current projects and hence the Group has no income.
For the year to 30 September 2016 the Group recorded a
total comprehensive expense attributable to shareholders
of the Company of £1,016,592, compared with £4,683,279
for the year to 30 September 2015. The bulk of the year’s
expense in 2015 arose as a result of the impairment
provision in respect of the deferred tax asset in MGA.
The Group’s net assets as at 30 September 2016 were
£2,680,627, in comparison with £1,546,069 at 30
September 2015.
Significant exploration activity took place during the year to
30 September 2016, as discussed later under “Operating
Review”. Capitalised exploration assets are valued in the
Consolidated Statement of Financial Position at cost; this
value should not be confused with the realisable value of
the relevant projects or be considered to determine the
value accorded to the projects by the stock market, which
in both cases may be considerably different.
Strategy and Business Model
The Group’s strategy is to locate and acquire mineral
projects which show good prospects. The Directors select
these projects after a thorough and critical appraisal. This
is needed as in general, across the industry as a whole,
the percentage of mineral exploration and development
projects which go on to become fully operational and
producing mines is relatively low.
After acquiring an interest in a project, the strategy is
then to leverage the Group’s commercial experience and
technical expertise to explore and further develop the
project, and in doing so to create value for the benefit of
the Company’s shareholders. Decisions can then be made
at appropriate times as to whether to continue the project
into production, enter into a joint venture with another
company, or sell the project outright.
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ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Strategic Report continued
Where a project has been disposed of, the proceeds of
that disposal will usually be reinvested in new projects. In
the case of very significant proceeds from a disposal, the
Directors would also consider distributions to shareholders.
The Group’s business model is to be an efficient and
successful explorer and developer of mineral deposits.
The rights to carry out these activities may be acquired
by the receipt by the Group of licences from the relevant
authorities, or by negotiating to acquire rights from existing
owners. The Group will generally seek to acquire such
rights for low initial payments, with any further amounts
paid later depending on the success of the project. This
enables the risk inherent to the Group’s activities to be
somewhat mitigated.
The business model requires the retention of a small
core team, combined with the use of consultants on
an as required basis, both in the UK and overseas. In
this way, overheads can be kept as low as possible, the
core administrative and technical skills retained, and the
flexibility of the Group can be maintained.
Key Performance Indicators (“KPIs”)
KPIs which apply in most businesses are not usually
particularly relevant to mineral exploration and development
companies which, for example, typically have little or no
product sales.
The Board has previously identified some key KPIs which
were considered of relevance. These are detailed below.
Project development: The Group reports the achievement
of exploration and development targets, including results
of exploration, definition of exploration targets, and
reporting of mineral resources and mineral reserves using
internationally recognised protocols. During the year
significant geological results were obtained, including the
estimation of a mineral resource for the Danglay project,
and the production of an NI43–101 technical report which
was published in December 2015.
End of year cash balance and attributable cash resources:
This KPI is of critical importance and it is a good indicator of
whether the Group has sufficient financial resources. The
Directors take all necessary steps to minimise the rate of
cash burn on overheads (commensurate with ensuring that
the Group’s quality standards including its human resources
are not compromised and that it has adequate resources,
both human and otherwise, to carry out its activities). The
Group held £471,809 of cash and cash equivalents at 30
September 2016, versus £90,398 at the beginning of the
year. The Directors consider the performance of the Group
to be in line with the activities required to fulfil the Group’s
work programmes.
8
Operating Review
As mentioned above, the Group’s current operations are
located in Australia, Argentina and the Philippines. Potential
new projects are reviewed from time to time in line with
the strategy discussed earlier in this report.
Victorian gold projects, Australia
The Victorian gold projects are located in the Victorian
goldfields and were acquired in mid-2016 and are 100%
held by ECR’s wholly owned subsidiary Mercator Gold
Australia Pty Ltd (“MGA”). During the year, Mercator
completed a small amount of work to identify geochemical
anomalies and further understand the mineralisation
mined historically. Unfortunately, the EL5387 (the Avoca
Project) and EL5433 (the Bailieston Project) licences were
not transferred during the year and work was therefore
minimised to reduce the risk of financial loss should an issue
be encountered in the transfer process. Applications were
also made for two additional exploration licences. EL006278
(the Timor Project) and EL006280 (the Moormbool Project)
were not granted during the year. As announced on 22
March 2017, the transfer of the Bailieston project has now
been approved and registered. ECR is working to satisfy all
regulatory requirements for the commencement of drilling
in the Byron area at Bailieston. The application for EL5387
is nearly complete. The application for tenement EL6278
(Timor) was also successful and the tenement was granted
on 17 March 2017. The application for tenement EL6278
(Moormbool) has not at the time of this report been granted
as it is being reviewed for native title consideration.
SLM gold project, Argentina
The SLM project is located in La Rioja Province, Argentina
and is 100% held by ECR’s wholly owned subsidiary Ochre
Mining SA.
In November 2015, Argentina elected a new president
who is seen to be relatively pro–business, and the new
administration has moved to liberalise currency controls
and remove export taxes on mined products. Activities at
SLM by Ochre remained paused. However, in December
2016, a site visit and review by three of the Company’s
Directors resulted in the reporting of an exploration target
for the JV14 prospect and recommended drill program.
The Directors’ preference is now for Ochre to drill and
sample the JV14 prospect and put two holes into the El
Abra prospect expected in 2017. Further discussion of the
status of the SLM project is provided in the Chief Executive
Officer’s Report.
Danglay gold project, Philippines
In late April 2013 ECR entered into an earn–in and
joint venture agreement with Cordillera Tiger and Tiger
International in relation to the Danglay gold project in the
Philippines, and subsequently terminated in August 2016.
Cordillera Tiger is a Philippine corporation and the holder
of the exploration permit (the “EP”) which represents the
Danglay project.
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 The Agreement gave ECR the exclusive right and option to
earn a 25% or 50% interest in Cordillera Tiger and thereby
in the Danglay project.
Under the terms of the earn–in, ECR funded all expenditure
required for Cordillera Tiger and was the operator of the
Danglay project.
The earn–in commenced in December 2013 and exploration
through Cordillera Tiger, as the operator of the project was
stopped at the termination of the earn-in agreement. It is
believed that completion of exploration programmes to
date has added significant value to ECR’s rights in respect
of the Danglay project by generating data which is relevant
to the assessment of the project’s economic potential to be
generated.
In December 2015, the Company published an NI43–101
technical report (the “Report”) in relation to the Danglay
project. The Report also disclosed a target for further
exploration (the “Exploration Target”), as permitted by
NI43–101. The Report supports the disclosure by ECR on
5 November 2015 of an inferred mineral resource estimate
for oxide gold mineralisation at Danglay. No further work
has been completed by ECR at Danglay. Importantly,
the Philippines government is currently not providing
a favourable investment market, and the Group is now
considering its options moving forward.
Risks and Uncertainties
The Directors regularly review the risks and uncertainties to
which the Group is exposed and seek to ensure that these
risks and uncertainties are, as far as possible, minimised.
The Directors have identified the principal risks and
uncertainties facing the Group and these are set out below.
Exploration Risk
Mineral exploration is, by its nature, speculative, and as
mentioned earlier the number of such projects which
develop into mining operations is relatively low. There
is no certainty that the Group’s exploration projects can
be economically exploited and no certainty that this will
enhance shareholder value. If the Directors ultimately
decide that a prospect has no economic future and they
are unable to sell it on, the costs incurred to date would
be written off in the Consolidated Income Statement in
the year in which the decision to discontinue exploration
operations is made.
Development Risk
All mineral exploration and development projects may be
subject to delays and/or unforeseen difficulties arising from
bad weather, natural disasters, non–availability or delayed
availability of licences or permits, changes in the terms on
which key licences or permits are available, commissioning
of operations, and the raising of finance, among other
factors. The risk of delays and unforeseen difficulties is
mitigated when practical and legal to do so. However
the risk remains that such factors may render a project
unfeasible, or not economically feasible.
Commodity Prices
Changes in the spot and forward prices of the relevant
mineral commodity can affect the economic viability of a
project at any stage in its life cycle.
Resource Risk
Mineral deposits are evaluated by their size, grade and by
other parameters, and mineral resources and reserves are
typically calculated in accordance with accepted industry
standards and codes. Nevertheless, there is always some
level of uncertainty in the underlying assumptions. The
Board keeps these assumptions under constant review and
adjusts the Group’s development strategy accordingly.
Mining & Processing Technical Risk
Variations can occur unexpectedly in the technical
parameters of a project and can considerably alter its
economic viability, despite the Directors taking as many
precautions (e.g. confirmatory drilling, metallurgical test
work and feasibility studies) as is sensible.
Environmental Risks
Changes in legislation and the risk of environmental
damage can give rise to unplanned environmental liabilities
or threaten the continuity of a project at any stage in its
life cycle. The environmental parameters of all projects are
considered carefully so as to minimise these risks.
Financing Risk
This arises when despite its best efforts the Group finds
itself unable to raise the requisite finance in its optimal
timescale, or at all. As a result, project development may
be either delayed or suspended pending the raising of
finance, and the lack thereof may threaten the rights of
the Group in the event the Group is unable to meet its
commitments.
The Directors aim to plan far enough ahead to ensure
an orderly timing of finance raising activities in order to
ensure, as far as practical, that the Group has sufficient
liquidity to enable projects to proceed as planned.
Partner Risks
Any joint venture arrangement contains an element of
counterparty risk, particularly as to the financial status of
the joint venture partner or to its level of participation in
the joint venture, and these issues can ultimately lead to
the failure of the joint venture. There is a need to maintain
good working relations with the Group’s joint venture
partners and to monitor their involvement and financial
condition on a regular basis.
9
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Strategic Report continued
Political Risk
This takes many forms and can exist in politically stable
countries (enhanced environmental requirements, changes
in taxation, etc.) as well as less developed countries
(civil unrest, government expropriation of mineral assets,
corruption etc.). The fact that the Group has operations in
multiple jurisdictions goes some way towards mitigating
these risks.
Internal Control & Risk Management
The Directors are responsible for the Company’s internal
control systems. Whilst no system can give absolute
assurance against material loss or misstatement, the
Group’s processes are designed, within the confines of
the limited number of personnel employed, to provide
reasonable assurance that issues are identified and dealt
with in a timely manner.
The on–going financial performance of the Group is
monitored regularly, risks are identified and where
necessary adjustments are made as early as is possible.
The Board, subject to the necessary shareholder authority,
regularly reviews capital investment, project acquisitions
and disposals, borrowing facilities (if any), insurance and
any guarantee arrangements.
Forward Looking Statements
This Annual Report & Accounts 2016 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 and the Group
disclaim any obligation to update or modify such forward
looking statements as a result of new information, future
events or for any other reason.
Corporate Governance
Companies whose shares are traded on AIM are not
required to make an annual statement to shareholders
concerning compliance with the UK Corporate Governance
Code. ECR is committed to high standards of corporate
governance and the Board complies with such provisions
of the Corporate Governance Code for Small and Mid-size
Quoted Companies 2013 issued by the Quoted Companies
Alliance as are commensurate with the size of the Group,
the nature of its activities and its stage of development.
The Board currently comprises a Non–Executive Chairman,
a Chief Executive Officer and Director, a Chief Operating
Officer and Director and a Non–Executive Director. The
Board considers this to be a suitable size and structure in
view of the Group’s present activities and in view of the
Company’s listing on AIM.
Role of the Board
The Board’s role is to set the Group’ and Company’s long–
term strategy and direction, and to monitor its business
objectives. It meets a minimum of four times a year and
holds additional meetings when necessary. It receives
reports for consideration on all strategic and operational
matters of significance.
Directors also take external independent advice at the
Company’s expense in carrying out their duties.
The Board delegates certain of its responsibilities to the
Audit and Remuneration Committees of the Board. These
operate within clearly defined terms of reference.
Audit Committee
The Audit Committee comprises William Howell and Craig
Brown. It meets when appropriate to assist the Board in
meeting its responsibilities for external financial reporting
and internal controls. It reviews the scope and results of
the audit as well as the cost effectiveness, independence
and objectivity of the auditors.
Remuneration Committee
The Remuneration Committee comprises William Howell
and Craig Brown and meets when appropriate to review
and make recommendations on the remuneration
arrangements including bonuses and options for the
Company’s executive directors and senior staff, ensuring
that it reflects their performance and that of the Group. The
remuneration and terms of appointment of non–executive
directors are set by the Board as a whole.
Conflicts of Interest
The Board as a whole reviews actual and potential conflicts
of interest of any of its members and the steps taken to
mitigate the effects thereof.
Corporate Responsibility
The Board regularly reviews the significance of social,
environmental and ethical matters affecting the Group’s
operations. It considers that the Group is not yet at a stage
where a specific Corporate Social Responsibility policy is
required, in view of the limited number of stakeholders,
other than shareholders. Instead the Board protects the
Group’s interests and those of its stakeholders through
individual policies and through ethical and transparent
business dealings.
10
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 The Board has adopted an Anti–Bribery and Corruption
Policy.
This Strategic Report was approved by the Directors on 31
March 2017.
Craig Brown
Director and Chief Executive Officer
Shareholders
The Board seeks to protect shareholders’ interests at all
times, by abiding, where applicable, by the Corporate
Governance Code for Small and Mid-size Quoted
Companies 2013 issued by the Quoted Companies
Alliance, including by ensuring that each Board decision is
taken with due regard to the interests of shareholders as
a whole. In addition to making appropriate news releases
and publishing financial reports, the Directors encourage
communication with shareholders at annual general
meetings and by participating in investor presentations,
Q&A sessions and via social media.
Environment
Mineral exploration and development has the potential
to adversely impact the environment in which it takes
place. The Group takes its environmental responsibilities
seriously, including having in place an environmental policy
and the environmental parameters of the activities of the
Group are considered carefully so as to minimise the risk of
adverse environmental effects.
Human Rights
The activities of the Group are carried out in accordance
with all applicable laws on human rights and with genuine
moral concern for all stakeholders.
Employees
The Group seeks to remunerate its employees fairly,
offers flexible working arrangements where practical and
encourages employees to gain exposure to all aspects
of the Group’s business. The Group gives full and fair
consideration to applications for employment received
regardless of age, gender, colour, ethnicity, disability,
nationality, religious beliefs, transgender status or sexual
orientation. It considers employees’ interests when making
decisions and welcomes suggestions from employees
which have the potential to improve the Group’s
performance.
Suppliers and Contractors
The Board recognises the importance of maintaining the
goodwill of its contractors, consultants and suppliers, and
encourages this through fair dealings. The Group has a
prompt payment policy and seeks to ensure all liabilities are
settled within the terms agreed with that supplier.
Health & Safety
The activities of the Group are carried out in accordance
with all applicable laws on health & safety via its Health &
Safety Policy.
11
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Report of the Directors
For the year ended 30 September 2016
Principal Activities
A full review of significant matters, including likely future
developments, is contained in the Chairman’s Statement,
Chief Executive Officer’s Report and the Strategic Report.
Details of events after the reporting date are disclosed in
Note 24 to the financial statements.
Financial Risk Management Objectives and Policies
The Group does not presently hold any forward or hedge
positions in either currency or minerals. Currently these are
not deemed necessary but this is reviewed from time to
time. There is inherent risk in operating between different
currencies, namely GBP, AUD, USD, Philippine and
Argentine pesos, and the Board monitors and reviews this
exposure on a regular basis.
The Board recognises the Group’s exposure to liquidity
risk and that the Group’s ability to continue its operations
is dependent on its having or acquiring sufficient cash
resources. The Board continually monitors the Group’s
cash position and may realise all or part of the Group’s
investments in order to maintain the ability of the Group to
meet its obligations as they fall due.
The locations of the Group’s principal activities are
currently in Argentina, Australia and the Philippines and its
corporate base is in the United Kingdom. These locations
are considered stable with advanced economic and legal
infrastructures.
Further details of the Group’s financial risk management
objectives and policies are set out in Note 21 to the
financial statements.
Position of the Company and Going Concern
At the date of this report the Group’s financial position
is stable. As explained herein, the financial statements
continue to be prepared on a going concern basis.
Based on a review of the Group’s budgets and cash
flow forecasts and the expected sources of financing
available to it, the Directors are satisfied that the Group
and Company have sufficient resources to continue its
operations and to meet their commitments for the next
12 months. The Directors have considered the present
economic and financial climate as specifically pertaining
to the Company and its peer group, and are confident in
the ability of the Company to raise funding as required to
sustain and develop the operations of the Group. Means of
raising finance potentially available to the Company include
the issue of equity and the sale of assets.
Reviews of operations and business developments are
provided in the reports of the Chairman and the Chief
Executive Officer, the Strategic Report, this Report of the
Directors and within the detail of the financial statements.
12
Therein are set out certain forward looking statements
that have been made by the Directors in good faith. By
the nature of these statements there can be no certainty
that any or all predictions will be met. 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.
The impact of Brexit on the Group
The Board have considered the extent of solvency, liquidity
and other risks and uncertainties arising from Brexit that
may threaten the long-term viability of the Group. The
Board does not envisage Brexit having a significant impact
on the Group, based on the geographical location of the
Group’s current exploration projects.
The Board will continue to follow the development of UK’s
negotiation with the EU and evaluate the impact on the
Group accordingly.
Dividends
The results for the year are set out in the Consolidated
Income Statement on page 17. No dividend is proposed in
respect of the year (2015: nil). The Group loss for the year
of £919,706 (2015 loss of £4.72 million) has been taken
to reserves together with the comprehensive income and
expenses set out on page 20.
Directors
The Directors who served during the year or thereafter
were:
Stephen James Clayson (resigned 31 August 2016)
Richard Andrew Watts (resigned 11 October 2016)
William John Selwood Howell
Craig William Brown (appointed 3 May 2016)
Ivor William Osborne Jones (appointed 8 November
2016)
Christian Gabriel St. John-Dennis (appointed 11 October
2016)
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Under the Company’s Articles of Association, at every
annual general meeting of the Company, any Director:
•
•
•
who has been appointed by the Board since the date of
the last annual general meeting; or
who held office at the time of the two preceding annual
general meetings and did not retire at either of them; or
who has held office with the Company as a non–
executive Director (that is, he has not been employed
by the Company or held executive office) for a
continuous period of nine years or more at the date of
the meeting:
shall retire from office and may offer himself for election/
re–election by the members.
Total Directors’ emoluments are disclosed in Note 6 to
the financial statements and details of the share options
granted to Directors are disclosed below.
The Directors will comply with Rule 21 of the AIM rules
and the Market Abuse Regulation relating to Directors
dealings and will take all reasonable steps to ensure
compliance by the Company’s applicable employees.
Directors’ Interests
Directors who held office at 30 September 2016 held the
following beneficial interests, either directly or indirectly
(including interests held by spouses, minor children or
associated parties) in the ordinary shares of the Company.
30 March 30 September 30 September
2015
no. of shares
2016
no. of shares
2017
no. of shares
R A Watts1
C W Brown
I W O Jones2
W J S Howell
–
1,549,271
1,000,000
1,500,000
14,250,000
–
–
–
14,250,000
–
–
–
4,049,271
14,250,000
14,250,000
1 R A Watts resigned on 11 October 2016
2 I W O Jones was appointed on 8 November 2016
Additionally, Directors of the Company who held office
at 30 September 2016 held the following share options
granted under the Company’s unapproved share option
scheme:
Options
Issued
Date
Issued
Expiry Exercise
Price
Date
R A Watts 19,816,514 12/8/2013 12/8/2018
£0.002
R A Watts 25,579,832 31/12/2014 31/12/2019 £0.00275
Share Capital and Substantial Share Interests
On 20 March 2017, the Company was aware of the
following holdings of 3% or more in Company’s issued
share capital of 135,899,461 ordinary shares of £0.0001
each.
Registered Shareholder
Number
%
of shares Holding
JIM Nominees Limited (Jarvis)
27,001,817
TD Direct Investing Nominees (Europe) Limited 10,693,983
10,259,923
Barclayshare Nominees Limited
7,683,029
Hargreaves Lansdown (Nominees) Limited
6,314,029
HSDL Nominees Limited
5,273,137
Hargreaves Landsown (Nominees) Limited
5,259,703
Hargreaves Landsown (Nominees) Limited
5,079,396
HSBC Client Holdings Nominee (UK) Limited
4,118,066
HSDL Nominees Limited
19.87
7.87
7.55
5.65
4.65
3.88
3.87
3.74
3.03
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the annual
report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have elected to prepare the Group and Parent
Company financial statements in accordance with
International Financial Reporting Standards (“IFRSs”) as
adopted by the European Union and, as regards the Parent
Company financial statements, as applied in accordance
with the provisions of the Companies Act 2006. Under
company law the Directors must not approve the financial
statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and
the Company and of the profit or loss of the Group for
that period. In preparing these financial statements the
Directors are required to:
•
•
•
•
select suitable accounting policies and then apply them
consistently;
make judgements and accounting estimates that are
reasonable and prudent;
state whether applicable IFRSs as adopted by the
European Union have been followed subject to any
material departures disclosed and explained in the
financial reports;
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and the Group and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company
and the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
13
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Report of the Directors continued
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
the financial statements may differ from legislation in other
jurisdictions.
Directors’ and Officers’ Liability Insurance
The Company had in force during the year and has in force
at the date of this report a qualifying indemnity in favour of
its Directors against the financial exposure that they may
incur in the course of their professional duties as Directors
and officers of the Company and/or its subsidiaries.
Statement on Disclosure of Information to Auditors
Having made the requisite enquiries and in the case of
each of the Directors who are Directors of the Company at
the date when this report is approved:
•
•
so far as they are individually aware, there is no
relevant audit information (as defined by Section 418
of the Companies Act 2006) of which the Company’s
auditors are unaware; and
each of the Directors has taken all the steps that they
should have taken as a Director to make himself aware
of any relevant audit information and to establish that
the Company’s auditors are aware of the information.
Auditor
On 13 January 2017 PKF Littlejohn LLP was appointed as
the Company’s auditor.
PKF Littlejohn LLP has expressed its willingness to
continue in office as auditor of the Company and a
resolution to confirm their appointment will be proposed at
the forthcoming annual general meeting.
Annual General Meeting
The annual general meeting of the Company will be held at
10.00 am on 24 April 2017 at the offices of Charles Russell
Speechlys LLP, 5 Fleet Place, London, EC4M 7RD, United
Kingdom. Notice of the annual general meeting is on pages
41 to 44.
This report was approved by the Board on 31 March 2017.
By order of the Board
Craig Brown
Director and Chief Executive Officer
14
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Independent Auditor’s Report
For the year ended 30 September 2016
Independent Auditors’ Report to the Members of ECR
Minerals Plc
We have audited the financial statements of ECR Minerals
Plc for the year ended 30 September 2016 which comprise
the Consolidated Statement of Comprehensive Income,
the Consolidated and Parent Company Statements of
Financial Position, the Consolidated and Parent Company
Statements of Changes in Equity, the Consolidated
and Parent Company Cash Flow Statements, and the
related notes. The financial reporting framework that has
been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as
adopted by the European Union and, as regards the Parent
Company financial statements, as applied in accordance
with the provisions of the Companies Act 2006.
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members
those matters we are required to state to them in an
auditors’ report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Directors’ Responsibilities
Statement, the Directors are responsible for the preparation
of the financial statements and for being satisfied that
they give a true and fair view. Our responsibility is to audit
and express an opinion on the financial statements in
accordance with applicable law and International Standards
on Auditing (UK and Ireland). Those standards require
us to comply with the Auditing Practices Board’s Ethical
Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts
and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements
are free from material misstatement, whether caused by
fraud or error. This includes an assessment of whether
the accounting policies are appropriate to the Group’s
and the Parent Company’s circumstances and have
been consistently applied and adequately disclosed;
the reasonableness of significant accounting estimates
made by the Directors; and the overall presentation of
the financial statements. In addition, we read all the
financial and non-financial information in the Annual Report
to identify material inconsistencies with the audited
financial statements and to identify any information that
is apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the
course of performing the audit. If we become aware of any
apparent material misstatements or inconsistencies we
consider the implications for our report.
Opinion on financial statements
In our opinion:
•
the financial statements give a true and fair view of
the state of the Group’s and of the Parent Company’s
affairs as at 30 September 2016 and of the Group’s loss
for the year then ended;
the financial statements have been properly prepared
in accordance with IFRSs as adopted by the European
Union;
the Parent Company financial statements have been
properly prepared in accordance with IFRSs as adopted
by the European Union and as applied in accordance
with the provisions of the Companies Act 2006; and
the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
•
•
•
Emphasis of matter – going concern and recoverability
of the Danglay gold project, Philippines
In forming our opinion on the financial statements, which
is not modified, we have considered the adequacy of the
disclosure made in Note 2 to the financial statements
concerning the Group’s and Company’s ability to continue
as going concerns. Financial projections and cash flow
forecasts prepared by the Directors show that fulfilment
of the conditional terms set out in the subscription
agreement with Shenyang Xinliaoan Machinery Co.
Limited (“Shenyang”) is required in order for the Group
and Company to meet their contracted and committed
expenditure during a period of at least twelve months
from the date of approval of these financial statements. If
the terms of the subscription agreement are not fulfilled,
the Group and Company would need to seek alternative
sources of funding to enable them to meet their liabilities
as they fall due.
We also draw your attention to the disclosures contained in
Note 10 to the financial statements, and as commented on
in the Chairman’s Statement and Chief Executive Officer’s
Report, regarding uncertainty over the recoverability of
the exploration costs relating to the Danglay gold project,
Philippines. The Group has not yet formally acquired title to
its 25% interest in Cordillera Tiger Gold Resources, Inc and
renewal of the exploration permit is currently outstanding
and at the discretion of the Mines and Geosciences Bureau
in the Philippines. The carrying value of the Danglay gold
project as at 31 December 2016 was £1,164,982.
These two matters indicate the existence of material
uncertainties which may cast significant doubt about
the Group’s and Company’s ability to continue as going
concerns and on the recoverability of the Danglay gold
project, Philippines. The financial statements do not include
the adjustments that would result if the Group and / or
Company were unable to continue as going concerns and if
the carrying value of the Danglay gold project was required
to be impaired.
15
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Independent Auditor’s Report continued
Opinion on fi nancial statements
In our opinion:
•
the fi nancial statements give a true and fair view of the
state of the Group’s and the Parent Company’s affairs
as at 30 September 2016 and of the Group’s loss for the
year then ended;
the Group fi nancial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union;
the Parent Company fi nancial statements have been
properly prepared in accordance with IFRSs as adopted
by the European Union and as applied in accordance
with the provisions of the Companies Act 2006; and
the fi nancial statements have been prepared in
accordance with the requirements of the Companies Act
2006.
•
•
•
Opinion on other matter prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course
of the audit:
•
the information given in the Strategic Report and the
Directors’ Report for the fi nancial year for which the
fi nancial statements are prepared is consistent with the
fi nancial statements; and
the Strategic Report and the Directors’ Report have
been prepared in accordance with applicable legal
requirements10.
•
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Group
and the Company and its environment obtained in the
course of the audit, we have not identifi ed any material
misstatements10 in the Strategic Report and the Directors’
Report.
We have nothing to report in respect of the following
matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
the parent company fi nancial statements are not in
agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specifi ed
by law are not made; or
we have not received all the information and
explanations we require for our audit.
David Thompson (Senior statutory auditor)
For and on behalf of PKF Littlejohn LLP
Statutory auditor
31 March 2017
1 Westferry Circus
Canary Wharf
London E14 4HD
16 ECR MINERALS PLC
ANNUAL REPORT & ACCOUNTS 2016
Consolidated Income Statement
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Year ended
30 September 2016
£
Year ended
30 September 2015
£
Note
Continuing operations
Exploration expenses
Other administrative expenses
Currency exchange differences
Total administrative expenses
Operating loss
Other income
Loss on disposal of available for sale financial asset
Fair value movements - available for sale financial asset
Reclassification of fair value movements on disposal of available for sale assets
3
9
Financial income
Financial expense
Finance income and costs
Loss for the year before taxation
Income tax
Loss for the year from continuing operations
7
5
–
(677,873)
9,399
(668,474)
(668,474)
34,688
–
(18,893)
–
(652,679)
484
(267,511)
(267,027)
(919,706)
–
(919,706)
(65,990)
(941,359)
(22,356)
(1,029,705)
(1,029,705)
–
(124,579)
(12,552)
(14,750)
(1,181,586)
28
(321,180)
(321,152)
(1,502,738)
(3,217,484)
(4,720,222)
Loss for the year - all attributable to owners of the parent
(919,706)
(4,720,222)
Earnings per share - basic and diluted
On continuing operations
4
(0.01)p
(0.13)p
The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent
company profit and loss account. The loss for the parent company for the year was £887,844 (2015: £4,674,506 loss).
The notes on pages 23 to 40 are an integral part of these financial statements.
17
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Year ended
30 September 2016
£
Year ended
30 September 2015
£
Loss for the year
(919,706)
(4,720,222)
Items that may be reclassified subsequently to profit or loss
Reclassification to Profit and loss on disposal of available for sale assets
(Loss)/Gain on exchange translation
Other comprehensive expense for the year
Total comprehensive expense for the year
Attributable to:-
Owners of the parent
–
(96,886)
(96,886)
14,750
22,193
36,943
(1,016,592)
(4,683,279)
(1,016,592)
(4,683,279)
The notes on pages 23 to 40 are an integral part of these financial statements.
18
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Consolidated & Company Statement of Financial Position
At 30 September 2016
ECR Minerals plc company no. 5079979
Assets
Non-current assets
Property, plant and equipment
Investments in subsidiaries
Intangible assets
Other receivables
Current assets
Trade and other receivables
Available for sale financial assets
Taxation
Other current assets
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Interest bearing borrowings
Total liabilities
Net assets
Equity attributable to owners of the parent
Share capital
Share premium
Exchange reserve
Other reserves
Retained losses
Group
Company
30 September
2016
£
30 September
2015
£
30 September
2016
£
30 September
2015
£
Note
8
9
10
11
11
9
12
6,237
–
2,437,608
–
7,705
–
2,132,224
–
6,237
740,100
2,076,104
107,341
7,705
703,740
1,797,460
10,907
2,443,845
2,139,929
2,929,782
2,519,812
5,470
21,014
38,059
2,672
471,809
74,233
39,277
2,514
2,672
90,398
4,147
21,014
10,067
2,672
443,165
35,674
39,277
1,837
2,672
81,040
539,024
209,094
481,065
160,500
2,982,869
2,349,023
3,410,847
2,680,312
14
15
302,242
–
351,850
451,104
268,323
–
349,990
451,104
302,242
802,954
268,323
801,094
302,242
802,954
268,323
801,094
2,680,627
1,546,069
3,142,524
1,879,218
13
13
11,281,628
42,441,553
(166,535)
1,147,717
(52,023,736)
11,071,602
40,802,469
(69,649)
845,677
(51,104,030)
11,281,628
42,441,553
–
1,147,717
(51,728,374)
11,071,602
40,802,469
–
845,677
(50,840,530)
Total equity
2,680,627
1,546,069
3,142,524
1,879,218
The loss for the parent company for the year was £887,844 (2015: £4,674,506 loss).
The notes on pages 23 to 40 are an integral part of these financial statements. The financial statements on pages 17 to 40
were approved and authorised for issue by the Directors on 31 March 2017 and were signed on its behalf by:
William Howell
Non–Executive Chairman
Craig Brown
Director & Chief Executive Officer
19
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Consolidated Statement of Changes in Equity
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Share
capital
(Note 13)
£
Share
premium
(Note 13)
£
Exchange
reserve
Other
reserves
Retained
reserves
£
£
£
Total
£
10,483,166
–
40,131,118
–
(91,842)
–
485,160
–
(46,398,558)
(4,720,222)
4,609,044
(4,720,222)
Balance at 1 October 2014
Loss for the year
Reclassification of fair value
movements to Income
Statement on disposal of
available for sale assets
Gain on exchange translation
–
Total comprehensive expense
548,544
Conversion of loan notes
6,556
Shares issued
–
Share based payments
Warrants issued in lieu of finance cost
–
Shares issued in payment of creditors 33,336
–
–
–
–
–
357,055
288,444
–
–
25,852
–
22,193
22,193
–
–
–
–
–
–
–
14,750
–
14,750
22,193
–
–
–
288,831
71,686
–
(4,705,472)
–
–
–
–
–
(4,683,279)
905,599
295,000
288,831
71,686
59,188
Total transactions with owners,
recognised directly in equity
Balance at 30 September 2015
Loss for the year
Reclassification of fair value
movements to Income
Loss on exchange translation
588,436
671,351
–
360,517
–
1,620,304
11,071,602
–
40,802,469
–
(69,649)
–
845,677
–
(51,104,030)
(919,706)
1,546,069
(919,706)
–
–
(96,886)
–
–
(96,886)
–
Total comprehensive expense
34,673
Conversion of loan notes
147,500
Shares issued
–
Share issue costs
–
Share based payments
Warrants issued in lieu of finance cost
–
Shares issued in payment of creditors 27,853
–
501,582
952,500
(55,750)
–
–
240,752
(96,886)
–
–
–
–
–
–
–
–
–
–
123,737
178,303
–
(919,706)
–
–
–
–
–
–
(1,016,592)
536,255
1,100,000
(55,750)
123,737
178,303
268,605
Total transactions with owners,
recognised directly in equity
210,026
1,639,084
–
302,040
–
2,151,150
Balance at 30 September 2016
11,281,628
42,441,553
(166,535)
1,147,717
(52,023,736)
2,680,627
The notes on pages 23 to 40 are an integral part of these financial statements.
20
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Company Statement of Changes in Equity
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Balance at 1 October 2014
Loss for the year
Reclassification of fair value movements to
Income Statement on disposal of available
for sale assets
Total comprehensive expense
Conversion of loan notes
Shares issued
Share based payments
Warrants issued in lieu of finance cost
Shares issued in payment of creditors
Total transactions with owners, recognised
directly in equity
Balance at 30 September 2015
Loss for the year
Total comprehensive expense
Conversion of loan notes
Shares issued
Share issue costs
Share based payments
Warrants issued in lieu of finance cost
Shares issued in payment of creditors
Total transactions with owners, recognised
directly in equity
Share
capital
(Note 13)
£
Share
premium
(Note 13)
£
Other
reserves
Retained
reserves
£
£
Total
£
10,483,166
–
40,131,118
–
485,160
–
(46,180,774)
(4,674,506)
4,918,670
(4,674,506)
–
–
–
14,750
14,750
–
548,544
6,556
–
–
33,336
–
357,055
288,444
–
–
25,852
–
–
–
288,831
71,686
–
(4,659,756)
–
–
–
–
–
(4,659,756)
905,599
295,000
288,831
71,686
59,188
588,436
671,351
369,517
–
1,620,304
11,071,602
–
–
34,673
147,500
–
–
–
27,853
40,802,469
–
–
501,582
952,500
(55,750)
–
–
240,752
845,677
–
–
–
–
–
123,737
178,303
–
(50,840,530)
(887,844)
(887,844)
–
–
–
–
–
–
1,879,218
(887,844)
(887,844)
536,255
1,100,000
(55,750)
123,737
178,303
268,605
210,026
1,639,084
302,040
–
2,151,150
Balance at 30 September 2016
11,281,628
42,441,553
1,147,717
(51,728,374)
3,142,524
The notes on pages 23 to 40 are an integral part of these financial statements.
21
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Group
Company
Year ended
30 September
2016
£
Year ended
30 September
2015
£
Year ended
30 September
2016
£
Year ended
30 September
2015
£
Note
Net cash flow used in operations
23
(494,118)
(654,704)
(483,553)
(595,822)
Investing activities
Purchase of property, plant & equipment
Increase in exploration assets
Cash introduced with re-admission of subsidiary
Investment in subsidiaries
Proceeds from sale of available for sale investments
Investment in available for sale investments
Interest income
10
–
(319,580)
–
–
–
–
484
–
(719,108)
10,125
–
68,022
(39,276)
28
–
(257,818)
–
(79,535)
–
–
35
–
(632,398)
–
(79,732)
68,022
(39,276)
28
Net cash used in investing activities
(319,096)
(680,209)
(337,318)
(683,356)
Financing activities
Proceeds from issue of share capital
Proceeds from issue of convertible loan notes
Repayment of convertible loan notes
Finance costs on fundraising
Interest paid and other financing costs
1,100,000
418,463
(248,332)
(55,750)
(31,385)
295,000
494,774
–
(38,956)
(1,384)
1,100,000
418,463
(248,332)
(55,750)
(31,385)
295,000
494,774
–
(38,956)
–
Net cash from financing activities
1,182,996
749,434
1,182,996
750,818
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of changes in foreign exchange rates
369,782
90,398
11,629
(585,479)
642,056
33,821
362,125
81,040
–
(528,360)
609,400
–
Cash and cash equivalents at end of the year
12
471,809
90,398
443,165
81,040
Non-cash transactions:
1. During the year £758,554 (2015: £955,913) of convertible loans and interest thereon were converted into shares.
2. Settlement of creditors of £140,863 (2015:£8,874) with ordinary shares.
3. Purchase of assets of £53,259 (2015:£nil) settled with ordinary shares.
The notes on pages 23 to 40 are an integral part of these financial statements.
22
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Notes to the Financial Statements
For the year ended 30 September 2016
1 General information
The Company and the Group operated mineral exploration
and development projects. The Group’s principal interests are
located in Argentina, the Philippines and Australia.
The Company is a public limited company incorporated and
domiciled in England. The registered office of the Company
and its principal place of business is Unit 117, Chester House,
81-83 Fulham High Street, Fulham Green, London SW6 3JA.
The Company is listed on the Alternative Investment Market
(AIM) of the London Stock Exchange.
2 Accounting policies
Overall considerations
The principal accounting policies that have been used in the
preparation of these consolidated financial statements are set
out below. The policies have been consistently applied unless
otherwise stated.
Basis of preparation
The financial statements of both the Group and the Parent
Company have been prepared in accordance with International
Financial Reporting Standards (IFRSs) and Interpretations
issued by the IFRS Interpretations Committee (IFRIC) as
adopted by the European Union and with those parts of the
Companies Act 2006 applicable to companies reporting under
IFRS. These are the standards, subsequent amendments and
related interpretations issued and adopted by the International
Accounting Standard Board (IASB) that have been endorsed
by the European Union at the year end. The consolidated
financial statements have been prepared under the historical
cost convention, as modified by the revaluation of certain
financial instruments. The Directors have taken advantage of
the exemption available under Section 408 of the Companies
Act 2006 and have not prepared an Income Statement or a
Statement of Comprehensive Income for the Company alone.
The Group and Parent Company financial statements have
been prepared on a going concern basis as explained in the
Report of the Directors on page 12.
New Accounting Standards and Interpretations
Effective during the year
During the year the Group has adopted the following standards
and amendments:
• Annual Improvements to IFRSs 2010–2012 Cycle
• Annual Improvements to IFRSs 2011–2013 Cycle
•
Amendments to IAS 19: Defined Benefit Plans: Employee
Contributions
The adoption of these standards and amendments did not
have any impact on the financial position or performance of the
Group.
Not yet effective
At the date of authorisation of these Group Financial
Statements and the Parent Company Financial Statements, the
following Standards, amendments and interpretations were
endorsed by the EU but not yet effective:
•
•
•
•
•
•
•
•
Amendments to IFRS 11: Accounting for Acquisitions of
Interests in Joint Operations
Amendments to IAS 16 and IAS 38: Clarification of
Acceptable Methods of Depreciation and Amortisation
Annual Improvements to IFRSs 2012–2014 Cycle
Amendments to IAS 1: Disclosure Initiative
Amendments to IAS 27: Equity Method in Separate
Financial Statements
Amendments to IFRS 10, IFRS 12 and IAS 28: Investment
Entities: Applying the Consolidation Exception
IFRS 15 Revenue from Contracts with Customers including
amendments to IFRS 15
IFRS 9 Financial Instruments
In addition to the above there are also the following standards
and amendments that have not yet been endorsed by the EU:
•
•
•
•
•
•
•
•
IFRS 14 Regulatory Deferral Accounts
Amendments to IFRS 10 and IAS 28: Sale or Contribution
of Assets between an Investor and its Associate or Joint
Venture (effective date postponed indefinitely by IASB)
Amendments to IAS 12: Recognition of Deferred Tax
Assets for Unrealised Losses
Amendments to IAS 7: Disclosure Initiative
Clarifications to IFRS 15 Revenue from Contracts with
Customers
Amendments to IFRS 2: Classification and Measurement
of Share-based Payment Transactions
Annual Improvements to IFRS Standards 2014-2016 Cycle
IFRIC Interpretation 22 Foreign Currency Transactions and
Advance Consideration
The Group intends to adopt these standards when they
become effective. The introduction of these new standards
and amendments is not expected to have a material impact on
the Group or Company.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and two of its subsidiaries made
up to 30 September 2016. Subsidiary undertakings acquired
during the period are recorded under the acquisition method
of accounting and their results consolidated from the date of
acquisition, being the date on which the Company obtains
control, and continue to be consolidated until the date such
control ceases.
The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power over the entity.
Going concern
It is the prime responsibility of the Board to ensure the Group
and Company remains going concern. At 30 September 2016,
the Group had cash and cash equivalents of £471,809 and no
borrowings. The Group’s financial projections and cash flow
forecasts covering a period of at least twelve months from
the date of approval of these financial statements show that,
provided the terms of the subscription by Shenyang are fulfilled
in accordance with the terms set out in the Subscription
Agreement dated 26 February 2017, the Group will have
sufficient available funds in order to meet its contracted and
23
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Notes to the Financial Statements continued
For the year ended 30 September 2016
committed expenditure. Further details are included in Note 24
to the financial statements. Whilst the Directors are confident
the conditional terms of the Subscription Agreement will be
met satisfactorily, these had not been entirely fulfilled at the
date of approval of the financial statements. The Group has
to date received the non-refundable deposit of £100,000 from
Shenyang in connection with the conditional subscription. In
addition, the Directors are confident in the ability of the Group
to raise additional funding, if required, from the issue of equity
and/or the sale of assets.
On the basis of their assessment of the financial position, the
Directors have a reasonable expectation that the Group will be
able to continue in operational existence for the foreseeable
future and continue to adopt the going concern basis of
accounting in preparing these Financial Statements.
Cash and cash equivalents
Cash includes petty cash and cash held in current bank
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.
Property, plant and equipment
Property, plant and equipment are stated at cost, less
accumulated depreciation and any provision for impairment
losses.
Depreciation is charged on each part of an item of property,
plant and equipment so as to write off the cost of assets less
the residual value over their estimated useful lives, using the
straight–line method. Depreciation is charged to the income
statement. The estimated useful lives are as follows:
Office equipment
Furniture and fittings
Machinery and equipment
3 years
5 years
5 years
Expenses incurred in respect of the maintenance and
repair of property, plant and equipment are charged against
income when incurred. Refurbishments and improvements
expenditure, where the benefit is expected to be long lasting,
is capitalised as part of the appropriate asset.
An item of property, plant and equipment ceases to be
recognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising
on cessation of recognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement in the
year the asset ceases to be recognised.
Exploration and development costs
All costs associated with mineral exploration and investments
are capitalised on a project–by–project basis, pending
determination of the feasibility of the project. Costs incurred
include appropriate technical and administrative expenses but
not general overheads. If an exploration project is successful,
the related expenditures will be transferred to mining assets
and amortised over the estimated life of the commercial ore
reserves on a unit of production basis. Where a licence is
relinquished or a project abandoned, the related costs are
written off in the period in which the event occurs. Where the
Group maintains an interest in a project, but the value of the
project is considered to be impaired, a provision against the
relevant capitalised costs will be raised.
The recoverability of all exploration and development costs is
dependent upon the discovery of economically recoverable
reserves, the ability of the Company to obtain necessary
financing to complete the development of reserves and future
profitable production or proceeds from the disposition thereof.
Impairment testing
Individual assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount of
an asset may exceed its recoverable amount, being the higher
of net realisable value and value in use. Any such excess of
carrying value over recoverable amount or value in use is taken
as a debit to the income statement.
Intangible exploration assets are not subject to amortisation
and are tested annually for impairment.
Provisions
A provision is recognised in the Statement of Financial
Position when the Group or Company has a present legal or
constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required
to settle the obligation. If the effect is material, provisions are
determined by discounting the expected future cash flows at
a pre–tax rate that reflects current market assessments of the
time value of money and, where appropriate, the risks specific
to the liability.
Leased assets
In accordance with IAS 17, leases in terms of which the Group
or Company assumes substantially all the risks and rewards of
ownership are classified as finance leases. All other leases are
regarded as operating leases and the payments made under
them are charged to the income statement on a straight line
basis over the lease term.
Taxation
There is no current tax payable in view of the losses to date.
Deferred income taxes are calculated using the Statement of
Financial Position liability method on temporary differences.
Deferred tax is generally provided on the difference between
the carrying amounts of assets and liabilities and their tax
bases. However, deferred tax is not provided on the initial
recognition of goodwill or on the initial recognition of an
asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries
and joint ventures is not provided if reversal of these temporary
differences can be controlled by the Company and it is
probable that reversal will not occur in the foreseeable future.
In addition, tax losses available to be carried forward as well
as other income tax credits to the Company are assessed for
recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting.
Deferred tax assets are recognised to the extent that it is
probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
24
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
and deferred tax assets and liabilities are calculated at tax
rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted
at the Statement of Financial Position date.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the income statement, except
where they relate to items that are charged or credited directly
to equity, in which case the related current or deferred tax is
also charged or credited directly to equity.
Investments in subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
The investments in subsidiaries held by the Company
are valued at cost less any provision for impairment that
is considered to have occurred, the resultant loss being
recognised in the income statement.
Equity
Equity comprises the following:
•
•
•
•
•
“Share capital” represents the nominal value of equity
shares, both ordinary and deferred.
“Share premium” represents the excess over nominal
value of the fair value of consideration received for equity
shares, net of expenses of the share issues.
“Other reserves” represent the equity component of
convertible debentures issued, plus the fair values of share
options and warrants issued.
“Retained reserves” include all current and prior year
results, including fair value adjustments on available for
sale financial assets, as disclosed in the consolidated
statement of comprehensive income.
“Exchange reserve” includes the amounts described in
more detail in the following note on foreign currency below.
Foreign currency translation
The consolidated financial statements are presented in pounds
sterling which is the functional and presentational currency
representing the primary economic environment of the Group.
Foreign currency transactions are translated into the respective
functional currencies of the Company and its subsidiaries using
the exchange rates prevailing at the date of the transaction
or at an average rate where it is not practicable to translate
individual transactions. Foreign exchange gains and losses are
recognised in the income statement.
Monetary assets and liabilities denominated in a foreign
currency are translated at the rates ruling at the Statement of
Financial Position date.
The assets and liabilities of the Group’s foreign operations are
translated at exchange rates ruling at the Statement of Financial
Position date. Income and expense items are translated at
the average rates for the period. Exchange differences are
classified as equity and transferred to the Group’s exchange
reserve. Such differences are recognised in the income
statement in the periods in which the operation is disposed of.
Share–based payments
The Company operates equity–settled share–based
remuneration plans for the remuneration of some of its
employees. The Company awards share options to certain
Company Directors and employees to acquire shares of the
Company. Additionally, the Company has issued warrants to
providers of loan finance.
All goods and services received in exchange for the grant of
any share–based payment are measured at their fair values.
Where employees are rewarded using share–based payments,
the fair values of employees’ services are determined indirectly
by reference to the fair value of the instrument granted to the
employee.
The fair value is appraised at the grant date and excludes
the impact of non–market vesting conditions. Fair value
is measured by use of the Black Scholes model. The
expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of
non–transferability, exercise restrictions, and behavioural
considerations.
All equity–settled share–based payments are ultimately
recognised as an expense in the income statement with a
corresponding credit to “other reserves”.
If vesting periods or other non–market vesting conditions
apply, the expense is allocated over the vesting period, based
on the best available estimate of the number of share options
expected to vest. Estimates are subsequently revised if there
is any indication that the number of share options expected
to vest differs from previous estimates. Any cumulative
adjustment prior to vesting is recognised in the current period.
No adjustment is made to any expense recognised in prior
years if share options ultimately exercised are different to that
estimated on vesting.
Upon exercise of share options the proceeds received net of
attributable transaction costs are credited to share capital and,
where appropriate, share premium.
A gain or loss is recognised in profit or loss when a financial
liability is settled through the issuance of the Company’s own
equity instruments. The amount of the gain or loss is calculated
as the difference between the carrying value of the financial
liability extinguished and the fair value of the equity instrument
issued.
Financial instruments
The Group’s financial assets comprise cash and cash
equivalents, investments and loans and receivables. Financial
assets are assigned to the respective categories on initial
recognition, depending on the purpose for which they were
acquired. This designation is re–evaluated at every reporting
date at which a choice of classification or accounting treatment
is available.
The Group’s loans, investments and receivables are
non–derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans and
receivables are measured at fair value on initial recognition.
After initial recognition they are measured at amortised cost
25
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Notes to the Financial Statements continued
For the year ended 30 September 2016
using the effective interest rate method, less any provision
for impairment. Any change in their value is recognised in
profit or loss. The Group’s receivables fall into this category of
financial instruments. Discounting is omitted where the effect
of discounting is immaterial. All receivables are considered for
impairment on a case–by–case basis when they are past due
at the Statement of Financial Position date or when objective
evidence is received that a specific counterparty will default.
Investments that are held as available for sale financial
assets are financial assets that are not classified in any other
categories. After initial recognition, available for sale financial
assets are measured at fair value. Any gains or losses from
changes in the fair value of the financial asset are recognised in
equity, except that impairment losses, foreign exchange gains
and losses on monetary items and interest calculated using
the effective interest method are recognised in the income
statement.
Where there is a significant or prolonged decline in the fair
value of an available for sale financial asset (which constitutes
objective evidence of impairment), the full amount of the
impairment, including any amount previously charged to equity,
is recognised in the consolidated income statement. The
Directors consider a significant decline to be one in which the
fair value is below the weighted average cost by more than
25%. A prolonged decline is considered to be one in which the
fair value is below the weighted average cost for a period of
more than twelve months.
If an available for sale equity security is impaired, any further
declines in the fair value at subsequent reporting dates are
recognised as impairments. Reversals of impairments of
available for sale equity securities are not recorded through the
income statement. Upon sale, accumulated gains or losses are
recycled through the income statement.
Financial liabilities, which are measured at amortised cost, and
equity instruments are classified according to the substance
of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest
in the assets of the entity after deducting all of its financial
liabilities. Any instrument that includes a repayment obligation
is classified as a liability.
Where the contractual liabilities of financial instruments
(including share capital) are equivalent to a similar debt
instrument, those financial instruments are classed as financial
liabilities, and are presented as such in the Statement of
Financial Position. Finance costs and gains or losses relating
to financial liabilities are included in the income statement.
Finance costs are calculated so as to produce a constant rate
of return on the outstanding liability.
Where the contractual terms of share capital do not have
any features meeting the definition of a financial liability then
such capital is classed as an equity instrument. Dividends and
distributions relating to equity instruments are debited direct
to equity.
Compound financial instruments
Compound financial instruments comprise both liability and
either equity components or embedded derivatives.
For compound instruments including equity components, at
issue date the fair value of the liability component is estimated
by discounting its future cash flows at an interest rate that
would have been payable on a similar debt instrument without
any equity conversion option. The liability component is
accounted for as a financial liability. The difference between
the net issue proceeds and the liability component, at the
time of issue, is the residual or equity component, which is
accounted for as an equity reserve.
Embedded derivatives included within compound instruments
are calculated using the Black Scholes model and are also
included within liabilities, but are measured at fair value in the
Statement of Financial Position, with changes in the fair value
of the derivative component recognised in the consolidated
income statement. The amounts attributable to the liability
components equal the discounted cash flows.
Transaction costs that relate to the issue of a compound
financial instrument are allocated to the liability and equity
components of the instrument in proportion to the allocation of
the proceeds.
The interest expense on the liability component is calculated by
applying the effective interest rate for the liability component
of the instrument. The difference between any repayments
and the interest expense is deducted from the carrying amount
of the liability.
Upon conversion of loan note debt the corresponding carrying
value of loan note liability and equity reserve is released, and
the difference between these and the nominal value of the
shares issued on conversion is recognised as a share premium.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with
IFRSs requires management to make judgements, estimates
and assumptions that affect the application of policies and
reported amounts of assets and liabilities, income and
expenses. The estimates and associated assumptions are
based on historical experience and various other factors that
are believed to be reasonable under the circumstances, the
results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on
an on–going basis. Revisions to accounting estimates are
recognised in the year in which the estimate is revised if the
revision affects only that year or in the year of the revision
and future years if the revision affects both current and future
years.
The most critical accounting policies and estimates in
determining the financial condition and results of the Group are
those requiring the greater degree of subjective or complete
judgement. These relate to:
• capitalisation of exploration costs (Note 10);
• share–based payments (Note 6 and Note 13);
26
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 3 Operating loss
The operating loss is stated after charging:
Depreciation of property, plant and equipment
Operating lease expenses
Share–based payments
Auditors’ remuneration – fees payable to the Company’s auditor for the audit of
Year ended
30 September
2016
£
1,468
14,126
123,737
Year ended
30 September
2015
£
3,111
13,583
288,831
the parent company and consolidated financial statements
22,000
24,750
4 Earnings per share
Basic and Diluted
Year ended
30 September
2016
Year ended
30 September
2015
Weighted number of shares in issue during the year
9,181,895,384
3,744,400,803
Loss from continuing operations attributable to owners of the parent
£
(919,706)
£
(4,720,222)
Basic earnings per share has been calculated by dividing the loss attributable to equity holders of the company after taxation by
the weighted average number of shares in issue during the year. There is no difference between the basic and diluted earnings
per share as the effect on the exercise of options and warrants would be to decrease the earnings per share.
Details of share options and warrants that could potentially dilute earnings per share in future periods is set out in Note 13.
5 Corporation tax
The relationship between the expected tax expense based on the corporation tax rate of 20% for the year ended 30 September
2016 (2015: 20.5%) and the tax expense actually recognised in the income statement can be reconciled as follows:
Group loss for the year
Loss on activities at effective rate of corporation tax of 20% (2015: 20.5%)
Expenses not deductible for tax purposes
Income not taxable
Depreciation in excess of capital allowances
Loss carried forward on which no deferred tax asset is recognised
Deferred tax (see below)
Total income tax expense
Year ended
30 September
2016
£
(919,706)
(183,941)
75,091
(7)
294
108,563
–
–
Year ended
30 September
2015
£
(1,502,738)
(308,061)
96,977
(6)
638
210,452
(3,217,484)
(3,217,484)
The Company has unused tax losses of approximately £3,246,000 (2015: £3,200,000). The related deferred tax asset has not
been recognised in respect of these losses as there is no certainty in regards to the level and timing of future profits.
27
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Notes to the Financial Statements continued
For the year ended 30 September 2016
5 Corporation tax continued
Deferred tax (timing differences)
The movement in the deferred tax asset in the year is as follows:
At 1 October
On re-acquisition of subsidiary
Impairment of asset
At 30 September
6 Staff numbers and costs
Group and Company
Directors
Administration
Total
The aggregate payroll costs of these persons were as follows:
Staff wages and salaries
Directors’ cash based emoluments
Share-based payments
2016
£
–
–
–
–
2015
£
–
3,217,484
(3,217,484)
–
Year ended
30 September
2016
Number
Year ended
30 September
2015
Number
3
1
4
£
39,557
213,167
–
252,724
3
2
5
£
68,249
226,200
288,831
583,280
The remuneration of the directors, who are the key management personnel of the Group, in aggregate for each of the categories
specified in IAS 24 ‘Related Party Disclosures’ was as follows:
Directors’ cash based emoluments
Employer’s national insurance contributions
Short-term employment
Share-based payments
£
£
213,167
6,626
219,793
–
219,793
226,200
25,678
251,878
182,697
434,575
Directors’ remuneration
As required by AIM Rule 19, details of remuneration earned in respect of the financial year ended 30 September 2016 by each
Director are set out below:
Year ended 30 September 2016
Salary
Paid
£
Accrued
£
Bonus
£
Share–based
payments
£
40,834
110,833
18,000
43,500
213,167
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
£
40,834
110,833
18,000
43,500
213,167
Director
C Brown
S Clayson
R Watts
W Howell
28
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
6 Staff numbers and costs continued
Year ended 30 September 2015
Director
S Clayson
P Johnson
R Watts
W Howell
Paid
£
50,000
37,500
13,200
–
Salary
Accrued
£
100,000
–
10,500
15,000
100,700
125,500
Bonus
£
Share–based
payments
£
98,224
49,112
35,361
–
–
–
–
–
–
Total
£
248,224
86,612
59,061
15,000
182,697
408,897
The highest paid Director received remuneration of £110,833 (2015: £150,000), excluding share–based payments.
R Watts received remuneration totalling £Nil (2015: £5,700) via a service company.
W Howell received remuneration totalling £43,500 (2015: £Nil) via a service company.
The amounts in the year ended 30 September 2015 described as share–based payments represent the deemed cost of share
options granted under the Company’s unapproved share option plan. The share options concerned are exercisable at £0.00275
(0.275p) per share. The closing mid–market price of the Company’s ordinary shares on AIM on the day prior to the publication of
this report is 1.85p per share. Details of each Director’s share options and interests in the Company’s shares are shown in the
Directors’ Report.
7 Finance income and costs
Finance costs
Issue costs of convertible loans amortised (Note 13,15)
Interest on convertible loans
Fair value of warrants issued under the loan finance agreement
Loss on the settlement of loan for equity
Other interest payable
Finance income
Interest on cash and cash equivalents
Net finance costs
8 Property, plant and equipment
Group
Cost
At 1 October 2015
Exchange differences arising on translation
At 30 September 2016
Depreciation
At 1 October 2015
Depreciation for the year
Exchange differences arising on translation
At 30 September 2016
Net book value
At 1 October 2015
At 30 September 2016
Year ended
30 September
2016
£
123,894
77,030
–
65,174
1,413
Year ended
30 September
2015
£
93,698
63,466
162,632
–
1,384
267,511
321,180
2016
£
(484)
2015
£
(28)
267,027
321,152
Furniture
&
fittings
£
3,445
–
3,445
2,880
70
–
2,950
565
495
Office
equipment
£
Machinery &
equipment
£
17,852
(123)
17,729
13,804
1,012
(123)
14,693
4,048
3,036
4,291
(119)
4,172
1,199
386
(119)
1,466
3,092
2,706
Total
£
25,588
(242)
25,346
17,883
1,468
(242)
19,109
7,705
6,237
29
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Notes to the Financial Statements continued
For the year ended 30 September 2016
8 Property, plant and equipment continued
Company
Cost
At 1 October 2015
At 30 September 2016
Depreciation
At 1 October 2015
Depreciation for the year
At 30 September 2016
Net book value
At 1 October 2015
At 30 September 2016
Furniture
&
fittings
£
3,445
3,445
2,880
70
2,950
565
495
Office
equipment
£
Machinery &
equipment
£
17,414
17,414
3,865
3,865
Total
£
24,724
24,724
13,366
1,012
14,378
4,048
3,036
773
386
17,019
1,468
1,159
18,487
3,092
2,706
7,705
6,237
The Group and the Company’s property, plant and equipment are free from any mortgage or charge.
The comparable table for 2015 is detailed below.
Group
Cost
At 1 October 2014
Exchange differences arising on translation
At 30 September 2015
Depreciation
At 1 October 2014
Depreciation for the year
Exchange differences arising on translation
At 30 September 2015
Net book value
At 1 October 2014
At 30 September 2015
Company
Cost
At 1 October 2014
At 30 September 2015
Depreciation
At 1 October 2014
Depreciation for the year
At 30 September 2015
Net book value
At 1 October 2014
At 30 September 2015
30
Furniture
&
fittings
£
3,445
–
3,445
2,740
140
–
2,880
705
565
Furniture
&
fittings
£
3,445
3,445
2,740
140
2,880
705
565
Office
equipment
£
Machinery &
equipment
£
Total
£
25,621
(33)
25,588
4,307
(16)
4,291
295
918
(14)
14,801
3,111
(29)
1,199
17,883
4,012
3,092
10,820
7,705
17,869
(17)
17,852
11,766
2,054
(16)
13,804
6,103
4,048
Office
equipment
£
Machinery &
equipment
£
17,414
17,414
3,865
3,865
11,342
2,024
13,366
6,072
4,048
–
773
773
3,865
3,092
Total
£
24,724
24,724
14,082
2,937
17,019
10,642
7,705
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
9
Investments
Cost as at 1 October 2015
Addition
Balance at 30 September 2016
The comparable table for 2015 is detailed below:
Cost as at 1 October 2014
Addition
Balance at 30 September 2015
Investment in subsidiaries
Investment in
subsidiaries
£
703,740
36,360
740,100
Investment in
subsidiaries
£
624,008
79,732
703,740
At 30 September 2016, the Company had interests in the following subsidiary undertakings:
Subsidiaries:
Ochre Mining SA
Mercator Gold Australia Pty Ltd
Principal
country of
incorporation
Argentina
Australia
USA
Warm Springs Renewable Energy Corporation
Copper Flat Corporation (formerly New Mexico Copper Corporation) USA
Address of the subsidiaries:
Principal
activity
Mineral
Exploration
Mineral
Exploration
Dormant
Dormant
Description
and effective
country of
operation
Proportion of
shares held
Argentina
100%
Australia
100%
USA
USA
90%
100%
Ochre Mining SA
Mercator Gold Australia Pty Ltd
Lamadrid 33, M5521JCV, Mendoza, Argentina
128A Camberwell Circuit, Robina, Queensland
4226 Australia
Warm Springs Renewable Energy Corporation
315 Paseo De Peralty, Santa Fe, NM 87501, USA
Copper Flat Corporation (formerly New Mexico Copper Corporation) 315 Paseo De Peralty, Santa Fe, NM 87501, USA
Available for sale financial assets
Quoted investments
At 1 October
Additions
Disposals
Impairment
Fair value movements
At 30 September
2016
£
39,277
–
–
–
(18,263)
21,014
2015
£
178,866
39,276
(54,286)
(124,579)
–
39,277
The £178,866 in 2015 represented the value of the Company’s holding of shares of THEMAC Resources Group Ltd (“THEMAC”).
The fair value was based on quoted market prices at the year end. THEMAC’s common shares are listed on TSX Venture
Exchange (TSX–V: MAC).
31
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Notes to the Financial Statements continued
For the year ended 30 September 2016
9
Investments continued
At 30 September 2014, the Company beneficially held approximately 12% of THEMAC’s issued common shares. The Company
also held common share purchase warrants, which if exercised would have potentially increased the Company’s holding of
common shares to approximately 14% on a fully diluted basis. During the year ended 30 September 2015, the Company disposed
of its entire holding in THEMAC, both common shares and common share purchase warrants, realising a loss on disposal of
£124,579.
The available for sale financial asset at 30 September 2015 and 2016 comprises shares in Tiger International Resources Inc.
Other financial assets
Warrants in a listed entity
At 1 October
Disposals
Fair value movements
At 30 September
2016
£
–
–
–
–
2015
£
26,196
(13,736)
(12,460)
–
10 Intangible assets – exploration and development costs
At 1 October
Additions
Translation difference
At 30 September
Group
Company
2016
£
2015
£
2016
£
2015
£
2,132,224
399,319
(93,935)
1,422,493
719,108
(9,377)
1,797,460
278,643
–
1,165,062
632,398
–
2,437,608
2,132,224
2,076,103
1,797,460
An operating segment level summary of exploration and development costs of the Group is presented below:
Danglay Gold Project, Philippines
SLM Gold Project, Argentina
Avoca and Bailieston Gold Project, Australia
At 30 September
Danglay Gold Project, Philippines
2016
£
1,164,982
1,117,335
155,291
2015
£
968,176
1,164,048
–
2,437,608
2,132,224
In April 2013 ECR entered into an earn-in and joint venture agreement (the “Agreement”) with Cordillera Tiger and Tiger
International in relation to the Danglay Gold Project, Philippines. Cordillera Tiger is a Philippine corporation and the holder of the
Danglay Gold Exploration Permit (“EP”). The Agreement gave ECR the exclusive right and option to earn a 25% or 50% interest
in Cordillera Tiger and thereby in the Danglay Gold Project. ECR has contributed more than $500,000 of expenditures in relation
to Danglay and completed a Mineral Resource estimate in accordance with Canadian NI 43-101. In fulfilling these two conditions,
ECR has earned a 25% interest in the project.
The Agreement was terminated in August 2016. The board of Cordillera Tiger Gold Resources, Inc (CTGR) passed a resolution
on the morning of 31 March 2017 to issue the 25% shareholding due to ECR. The issue is subject to the approval of the local
Securities Commission in the Philippines.
The EP of the Danglay project expired on 30 September 2015, and an application for renewal of the EP is pending. A new
government took office in the Philippines on 30 June 2016, and the new administration has to date adopted a far from supportive
stance towards the mining industry. Despite this, the Group is not currently aware of any reason why the pending application for
renewal of the Danglay EP will not be granted, although there can be no guarantee and no certainty to the likely timeframe. The
Directors are hopeful that the political situation for the mining industry in the Philippines will improve in future.
The Group has stopped exploration activities at Danglay since August 2016. However, with its NI 43 101 Mineral Resource and
target for further exploration published in December 2015, Danglay Gold Project remains a project of intrinsic interest to the
Group. Should the issues disclosed above be satisfactorily resolved and the Group wishes to resume exploration activities at
Danglay, the Board will need to find additional funding.
32
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
11 Trade and other receivables
Non-current assets
Amount owed by a subsidiary
Current assets
Prepayments and accrued income
Group
Company
2016
£
2015
£
2016
£
2015
£
–
–
107,341
10,907
5,470
74,233
4,147
35,674
The short–term carrying values are considered to be a reasonable approximation of the fair value.
The amount owed by a subsidiary is stated net of impairment provision made in prior years.
12 Cash and cash equivalents
Cash and cash equivalents consisted of the following:
Deposits at banks
Cash on hand
13 Share capital and share premium accounts
Group
Company
2016
£
2015
£
2016
£
2015
£
471,643
166
89,873
525
443,009
156
80,857
183
471,809
90,398
443,165
81,040
The share capital of the Company consists of three classes of shares: ordinary shares of 0.001p each which have equal rights
to receive dividends or capital repayments and each of which represents one vote at shareholder meetings; and two classes of
deferred shares, one of 9.9p each and the other of 0.099p each, which have limited rights as laid out in the Company’s articles:
in particular deferred shares carry no right to dividends or to attend or vote at shareholder meetings and deferred share capital is
only repayable after the nominal value of the ordinary share capital has been repaid.
a)
Changes in issued share capital and share premium:
Number of
Shares
4,842,714,636
At 1 October 2015
Issue of shares less costs 14,750,000,000
Shares issued in payment
of creditors
Loan converted into
shares
3,467,322,467
2,785,250,850
Ordinary
shares
£
48,427
147,500
27,853
34,673
Deferred
shares
£
7,194,816
–
Deferred
‘B’ shares
£
Total
shares
£
Share
premium
£
Total
£
3,828,359 11,071,602 40,802,469 51,874,071
1,044,250
896,750
147,500
–
–
–
–
–
27,853
175,577
268,605
34,673
566,757
536,255
Balance at
30 September 2016
25,845,287,953
258,453
7,194,816
3,828,359 11,281,628 42,441,553 53,723,181
All the shares issued are fully paid up and none of the Company’s shares are held by any of its subsidiaries.
33
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Notes to the Financial Statements continued
For the year ended 30 September 2016
13 Share capital and share premium accounts continued
Potential issue of ordinary shares
b)
Share options
The number and weighted average exercise prices of share options valid at the year–end are as follows:
Exercisable at the beginning of the year
Granted during the year
Weighted
average
exercise price
2016
£
0.003
–
Number of
options
2016
350,140,427
–
Weighted
average
exercise price
2015
£
0.004
0.003
Number of
options
2015
141,200,000
208,940,427
Exercisable at the end of the year
0.003
350,140,427
0.003
350,140,427
The options outstanding at 30 September 2016 have a weighted average remaining contractual life of three years
(2015: four years).
The options outstanding at the end of the year have the following expiry date and exercise prices:
Date granted
Expiry Date
Exercise Price in
6 January 2011
12 August 2013
31 December 2014
Share-based payments
5 January 2021
11 August 2018
30 December 2019
£0.025
£0.002
£0.00275
No. of Options
11,200,000
130,000,000
208,940,427
The fair value of services received in return for share options granted are measured by reference to the fair value of share options
granted. The estimate of the fair value of the services is measured based on the Black Scholes valuation model.
Fair value of share options and assumptions
Fair value at measurement date
Weighted average share price
Weighted average exercise price
Expected volatility
Average option life in years
Expected dividends
Weighted average risk–free interest rate (based on national government bonds)
2015
£
288,831
0.00190
0.00275
109%
5
–
1.178%
The expected volatility is based on the historical volatility of the Company over the previous five years, and reflects the
assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome.
There are service related conditions associated with share option exercises but no market related conditions.
Critical estimate
The Directors have assumed a life of 5 years; however a material difference would arise if the life were lowered to 2.9 years or
below.
Share options granted
Total expense recognised as employee costs
2015
208,940,427
£288,831
34
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
13 Share capital and share premium accounts continued
Share warrants
Exercisable at the beginning of the year
Granted during the year
Weighted
average
exercise price
2016
£
Number of
warrants
2016
Weighted
average
exercise price
2015
£
Number of
warrants
2015
0.0008
182,745,730
0.0002 2,947,521,858
0.0012
0.0004
97,192,506
85,553,224
Exercisable at the end of the year
0.0003 3,130,267,588
0.0008
182,745,730
The assessed fair value of the warrants granted was determined using the Black Scholes model. The following inputs to the
model were used:
Fair value at measurement date
No. of warrants granted
Share price at grant date
Exercise price
Expected volatility
Life in years
Expected dividends
Weighted average risk–free interest rate
(based on national government bonds)
Nov 2015
Mar 2016
Apr 2016
May 2016
£178,303
1,250,000,000
£0.0028
£0.0040
104 %
3
–
£27,236
171,755,725
£0.0026
£0.0033
109 %
3
–
£19,539
116,666,666
£0.0026
£0.0028
110 %
3
–
£11,809
80,985,915
£0.0023
£0.0027
110 %
3
–
0.53%
0.53%
0.50%
0.55%
June 2016
Sep 2016
Sep 2016
Fair value at measurement date
No. of warrants granted
Share price at grant date
Exercise price
Expected volatility
Life in years
Expected dividends
Weighted average risk–free interest rate (based on national government bonds)
£10,447
94,780,219
£0.0018
£0.0023
109 %
3
–
0.50%
£36,326
900,000,000
£0.0001
£0.0001
106 %
3
–
0.15%
£2,173
333,333,333
£0.0006
£0.0015
110 %
3
–
0.085%
The expected volatility is based on the historical volatility of the Company over the previous three years, and reflects the
assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome.
The warrants outstanding at the end of the year have the following expiry date and exercise prices:
Date granted
Expiry Date
Exercise Price
23 November 2015
8 December 2015
9 March 2016
4 April 2016
6 May 2016
2 June 2016
6 September 2016
6 September 2016
6 September 2016
20 September 2016
22 November 2018
7 December 2018
8 March 2019
3 April 2019
5 May 2019
1 June 2019
5 September 2016
5 September 2016
5 September 2016
19 September 2016
0.0004
0.0004
0.000328
0.000281
0.000266
0.000228
0.000050
0.000150
0.00010
0.000150
No. of Warrants
900,000,000
350,000,000
171,755,725
116,666,666
80,985,915
94,780,219
400,000,000
500,000,000
200,000,000
133,333,333
The fair value of warrants issued amounting to £178,303 and £123,737 have been recognised respectively in other reserves and
profit or loss.
35
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Notes to the Financial Statements continued
For the year ended 30 September 2016
14 Trade and other payables
Trade payables
Social security and employee taxes
Other creditors and accruals
15 Interest bearing liabilities
Group and Company
YA Global Master SPV Ltd loan - unsecured
Total
YA Global Master SPV Ltd loan
Group
Company
2016
£
47,629
7,455
247,158
2015
£
6,585
9,057
336,208
2016
£
33,757
7,455
227,111
2015
£
6,585
7,197
336,208
302,242
351,850
268,323
349,990
2016
£
–
–
2015
£
451,104
451,104
On 3 September 2014 the Company entered into an agreement in relation to a convertible loan facility (the “Facility”) of up to
US$10 million to be made available by YA Global Master SPV Ltd (the “Investor”), an investment fund managed by Yorkville
Advisors Global, LP. The Facility, which was available to the Company for three years, provided for an initial loan tranche of
principal amount US$1.5 million (the “Initial Tranche”), which was drawn down by ECR in September 2014, and for future loans
up to an aggregate principal amount of US$10 million.
The outstanding principal amount of a tranche (a “Loan”) drawn down by ECR under the Facility was convertible at YA Global’s
option into ordinary shares of the Company of 0.001p (“Ordinary Shares”) on the following terms: (a) at 92.5% of the average
daily volume weighted average price (VWAP) of the Ordinary Shares during the ten trading days preceding the conversion date,
conversion on this basis being restricted to a maximum amount of US$250,000 per calendar month; or (b) at 150% of the average
daily VWAP of the Ordinary Shares during the five trading days preceding drawdown of any subsequent Loan, conversion on this
basis being subject to no maximum amount.
On maturity of a Loan (two years from the date of drawdown, extendable by up to one year at the option of YA Global) any
outstanding principal amount was to be mandatorily converted to Ordinary Shares at the closing price of the Ordinary Shares on or
immediately prior to the maturity date. Interest on the outstanding principal amount of a Loan accrued at 10% per annum, payable
in Ordinary Shares at 92.5% of the average daily VWAP of the Ordinary Shares during the ten trading days prior to the interest
payment date. An implementation fee of 7.5% of the principal amount of each Loan is payable to YA Global upon drawdown of
the relevant Loan. The Company was entitled to prepay a Loan in cash, in whole or in part, by making a payment to YA Global
equal to the principal amount to be prepaid plus any interest due and an additional amount of 10% of the principal amount to be
prepaid.
In connection with any Loan, YA Global received a quantity of warrants equal to 25% of the principal amount of such Loan
(converted to £) divided by the closing price of the Ordinary Shares on the trading day prior to the date of drawdown, each
warrant to be valid for three years and exercisable to acquire one Ordinary Share for a price equal to 125% of the VWAP of the
Ordinary Shares on the trading day prior to the date of drawdown. Details of the warrants issued in this connection are provided in
Note 13.
The loan was fully extinguished during the year by the issue of ordinary shares.
16 Capital management
The Group’s objective when managing capital is to safeguard the entity’s ability to continue as a going concern and develop its
mineral exploration and development and other activities to provide returns for shareholders and benefits for other stakeholders.
The Group’s capital structure comprises all the components of equity (all share capital, share premium, retained earnings when
earned and other reserves). When considering the future capital requirements of the Group and the potential to fund specific
project development via debt, the Directors consider the risk characteristics of the underlying assets in assessing the optimal
capital structure.
36
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
17 Related party transactions
Group
Company
2016
£
2015
£
2016
£
2015
£
Amounts owed to Directors
31,097
125,500
31,097
125,500
Details of Directors’ emoluments are disclosed in Note 6. The amounts owed to Directors relate to accrued emoluments.
The Directors are the only key management. Transactions with the Directors are disclosed in Note 18 and this note.
During the year the Company provided funding to the value of £43,175 to Mercator Gold Australia Pty Ltd, and issued shares
in order for MGA to fund part of the acquisition of the Avoca and Bailieston gold project. The balance owed to the Company is
showed in Note 11.
During the year the Company subscribed for new shares of Ochre Mining SA (“Ochre”) to the value of £31,069 in order to
provide funding for Ochre’s exploration activities. Ochre is a wholly owned subsidiary of the Company and operates the SLM
project in Argentina.
The Company and the Group have no ultimate controlling party.
18 Advances made to directors
S Clayson
Amount owed at start of the year
Advances – to cover business expenses
Repayments achieved through expense claims
Amount owed at the year end
19 Commitments and contingencies
Capital expenditure commitment
As at 30 September 2016, the Group had no commitments (2015: £Nil).
2016
£
2015
£
–
15,860
(15,860)
10,299
–
(10,299)
–
–
The Group is committed to issue a further AUD 150,000 worth of Ordinary Shares in ECR contingent on commercial production
being established from either the Avoca or the Bailieston projects.
Operating lease commitments
Details of operating lease commitments are set out in Note 20 below.
20 Operating leases
The total amounts payable under:
Non–cancellable operating lease liabilities of the Group and Company are as follows:
Payable:
Within 1 year
2016
£
–
2015
£
4,453
37
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Notes to the Financial Statements continued
For the year ended 30 September 2016
21 Financial instruments
Categories of financial instrument
Group
Financial assets
Cash and cash equivalents
Available for sale financial assets
Financial liabilities
Trade and other payables
Borrowings
Company
Financial assets
Cash and cash equivalents
Available for sale financial assets
Financial liabilities
Trade and other payables
Borrowings
2016
£
471,809
471,809
21,014
21,014
302,242
302,242
–
–
2016
£
443,165
443,165
21,014
21,014
268,323
268,323
–
–
2015
£
90,398
90,398
39,277
39,277
132,085
132,085
451,104
451,104
2015
£
81,040
81,040
39,277
39,277
349,990
349,990
451,104
451,104
Risk management objectives and policies
The Group’s principal financial assets comprise cash and cash equivalents, trade and other receivables, investments and
prepayments. The Group’s liabilities comprise trade payables, other payables including taxes and social security, and accrued
expenses.
The Board determines as required the degree to which it is appropriate to use financial instruments, commodity contracts or other
hedging contracts to mitigate financial risks.
Credit risk
The Group’s cash at bank is held with reputable international banks. Cash is held either on current account or on short–term
deposit at floating rates of interest determined by the relevant prevailing base rate. The fair value of cash and cash equivalents at
30 September 2016 and 30 September 2015 did not differ materially from their carrying value.
Market risk
The Group’s financial instruments potentially affected by market risk include bank deposits, and trade payables. An analysis is
required by IFRS 7, intended to illustrate the sensitivity of the Group’s financial instruments (as at period end) to changes in
market variables, being exchange rates and interest rates.
The Group’s exposure to market risk is not considered to be material.
Interest rate risk
The Group has no material exposure to interest rate risk.
Since the interest accruing on bank deposits was relatively immaterial there is no material sensitivity to changes in interest rates.
38
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
21 Financial instruments continued
Foreign currency risk
The Group is exposed to foreign currency risk in so far as some dealings with overseas subsidiary undertakings are in foreign
currencies.
Fair value of financial instruments
The fair values of the Company’s financial instruments at 30 September 2016 and 30 September 2015 did not differ materially
from their carrying values.
The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making
the measurements:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: valuation techniques based on observable inputs either directly (i.e. as prices) or indirectly (i.e. derived from prices);
• Level 3: valuation techniques that include inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
by the level in the fair value hierarchy into which the measurement is categorised.
Group and Company
30 September 2016
Available for sale financial assets
Group and Company
30 September 2015
Available for sale financial assets
Liquidity risk
Level 1
£
21,014
21,014
Level 1
£
39,277
39,277
Level 2
£
Level 3
£
–
–
–
–
Level 2
£
Level 3
£
–
–
–
–
Total
£
21,014
21,014
Total
£
39,277
39,277
The Group finances its operations primarily through the issue of equity share capital and debt in order to ensure sufficient cash
resources are maintained to meet short–term liabilities and future project development requirements. Management monitors
availability of funds in relation to forecast expenditures in order to ensure timely fundraising. Funds are raised in discrete tranches
to finance activities for limited periods.
Funds surplus to immediate requirements may be placed in liquid, low risk investments.
The Group’s ability to raise finance is subject to market perceptions of the success of its projects undertaken during the year and
subsequently. Due to the uncertain state of financial markets there can be no certainty that future funding will continue to be
available.
The table below sets out the maturity profile of financial liabilities as at 30 September 2016.
Due in less than 1 month
Due between 1 and 3 months
Due between 3 months and 1 year
Due after 1 year
2016
£
302,242
–
–
–
302,242
2015
£
351,850
–
451,104
–
802,954
39
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
Notes to the Financial Statements continued
For the year ended 30 September 2016
22 Segmental report
The Group is engaged in mineral exploration and development. Management does not segment the mineral exploration activity by
geographical region when evaluating performance.
23 Cash used in operations
Group
Company
Year ended
30 September
2016
£
Year ended
30 September
2015
£
Year ended
30 September
2016
£
Year ended
30 September
2015
£
Note
Operating activities
Loss for the year before tax
Adjustments:
Depreciation expense property, plant and equipment
Provisions and impairments of investments and loans
Impairment of other current assets
Loss on available for sale assets
Loss on extinguishment of debt by equity
Interest income
Interest accrued on convertible loan notes
Share based payments
Other interest payable
(Increase)/decrease in accounts receivable
(Increase)/decrease in taxation
Increase in accounts payable
Shares issued in lieu of expense payments
8
7
(919,706)
(1,502,738)
(887,844)
(4,674,506)
1,468
–
–
18,263
30,486
(484)
200,924
123,737
–
(12,941)
(8,230)
58,565
13,800
3,111
14,750
–
137,131
–
(28)
319,796
288,831
1,384
6,539
543
67,103
8,874
1,468
–
–
18,263
30,486
(35)
200,924
123,737
–
(692)
(8,230)
24,570
13,800
2,937
14,750
3,217,484
137,040
–
(28)
319,796
288,831
–
20,533
543
67,924
8,874
Net cash flow used in operations
(494,118)
(654,704)
(483,553)
(595,822)
24 Events after the reporting date
•
•
On 12 October 2016, the directors of ECR Minerals plc (the “Board”) announced the appointment of Christian Gabriel St.
John-Dennis together with the resignation of Richard Watts non-executive director of the Company with immediate effect.
On 8 November 2016, the directors of ECR Minerals plc announced the appointment of Ivor William Osborne Jones as an
executive director of the Company with immediate effect.
•
On 21 November 2016, the Company passed a resolution for capital reorganisation, with the following effects:
•
•
every 200 existing ordinary shares of 0.001 pence each (“Existing Ordinary Shares”) were consolidated into one
consolidated share of 0.2 pence (“Consolidated Share”) (“Consolidation”); and
immediately following the Consolidation, each Consolidated Share were sub-divided into one new ordinary share of 0.001
pence (“New Ordinary Share”) and one new deferred share of 0.199 pence (“New Deferred Share”) (“Sub-Division”).
•
On 27 February 2017 the Group conditionally raised gross proceeds of £553,564 pursuant to a subscription by Shenyang for
55,356,391 new ordinary shares and, conditional on completion of the subscription, Shenyang will also be issued warrants
over 83,034,586 new ordinary shares. Of the warrants, 55,356,391 are exercisable at a price of 2 pence per share and
27,678,195 are exercisable at a price of 5 pence per share.
•
On 31 March 2017 the board of Cordillera Tiger Gold Resources, Inc. (CTGR) passed a resolution to issue the 25%
shareholding due to ECR Minerals Plc.
40
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
PLEASE NOTE THAT THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any
doubt as to what action you should take, please consult your stockbroker or other independent adviser authorised under
the Financial Services and Markets Act 2000 immediately. If you have recently sold or transferred all of your ordinary shares
in ECR Minerals PLC, please forward this document, together with the accompanying documents, as soon as possible either
to the purchaser or transferee or to the person who arranged the sale or transfer so they can pass these documents to the
person who now holds the shares.
ECR MINERALS PLC
(the “Company”)
(Registered in England and Wales No 05079979)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the Annual General Meeting of the Company will be held at the offices of Charles Russell Speechlys
LLP, 5 Fleet Place, London EC4M 7RD on 24 April 2017 at 10.00 a.m. for the purpose of considering and, if thought fit, passing
Resolutions 1 to 5 as ordinary resolutions, and Resolution 6 as a special resolution:
Ordinary Resolutions
1
2
3
4
To receive, consider and adopt the annual accounts of the Company for the year ended 30 September 2016, together with the
reports of the directors and auditors thereon.
That Craig William Brown, a director retiring in accordance with article 29 of the Company’s articles of association, be and is
hereby re-elected as a director of the Company.
That Ivor William Osborne Jones, a director retiring in accordance with article 29 of the Company’s articles of association, be and
is hereby re-elected as a director of the Company.
That Christian Gabriel St. John-Dennis, a director retiring in accordance with article 29 of the Company’s articles of association, be
and is hereby re-elected as a director of the Company.
5
To appoint PKF Littlejohn LLP as auditors of the Company and to authorise the directors to determine their remuneration.
Special Resolution
6
That the articles of association in the form presented to the meeting be adopted as the new articles of association of the
Company in substitution for, and to the exclusion of, the existing articles of association of the Company.
By Order of the Board
Craig Brown
Director and Company Secretary
Registered Office:
Unit 117, Chester House
81-83 Fulham High Street
Fulham Green
London, SW6 3JA
31 March 2017
41
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 NOTES ON RESOLUTIONS
The following paragraphs explain, in summary, the Resolutions
to be proposed at the Annual General Meeting (the
“Meeting”).
Resolution 1: Receipt of the annual accounts
Resolution 1 proposes that the Company’s annual accounts
for the period ended 30 September 2016, together with the
reports of the directors and auditors on these accounts, be
received, considered and adopted.
Resolutions 2 to 4: Re-election of directors
Mr Craig Brown, Mr Ivor Jones and Mr Christian St. John-
Dennis who were all appointed since the last Annual General
Meeting of the Company are retiring in accordance with article
29 of the Company’s articles of association. Each of Mr Craig
Brown, Mr Ivor Jones and Mr Christian St. John-Dennis is
offering himself for re-election by the members.
Resolution 5: Appointment and remuneration of auditor
Resolution 5 proposes to appoint PKF Littlejohn LLP as the
Company’s auditors and to authorise the directors to set the
auditors’ remuneration.
Resolutions 6: Adoption of new articles of association
It is proposed that the Company adopts new articles of
association (“New Articles”).
The Company’s articles of association were adopted in 2009
and have not been substantially revised since then. The
principal change introduced by the New Articles is the removal
of the provisions relating to the regulations applicable to the
Company which would be relevant only if the Company had a
secondary listing on the ASX and the directors do not consider
that there are any advantages to seeking a secondary listing
on the ASX. Otherwise, the provisions in the New Articles are
broadly similar to those in the current articles of association of
the Company.
A copy of the proposed New Articles will be available for
inspection during normal business hours (Saturdays, Sundays
and public holidays excepted) at the Company’s registered
office up until the close of the Meeting. Copies will also be
available on the day of the Meeting at the offices of Charles
Russell Speechlys LLP, 5 Fleet Place, London EC4M 7RD from
9.45 a.m. until the conclusion of the Meeting.
A copy of the New Articles will also be found in the Investor
Relations section of the Company’s website at www.
ecrminerals.com from the passing of the resolution onwards.
42
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 SHAREHOLDER NOTES
The following notes provide mode detailed information about
your voting rights, and how you may exercise them.
1
2
A member entitled to attend and vote at the meeting
is entitled to appoint another person(s) (who need not
be a member of the Company) to exercise all or any of
his rights to attend, speak and vote at the meeting. A
member can appoint more than one proxy in relation to
the meeting, provided that each proxy is appointed to
exercise the rights attaching to different shares held by
him.
Your proxy could be the Chairman, another director of the
Company or another person who has agreed to attend
to represent you. Your proxy will vote as you instruct and
must attend the meeting for your vote to be counted.
Details of how to appoint the Chairman or another person
as your proxy using the proxy form are set out in the
notes to the proxy form. Appointing a proxy does not
preclude you from attending the meeting and voting in
person. If you attend the meeting in person, your proxy
appointment will automatically be terminated.
3
An appointment of proxy is provided with this notice and
instructions for use are shown on the form. In order to be
valid, a completed appointment of proxy must be returned
to the Company by one of the following methods:
3.1
in hard copy form by post, by courier or by hand to the
Company’s registrars, Computershare Investor Services
plc, at the address shown on the form of proxy; or
3.2
in the case of CREST members, by utilising the CREST
electronic proxy appointment service in accordance with
the procedures set out below,
and in each case must be received by the Company
by 10.00 a.m. on 20 April 2017 or in the case of any
adjourned meeting 48 hours (excluding non-business
days) before the adjourned meeting.
Please note that any electronic communication sent to
us/our registrars in respect of the appointment of a proxy
that is found to contain a computer virus will not be
accepted.
4
To change your proxy instructions you may return a new
proxy appointment using the methods set out above.
Where you have appointed a proxy using the hard copy
proxy form and would like to change the instructions
using another hard copy proxy form, please contact
Computershare Investor Services plc. The deadline for
receipt of proxy appointments (see above) also applies
in relation to amended instructions. Any attempt to
terminate or amend a proxy appointment received after
the relevant deadline will be disregarded. Where two or
more valid separate appointments of proxy are received
in respect of the same share in respect of the same
meeting, the one which is last sent shall be treated as
revoking the other or others.
5
6
7
8
9
CREST members who wish to appoint a proxy or proxies
by utilising the CREST electronic proxy appointment
service may do so by utilising the procedures described
in the CREST Manual. CREST Personal Members or other
CREST sponsored members, and those CREST members
who have appointed a voting service provider(s), should
refer to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on their
behalf.
In order for a proxy appointment made by means of
CREST to be valid, the appropriate CREST message
(a “CREST Proxy Instruction”) must be properly
authenticated in accordance with Euroclear UK & Ireland’s
specifications and must contain the information required
for such instructions, as described in the CREST Manual.
The message, regardless of whether it constitutes
the appointment of a proxy or an amendment to the
instruction given to a previously appointed proxy, must,
in order to be valid, be transmitted so as to be received
by the issuer’s agent, Computershare Investor Services
plc (ID 3RA50) by the latest time(s) for receipt of proxy
appointments specified in the notice of meeting. For this
purpose, the time of receipt will be taken to be the time
(as determined by the timestamp applied to the message
by the CREST Applications Host) from which the issuer’s
agent is able to retrieve the message by enquiry to CREST
in the manner prescribed by CREST.
The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001.
CREST members and, where applicable, their CREST
sponsors or voting service providers should note that
Euroclear UK & Ireland does not make available special
procedures in CREST for any particular messages. Normal
system timings and limitations will therefore apply in
relation to the input of CREST Proxy Instructions. It is
the responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST personal
member or sponsored member or has appointed a voting
service provider(s), to procure that his CREST sponsor
or voting service provider(s) take(s)) such action as shall
be necessary to ensure that a message is transmitted by
means of the CREST system by any particular time. In this
connection, CREST members and, where applicable, their
CREST sponsors or voting service providers are referred,
in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and
timings.
Only those shareholders registered in the Register of
Members of the Company as at 6.00 p.m. on 20 April
2017 (or, if the meeting is adjourned, on the date which is
two days before the time of the adjourned meeting) shall
be entitled to attend and vote at the meeting or adjourned
meeting in respect of the number of shares registered
in their respective names at that time. Changes to the
Register of Members after that time will be disregarded in
determining the rights of any person to attend or vote at
the meeting or adjourned meeting.
43
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016
10
11
12
13
Any corporation which is a member can appoint one or
more corporate representatives who may exercise on its
behalf all of its powers as a member provided that they do
not do so in relation to the same shares.
You may not use any electronic address provided either in
this notice of general meeting or any related documents
(including the form of proxy) to communicate with the
Company for any purposes other than those expressly
stated.
As at 30 March 2017 (being the last business day before
the publication of this Notice), the Company’s issued
share capital consisted of 135,899,461 Ordinary Shares
carrying one vote each. The Company does not hold any
shares in treasury.
Any member attending the meeting has the right to ask
questions. The Company must cause to be answered any
such question relating to the business being dealt with at
the meeting but no such answer need be given if:
13.1 to do so would interfere unduly with the preparation
for the meeting or involve the disclosure of confidential
information;
13.2 the answer has already been given on a website in the
form of an answer to a question; or
13.3 it is undesirable in the interests of the company or the
good order of the meeting that the question be answered.
44
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 Company Information
DIRECTORS
AUDITOR
William John Selwood Howell Non–Executive
PKF Littlejohn LLP
Chairman
Craig William Brown
Director & CEO
Ivor William Osborne Jones
Executive Director & COO
Christian Gabriel St. John-Dennis
Non-Executive Director
COMPANY SECRETARY
Craig William Brown
Statutory Auditor
1 Westferry Circus
Canary Wharf
London E14 4HD
REGISTRARS
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol BS13 8AE
LEGAL ADVISERS
Unit 117, Chester House 81-83 Fulham High Street
Charles Russell Speechlys LLP
Fulham Green London SW6 3JA
5 Fleet Place
London EC4M 7RD
AIM NOMINATED ADVISER
Cairn Financial Advisers LLP
Cheyne House, Crown Court
62-63 Cheapside
London EC2V 6AX
AIM BROKER OF RECORD
Optiva Securities Ltd
2 Mill Street
London W1S 2AT
BANKERS
Barclays Bank plc
1 Churchill Place
London
E14 5HP
REGISTERED AND HEAD OFFICE
ECR Minerals plc
Unit 117, Chester House
81-83 Fulham High Street
Fulham Green
London SW6 3JA
Tel: +44 (0)20 7929 1010
Fax: +44 (0)20 7929 1015
info@ecrminerals.com
www.ecrminerals.com
Aim ticker: ECR
Twitter.com/ecrminerals
45
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2016 NP0317.2326