Annual Report
and Accounts 2017
The Directors of ECR Minerals plc (the “Directors” or the “Board”) present their report
and audited financial statements for the year ended 30 September 2017 for ECR Minerals
plc (“ECR”, the “Company” or the “Parent Company”) and on a consolidated basis (the
“Group”)
CONTENTS
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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45
Chairman’s Statement
On behalf of the Board of Directors it gives me great
pleasure to present the consolidated fi nancial statements of
ECR Minerals for the year ended September 2017. Although
I myself joined ECR relatively recently as Non-Executive
Chairman in August 2017, over the last year I have observed
a period of positive change and focused restructuring as
part of a measured strategy to strengthen the Company’s
prospects and carefully lay foundations for growth and
the creation of shareholder value through exposure to
ECR’s highly prospective mineral exploration licences in
the Australian State of Victoria, which as a State has an
exceptional history of gold production as well as hosting
numerous successful present-day mining operations.
Following a period of focused and successful structural
change where we saw the repayment of all outstanding
debts in September 2016 (including a signifi cant convertible
loan facility) closely followed by a successful share
consolidation and signifi cant reductions in operating and
management costs, ECR has deliberately refocused its
efforts upon the Australian assets within its portfolio, which
through their development we believe to have the potential
to generate the most value for our shareholders.
A culmination of much hard work has successfully seen
ECR consolidate its Avoca and Bailieston licences into
its Australian subsidiary and ensure security of tenure
through their renewal. This period also saw ECR deliver two
additional gold exploration projects into its Victorian portfolio
when the Company was granted licences for the Timor
and Moormbool tenements. Like Bailieston, Moormbool is
also situated in the heart of one of the principal modern day
mining districts in Victoria, which, as demonstrated by the
success of the nearby Fosterville and Costerfi eld mines we
consider to be a highly prospective location.
In June of last year ECR secured the support of a
cornerstone investor, the Shenyang Xinliaoan Machinery
Company, and immediately prior to this the Company also
completed an oversubscribed placing for £1million to raise
a total of £1.554 million during the fi nancial year. These
funds were raised with the objective of furthering our
suite of Australian projects and for continuing to carefully
assess potential new opportunities without distracting
from our main objective in Victoria, which is to develop
multiple prospective gold exploration targets, which could
cumulatively, create substantial value for shareholders.
With regards to new opportunities, the Board of Directors
continue to assess potential new opportunities with a strong
focus on gold projects and the rapidly evolving battery
metals sector. Whilst due diligence and careful consideration
are paramount in the evaluation of new opportunities we
will not hesitate to act if an opportunity of suffi cient merit
becomes available to ECR.
On the operational front, and as previously referenced much
of our efforts this year have been focused on the work
required to secure our existing licences and the submission
of applications to secure the two new licences; In addition
to this we have successfully obtained the permits to be able
to commence exploration drilling our prospects with the
objective of delivering further value for shareholders at the
drill bit. At present we await the results of a comprehensive
geochemical sampling programme at our highest priority
targets within the four licence areas the results of which
will help ECR determine targets for a drilling programme,
which we look forward to updating shareholders on over the
coming months.
In summary, we remain very confi dent in the prospectivity
of our gold exploration assets and we are optimistic that in
due course our exploration activities in Victoria will bear fruit
in the form of one or more economic gold deposits; ECR
has made good progress toward its goals this year, whilst
remaining on a strong fi nancial footing and with no debt. I
am sure that the coming months will see further positive
developments for your Company.
Weili (David) Tang
Weili (David) Tang
Chairman
28 March 2018
ECR MINERALS PLC
ANNUAL REPORT & ACCOUNTS 2017
1
Chief Executive Officer’s Report
The Company’s focus during the year, and since the year-
end, was very much on exploration for gold in Victoria,
Australia, which is one of the World’s major gold producing
provinces and hosts the second largest gold endowment
in Australia with total recorded gold production of around
85 million ounces. In Central Victoria, ECR’s wholly
owned Australian subsidiary Mercator Gold Australia Pty
Ltd (“MGA”) is now the registered holder of the Avoca
(EL5387) and Bailieston (EL5433) exploration licences
pursuant to their acquisition from Currawong Resources
Pty Ltd, and has been granted two new exploration
licences, Timor (EL006278) and Moormbool (EL006280).
At the same time, since October 2016 all the Group’s
projects and operations have been thoroughly reviewed,
numerous potential new projects have been evaluated, and
a significant reduction in head office and administration
costs has been achieved.
On the corporate front, we were very pleased to welcome
Shenyang Xinliaoan Machinery Co Ltd as ECR’s largest
shareholder in June 2017, as further discussed in the
Chairman’s Report. Thanks to this subscription and to a
successful placing, which also took place in June 2017
and which raised gross proceeds of £1 million, ECR is on
a strong financial footing to continue exploration in Victoria
and assess potential new opportunities.
GOLD EXPLORATION IN VICTORIA,
AUSTRALIA
The Avoca and Bailieston licences remain the core of
the portfolio, and in November 2017 MGA received
confirmation of the renewal of the Avoca licence until 27
November 2021, while the Bailieston licence was renewed
in February 2018 for a five-year term until 27 March 2023.
In December 2017, ECR announced the results of
an interpretation and targeting study using open-
file geophysical data covering the Avoca, Bailieston,
Moormbool and Timor projects. The results were of great
interest, with 27 targets identified within the Avoca and
Timor licences, including 10 high priority areas, and 20
targets identified within the Bailieston and Moormbool
licences, including 5 high priority areas. The high priority
targets identified included areas already considered to be
of significant interest by ECR, such as the Byron, Black Cat
and Cherry Tree prospects at Bailieston, and the magnetic
anomaly at Moormbool.
A programme of reverse circulation (RC) drilling comprising
seven holes, for a total of 592m, was completed within
the Bailieston licence in June 2017. Three targets were
tested, being the old Byron Shaft workings, the Scoulars
trend and the Maori trend, which are all within the part of
the licence known as HR3. The results for the Scoulars and
Maori trends were consistent with the geological model,
whilst drilling around the Byron Shaft did not intersect
the target mineralisation. The drilling programme was
designed as a low-cost verification of the geological model
for the Bailieston project as a whole, and in this regard
was a success. Although no high-grade mineralisation was
intersected, this was not unexpected given the relatively
small size of the programme and the fact that it was spread
over three targets. Drilling on the Maori trend provided the
highest-grade results, with drillhole MGARC07 intersecting
4m at 3.29 g/t Au from 39m downhole, including 2m at
6.21 g/t.
In November 2017, MGA appointed Dr Rodney Boucher, an
experienced Victorian-based geologist, as a consultant to
oversee MGA’s exploration activities in Victoria. Dr Boucher
has extensive exploration experience in Victoria, including
many years of involvement with Perseverance Corporation,
the developers of the million-ounce Fosterville gold mine
which is now owned by Kirkland Lake Gold. The Fosterville
mine is located in the same district as MGA’s Bailieston
and Moormbool gold projects.
Dr Boucher immediately set about reviewing all available
data regarding MGA’s four exploration licences, visited
most of the known prospects and carried out geological
mapping in key zones. A programme of geochemical
sampling at the higher priority prospects took place in
February 2018, the purpose of which was to augment
existing data and help define drill targets.
A drilling programme to commence in the first half of 2018
is now being planned and will include multiple target areas.
MGA currently intends to drill in the HR3 area and at the
Blue Moon and Black Cat prospects within the Bailieston
licence (EL5433) and at the Bung Bong prospect within
the Avoca licence (EL5387). The Company will announce
the final composition of the drilling programme and the
intended start date after the planning has been finalised.
Drilling in each area is subject to a final decision by the
Directors, advised by Dr Boucher, as well as the receipt of
all necessary government permits and landowner consents.
Considerable effort has been devoted during 2017 and
so far in 2018 towards permitting activities and liaison
with landowners, which is an essential part of all mineral
exploration projects. All required permits and consents
have already been obtained for drilling in the HR3 area and
at the Black Cat prospect within the Bailieston licence.
Dr Boucher’s work so far has led to some potentially
significant geological insights, as outlined below.
Bailieston exploration licence (EL5433)
* Black Cat prospect
Black Cat is characterised by previously defined
widespread anomalous geochemical results, especially to
2
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 the northeast, which are not due to downhill dispersion
from the main reefs and therefore must come from
hitherto undiscovered sources.
* Blue Moon prospect
There is potential at Blue Moon for a previously
unrecognised finely-disseminated gold system. Previous
encouraging rock chip and soil geochemical results extend
over an area approximately 350m across and open at both
ends. There are only a few small workings at surface,
and this may be an indication of finely-disseminated gold,
which is more likely to be suitable for modern bulk mining
methods than the coarse gold targeted by most historical
mining in Victoria.
* Cherry Tree and Cherry Tree South prospects
The Cherry Tree historical workings cover an area 600m by
200m, while the Cherry Tree South workings extend over
an area 250m by 60m, with a wider geochemical footprint
and encouraging previous geochemical results across the
full width of the sampling.
* HR3 area
This area encompasses the Byron, Maori, Scoulars, Dan
Genders, Hard Up and Scanlon’s reefs, and forms the
largest area of historical workings (700m by 300m) within
the tenement package, especially when considered as part
of a larger system connected to the Bailieston open pit
located outside the northern boundary. MGA’s exploration
objective at HR3 will be to investigate the possibility
of integrating the various reefs at depth to arrive at a
meaningful modern-day resource.
There is a gap in the historical workings from the HR3
area for approximately 800m to Cherry Tree to the south
and for approximately 400m to the tenement boundary
to the north, and there is potential in these zones for
undiscovered mineralisation, particularly at depth. This is
supported by the limited previous geochemical sampling.
Avoca exploration licence (EL5387)
* Bung Bong prospect
Bung Bong features a series of historical shafts on shoots
up to 100m long punctuated by barren zones and gullies.
Road cuttings on the nearby highway show multiple west-
dipping faults linked by associated quartz vein networks
that may have the potential for a broad zone of significant
tonnage.
* Monte Christo prospect
This prospect is of significant interest as it hosts historical
workings extending over a strike length of approximately
1,000m, punctuated by alluvial cover.
* Surprise prospect
There are numerous historical shafts at Surprise and some
noteworthy historical (late 1990s) drilling results (including
2m at 3.27g/t gold from 18m in SPAC04 and 5m at 1.4g/t
gold from 26m in SPAC06). The presence of molybdenum
with gold in breccia raises the conceptual possibility of
a high tonnage porphyry deposit. Landowner consent is
currently being sought for field mapping and geochemical
surveying, which will enable this concept to be considered
further.
Moormbool exploration licence (EL006278)
Modelling carried out on behalf of MGA has delineated
a magnetic body at depth. The magnetic anomaly has
horizontal dimensions of approximately 3.15km x 3.5km.
The corresponding body may be unmineralised, but there
is considered to be some potential for mineralisation
styles such as Woods Point/Walhalla dyke-associated gold
or a VMS (volcanogenic massive sulphide)/Cobar-style
polymetallic deposit as found in central New South Wales.
Alternatively, the anomaly may represent weak magnetite
alteration within a porphyry, similar to the Cadia gold-
copper-porphyry-related deposits in central New South
Wales.
SLM GOLD PROJECT, ARGENTINA
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, all of which are located in
a long established mining district known as Sierra de las
Minas. The change in government which took place in
late 2015 made Argentina a significantly more attractive
destination for investment, and following a visit to
Argentina by three members of the Board in December
2016, Exploration Targets were determined for the El Abra
prospect and JV14 zone in accordance with the JORC
Code.
In connection with the Exploration Targets, a programme
of approximately 2,000m of RC drilling has been designed
for the JV prospect, with an additional 300m planned for
El Abra. The objective of these programmes is to enable
the estimation of Mineral Resources compliant with the
JORC Code for both prospects. Preparations for drilling
were made by Ochre in the first half of 2017, including
the establishment of drill pads, permitting activities and
liaison with the provincial government. As the Directors are
required to prioritise the Group’s activities in order to avoid
an excessive drain on its resources at any one time, the
drilling has not yet commenced.
During 2017, discussions continued between Ochre and
Esperanza Resources SA (“Esperanza”), pursuant to the
memorandum of understanding signed between the
3
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 FINANCIAL RESULTS FOR THE YEAR
ENDED 30 SEPTEMBER 2017
For the year to 30 September 2017 the Group recorded a
total comprehensive expense of £562,649, compared with
£1,016,592 for the year to 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, where these costs are
ineligible for capitalisation under applicable accounting
standards.
The Group’s net assets as at 30 September 2017
were £3,735,225, in comparison with £2,680,627 at 30
September 2016. The increase is due to the capitalisation
of exploration expenditure during the year, leading to
increased exploration assets, and the larger cash balance
of £1,082,994 held by the Group at 30 September 2017, in
comparison with £471,809 at the previous year-end.
Craig Brown
Chief Executive Officer
28 March 2018
Chief Executive Officer’s Report continued
two companies in 2015. Esperanza previously operated
a processing plant within potential trucking distance of
Ochre’s deposits. Whilst this has not progressed, ECR
has taken note of the announcement in October 2017 by
a company listed on the TSX Venture Exchange, Falcon
Gold Corporation (“Falcon”), that Falcon has signed an
agreement giving it the right to acquire an initial 80%
interest in Esperanza’s mineral tenements located in the
Sierra de Las Minas district. Falcon has agreed, subject
to due diligence and TSX Venture Exchange approval, to
make escalating annual payments to Esperanza totalling
US$815,000 over a six-year option period and to issue
a total of 5 million Falcon common shares. During the
six-year option period, Falcon would be expected to make
exploration expenditures amounting to US$5,645,000. After
acquiring the 80% interest, Falcon would have the right, for
a period of 24 months, to purchase Esperanza’s residual
20% interest for a further payment of US$4 million and a
1% net smelter return royalty.
If the transaction with Falcon was to progress the
memorandum of understanding between Ochre and
Esperanza would fall away however the Directors view
the agreement between Esperanza and Falcon as
encouraging, given that in the Board’s view, Ochre’s
licences are significantly more prospective than those held
by Esperanza.
DANGLAY GOLD PROJECT, PHILIPPINES
Danglay is an intermediate sulphidation epithermal
gold deposit situated within the prolifically gold-copper
mineralised Baguio District in the northern Philippines. An
initial NI43-101 Mineral Resource was estimated for the
project in December 2015, following extensive exploration
carried out by ECR during 2014 and 2015. A copy of the
corresponding NI43-101 technical report is available for
download from the Company’s website. As a result of
these activities, ECR is entitled to a 25% interest in the
project. No further work has yet been carried out, and
renewal of the project’s Exploration Permit is pending.
In June 2017, Ivor Jones, at that time a director of ECR
and its Chief Operating Officer, visited Danglay, and his
observations confirmed the project’s significant exploration
potential. The Directors remain hopeful that the political
and legal issues to which the project is currently subject
will be ameliorated in due course, and that ECR’s rights
in respect of Danglay are of significant value. Further
discussion of these issues and ECR’s rights is provided in
the Strategic Report.
4
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Christian Gabriel St. John-Dennis
Non-Executive Director
(aged 53)
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.
Directors’ Biographies
Weili (David) Tang
Non-Executive Chairman
(aged 52)
David Tang was previously the President of China
Nonferrous Metals Int’l Mining Co., Ltd. (CNMIM) and
the Managing Director of China Nonferrous Gold Ltd, an
AIM-listed company which was formerly known as Kryso
Resources plc. China Nonferrous Gold is focused on the
Pakrut gold mine in Tajikistan, where first gold was poured
in 2015. Mr Tang has previously served as a director to
several companies involved in mining or exploration in
Africa, South-east Asia and Australia. Mr Tang graduated
with a Bachelor of Science degree (1988) majoring in
computer science from Central-South University, China and
also holds a Master of Science degree (1991). In the 1990s,
he pioneered the trading system for the first nonferrous
metals futures exchange in China. He worked for several
years in Canada in investment management and consulting,
before returning to China to take up office at CNMIM in
2003.
Craig William Brown
Director and Chief Executive Officer
(aged 47)
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.
5
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Strategic Report
The Directors present their Strategic Report on the Group
for the year ended 30 September 2017.
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 also considers opportunities in other
mineral commodities.
add value to the Group’s projects. The Company has three
male Directors, one of whom is an employee, and no other
employees. The services of various consultants are utilised
to meet the needs of the Group in respect of technical and
other activities.
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 finance appropriate
to the stage of development and potential of each project
may be considered.
The main current area of activity is Central Victoria,
Australia, and the Group continues to review potential new
projects on a highly selective basis, with a concentration on
precious, base and strategic metals.
Financial & Performance Review
The Group’s ongoing activities are solely in mineral
exploration and development. It is not in production at any
of its current projects and hence has no income.
Organisation Review
The Company is incorporated in England but 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 Weili Tang, Non-
Executive Chairman, is based in the People’s Republic of
China (PRC). 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, which in
physical terms ceased in 2015, has been 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 substantial tax losses from
its past trading, and is therefore a suitable vehicle for any
future profit generative activities of the Group in Australia.
The Group’s activities in the Philippines, which ceased
in 2016, were 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”). Further details of the Group’s
interests in Argentina and the Philippines can be found
under “Operating Review” below.
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 consultants of the Group are employed to
For the year to 30 September 2017 the Group recorded a
total comprehensive expense attributable to shareholders
of the Company of £562,649, compared with £1,016,592
for the year to 30 September 2016. In both 2016 and 2017,
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, where these costs are
ineligible for capitalisation under applicable accounting
standards. The Group’s net assets as at 30 September
2017 were £3,735,225, in comparison with £2,680,627 at
30 September 2016.
Exploration activity took place in Central Victoria, Australia
during the year to 30 September 2017, 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 access
to 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.
6
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 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
through 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 is put into practice by the Directors
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 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 drilling
results were obtained from the Bailieston project in Central
Victoria, Australia, which are considered to justify continued
exploration.
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 £1,082,994 of cash and
cash equivalents at 30 September 2017, versus £471,809
at the beginning of the year. The Directors consider the
performance of the Group in this regard to be in line
with the activities required to fulfil the Group’s work
programmes.
Operating Review
As mentioned above, the Group’s current physical
operations are located in Central Victoria, Australia. The
Group holds interests in Argentina and the Philippines but
did not carry out significant operations in either jurisdiction
during the year and has not done so since the year-end.
Potential new projects are reviewed from time to time in
line with the strategy discussed earlier in this Strategic
Report.
Avoca, Bailieston, Moormbool and Timor gold projects,
Australia
These projects are located in Central Victoria and are
100% held by ECR’s wholly owned Australian subsidiary
MGA. The exploration licences comprising the Moormbool
(EL006280) and Timor (EL006278) projects were granted
to MGA during the year, while the Avoca (EL5387) and
Bailieston (EL5433) exploration licences were acquired
from Currawong Resources Pty Ltd (“Currawong”)
pursuant to a deed of assignment (the “Deed”) entered
into between MGA and Currawong during the prior year.
In respect of future production from the Avoca and/
or Bailieston projects (if any), the original holder of the
licences, Currawong, is entitled to be paid a net profits
interest royalty of 20% in respect of mine dumps and 10%
in respect of other deposits. Royalties on the same basis
would also be payable, subject to the terms of the Deed, in
respect of a 10km Area of Interest (as that term is defined
in the Deed) surrounding the Avoca and Bailieston projects.
This is considered likely to bring the Moormbool and Timor
projects within the ambit of the royalties. Total royalties
payable to Currawong under the Deed are capped at AUD
3.5 million. In addition, AUD150,000 worth of ECR shares
will become issuable to Currawong if any Tenement (as
that term is defined under the Deed) reaches commercial
production.
At the Bailieston project, a preliminary programme of
reverse circulation (RC) drilling was carried out by MGA in
June 2017. Results of this drilling were announced in July
2017 and are considered sufficient to justify, alongside
more recent work, further drilling within the licence. This
is now being planned, as further discussed in the Chief
Executive Officer’s Report. Recent activities relating to the
Avoca, Moormbool and Timor projects are also discussed in
the Chief Executive Officer’s Report.
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 moved to liberalise currency controls
and remove export taxes on mined products.
7
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Strategic Report continued
In December 2016, a site visit and review by three of the
Company’s Directors (including Ivor Jones, a professional
geologist, who has since resigned from the Board)
enabled the announcement of a JORC Code-compliant
Exploration Target for the El Abra and JV14 prospects,
along with details of a proposed drilling programme.
Further information and explanation regarding the SLM
project Exploration Targets and proposed 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.
Danglay gold project, Philippines
In late April 2013 ECR entered into an earn-in and joint
venture agreement (the “Agreement”) in relation to the
Danglay gold project in the Philippines. Cordillera Tiger
Gold Resources, Inc. (“Cordillera Tiger”) is a Philippine
corporation and the holder of the exploration permit (the
“EP”) which represents the Danglay project.
Activities under the Agreement commenced in December
2013 and ceased when the Earn-In Option (as that term
is defined in the Agreement) was terminated in August
2016. The Philippine mining industry is enduring a period
of significant political and regulatory upheaval, which has
been particularly intense and unpredictable since June
2016. In light of this, termination of the Earn-In Option was
considered a prudent step for the Company to take.
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 Agreement,
ECR was the operator of the Danglay project, through
Cordillera Tiger. The completion of various exploration
programmes generated valuable data which is relevant to
the assessment of the project’s economic potential.
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, as permitted by NI43-101. The Report supports
the disclosure on 5 November 2015 of an inferred mineral
resource estimate for oxide gold mineralisation at Danglay.
Under the Agreement, the estimation of this mineral
resource and the making of expenditures exceeding
US$500,000 in connection with the Danglay project entitle
ECR to a 25% interest in Cordillera Tiger. Both conditions
have been satisfied, but the relevant shareholding has yet
to be issued, despite a resolution of Cordillera Tiger’s board
of directors authorising the issuance.
One of the delaying factors is a lawsuit which has been
filed in the Philippines against three members of the
Cordillera Tiger board. The lawsuit challenges, among other
things, the resolution approving the issuance of shares
in Cordillera Tiger to ECR. The plaintiff in the suit is Patric
Barry, a director of Cordillera Tiger. The Company considers
the lawsuit to be a transparent and unscrupulous attempt
to obstruct Cordillera Tiger’s performance of its contractual
obligations and deprive ECR of its rightful shareholding.
Renewal of the EP for a further two-year term was applied
for in September 2015, and in June 2016 the renewed
EP was issued to Cordillera Tiger for signature and return
to the Philippine authorities. The final renewed EP has
yet to be provided to Cordillera Tiger, and the status of
the renewal is unclear. Given the political and regulatory
uncertainty affecting the mining sector in the Philippines,
the delay is not unexpected.
The Danglay project remains attractive from a technical
standpoint, but due to the high level of political and
regulatory risk affecting the Philippine mining sector, only
limited efforts by ECR to enforce its rights in respect of
Cordillera Tiger have to date been considered commercially
justifiable.
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.
8
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 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 (such as 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 on 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.
Political & Regulatory Risk
This takes many forms and can exist in developed
countries (enhanced environmental requirements, changes
in taxation, etc.) as well as less developed countries
(civil unrest, government expropriation of mineral assets,
corruption etc.).
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 2017 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, 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.
9
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Strategic Report continued
Role of the Board
The Board’s role is to set the Group and the 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 may 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 David Tang 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.
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.
Remuneration Committee
Employees
The Remuneration Committee comprises Christian
Dennis 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 any steps necessary
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.
The Board has adopted an Anti-Bribery and Corruption
Policy.
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
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 the interests of employees
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.
This Strategic Report was approved by the Directors on 28
March 2018.
Craig Brown
Director and Chief Executive Officer
10
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Report of the Directors
For the year ended 30 September 2017
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 significant events after the reporting date are
also disclosed in Note 23 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, principally GBP, AUD and USD, 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 location of the Group’s principal activities is currently in
Australia 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 20 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 at least 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.
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 the proposed
withdrawal of the United Kingdom from the European
Union (“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 and
investor base.
The Board will continue to follow the development of UK’s
negotiations with the European Union and evaluate the
impact on the Group accordingly.
Dividends
The results for the year are set out in the Consolidated
Income Statement. No dividend is proposed in respect of
the year (2016: nil). The Group loss for the year of £511,124
(2016 loss of £919,706) has been taken to reserves
together with the comprehensive income and expenses.
Directors
The Directors who served during the year or thereafter
were:
William John Selwood Howell (resigned 4 August 2017)
Weili (David) Tang (appointed 4 August 2017)
Craig William Brown
Ivor William Osborne Jones (appointed 8 November
2016, resigned effective 30 November 2017)
Christian Gabriel St. John-Dennis
11
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Report of the Directors continued
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 2017 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.
29 March 30 September 30 September
2016
no. of shares
2017
no. of shares
2018
no. of shares
C W Brown
I W O Jones1
C G St. John-Dennis2
Weili (David) Tang3
1,549,271
–
–
–
1,549,271
1,000,000
–
–
1,549,271
2,549,271
–
–
–
–
–
1 I W O Jones was appointed on 8 November 2016 and resigned
effective 30 November 2017
2 C G St. John-Dennis was appointed on 12 October 2016
3 Weili (David) Tang was appointed on 4 August 2017
Additionally, Directors of the Company who held office
at 30 September 2017 held the following share options
granted under the Company’s unapproved share option
scheme:
Options
Issued
Date
Issued
Expiry Exercise
Price
Date
C W Brown 4,076,984 27/02/2017 27/02/2022 £0.01725
I W O Jones 4,076,984 27/02/2017 27/02/2022 £0.01725
12
Share Capital and Substantial Share Interests
On 26 March 2018, the Company was aware of the
following holdings of 3% or more in Company’s issued
share capital of 247,605,240 ordinary shares of £0.0001
each.
Registered Shareholder
Shenyang Xinliaoan Machinery Co Ltd
JIM Nominees Ltd
Interactive Investor Services Nominees
Limited
Barclays Direct Investing Nominees Ltd
HSDL Nominees Ltd
Interactive Investor Services Nominees
Ltd
Number
%
of shares Holding
55,356,391
44,088,747
22.36
17.81
28,749,419
11.61
21,436,710
14,171,737
8.66
5.72
8,307,141
3.35
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.
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
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
PKF Littlejohn LLP has expressed its willingness to
continue in office as auditor of the Company and a
resolution to confirm the 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 2018 at the offices of Charles Russell
Speechlys LLP, 5 Fleet Place, London, EC4M 7RD, United
Kingdom. Notice of the annual general meeting is enclosed.
This report was approved by the Board on 28 March 2018.
By order of the Board
Craig Brown
Director and Chief Executive Officer
13
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Independent Auditor’s Report
For the year ended 30 September 2017
Independent Auditors’ Report to the Members of ECR
Minerals Plc
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Opinion
We have audited the financial statements of ECR Minerals
Plc (the ‘parent company’) and its subsidiaries (the ‘group’)
for the year ended 30 September 2017 which comprise
the Consolidated Statement of Comprehensive Income,
the Consolidated and Parent Company Statement of
Financial Position, the Consolidated and Parent Company
Statements of Changes in Equity, the Consolidated and
Parent Company Statements of Cash Flows and notes to
the financial statements, including a summary of significant
accounting policies. 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
auditor’s 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.
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 2017 and of the group’s and parent
company’s loss for the year then ended;
the group 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.
•
•
•
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We
are independent of the group and parent company in
accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that
14
Conclusions relating to going concern
We have nothing to report in respect of the following
matters in relation to which the ISAs (UK) require us to
report to you where:
•
•
the directors’ use of the going concern basis
of accounting in the preparation of the financial
statements is not appropriate; or
the directors have not disclosed in the financial
statements any identified material uncertainties that
may cast significant doubt about the group’s or the
parent company’s ability to continue to adopt the
going concern basis of accounting for a period of at
least twelve months from the date when the financial
statements are authorised for issue.
Our application of materiality
The scope of our audit was influenced by our application
of materiality. The quantitative and qualitative thresholds
for materiality determine the scope of our audit and the
nature, timing and extent of our audit procedures. Group
materiality was £70,000 based upon gross assets. The
Parent Company materiality was £60,000 based upon gross
assets and the result for the year. For each component in
the scope of our group audit, we allocated a materiality that
is either equal to or less than our overall group materiality.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and
assessed the risk of material misstatement in the financial
statements. In particular, we looked at areas involving
significant accounting estimates and judgement by the
Directors and considered future events that are inherently
uncertain. As in all of our audits, we also addressed the
risk of management override of internal controls, including
among other matters consideration of whether there
was evidence of bias that represented a risk of material
misstatement due to fraud. The Australian and Argentinian
subsidiary undertakings represent the principal business
units within the Group, upon which we performed audit
procedures directly on significant accounts based on size or
risk profile to the Group. A full scope audit was undertaken
on the financial statements of the Parent Company.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were
addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Key Audit Matter
Recoverability of intangible assets – exploration and
development costs
The carrying value of intangible assets as at 30 September
2017 was £2,668,747 which comprises exploration and
development projects in Australia, Argentina and the
Philippines. There is a risk that the carrying value of these
early stage projects is impaired and that exploration and
development expenditure capitalised during the year is not
in accordance with IFRS 6.
How the scope of our audit responded to the key audit
matter
The carrying value of all early stage exploration and
development projects were assessed and tested in
accordance with the following criteria:
•
•
•
The Group holds good title to the licence areas;
The Group has planned and budgeted for further
expenditure for mineral resources in the licence areas;
and
Exploration and development work undertaken to date
has indicated the existence of commercially viable
quantities of mineral resource.
We undertook substantive testing on capitalised
expenditure during the year to ensure it satisfied the
criteria under IFRS 6.
We discussed with management the scope of their future
budgeted and planned expenditure on each licence area.
As disclosed in note 10 to the financial statements, the
Group has not yet formally acquired title to its 25% interest
in Cordillera Tiger Gold Resources, Inc (“Cordillera”) which
is the holder of the exploration permit for the Danglay
gold project in the Philippines. The conditions for the
earn-in have been satisfied but the relevant shareholding
has yet to be issued, despite the Board of Cordillera
authorising the issue. In addition, the exploration permit
for the Danglay gold project held by Cordillera expired
on 30 September 2015. Cordillera is currently waiting
for the Philippine authority to formally grant its renewal
application. This indicates the existence of a material
uncertainty over the recoverability of the carrying value of
the Danglay gold project, which amounted to £1,160,848
as at 30 September 2017.
Other information
The other information comprises the information included
in the annual report, other than the financial statements
and our auditor’s report thereon. The directors are
responsible for the other information. Our opinion on the
group and parent company financial statements does
not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon. In connection
with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider
whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether there is a material misstatement in the financial
statements or a material misstatement of the other
information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters 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 financial year for which the
financial statements are prepared is consistent with the
financial statements; and
the strategic report and the directors’ report have
been prepared in accordance with applicable legal
requirements.
15
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Independent Auditor’s Report continued
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group
and the parent company and their environment obtained
in the course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at: http://www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
David Thompson (Senior statutory auditor)
For and on behalf of PKF Littlejohn LLP
Statutory auditor
28 March 2018
1 Westferry Circus
Canary Wharf
London E14 4HD
We have nothing to report in respect of the following
matters in relation to which 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 financial statements are not in
agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified
by law are not made; or
we have not received all the information and
explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement, the directors are responsible for the preparation
of the group and parent company financial statements and
for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary
to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or
error.
In preparing the group and parent company financial
statements, the directors are responsible for assessing the
group’s and the parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
16
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Consolidated Income Statement
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Continuing operations
Other administrative expenses
Currency exchange differences
Total administrative expenses
Operating loss
Other income
Loss on disposal of investment
Fair value movements - available for sale financial asset
Financial income
Financial expense
Finance income and costs
Loss for the year before taxation
Income tax
Loss for the year from continuing operations
Year ended
30 September 2017
£
Year ended
30 September 2016
£
Note
(509,545)
(3,186)
(512,731)
(512,731)
–
(1)
1,255
(511,477)
353
–
353
(511,124)
–
(511,124)
(677,873)
9,399
(668,474)
(668,474)
34,688
–
(18,893)
(652,679)
484
(267,511)
(267,027)
(919,706)
–
(919,706)
3
9
7
5
Loss for the year - all attributable to owners of the parent
(511,124)
(919,706)
Earnings per share - basic and diluted
On continuing operations
4
(0.31)p
(0.01)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 £208,774 (2016: £887,844 loss).
The notes on pages 23 to 39 are an integral part of these financial statements.
17
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Year ended
30 September 2017
£
Year ended
30 September 2016
£
Loss for the year
(511,124)
(919,706)
Items that may be reclassified subsequently to profit or loss
Loss on exchange translation
Other comprehensive expense for the year
Total comprehensive expense for the year
Attributable to:-
Owners of the parent
(51,524)
(51,524)
(96,886)
(96,886)
(562,649)
(1,016,592)
(562,649)
(1,016,592)
The notes on pages [20] to [35] are an integral part of these financial statements.
18
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Consolidated & Company Statement of Financial Position
At 30 September 2017
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 fi nancial 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
2017
£
30 September
2016
£
30 September
2017
£
30 September
2016
£
Note
8
9
10
11
11
9
12
8,694
–
2,668,747
–
6,237
–
2,437,608
–
7,020
852,170
2,180,312
240,970
6,237
740,100
2,076,104
107,341
2,677,441
2,443,845
3,280,472
2,929,782
54,888
22,269
–
–
1,082,994
5,470
21,014
38,059
2,672
471,809
281,901
22,269
–
–
1,046,787
4,147
21,014
10,067
2,672
443,165
1,160,151
539,024
1,350,957
481,065
3,837,592
2,982,869
4,631,429
3,410,847
14
15
102,367
–
302,242
–
80,432
–
268,323
–
102,367
302,242
80,432
268,323
102,367
302,242
80,432
268,323
3,735,225
2,680,627
4,550,997
3,142,524
13
13
11,282,812
43,823,335
(218,059)
1,381,998
(52,534,860)
11,281,628
42,441,553
(166,535)
1,147,717
(52,023,736)
11,282,812
43,823,335
–
1,381,998
(51,937,148)
11,281,628
42,441,553
–
1,147,717
(51,728,374)
Total equity
3,735,225
2,680,627
4,550,997
3,142,524
The loss for the Parent Company for the year was £208,774 (2016 - £887,844 loss).
The notes on pages 23 to 49 are an integral part of these fi nancial statements. The fi nancial statements on pages 17 to 39
were approved and authorised for issue by the Directors on 28 March 2018 and were signed on its behalf by:
Weili (David) Tang
Non–Executive Chairman
Craig Brown
Director & Chief Executive Offi cer
ECR MINERALS PLC
ANNUAL REPORT & ACCOUNTS 2017
19
Consolidated Statement of Changes in Equity
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Share
capital
(Note 13)
£
Share
premium
(Note 13)
£
Exchange
reserve
Other
reserves
Retained
reserves
£
£
£
Total
£
Balance at 1 October 2015
Loss for the year
Gain on exchange translation
11,071,602
–
–
40,802,469
–
–
–
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
(69,649)
–
(96,886)
96,886
–
–
–
–
–
–
845,677
–
–
–
–
–
–
123,737
178,303
–
(51,104,030)
(919,706)
–
1,546,069
(919,706)
(96,886)
(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
Loss for the year
Loss on exchange translation
11,281,628
–
–
42,441,553
–
–
Total comprehensive expense
Shares issued
Share issue costs
Share based payments
Shares issued in payment of creditors
–
1,109
–
–
75
–
1,552,455
(84,878)
(166,739)
80,944
(166,535)
–
(51,524)
(51,524)
–
–
–
–
1,147,717
–
–
(52,023,736)
(511,124)
–
–
–
–
234,281
–
(511,124)
–
–
–
–
2,680,627
(511,124)
(51,524)
(562,649)
1,553,564
(84,878)
67,542
81,019
Total transactions with owners,
recognised directly in equity
1,184
1,381,782
–
234,281
–
1,617,247
Balance at 30 September 2017
11,282,812
43,823,335
(218,059)
1,381,998
(52,534,860)
3,735,226
The notes on pages 23 to 39 are an integral part of these financial statements.
20
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Company Statement of Changes in Equity
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Share
capital
(Note 13)
£
Share
premium
(Note 13)
£
Other
reserves
Retained
reserves
£
£
Total
£
Balance at 1 October 2015
Loss for the year
11,071,602
–
40,802,469
–
845,677
–
(50,840,530)
(887,844)
1,879,218
(887,844)
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
Balance at 30 September 2016
Loss for the year
Total comprehensive expense
Shares issued
Share issue costs
Share based payments
Shares issued in payment of creditors
Total transactions with owners, recognised
directly in equity
–
34,673
147,500
–
–
–
27,853
–
501,582
952,500
(55,750)
–
–
240,752
–
–
–
–
123,737
178,303
–
(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
11,281,628
–
–
1,109
–
–
75
42,441,553
–
–
1,552,455
(84,878)
(166,739)
80,944
1,147,717
–
–
–
–
234,281
–
(51,728,374)
(208,774)
(208,774)
–
–
–
–
3,142,524
(208,774)
(208,774)
1,553,564
(84,878)
67,542
81,019
1,184
1,381,782
234,281
–
1,617,247
Balance at 30 September 2017
11,282,812
43,823,335
1,381,998
(51,937,148)
4,550,997
The notes on pages 23 to 39 are an integral part of these financial statements.
21
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Group
Company
Year ended
30 September
2017
£
Year ended
30 September
2016
£
Year ended
30 September
2017
£
Year ended
30 September
2016
£
Note
Net cash flow used in operations
22
(569,016)
(494,118)
(511,307)
(483,553)
Investing activities
Purchase of property, plant & equipment
Increase in exploration assets
Investment in subsidiaries
Loan to subsidiary
Interest income
10
(6,174)
(231,140)
–
–
353
–
(319,580)
–
–
484
(4,082)
(104,209)
(112,070)
(133,629)
233
–
(257,818)
(79,535)
–
35
Net cash used in investing activities
(236,961)
(319,096)
(353,757)
(337,318)
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
1,468,686
–
–
–
–
1,100,000
418,463
(248,332)
(55,750)
(31,385)
1,468,686
–
–
–
–
1,100,000
418,463
(248,332)
(55,750)
(31,385)
Net cash from financing activities
1,468,686
1,182,996
1,468,686
1,182,996
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of changes in foreign exchange rates
662,709
471,809
(51,524)
369,782
90,398
11,629
603,622
443,165
–
362,125
81,040
–
Cash and cash equivalents at end of the year
12
1,082,994
471,809
1,046,787
443,165
Non-cash transactions:
1. During the year no convertible loans and interest thereon were converted into shares (2016: £758,554).
2. Settlement of creditors of £80,944 (2016: £140,863) with ordinary shares.
3. No purchases of assets were settled with ordinary shares (2016: £53,259).
The notes on pages 23 to 39 are an integral part of these financial statements.
22
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Notes to the Financial Statements
For the year ended 30 September 2017
1 General information
Not yet effective
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
Directors’ Report on page [10].
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 2012–2014 Cycle
Amendments to IAS 1: Disclosure Initiative
Amendments to IFRS 10, IFRS 12 and IAS 28: Investment
Entities: Applying the Consolidation Exception
Amendments to IAS 16 and IAS 38: Clarification of
Acceptable Methods of Depreciation and Amortisation
Amendments to IAS 27: Equity Method in Separate
Financial Statements
The adoption of these standards and amendments did not
have any impact on the financial position or performance of the
Group.
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 12: Recognition of Deferred Tax
Assets for Unrealised Losses
Amendments to IAS 7: Disclosure Initiative
IFRS 15 Revenue from Contracts with Customers including
amendments to IFRS 15
Clarifications to IFRS 15 Revenue from Contracts with
Customers
IFRS 9 Financial Instruments
IFRS 16 Leases
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 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
IFRIC 23 Uncertainty over Income Tax Treatments
Amendments to IAS 28 Long-term Interests in Associates
and Joint Ventures
Annual Improvements to IFRS Standards 2015-2017 Cycle
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 Parent 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 2017. 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 2017,
the Group had cash and cash equivalents of £1,082,994 and
no borrowings. The Group’s financial projections and cash flow
forecasts covering a period of at least twelve months from
23
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Notes to the Financial Statements continued
For the year ended 30 September 2017
the date of approval of these financial statements show that
the Group will have sufficient available funds in order to meet
its contracted and committed expenditure. Further details are
included in Note 23 to the financial statements. 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.
Based on 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 next 12
months 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
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.
24
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
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.
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 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 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
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
using the effective interest rate method, less any provision
for impairment. Any change in their value is recognised in
25
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 Notes to the Financial Statements continued
For the year ended 30 September 2017
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 and recoverability of exploration costs (Note 10);
•
• share–based payments (Note 6 and Note 13);
26
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 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
2017
£
4,653
24,213
67,542
Year ended
30 September
2016
£
1,468
14,126
123,737
the parent company and consolidated financial statements
21,500
22,000
4 Earnings per share
Basic and Diluted
Year ended
30 September
2017
Year ended
30 September
2016
Weighted number of shares in issue during the year
166,559,125
9,181,895,384
Loss from continuing operations attributable to owners of the parent
£
(511,124)
£
(919,706)
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 19% for the year ended 30 September
2017 (2016: 20%) 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 19% (2016: 20%)
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
Current tax expense
Deferred tax (see below)
Total income tax expense
Year ended
30 September
2017
£
Year ended
30 September
2016
£
(511,124)
(97,114)
13,694
(19)
247
83,192
–
–
–
(919,706)
(183,941)
75,091
(7)
294
108,563
–
–
–
The Company has unused tax losses of approximately £3,763,000 (2016: £3,246,000) to carry forward and set against future
profits; and the Company has capital losses of £196,977 to carry forward and set against future capital gains of the Company. 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 2017
Notes to the Financial Statements continued
For the year ended 30 September 2017
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
Social security costs
Share-based payments
Year ended
30 September
2017
Number
Year ended
30 September
2016
Number
3
1
4
£
243
208,232
10,402
67,542
286,419
3
1
4
£
39,557
213,167
6,626
–
259,350
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
Share-based payments
£
£
208,232
10,402
67,542
286,176
213,167
6,626
–
219,793
Directors’ remuneration
As required by AIM Rule 19, details of remuneration earned in respect of the financial year ended 30 September 2017 by each
Director are set out below:
Year ended 30 September 2017
Director
C Brown
R Watts
C St John Dennis
I Jones
W Tang
W Howell
Paid
£
90,000
484
23,385
38,968
6,395
45,000
204,232
Salary
Accrued
£
Consulting
fees
£
Share–based
payments
£
–
–
–
4,000
–
–
4,000
–
–
–
37,000
–
–
37,000
33,771
–
–
33,771
–
–
67,542
Total
£
123,771
484
23,385
113,739
6,395
45,000
312,774
28
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
6 Staff numbers and costs continued
Year ended 30 September 2016
Director
C Brown
S Clayson
R Watts
W Howell
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
The highest paid Director received remuneration of £90,000 (2016: £110,833), excluding share–based payments.
W Howell received remuneration totalling £45,000 (2016: £43,500) via a service company.
I Jones received remuneration, excluding share-based payments, including consulting fees of £79,968 (2016: £Nil) via a service
company.
The amounts in the year ended 30 September 2017 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 £0.01725
(1.725p) 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 0.85p 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
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
Year ended
30 September
2017
£
–
–
–
–
Year ended
30 September
2016
£
123,894
77,030
65,174
1,413
–
267,511
2017
£
(353)
(353)
2016
£
(484)
267,028
Group
Cost
At 1 October 2016
Additions
Written off
At 30 September 2017
Depreciation
At 1 October 2016
Written off
Depreciation for the year
At 30 September 2017
Net book value
At 1 October 2016
At 30 September 2017
Office
equipment
£
Machinery &
equipment
£
Furniture
&
fittings
£
3,445
2,277
(2,740)
2,982
17,729
4,833
(9,645)
12,917
2,950
(2,740)
581
14,693
(9,645)
3,299
791
8,347
495
2,191
3,036
4,570
4,172
–
(307)
3,865
1,466
(307)
773
1,932
2,706
1,933
Total
£
25,346
7,110
(12,692)
19,764
19,109
(12,692)
4,653
11,070
6,237
8,694
29
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Notes to the Financial Statements continued
For the year ended 30 September 2017
8 Property, plant and equipment continued
Company
Cost
At 1 October 2016
Additions
Written off
At 30 September 2017
Depreciation
At 1 October 2016
Written off
Depreciation for the year
At 30 September 2017
Net book value
At 1 October 2016
At 30 September 2017
Office
equipment
£
Machinery &
equipment
£
Furniture
&
fittings
£
3,445
185
(2,740)
890
2,950
(2,740)
163
373
17,414
4,833
(9,330)
12,917
14,378
(9,330)
3,299
8,347
495
517
3,036
4,570
3,865
–
–
3,865
1,159
–
773
1,932
2,706
1,933
The Group and the Company’s property, plant and equipment are free from any mortgage or charge.
The comparable table for 2016 is detailed below.
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
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
30
Furniture
&
fittings
£
3,445
–
3,445
2,880
70
–
2,950
565
495
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
Office
equipment
£
Machinery &
equipment
£
17,414
17,414
3,865
3,865
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
Total
£
24,724
5,018
(12,070)
17,672
18,487
(12,070)
4,235
10,652
6,237
7,020
Total
£
25,588
(242)
25,346
17,883
1,468
(242)
19,109
7,705
6,237
Total
£
24,724
24,724
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
9
Investments
Cost as at 1 October 2016
Addition
Balance at 30 September 2017
The comparable table for 2016 is detailed below:
Cost as at 1 October 2015
Addition
Balance at 30 September 2016
Investment in subsidiaries
Investment in
subsidiaries
£
740,100
112,070
852,170
Investment in
subsidiaries
£
703,740
36,360
740,100
At 30 September 2017, 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%
Lamadrid 33, M5521JCV, Mendoza, Argentina
Ochre Mining SA
58 Gipps Street, Collingwood Victoria, 3066, Australia
Mercator Gold Australia Pty Ltd
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
Fair value movements
At 30 September
2017
£
21,014
1,255
22,269
2016
£
39,277
(18,263)
21,014
The available for sale financial asset at 30 September 2016 and 2017 comprises of shares in Tiger International Resources Inc.
31
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Notes to the Financial Statements continued
For the year ended 30 September 2017
10 Intangible assets – exploration and development costs
At 1 October
Additions
Translation difference
At 30 September
Group
Company
2017
£
2016
£
2017
£
2016
£
2,437,608
284,063
(52,924)
2,132,224
399,319
(93,935)
2,076,103
104,208
–
1,797,460
278,643
–
2,668,747
2,437,608
2,180,312
2,076,103
An operating segment level summary of exploration and development costs of the Group is presented below:
Danglay Gold Project, Philippines
SLM Gold Project, Argentina
Central Victorian Gold Projects, Australia
At 30 September
Danglay Gold Project, Philippines
2017
£
1,160,848
1,161,979
345,920
2016
£
1,164,982
1,117,335
155,291
2,668,747
2,437,608
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; Tiger International presently refuses to acknowledge ECR’s 25% interest in
Cordillera Tiger. In January 2017, ECR appointed legal counsel to begin the process of enforcing the Group’s rights.
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 a funding partner.
11 Trade and other receivables
Non-current assets
Amount owed by a subsidiary
Current assets
Other renewables
Prepayments and accrued income
Group
Company
2016
£
2017
£
2016
£
–
240,970
107,341
2017
£
–
46,884
8,004
54,888
–
5,470
5,470
275,027
6,874
281,901
–
4,147
4,147
The short–term carrying values are considered to be a reasonable approximation of the fair value.
32
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
12 Cash and cash equivalents
Cash and cash equivalents consisted of the following:
Deposits at banks
Cash on hand
Group
Company
2017
£
2016
£
2017
£
2016
£
1,082,941
53
471,643
166
1,046,739
48
443,009
156
1,082,994
471,809
1,046,787
443,165
13 Share capital and share premium accounts
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
25,845,287,953
Ordinary
shares
£
258,453
Deferred Deferred ‘B’
0.099p
shares
£
3,828,359
9.9p
shares
£
7,194,816
Deferred
0.199p
shares
Total
£
£
– 11,281,628 42,441,553 53,723,181
Share
premium
£
Total
shares
£
129,226,440
1,292
110,911,947
1,109
7,466,853
75
–
–
–
–
–
–
257,161
–
–
–
–
–
1,109
1,300,837
1,301,946
75
80,945
81,020
At 1 October 2016
Share consolidation
200:1
Issue of shares
less costs
Shares issued in
payment of creditors
Balance at
30 September 2017 247,605,240
2,476
7,194,816
3,828,359
257,161 11,282,812 43,823,335 55,106,147
All the shares issued are fully paid up and none of the Company’s shares are held by any of its subsidiaries.
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
2017
£
0.637
0.01725
Number of
options
2017
1,750,702
8,153,968
Weighted
average
exercise price
2016
£
0.637
–
Number of
options
2016
1,750,702
–
Exercisable at the end of the year
0.127
9,904,670
0.637
1,750,702
The options outstanding at 30 September 2017 have a weighted average remaining contractual life of four years (2016: three
years). The 2016 comparative has been adjusted to reflect the share consolidation during the current period.
The options outstanding at the end of the year have the following expiry date and exercise prices:
Date granted
Expiry Date
Exercise Price in
No. of Options
6 January 2011
12 August 2013
31 December 2014
27 February 2017
5 January 2021
11 August 2018
30 December 2019
26 February 2022
£5.00
£0.40
£0.55
£0.01725
56,000
650,000
1,044,702
8,153,968
33
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Notes to the Financial Statements continued
For the year ended 30 September 2017
13 Share capital and share premium accounts continued
Share-based payments
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
Share price at the day before grant
Exercise price
Expected volatility
Average option life in years
Expected dividends
Weighted average risk–free interest rate (based on national government bonds)
2017
£
67,542
0.0115
0.01725
107%
5
–
0.5%
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
Share warrants
Exercisable at the beginning of the year
Expired during the year
Granted during the year
2017
8,153,968
£67,542
Weighted
average
exercise price
2017
£
0.0583
0.2363
0.0290
Number of
warrants
2017
15,651,338
(485,963)
88,580,184
Weighted
average
exercise price
2016
£
0.1594
–
0.0521
Number of
warrants
2016
913,729
–
14,737,609
Exercisable at the end of the year
0.03245
103,745,559
0.0583
15,651,338
The 2016 comparative has been adjusted to reflect the share consolidation during the current period.
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
2 June 2017
6 June 2017
6 June 2017
6 June 2017
£13,161
2,777,778
£0.022
£0.018
14 %
3
–
0.50%
£26,343
2,767,820
£0.01925
£0.01
14 %
3
–
0.50%
£124,965
55,356,391
£0.01925
£0.02
14 %
5
–
0.50%
£98
27,678,195
£0.0195
£0.05
14 %
5
–
0.50%
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:
34
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
13 Share capital and share premium accounts continued
Date granted
Expiry Date
Exercise Price
9 February 2015
9 February 2015
6 March 2015
6 March 2015
20 April 2015
20 April 2015
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
2 June 2017
6 June 2017
6 June 2017
6 June 2017
8 February 2018
8 February 2018
5 March 2018
5 March 2018
19 April 2018
19 April 2018
22 November 2018
7 December 2018
8 March 2019
3 April 2019
5 May 2019
1 June 2019
5 September 2019
5 September 2019
5 September 2019
19 September 2019
1 June 2020
5 June 2020
5 June 2022
5 June 2022
£
0.0656
0.0786
0.0656
0.0786
0.0656
0.0786
0.08
0.08
0.0656
0.0562
0.0532
0.0456
0.01
0.03
0.02
0.03
0.018
0.01
0.02
0.05
No. of
Warrants
54,350
54,350
68,365
68,365
91,168
91,168
4,500,000
1,750,000
858,779
583,333
404,930
473,901
2,000,000
2,500,000
1,000,000
666,667
2,777,778
2,767,820
55,356,391
27,678,195
The fair value of warrants issued amounting to £164,567 has been recognised respectively in other reserves and deducted from
share premium. The additional fair value of warrants issued for commission on a placing in September 2016 and charged to the
financial year ending 30 September 2017 was £2,172.
14 Trade and other payables
Trade payables
Social security and employee taxes
Other creditors and accruals
15 Capital management
Group
Company
2017
£
44,227
13,684
44,456
2016
£
47,629
7,455
247,158
102,367
302,242
2017
£
34,104
13,684
32,644
80,432
2016
£
33,757
7,455
227,111
268,323
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.
35
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Notes to the Financial Statements continued
For the year ended 30 September 2017
16 Related party transactions
Group
Company
2017
£
2016
£
2017
£
2016
£
Amounts owed to Directors
12,323
31,097
12,323
31,097
Details of Directors’ emoluments are disclosed in Note 6. The amounts owed to Directors relate to accrued emoluments,
consulting fees and expenses due.
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 additional advances of £133,629 under a loan to Mercator Gold Australia Pty Ltd. The
balance owed to the Company is shown in Note 11.
During the year the Company subscribed for new shares of Ochre Mining SA (“Ochre”) to the value of £112,070 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.
17 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
18 Commitments and contingencies
Capital expenditure commitment
As at 30 September 2017, the Group had no commitments (2016: £Nil).
2017
£
2016
£
–
–
–
–
–
15,860
(15,860)
–
The Group is committed to issuing 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 19 below.
19 Operating leases
The total amounts payable under:
Non–cancellable operating lease liabilities of the Group and Company are as follows:
Payable:
Within 1 year
2017
£
–
2016
£
–
36
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
20 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
2017
£
1,082,994
1,082,994
22,269
22,269
102,367
102,367
–
–
2017
£
1,046,787
1,046,787
22,269
22,269
80,432
80,432
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
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.
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.
37
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
Notes to the Financial Statements continued
For the year ended 30 September 2017
20 Financial instruments continued
Fair value of financial instruments
The fair values of the Company’s financial instruments at 30 September 2017 and 30 September 2016 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 2017
Available for sale financial assets
Group and Company
30 September 2016
Available for sale financial assets
Liquidity risk
Level 1
£
22,269
22,269
Level 1
£
21,014
21,014
Level 2
£
Level 3
£
–
–
–
–
Level 2
£
Level 3
£
–
–
–
–
Total
£
22,269
22,269
Total
£
21,014
21,014
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 2017.
Due in less than 1 month
Due between 1 and 3 months
Due between 3 months and 1 year
Due after 1 year
2017
£
102,367
–
–
–
102,367
2016
£
302,242
–
–
–
302,242
38
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
21 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.
22 Cash used in operations
Group
Company
Year ended
30 September
2017
£
Year ended
30 September
2016
£
Year ended
30 September
2017
£
Year ended
30 September
2016
£
Note
Operating activities
Loss for the year before tax
Adjustments:
Depreciation expense property, plant and equipment
Loss on disposal of investment
(Gain)/Loss on available for sale assets
Loss on extinguishment of debt by equity
Interest income
Interest accrued on convertible loan notes
Share based payments
(Increase)/decrease in accounts receivable
(Increase)/decrease in taxation
Increase in accounts payable
Shares issued in lieu of expense payments
8
7
(511,124)
(919,706)
(208,774)
(887,844)
3,717
1
(1,255)
–
(353)
–
67,542
(36,899)
28,212
(199,876)
81,019
1,468
–
18,263
30,486
(484)
200,924
123,737
(12,941)
(8,230)
58,565
13,800
3,299
1
(1,255)
–
(233)
–
67,542
(265,235)
220
(187,891)
81,019
1,468
–
18,263
30,486
(35)
200,924
123,737
(692)
(8,230)
24,570
13,800
Net cash flow used in operations
(569,016)
(494,118)
(511,307)
(483,553)
23 Events after the reporting date
•
•
On 27 November 2017, the directors of ECR Minerals plc (the “Board”) announced the resignation of Ivor Jones, Director and
COO of the company, with effect from 30 November 2017.
On 23 February 2018, the directors of ECR Minerals plc (the “Board”) announced that the Company’s wholly owned
Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) has been notified of the renewal of MGA’s Exploration Licence
EL5433 in Central Victoria, Australia for a further five-year term until 27 March 2023.
39
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
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 2018 at 10.30 a.m. for the purpose of considering and, if thought fit, passing
Resolutions 1 to 5 as ordinary resolutions, and Resolutions 6 and 7 as special resolutions:
Ordinary Resolutions
1
2
3
To receive, consider and adopt the annual accounts of the Company for the year ended 30 September 2017, together with the
reports of the directors and auditors thereon.
That Weili Tang, a director retiring in accordance with article 79.1.1 of the Company’s articles of association, be elected as a
director of the Company.
To re-appoint PKF Littlejohn LLP as auditors of the Company, to hold office until the conclusion of the next general meeting at
which accounts are laid before the Company.
4
To authorise the audit committee to determine the remuneration of the Company’s auditors of the Company.
5
That the directors be generally and unconditionally authorised pursuant to and in accordance with section 551 of the Companies
Act 2006 (the “CA 2006”) to exercise all the powers of the Company to allot shares or grant rights to subscribe for, or to convert
any security into shares in the Company up to an aggregate nominal amount of £5,000 provided that this authority shall, unless
renewed, varied or revoked by the Company, expire on 30 June 2019 or, if earlier, the date of the next annual general meeting of
the Company, save that the Company may, before such expiry, make offers or agreements which would or might require equity
securities to be allotted (or treasury shares to be sold) after the authority expires and the directors may allot equity securities (or
sell treasury shares) in pursuance of any such offer or agreement as if the authority had not expired.
Special Resolutions
6 That, subject to the passing of resolution 5, the directors be empowered to allot equity securities (as defined by section 560
of the CA 2006) pursuant to the authority conferred by resolution 5 for cash, and/or sell treasury shares for cash, as if section
561(1) of the CA 2006 did not apply to any such allotment, provided that this power shall be limited to the allotment of equity
securities of up to an aggregate nominal value of £5,000. The authority granted by this resolution will expire at the conclusion of
the Company’s next annual general meeting after this resolution is passed or, if earlier, at the close of business on 30 June 2019
save that the Company may, before such expiry make offers or agreements which would or might require equity securities to
be allotted (or treasury shares to be sold) after the authority expires and the directors may allot equity securities (or sell treasury
shares) in pursuance of any such offer or agreement as if the authority had not expired.
7 That the Company be generally and unconditionally authorised for the purposes of section 701 of the CA 2006 to make one or
more market purchases (as defined in section 693(4) of the CA 2006) of its ordinary shares with nominal value of £0.00001 each
in the Company, provided that:
7.1 the Company does not purchase under this authority more than 24,760,524 ordinary shares;
7.2 the Company does not pay less than £0.00001 for each ordinary share; and
40
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 7.3 the Company does not pay more per ordinary share than the higher of (i) an amount equal to 5 per cent. over the average of the
middle-market price of the ordinary shares for the five business days immediately preceding the day on which the Company
agrees to buy the shares concerned, based on share prices published in the Daily Official List of the London Stock Exchange; and
(ii) the amount stipulated by the regulatory technical standards adopted by the European Commission pursuant to Article 5(6) of
the Market Abuse Regulation (EU) No. 596/2014.
This authority shall continue until the conclusion of the Company’s annual general meeting in 2019 or 30 June 2019, whichever is
the earlier, provided that if the Company has agreed before this date to purchase ordinary shares where these purchases will or
may be executed after the authority terminates (either wholly or in part) the Company may complete such purchases.
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
29 March 2018
41
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017
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 2017, together with the
reports of the directors and auditors on these accounts, be
received, considered and adopted.
Resolution 2: Election of Weili Tang
Resolution 2 proposes that Mr Weili Tang, who was appointed
since the last Annual General Meeting of the Company and
is retiring in accordance with article 79.1.1 of the Company’s
articles of association, be elected as a director of the Company.
Resolution 3: Re-appointment of Auditor
Resolution 3 proposes the reappointment of the Company’s
existing auditor to hold office until the end of the next such
meeting.
Resolution 4: Remuneration of Auditor
Resolution 4 is to authorise the audit committee of the
Company to determine the remuneration of the Company’s
auditors.
Resolution 5: Authority to allot shares
Resolution 5 is to renew the directors’ power to allot shares
in accordance with section 551 of the CA 2006. The authority
granted at general meeting on 23 March 2017 is due to expire
on 30 June 2018.
If passed, the resolution will authorise the Directors to allot
equity securities up to a maximum nominal amount of £5,000,
which represents approximately 202% of the Company’s
issued ordinary shares as at 28 March 2018 (being the latest
practicable date before publication of this document).
Accordingly, resolution 6 will be proposed as a special
resolution to grant such a power and will permit the directors
to allot pursuant to the authority to allot granted by resolution
5 to allot equity securities (as defined by section 560 of
the CA 2006) or sell treasury shares for cash without first
offering them to existing shareholders in proportion to their
existing holdings up to a maximum nominal value of £5,000
representing approximately 202% of the Company’s issued
ordinary shares (excluding treasury shares) as at 28 March
2018 (being the latest practicable date before publication of
this document). If given, this authority will expire at the annual
general meeting in 2019 or on 30 June 2019, whichever is the
earlier.
Resolution 7
Resolution 7 will be proposed as a special resolution and will
give the Company authority to purchase its own shares in the
markets up to a limit of 10 per cent. of its issued ordinary share
capital. The maximum and minimum prices are stated in the
resolution. Your directors believe that it is advantageous for the
Company to have this flexibility to make market purchases of
its own shares.
Your directors will exercise this authority only if they are
satisfied that a purchase would result in an increase in
expected earnings per share and would be in the interests of
shareholders generally. In the event that shares are purchased,
they would either be cancelled (and the number of shares in
issue would be reduced accordingly) or, in accordance with the
CA 2006, be retained as treasury shares.
As at 28 March 2018, the total number of options and warrants
over shares that were outstanding under all of the Company’s
share option plans was 110,636,980 which if exercised would
represent 44.7 per cent. of the Company’s issued share capital
at that date. If the Company were to purchase its own shares
to the fullest possible extent of its authority from shareholders,
the number of outstanding options could potentially represent
40.6 per cent. of the issued share capital of the Company.
If given, these authorities will expire at the annual general
meeting in 2019 or on 30 June 2019, whichever is the earlier.
If given, these authorities will expire at the annual general
meeting in 2019 or on 30 June 2019, whichever is the earlier.
The directors have no present intention to issue new ordinary
shares, other than pursuant to the exercise of options
or warrants. However, the directors consider it prudent
to maintain the flexibility to take advantage of business
opportunities that this authority provides.
As at the date of this document the Company does not hold
any Ordinary Shares in the capital of the Company in treasury.
Resolution 6: disapplication of pre-emption rights
Resolution 6 is to grant the directors the authority to allot
equity securities for cash or sell any shares held in treasury
otherwise than to existing shareholders pro rata to their
holdings, as there may be occasion where it is in the best
interests of the Company not to be required to first offer such
shares to existing shareholders.
42
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 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 2018 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
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.
9 Only those shareholders registered in the Register of
Members of the Company as at 6.00 p.m. on 20 April
2018 (or, if the meeting is adjourned, on the date which
is 48 hours (excluding non-business 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 2017
10 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.
11 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.
12 As at 28 March 2018 (being the last business day before
the publication of this Notice), the Company’s issued
share capital consisted of 247,605,240 Ordinary Shares
carrying one vote each. The Company does not hold any
shares in treasury.
13 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 2017 Company Information
DIRECTORS
Weili (David) Tang
Non–Executive Chairman
Craig William Brown
Director & CEO
Christian Gabriel St. John-Dennis
Non-Executive Director
COMPANY SECRETARY
Craig William Brown
Unit 117, Chester House
81-83 Fulham High Street
Fulham Green London SW6 3JA
AUDITOR
PKF Littlejohn LLP
Statutory Auditor
1 Westferry Circus
Canary Wharf
London E14 4HD
AIM NOMINATED ADVISER
WH Ireland Group plc
24 Martin Lane
London
EC4R 0DR
REGISTRARS
AIM BROKER OF RECORD
Computershare Investor Services plc
Optiva Securities Ltd
The Pavilions
Bridgwater Road
Bristol BS13 8AE
REGISTERED AND HEAD OFFICE
LEGAL ADVISERS
Charles Russell Speechlys LLP
5 Fleet Place
London EC4M 7RD
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
2 Mill Street
London W1S 2AT
BANKERS
Barclays Bank plc
1 Churchill Place
London
E14 5HP
45
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2017 NP0318.2574
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