Annual Report and Accounts
– 2021 –
The Directors of ECR Minerals plc (the “Directors” or the “Board”) present their report
and audited financial statements for the year ended 30 September 2021 for ECR Minerals
plc (“ECR”, the “Company” or the “Parent Company”) and on a consolidated basis (the
“Group”)
CONTENTS
Chairman’s Statement
Non-Executive Committee 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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49
Chairman’s Statement
The Directors of ECR Minerals plc (the “Directors” or
the “Board”) present their report and audited fi nancial
statements for the year ended 30 September 2021 for
ECR Minerals plc (“ECR”, the “Company” or the “Parent
Company”) and on a consolidated basis (the “Group”)
As the COVID-19 pandemic continued to wreak havoc
across the globe, for ECR the fi nancial year ending 2021 was
one of great operational progress that saw our determined
management team and workforce overcome adversity to
deliver solid progress.
All that was achieved during the year was, however,
overshadowed by the untimely and tragic death of our
long serving CEO Craig Brown. Craig was a close personal
friend and confi dant of mine. Although he died a few weeks
after the year-end, progress continued through our interim
management committee. I speak for everyone working
with and associated with the company to say we miss him
dearly.
Our operational hub is centred in the state of Victoria in
Australia, where ECR’s wholly owned subsidiary Mercator
Gold Australia Pty Ltd (“MGA”) has continued to develop
Bailieston and Creswick, ECR’s two fl agship gold exploration
projects. In addition, ECR Minerals formed a subsidiary
company, LUX Exploration Pty Ltd (“LUX”) in May, to
develop potential gold licence assets in the Lolworth Range
area in Northern Queensland, and as I write to you now, the
three Lolworth exploration licences have just been granted.
Throughout the year MGA conducted intensive drilling
and soil sampling programmes at the Historic Reserve #3
(HR3) prospect, which includes the prospective Byron,
Dan Genders, Scoulars and Maori Reefs, plus numerous
cross-structures. Drilling results have provided us with some
initial good cross-sections of gold grades and a detailed
understanding of the geology that have, in turn, identifi ed
further targets. Post year-end results from core logging and
soil sample testing have left us enthusiastic with the scale
and development potential of HR3 as a whole.
An intensive campaign of drilling and soil sampling at
Creswick has also provided us with some good initial gold
grades and again a detailed understanding of the narrow
vein geology of the region, which is similar in many ways to
the Ballarat gold mine located directly south of the Creswick
area. Unfortunately, the prevalence of COVID has resulted in
lengthy delays to assay results and supply chain disruption,
but the team on the ground have worked tirelessly to
overcome these challenges.
Following a £2m (gross) fundraise in April 2021, ECR
decided to use its strong cash position to invest into three
properties; 35 Brewing Lane, Springmount (Creswick), 127
Nagambie –Rushworth Road (Bailieston) and 177 Bassett
Road, Sebastian. Many mining groups operating in Victoria
have encountered diffi culties with land access in the region,
so immediately the Brewing Lane and Nagambie-Rushworth
Road properties provided full access and working rights
across our fl agship projects, while the Bassett Road
property now provides accommodation for the Bendigo-
based workforce. I am happy to say that the buoyant Victoria
property market should in time see a comfortable increase
in the value of each property, giving ECR a far superior
return to keeping cash on deposit. Despite the loss of Craig,
we are hugely optimistic with the future and what we will
achieve in the current year.
Through MGA, ECR also owns two exploration licence
applications in eastern Victoria, known as the Tambo project.
Post year-ending, one of the exploration licences covering
the Tambo River and Swifts Creek region was granted.
Separately, approaching the end of the fi nancial year, our
25% interest in the Danglay Gold project in the Philippines
was confi rmed. Previously, uncertainties over formalising
our stake in the asset saw the risk of the carrying value
being written down on our 2020 annual report, but I am
happy to say this is no longer the case. Discussion on the
Danglay valuation is addressed by our auditors in their
report.
The costs of maintaining intensive drilling campaigns have all
served to reduce the capital position during the year, which
now stands at £1.23m. Nonetheless, we have signifi cantly
advanced the value of our assets across the group, and
together with our Victoria properties there is no additional
cash requirement in the immediate future.
Finally, while we look forward to progressing ECR interests
in 2022, our thoughts remain with Craig and his family.
Weili (David) Tang
Chairman
31 March 2022
ECR MINERALS PLC
ANNUAL REPORT & ACCOUNTS 2021
1
Current tenement position of ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd in the state of
Victoria, Australia.
2
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 Non-Executive Committee Report
Although we believe the gold price performance during
FY2021 lacked some of the excitement and growth of
the previous year, gold retained a value of US$1737/oz at
the end of September 2021. Unlike 2020, the latter half
of FY2021 saw some disruptions in operations as a result
of the COVID-19 pandemic, which affected the timing of
assay results and associated supply chains. This all paled
into insignificance with the loss of our CEO and colleague
Craig Brown, and while we are now reporting to you as a
committee, his sudden death has affected us all.
As in the previous year, ECR’s operational focus remained
on Victoria, Australia, with intensive drilling campaigns at
the Bailieston and Creswick gold projects. LUX Exploration
Pty Ltd, a new subsidiary company, was set up to apply
for and manage three new exploration licence applications
in the Lolworth Range area, near to the Charters Towers
Region in North Queensland. Initial exploration work will
take place there in 2022.
ECR’s 25% interest in the Danglay Gold project in the
Philippines, which has an inferred MRE of 63,500 ounces
of gold at 1.55g/t, was formalised at the end of the year
under review following the resolution of a long-standing
legal dispute.
Also, following the year under review, in January 2022
approval was received for one of the exploration licences
covering the Tambo River and Swifts Creek in eastern
Victoria, Australia.
EXPLORATION AT BAILIESTON AND
CRESWICK PROJECTS
An intensive drilling campaign began in January 2021 with
the aim of fully exploring the Historic Reserve #3 (HR3)
prospect, which includes the Byron, Dan Genders, Scoulars
and Maori Reefs. Initial success was achieved in drilling
under the historic Byron Mine with hole BH3DD001 which
intersected 0.6m @ 19 g/t Au from 110.9m drilled depth
(see announcement dated[ 20 April 2021]). A total of eight
drillholes were completed across parts of the HR3 goldfield
by mid 2021. With initial first pass exploration completed
at HR3, the drill rig was moved to test the nearby Cherry
tree (HR4) prospect where drilling of ten diamond holes
were completed by September 2021. Ultimately the drill
results were disappointing, although we now have a full
structural interpretation of the deposit. It was the intention
to move to the Blue Moon prospect located in the southern
part of the Bailieston licence area once compensation
arrangements were made to land owners. (Following
the year under review, in January 2022, permission was
received to access the Blue Moon prospect to continue
exploration). The Company’s drill rig moved back to HR3 to
follow up results from the initial first-pass drilling. Drilling
is still continuing there into 2022 with a focus on the
Maori, Hard-Up and Scoulers Reef systems. In addition to
drilling, soil sampling has been completed over the central
and eastern parts of the HR3 Goldfield along strike of the
Scoulers Reef.
Following the end of the period under review, results
were received in December 2021 that revealed four gold
anomalies along the Scoulers and Dan Genders Reef lines,
at the convergence with the Hard-Up Reef. This resulted in
a proposed ‘dilational jog’ model. With further assays due,
this is looking like an exciting discovery.
Drilling at the Creswick project began during the winter of
2020 and continued apace through to September 2021. The
first hole (CSD001) intersected 0.95m @ 9.68 g/t Au from
131.9m drilled depth (see announcement dated [19 July
2021]). This was a significant development, being the first
diamond hole drilled into the Dimocks Main Shale (DMS)
within the entire tenement. As further drilling data came
in, holes CSD003 returned the best gold intersections
yet, with 0.95m @ 9.93 g/t Au and 0.95m @ 23.58 g/t Au
from drilled depths of 84.2m and 89.05m respectively
(see announcement dated [19 July 2021]). Head Geologist
Adam Jones summed up the geology and ‘coarse nature’
of the gold deposits as gold within defined ‘mineral shoots’
similar in many ways to the geology within the narrow vein
gold mine at Ballarat.
Following the end of the year under review, delayed assay
results from Creswick revealed ‘erratic’ results due to the
coarse nature of the gold deposits, but armed with this
new knowledge, ECR will continue to explore Creswick
licence EL006184, and will commence exploration on the
newly approved licence EL6907 located further south.
Property Purchase
There are well-documented problems in Victoria for mining
exploration companies seeking to access land to undertake
exploration work. Land owners have either refused access
or demanded disproportionate compensation from the
explorers in order to grant access. Craig Brown saw an
opportunity to solve this issue by investing into three
properties at 35 Brewing Lane, Springmount (Creswick),
127 Nagambie –Rushworth Road (Bailieston) and 177
Bassett Road, Sebastian.
Through owning these properties, our drilling and geology
teams were afforded full access and working rights across
our flagship projects, along with accommodation. In
particular, Brewing Lane and Nagambie-Rushworth Road
have the potential to support mine works, and in the case
of Creswick, a mine decline, should an economic gold
resource be found. The Bassett Road property is already
housing members of our workforce at Bendigo. The added
benefit is the properties were purchased amidst what the
directors believe a strengthening Victoria property market
and given the recent sale prices of similar properties in the
area, we believe all three properties have appreciated in
value.
3
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 Non-Executive Committee Report continued
Tambo Gold Project
In September 2020, MGA lodged two new exploration
licence applications in eastern Victoria, EL007484 and
EL007486, which comprise the Tambo gold project, and
which covers a sizeable area of prospective geology
near historic goldfields. The applications cover portions
of the historic Swifts Creek/Omeo and Tambo River
Goldfields that have a recorded historical gold production
totalling 225,000 oz, according to figures published by
the Geological Survey of Victoria. MGA considers the
application areas to be prospective for orogenic reef gold
and additionally for intrusion-related gold and base metal
systems. On 15 December 2021 the license EL007484
covering Swifts Creek and the Tambo River has been
approved, and some preliminary exploration work is
planned for 2022.
Lolworth Range Gold Project
In May 2021, exploration licences for tenements
EPM27901, EPM27902 and EPM27903 were applied for by
ECR Minerals’ subsidiary company LUX Exploration Limited
(LUX). The tenements are located within the Lolworth
Range area, North Queensland. The area has been closely
monitored by ECR’s Head Geologist Adam Jones for at
least eight years and is considered prospective for gold.
The exploration licences for all three areas were granted to
LUX on 1 February 2022. The tenements will expire in five
years (on 31 January 2027) and, while they will be available
for renewal after the initial 5-year term, the area available
for renewal will be reduced by 50%, which is a standard
term of exploration licences to encourage companies to
focus their exploration activities.
LUX has a commitment expenditure of AUD$650,000 for
the first three years across the three licence areas, which is
expected to be funded from ECR’s existing cash resources.
OVERVIEW OF EXPLORATION LICENCE
PORTFOLIO
At the end of the financial year under review, MGA
held two granted mineral exploration licences in Victoria
(EL5433 and EL6148).). At the time of publishing, MGA
has applied to renew Creswick license EL006184, and
has received approval for EL006907 to the south, linking
Creswick to the Ballarat East-Nerrina Goldfield. MGA holds
granted exploration licence EL5433 at Bailieston, licence
EL007484 covering Swifts Creek and the Tambo River and
three new exploration licences (EPM27901, EPM27902
and EPM27903) in the Lolworth area, North Queensland.
These are augmented, in the case of Bailieston, by
exploration licence applications EL006911, EL006912 and
EL007296; and in the case of Creswick, exploration licence
applications EL006713.
In November 2020, MGA lodged exploration licence
application EL007537 for an area which surrounds mining
licences MIN5396 and MIN4847. These mining licences,
which are not held by MGA, contain the operating Ballarat
gold mine. The area of EL007537 includes the southern
extension of the Dimocks Main Shale, which is the
principal target of exploration at MGA’s Creswick gold
project located a short distance to the north, the northern
extension of the Ballarat East line and the depth extensions
of the Ballarat West line. EL007537 is in a competitive bid
with three other applicants.
Danglay Gold Project, Philippines
Following the end of the year under review, ECR Minerals
received formal recognition for its 25% shareholding
in Philippines-based company Cordillera Tiger Gold
Resources, Inc. (“Cordillera Tiger”), having invested some
£1.2 million in the Danglay gold project to date. In July
2021, Cordillera Tiger successfully renewed Exploration
License EP-006 at the Danglay gold project, which is
located in a prolific gold and copper mining district in the
north of the Philippines.
The ECR Board believes the political climate for the
minerals industry in the Philippines is improving and
considers that the Danglay gold project has potential for
further exploration to build upon the existing inferred
mineral resource estimate of 63,500 ounces of gold at 1.55
g/t gold. This resource was reported by ECR in 2015 to the
Canadian NI43-101 standard, based on exploration carried
out at Danglay by ECR during 2014 and 2015. In addition
to the resource, an NI43-101 target for further exploration
(conceptual potential quantity and grade of mineralisation
expressed as ranges) of 95,000 to 170,000 ounces of gold
at 5 to 7.5 g/t was reported.
Avoca and Timor Exploration License
Royalties
In April 2020 MGA entered into an agreement for the
sale of Avoca and Timor exploration licences EL5387,
EL006280, EL006913 and EL006278 in Victoria to
Currawong Resources Pty Ltd, a wholly owned subsidiary
of Fosterville South Exploration Ltd. A cash payment of
US$500,000 was received, and ECR is entitled to:
1. A further payment of A$1 for every ounce of gold
or gold equivalent of measured resource, indicated
resource or inferred resource estimated within the
area of one or more of the licences in any combination
or aggregation of the foregoing, up to a maximum of
A$1,000,000 in aggregate;
2. A further payment of A$1 for every ounce of gold or
gold equivalent produced from within the area of one or
more of the licences, up to a maximum of A$1,000,000
in aggregate.
4
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 SLM Gold Project Royalties
In February 2020, the Company sold its wholly owned
Argentine subsidiary Ochre Mining SA, which holds the
SLM gold project in La Rioja, Argentina. The sale allows
ECR to focus on its core gold exploration activities in
Australia. The purchaser, Hanaq Argentina SA (“Hanaq”),
is a Chinese-owned company engaged in lithium, base
and precious metals exploration in Northwest Argentina
including Salta, Jujuy and La Rioja, with a highly
experienced management team.
ECR retains an NSR royalty of up to 2% to a maximum of
USD 2.7 million in respect of future production from the
SLM gold project, owned by Hanaq Argentina SA (Hanaq).
The Directors believe that Hanaq has the operational
capabilities and access to Chinese investment capital
necessary to put the SLM project into production, subject
to the usual prerequisites such as further exploration and
feasibility studies being successfully completed (if deemed
necessary by Hanaq) and to the necessary permits for
production being obtained.
FINANCIAL RESULTS FOR THE YEAR
ENDED 30 SEPTEMBER 2021
For the year to 30 September 2021 the Group recorded a
total comprehensive loss of £1,113,870, compared with
£2,595,002 for the year to 30 September 2020.
The Group’s net assets at 30 September 2021 were
£7,657,684 in comparison with £3,563,819 at 30
September 2020. The increase is due to an increase
in exploration assets as a result of the capitalisation of
exploration expenditure during the year, and purchase of
two properties as a result of the current aggressive drilling
programme.
Weili Tang
Non-Executive Chairman
31 March 2022
ECR MINERALS PLC
ANNUAL REPORT & ACCOUNTS 2021
5
Directors’ Biographies
Weili (David) Tang
Non-Executive Chairman
(aged 56)
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.
Adam Jones
Non-Executive Director
(aged 39)
Adam Jones holds a Bachelor of Science degree from
Ballarat University and First Class Honours from Adelaide
University. Adam has over 10 years of experience as a
professional geologist in Australia, including significant
experience of gold exploration and production, and lives in
Victoria within easy reach of ECR’s Bailieston and Creswick
gold projects. He is a member of the Australian Institute
of Geoscientists (AIG) and has worked as an independent
consulting geologist since 2015. His clients include or have
included the A1 gold mine, Dart Mining and Nagambie
Resources in Victoria and Vendetta Mining in Queensland.
Adam is experienced in planning and supervising resource
drill programmes, geological interpretation, geotechnical
and fault modelling, geological mapping and sampling,
turbidite sequence-structural interpretations, wireframing
and 3D modelling using Vulcan Software.
Dr. Trevor George Davenport
Independent Non-Executive Director
(aged 81)
Dr Davenport obtained a BSc (Hons) Geology at
Southampton University, subsequently attaining his
MSc in Mining Geology and Mineral Exploration in 1967,
and a PhD in Geology & Exploration Geochemistry at
Leicester University in 1970. In 1971 he attained the title
of Chartered Engineer after becoming a Member of The
Institute of Mining and Metallurgy.
Trevor started off working as a trainee mining engineer
in the South Africa gold mines in 1958 before starting
university. Trevor has 63 years of experience working in
the geological and mining industry. Trevor’s experience
includes working as an underground miner, exploration
geochemist, exploration and mine geologist and as a
lecturer to post-graduate mining geology students at
the University of Leicester. Trevor has experience in
exploration for and mining of gold, copper/nickel, lead/zinc/
silver, bauxite, chrome and diamonds. Trevor’s experience
includes working in Ireland, Canada, Montana (USA),
Portugal, Romania, Uzbekistan, Tajikistan, Burma, Ghana,
Botswana, Guyana and South Africa.
Trevor was a director, the exploration manager and chief
geologist for Nelson Gold’s, Zeravshan Gold Company in
Tajikistan from 1994 until end of 1996.
From 2004 until 2011 he was Non-Executive Chairman
and director of Kryso Resources Plc. After this he
was consulting for Kryso Resources at the time of the
takeover of control of the company by China Nonferrous
International Mining Co. Ltd in 2011. Today Dr Davenport is
a director at Brix Investments Limited and is also President
of the Alderney Society and a director of the Alderney
Journal.
Andrew Scott
Non-Executive Director
(aged 36)
A long-standing finance presenter and broadcaster, Andrew
Scott is well known for his extensive body of work across
the UK and Australia having interviewed countless CEOs
and directors within the natural resources space alongside
fund managers and analysts on their sector outlook,
strategy and broader economic perspectives. Prior to
joining Proactive, Andrew worked at Sky World News,
Reuters Business and as an editor on ITV Breakfast.
6
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Strategic Report
The Directors of the Company present their Strategic
Report for the year ended 30 September 2021.
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, as is its current focus, it also considers
opportunities in other mineral commodities.
The main current area of activity is Central Victoria,
Australia.
Future Developments
The Group will continue seeking to advance and add
value to its projects through exploration activities, and, in
addition, is actively considering potential transactions in
relation to certain of its projects, which may create value
for the Company and its shareholders.
The Group also continues to review potential new projects
on a highly selective basis, with a concentration on
precious, base and strategic metals.
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 was based in the United Kingdom while Weili Tang,
Non-Executive Chairman, is based in the People’s Republic
of China (PRC), Adam Jones, Non-Executive Director, is
based in Victoria, Australia, Dr Trevor George Davenport,
is based in Guernsey and Andrew Scott, Non-Executive
Director, is based in New Zealand. 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 past exploration activity in Argentina has
been undertaken through an Argentinian wholly owned
subsidiary, Ochre Mining SA. During the prior year, Ochre
Mining SA was sold. 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.
During the financial period, the Company incorporated a
wholly owned Australia subsidiary named Lux Exploration
Pty Ltd (“LUX”).
The Group’s activities in the Philippines, which ceased in
2016, were undertaken under the auspices of an earn-in
and joint venture agreement. Further details of the Group’s
interest in 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
add value to the Group’s projects. The Company has four
male Directors, and two 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.
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.
For the year to 30 September 2021 the Group recorded
a total comprehensive loss attributable to shareholders
of the Company of £1,413,206, a decrease compared
with £2,595,002 for the year to 30 September 2020. The
largest contributor to the total comprehensive loss was
administrative expenses.
The Group’s net assets as at 30 September 2021
were £7,657,685 in comparison with £3,563,819, at 30
September 2020.
Exploration activity took place in Central Victoria, Australia
during the year to 30 September 2021, as discussed in
the Interim Committee Report and 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 demonstrate good prospectivity. 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.
7
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 Strategic Report continued
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.
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, in
conjunction with 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 generally
not 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
are 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
recognized protocols.
Notable outcomes of exploration work during the year
included a good cross-section of gold grades and a
detailed understanding of the geology that have in turn
identified further targets across the HR3 area at Bailieston.
Following the year under review, subsequent results from
core logging and soil sample testing indicate significant
development potential for HR3.
The intensive drilling and soil sampling campaign at
Creswick has also provided us with some good gold grades
and again a detailed understanding of the narrow vein
geology of the region, which is similar in many ways to the
Ballarat gold mine located directly south.
The strategic acquisition of three properties, (two within
Bailieston and the other within the Creswick licence area)
has provided our drilling and geology teams with full access
and working rights across our flagship projects.
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 £2,982,046 of cash and cash
equivalents at 30 September 2021, versus £1,497,231
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. At the
year-end, the Group held an interest in relation to a project
in the Philippines but did not carry out significant operations
in that jurisdiction during the year and has not done so
since the year-end.
Gold Exploration Projects in Victoria, Australia
At the end of the financial year under review, MGA held six
granted mineral exploration licences in Victoria (EL5387,
EL5433, EL006184, EL006280, EL006278 and EL006913).
At the time of publishing, MGA has applied to renew
Creswick licence EL006184, and has received approval
for EL006907 to the south, linking Creswick to the
Ballarat East Nerrina Goldfield. MGA holds granted
exploration licence EL5433 at Bailieston, licence EL007484
covering Swifts Creek and the Tambo River and three
new exploration licences (EPM27901, EPM27902 and
EPM27903) in the Lolworth area, North Queensland.
These are augmented, in the case of Bailieston, by
exploration licence applications EL006911, EL006912 and
EL007296; and in the case of Creswick, exploration licence
applications EL006713.
In November 2020, MGA lodged exploration licence
application EL007537 for an area which surrounds mining
licences MIN5396 and MIN4847. These mining licences,
which are not held by MGA, contain the operating Ballarat
gold mine. The area of EL007537 includes the southern
8
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 extension of the Dimocks Main Shale, which is the
principal target of exploration at MGA’s Creswick gold
project located a short distance to the north, the northern
extension of the Ballarat East line and the depth extensions
of the Ballarat West line. EL007537 is a competitive bid
with three other applicants.
refused access or demanded disproportionate sums from
explorers in order to grant access. Craig Brown saw an
opportunity to solve this issue by investing into three
properties at 35 Brewing Lane, Springmount (Creswick),
127 Nagambie –Rushworth Road (Bailieston) and 177
Bassett Road, Sebastian.
Exploration at Bailieston and Creswick Projects
An intensive campaign kicked off in January 2021 with the
aim of fully exploring Historic Reserve #3 (HR3) prospect,
which includes Byron, Dan Genders, Scoulars and Maori
Reefs. Once completed, the drill rig was moved up to
test the Cherry tree (HR4) prospect, and eventually Blue
Moon. (Following the year in review, in January 2022
permission was finally received to access the Blue Moon
prospect to continue exploration). In June, high gold and
antimony results were logged from soil sampling at HR3,
with subsequent drilling revealing a steep, south plunging
anticline along strike to the Maori reef line.
Through owning these properties, our drilling and geology
teams were afforded full access and working rights
across our flagship projects, along with accommodation.
In particular, Brewing Lane and Nagambie-Rushworth
Road have the potential to develop mine works, and a
mine decline on the land in the case of Creswick. The
Bassett Road property is already housing members of our
workforce at Bendigo. The added benefit of course is that
the properties were purchased amidst a buoyant Victoria
property market, and given the recent sale prices of similar
properties in the area, we believe all three properties have
appreciated in value.
The rig was moved to Cherry Tree (HR4), where the first
diamond drill hole ever completed at HR4 identified an
anticlinal hinge through the centre of the goldfield, along
with low-grade mineralization. Ultimately the drill results
were disappointing, although we now have a full structural
interpretation of the deposit.
Tambo Gold Project
In September 2020, MGA lodged two new exploration
licence applications in eastern Victoria, EL007484 and
EL007486, to comprise the Tambo gold project, which
covers a sizeable area of prospective geology near historic
goldfields and has received little contemporary exploration.
Following the period under review, in December results for
HR3 and the Maori Anticline revealed four gold anomalies
along Scoulers and Dan Genders reef lines, with the
convergence of two reef lines (Anomaly A) fitting with
the ‘dilational jog’ model identified across three diamond
drill holes. With further assays due, this is looking like an
exciting discovery.
Drilling at the Creswick project continued apace through
the year, with the first hole (CSD001) intersecting 1m
@9.68g/t. This was a significant development: it was the
first diamond hole drilled into the Dimocks Main Shale
(DMS) in the entire tenement. As further drilling data came
in, holes CSD003 and CSD004 returned the best gold
intersections yet, with 9.93g/t and 23.58g/t respectively.
Head Geologist Adam Jones summed up the geology and
‘coarse nature’ of the gold deposits as gold veined ‘mineral
shoots’ similar in many ways to the geology within the
narrow vein gold mine at Ballarat.
Following the end of the year in review, delayed assay
results from Creswick revealed ‘erratic’ results due to
the coarse nature of the gold deposits, but armed with a
large data resource, ECR will continue to explore Creswick
licence EL006184, and will commence exploration on
newly approved licence EL6907 to the south.
Property Purchases
There are well-documented historical problems in Victoria
for mining exploration companies seeking to access land
to undertake exploration work. Land owners have either
The applications cover portions of the historic Swifts Creek/
Omeo and Haunted Stream goldfields. These goldfields
have recorded historical gold production of 205,000 and
25,000 oz respectively, according to figures published
by the Geological Survey of Victoria. MGA considers the
application areas to be prospective for orogenic reef gold
and additionally for intrusion-related gold and base metal
systems. At the time of publishing, license EL007484
covering Swifts Creek and the Tambo River has been
approved, and some preliminary exploration work is
planned for 2022.
Lolworth Range Gold Project
In May 2021, exploration licences for tenements
EPM27901, EPM27902 and EPM27903 were applied
for by ECR subsidiary LUX Exploration Limited (LUX) in
the Lolworth Range area, North Queensland. The area
has been closely monitored by ECR’s Head Geologist
Adam Jones for at least eight years, and is considered
prospective for gold. The exploration licences for all three
areas were granted to LUX on 1 February 2022. The
tenements will expire in five years (on 31 January 2027)
and, while they will be available for renewal after the initial
5-year term, the area available for renewal will be reduced
by 50%, which is a standard term of exploration licences to
encourage companies to focus their exploration activities.
LUX has a commitment expenditure of AUD$650,000 for
the first three years across the three licence areas, which is
expected to be funded from ECR’s existing cash resources.
9
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 Strategic Report continued
Danglay gold project, Philippines
Following the end of the year under review, ECR Minerals
received formal recognition for its 25% shareholding
in Philippines based company Cordillera Tiger Gold
Resources, Inc. (“Cordillera Tiger”), having invested some
£1.2 million in the Danglay gold project to date.
In July 2021, Cordillera Tiger successfully renewed
Exploration License EP-006 at the Danglay gold project,
which is located in a prolific gold and copper mining district
in the north of the Philippines.
The ECR Board believes the political climate for the
minerals industry in the Philippines is improving and
considers that the Danglay gold project has potential for
further exploration to build upon the existing inferred
mineral resource estimate of 63,500 ounces of gold at 1.55
g/t gold. This resource was reported by ECR in 2015 to the
Canadian NI43-101 standard, based on exploration carried
out at Danglay by ECR during 2014 and 2015. In addition
to the resource, an NI43-101 target for further exploration
(conceptual potential quantity and grade of mineralisation
expressed as ranges) of 95,000 to 170,000 ounces of gold
at 5 to 7.5 g/t was reported.
Avoca and Timor Exploration Licence Royalties
In April 2020 MGA entered into an agreement for the
sale of Avoca and Timor exploration licences EL5387,
EL006280, EL006913 and EL006278 in Victoria to
Currawong Resources Pty Ltd, a wholly owned subsidiary
of Fosterville South Exploration Ltd. A cash payment of
$500,000 was received, and ECR is entitled to:
1. A further payment of A$1 for every ounce of gold
or gold equivalent of measured resource, indicated
resource or inferred resource estimated within the
area of one or more of the licences in any combination
or aggregation of the foregoing, up to a maximum of
A$1,000,000 in aggregate;
2. A further payment of A$1 for every ounce of gold or
gold equivalent produced from within the area of one or
more of the licences, up to a maximum of A$1,000,000
in aggregate.
SLM Gold Project Royalties
In February 2020, the Company sold its wholly owned
Argentine subsidiary Ochre Mining SA, which holds the
SLM gold project in La Rioja, Argentina. The sale allows
ECR to focus on its core gold exploration activities in
Australia. The purchaser, Hanaq Argentina SA (“Hanaq”),
is a Chinese-owned company engaged in lithium, base
and precious metals exploration in Northwest Argentina
including Salta, Jujuy and La Rioja, with a highly
experienced management team.
ECR retains an NSR royalty of up to 2% to a maximum of
USD 2.7 million in respect of future production from the
SLM gold project, owned by Hanaq Argentina SA (Hanaq).
The Directors believe that Hanaq has the operational
capabilities and access to Chinese investment capital
necessary to put the SLM project into production, subject
to the usual prerequisites such as further exploration and
feasibility studies being successfully completed (if deemed
necessary by Hanaq) and to the necessary permits for
production being obtained.
Principal Risks and Uncertainties
The Directors regularly review the risks and uncertainties to
which the Group is exposed and seek to ensure that these
risks and uncertainties are, as far as possible, minimised.
The Directors have identified the principal risks and
uncertainties facing the Group and these are set out below.
Exploration Risk
Mineral exploration is, by its nature, speculative, and as
mentioned earlier the number of such projects which
develop into mining operations is relatively low. There
is no certainty that the Group’s exploration projects can
be economically exploited and no certainty that this will
enhance shareholder value. If the Directors ultimately
decide that a prospect has no economic future and they
are unable to sell it on, the costs incurred to date would
be written off in the Consolidated Income Statement in
the year in which the decision to discontinue exploration
operations is made.
Development Risk
All mineral exploration and development projects may be
subject to delays and/or unforeseen difficulties arising from
bad weather, natural disasters, non-availability or delayed
availability of licences or permits, changes in the terms on
which key licences or permits are available, commissioning
of operations, and the raising of finance, among other
factors. The risk of delays and unforeseen difficulties is
mitigated when practical and legal to do so. However,
the risk remains that such factors may render a project
unfeasible, or not economically feasible.
Commodity Prices
Changes in the spot and forward prices of the relevant
mineral commodity can affect the economic viability of a
project at any stage in its life cycle.
Resource Risk
Mineral deposits are evaluated by their size, grade and by
other parameters, and mineral resources and reserves are
typically calculated in accordance with accepted industry
standards and codes. Nevertheless, there is always some
level of uncertainty in the underlying assumptions. The
10
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 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.). Risks of this nature have affected the
Company’s interest in the Danglay gold project in the
Philippines, where uncertainty regarding government policy
towards the mining sector continues to act as a brake on
the development of the industry.
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 2021 may include forward
looking statements. Such statements may be subject to
a number of known and unknown risks, uncertainties and
other factors that could cause actual results or events to
differ materially from current expectations. There can be no
assurance that such statements will prove to be accurate
and therefore actual results and future events could differ
materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance
on forward looking statements. Any forward-looking
statements contained herein speak only as of the date
hereof (unless stated otherwise) and, except as may be
required by applicable laws or regulations (including the
AIM Rules for Companies), the Company and the Group
disclaim any obligation to update or modify such forward-
looking statements as a result of new information, future
events or for any other reason.
Corporate Governance
Since September 2018, all AIM-quoted companies have
been required to apply a recognised corporate governance
code. The Company has chosen the Quoted Companies
Alliance (QCA) Corporate Governance Code published in
April 2018 for this purpose.
High standards of corporate governance are a priority for
the Board, and details of how ECR addresses the key
governance principles defined in the QCA code are set out
below, and on the Company’s website in accordance with
AIM Rule 26.
Deliver growth
1. Strategy and business model
ECR’s business model and strategy to deliver shareholder
value are set out in this Strategic Report, together with the
Company’s values and risk management approach.
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
2. Understanding and meeting shareholder needs and
expectations
The Company maintains a contact form on its website
which investors can use to contact the Company. This
11
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 Strategic Report continued
form is prominently displayed on the Company’s website
together with its address and phone number.
Annual general meetings are held, which all members
have the right to attend, and during each annual general
meeting, time is set aside specifically to allow questions
from attending members to be addressed to the Board.
As the Company is too small to have a dedicated
investor relations department, the CEO is responsible for
reviewing all communications received from members and
determining the most appropriate response. In addition to
these passive measures, the CEO typically engages with
members through investor shows once or twice each year,
which seems to be effective.
3. Stakeholder and social responsibilities
In addition to its members, the Company recognises
that its main stakeholder groups are its employees,
consultants and contractors, and the communities and
governmental authorities where the Company and its
subsidiaries operate. Where necessary, the Company
dedicates significant time to understanding and acting
on the needs and requirements of each of these groups.
Board members assess the needs and requirements of
the Company’s stakeholders as and when they interact
with each stakeholder group, usually through meetings and
dialogue, and matters are then be raised at Board level for
appropriate action.
With regard to corporate social responsibility, the Board is
aware of the impact the activities of the Company and its
subsidiaries may have on the communities in which they
operate, and aims to ensure this impact is positive.
4. Risk management
The Company operates in the mineral exploration and
development sector, which is generally high risk but can
provide exceptionally high returns for shareholders. The
Company maintains a register of risks across a number
of categories including personnel, competition, finance,
environmental, political, technical and legal.
The risks are identified on an annual basis and discussed
with the auditors, and kept up to date with the aid of
regular discussions at Board level. For each risk the Board
estimates the potential impact and likelihood of adverse
events, and identifies mitigating strategies. This register is
reviewed periodically as the Company’s situation changes
and at a minimum annually to determine whether the
systems in place are effective or need updating.
Maintain a dynamic management framework
5. Board structure
During the financial year, the Board comprised of one
executive director, one independent non-executive
chairman and one non-executive director. The Board meets
at least quarterly, and all current directors have attended all
Board meetings held in the current financial year (subject
to his being a director at that time). The Board currently
comprises of one independent non-executive chairman,
two non-executive directors and one independent director.
The Board are currently in search for a new Chief-Executive
Officer to replace our former CEO Craig Brown in order to
maintain the management framework.
Under the Company’s articles of association, each director
must periodically offer himself for re-election by vote of the
members at the Company’s annual general meeting.
The contracts of engagement for the Company’s non-
executive directors routinely require that they devote
such of their time as is reasonably necessary to perform
their duties. In addition, they may provide paid consulting
services in respect of work going beyond the role of a non-
executive director. The Company notes that best practice
under the QCA code is to have at least half the Board made
up of independent non-executive directors.
In addition, the Company notes that its Non-Executive
Chairman David Tang has been in post for more than one
year and the Board is satisfied as to his independence,
especially in light of the periodic requirement for all
directors to offer themselves for re-election, which offers
shareholders an opportunity to vote on their suitability.
During the past twelve months there have been 6 formal
board meetings and all directors in office at the relevant
time attended.
6. Board diversity and experience
The individuals who have been appointed to the Board have
been chosen because of the skills and experience they
offer. The members of the Board at the present time are
listed earlier in this annual report, together with an outline
of their experience, skills and personal qualities relevant to
the Company’s business.
The diverse experience and expertise of the directors
is intended to ensure that the Board has the skills and
capabilities to manage the Company for the benefit of
shareholders over the medium to long term.
The Company has no specific advisers to the board other
than its lawyers and AIM nominated adviser. Weili Tang
temporarily acts in the role of Company Secretary.
7. Board performance & evaluation
Evaluation of the performance of the Board has historically
been implemented in an informal manner. In the future
however, the Board will formally review and consider the
performance of each director at or around the time of the
Company’s annual general meeting using a process which
is currently under development.
12
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 On an ongoing basis, Board members maintain a watching
brief to identify relevant internal and external candidates
who may be suitable additions to or backup for current
Board members, however the Board considers that the
Company is too small to have an internal succession plan
and that it would not be cost effective to maintain an
external candidate list prior to the need arising.
8. Corporate culture
The Board believes that the promotion of a corporate
culture based on sound ethical values and behaviours is
essential to maximise shareholder value in the medium to
long term. Adherence to these standards is a key factor
in the evaluation of performance within the Company,
including during annual performance reviews. In addition,
staff matters are a standing topic at every Board
meeting and the CEO reports on any notable examples
of behaviours that either align with or are at odds with
the Company’s stated values. The Board believes that
the Company’s culture encourages collaborative, ethical
behaviour which benefits employees and shareholders. The
Board further believes that all employees and consultants
worked in line with the Company’s values during the
financial year ended 30 September 2021 and since. This
has been assessed by the Board in the course of the day-
to-day management of the Company, which is feasible
given the relatively small size of the organisation.
9. Governance structures
Due to the size of the Company all strategic and major
commercial matters are reserved for the Board.
The key Board roles are as follows:
Chair: The primary responsibility of the Chair is to lead the
Board effectively and to oversee the adoption, delivery and
communication of the Company’s corporate governance
model. The Chair has sufficient separation from the day-to-
day business to be able to make independent decisions.
The Chair is also responsible for making sure that the Board
agenda concentrates on the key issues, both operational
and financial, with regular reviews of the Company’s
strategy and its overall implementation.
Chief Executive Officer (CEO): Charged with the
implementation of the strategy set by the Board. Works
with the Chair and non-executives in an open and
transparent way. Keeps the Chair and the Board as a whole
up-to-date with operational performance, risks and other
issues to ensure that the business remains aligned with the
strategy.
The Board has two committees. They are as follows:
Audit committee: The audit committee meets to consider
matters relating to the Company’s financial position
and financial reporting. The committee reviews the
independence and objectivity of the external auditors,
PKF Littlejohn LLP, as well as the amount of non-audit
work undertaken by them, to satisfy itself that this will
not compromise their independence. Details of the fees
paid to PKF Littlejohn LLP during each financial year
are given in the annual accounts. The audit committee
currently comprises David Tang (Non-Executive Chairman),
Adam Jones (Non-Executive Director), Dr Trevor George
Davenport (Independent Director) and Andrew Scott (Non-
Executive Director).
Remuneration committee: The remuneration committee
has been established primarily to determine the
remuneration, terms and conditions of employment of the
executive directors of the Company. Any remuneration
issues concerning non-executive directors are also resolved
by this committee, although no director participates
in decisions that concern his own remuneration. The
remuneration committee comprises David Tang (Non-
Executive Chairman), Adam Jones (Non-Executive
Director), Dr Trevor George Davenport (Independent
Director) and Andrew Scott (Non-Executive Director).
Due to the nature of the size of the Company all major
operational decisions are reserved for the Board. For the
same reason, matters delegated to committees of the
Board have been dealt with during the course of ordinary
board meetings, with no separate meetings having been
held during the year for the individual committees. The
appropriateness of the Company’s governance structures
will be reviewed as the Company evolves, and changes
made as necessary.
During the past twelve months there have been 4 formal
committee meetings and all directors in at the relevant
time attended.
Build trust
10. Stakeholder communication
On the Company’s website shareholders can find all
historical regulatory announcements, notices of general
meetings, governance-related materials, interim reports
and annual reports. Annual reports and notices of general
meetings are posted directly to all registered shareholders,
and the outcome of general meetings is disclosed in a clear
and transparent manner via regulatory announcements.
As described earlier, the Company also maintains web-
based and phone contacts which shareholders can use to
make enquiries or requests.
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
13
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 Section 172 Statement
The Directors believe they have acted in the way most
likely to promote the success of the Group and Company
for the benefi t of its members as a whole, as required by
s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
• Consider the likely consequences of any decision in the
long term;
• Act fairly between the members of the Company;
• Maintain a reputation for high standards of business
conduct;
• Consider the interests of the Company’s employees;
• Foster the Company’s relationships with suppliers,
customers and others; and
• Consider the impact of the Company’s operations on
the community and the environment.
The Group’s operations and strategic aims are set out
throughout the Strategic Report and in the Interim
Committee Report, and relationships with stakeholders are
also dealt with in the Corporate Governance statement.
This Strategic Report was approved by the Directors on
31 March 2022.
Weili (David) Tang
Non-Executive Director/ Chairman
Strategic Report continued
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 operating in accordance with the corporate
governance arrangements set out above, and 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 fi nancial 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
and the environmental parameters of the activities of the
Group are considered carefully so as to minimise the risk of
adverse environmental effects.
Human Rights
The activities of the Group are carried out in accordance
with all applicable laws on human rights and with genuine
moral concern for all stakeholders.
Employees
The Group seeks to remunerate its employees fairly,
offers fl exible 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 & 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.
14 ECR MINERALS PLC
ANNUAL REPORT & ACCOUNTS 2021
Report of the Directors
For the year ended 30 September 2021
Principal Activities
A full review of significant matters, including likely future
developments, is contained in the Chairman’s Statement,
Interim Committee Report and the Strategic Report.
Details of significant events after the reporting date are
also disclosed in Note 21 to the financial statements.
Impact of COVID-19 Pandemic
At the date of this report, although the worst ravages
of the COVID-19 pandemic are past us, many countries
continue to experience severe disruption. For the most
part, the suspension of international travel routes as well
as domestic movement restrictions within the UK is not
affecting the Group’s operations. In Australia and Victoria,
lockdowns and movement restrictions have delayed assay
results and laboratory analysis at times during the last year
however, exploration and mining is considered essential
services and therefore there has been relatively little
disruption to operations.
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 and AUD, 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 it 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 18 to the
financial statements.
Position of the Company and Going Concern
At the date of this report the Group’s financial position
is strong. 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, the Directors are satisfied that the Group
and Company has sufficient resources to continue their
operations and to meet their commitments for the next
12 months. The Directors have considered the present
economic and financial climate (including the COVID-19
pandemic) as specifically pertaining to the Company and its
peer group.
Reviews of operations and business developments are
provided in the reports of the Chairman and the Interim
Committee, 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.
Dividends
The results for the year are set out in the Consolidated
Income Statement. No dividend is proposed in respect
of the year (2020: nil). The Group loss for the year of
£1,465,751 (2020 loss of £2,690,882) has been taken to
reserves together with the other comprehensive income
and loss.
Directors
The Directors who served during the year and to the date
of this report were:
Weili (David) Tang
Craig William Brown (deceased 29 October 2021)
Adam Jones
Dr Trevor George Davenport (appointed 1 October 2021)
Andrew Scott (appointed 24 January 2022)
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
15
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Report of the Directors continued
• 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 Group’s applicable employees.
Directors’ Interests
Directors who held office at 30 September 2021 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.
C W Brown
Weili (David) Tang
30 September 30 September
2020
no. of shares no. of shares
2021
1,549,270
-
2,977,842
1,428,572
1,549,270
4,406,414
Additionally, Directors of the Company who held office
at 30 September 2021 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 26/10/2022 £0.01725
C W Brown 10,000,000 30/07/2017 29/07/2023 £0.01125
Share Capital and Substantial Share Interests
On 23 March 2022, the Company was aware of the
following holdings of 3% or more in Company’s issued
ordinary share capital of 1,038,344,551 ordinary shares of
£0.00001 each.
16
Registered Shareholder
Number
%
of shares Holding
111,976,083
Barclays Direct Investing Nominees Limited
Hargreaves Lansdown Nominees Limited
104,383,354
Interactive Investor Services Nominees Limited 103,238,536
Interactive Investor Services Nominees Limited 78,647,202
Interactive Investor Services Nominees Limited 62,673,546
62,435,233
The Bank of New York (Nominees) Limited
53,133,336
Hargreaves Lansdown Nominees Limited
50,130,165
HSDL Nominees Limited
43,538,471
Hargreaves Lansdown Nominees Limited
40,447,649
JIM Nominees Limited
37,643,632
HSDL Nominees Limited
36,812,383
Lawshare Nominees Limited
33,071,256
VIDACOS Nominees Limited
10.78
10.05
9.94
7.57
6.04
6.01
5.12
4.83
4.19
3.90
3.63
3.55
3.19
Streamlined Energy and Carbon Reporting
As per the Streamlined Energy and Carbon Reporting
(“SECR”) Regulations published in 2018 quoted companies
and large unquoted companies that have consumed more
than 40,000 kilowatt-hours (kWh) of energy in the reporting
period must include energy and carbon information within
their directors’ report. ECR Minerals Plc and the Group
do not currently exceed this threshold and are therefore
presently exempt from the SECR reporting requirements.
The Group intends to publish energy emissions data in
line with the SECR regulations as the Group’s projects
develops.
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 accounting standards in conformity with the
Companies Act 2006 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 international accounting standards in
conformity with the Companies Act 2006 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.
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Annual General Meeting
The annual general meeting of the Company will be held at
9.00 am on Monday 25 April 2021 at Hurlingham Studios,
Ranelagh Gardens, London SW6 3PA, United Kingdom.
Notice of the annual general meeting is enclosed.
This report was approved by the Board on 31 March 2022.
By order of the Board
Weili (David) Tang
Director
The Directors are responsible for keeping adequate
accounting records that are suffi cient to show and explain
the Company’s and Group’s transactions and disclose with
reasonable accuracy at any time the fi nancial position of
the Company and the Group and enable them to ensure
that the fi nancial 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.
The Directors are responsible for the maintenance and
integrity of the corporate and fi nancial information included
on the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
the fi nancial statements may differ from legislation in other
jurisdictions.
Directors’ and Offi cers’ 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 fi nancial exposure that they may
incur in the course of their professional duties as Directors
and offi cers 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 defi ned 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 offi ce as auditor of the Company and a
resolution to confi rm the appointment will be proposed at
the forthcoming annual general meeting.
ECR MINERALS PLC
ANNUAL REPORT & ACCOUNTS 2021
17
Independent Auditor’s Report
For the year ended 30 September 2021
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF ECR MINERALS PLC
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 2021 which comprise
the Consolidated Income Statement, the Consolidated
Statement of Comprehensive Income, the Consolidated
and Parent Company Statements of Financial Position,
the Consolidated and Parent Company Statements of
Changes in Equity, the Consolidated and Parent Company
Statements of Cash Flows and notes to the financial
statements, including significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and international accounting
standards in conformity with the requirements of the
Companies Act 2006 and as regards the parent company
financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
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 2021 and of the group’s loss for
the year then ended;
the group financial statements have been properly
prepared in accordance with international accounting
standards in conformity with the requirements of the
Companies Act 2006;
the parent company financial statements have been
properly prepared in accordance with international
accounting standards in conformity with the
requirements of the Companies Act 2006 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
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
18
is appropriate. Our evaluation of the directors’ assessment
of the group’s and parent company’s ability to continue
to adopt the going concern basis of accounting included
evaluating management’s cash flow forecasts for a period
of at least 12 months from the date of approval of the
financial statements, including challenge of the underlying
assumptions, evaluating subsequent events impacting
going concern and sensitising the cash flows for possible
changes which could impact the available headroom.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group’s or parent company’s ability
to continue as a going concern for a period of at least
twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
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 £55,000 (2020: £55,000) based upon 2% of
gross assets, capped at the prior period materiality in order
to obtain additional coverage of additions in the year. We
consider gross assets to be the main driver of the business
as the group is still in the exploration stage and therefore
no revenues are currently being generated, and that current
and potential investors will be most interested in the
recoverability of the exploration and evaluation assets. The
parent company materiality was £50,000 (2020:£45,000),
based upon 2% of gross assets and capped to be below
group materiality.
Whilst materiality for the financial statements as a whole
was set at £55,000, each significant component of the
group was audited to an overall materiality ranging between
£3,500 to £50,000 (2020: between £40,000 to £45,000)
with performance materiality set at 70% for all entities.
We agreed with the audit committee that we would report
to the committee all audit differences identified during
the course of our audit in excess of £2,750 (2020: £2,750)
as well as differences below these thresholds that, in our
view, warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and
assessed the risk of material misstatement in the financial
statements. In particular, we looked at areas requiring the
directors to make subjective judgements, for example in
respect of significant accounting estimates including the
carrying value of intangible assets and the consideration
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 of future events that are inherently uncertain. We also
addressed the risk of management override of internal
controls, including evaluating whether there was evidence
of bias by the directors that represented a risk of material
misstatement due to fraud.
An audit was performed on the financial information of
the group’s operating entities which for the year ended 30
September 2021 were located in the United Kingdom and
Australia. The audit work on each significant component
was performed by us as group auditor based upon
materiality or risk profile, or in response to potential risks of
material misstatement to the group.
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.
Key Audit Matter
How our scope addressed this matter
Recoverability of intangible assets – exploration and
evaluation assets (refer to note 10)
The group as at 30 September 2021 had ongoing early stage
exploration projects in the Philippines and Australia.
There is a risk that the expenditure is not correctly capitalised
in accordance with IFRS 6. There is also a risk that the
capitalised exploration costs are not recoverable and should
be impaired. The carrying value of intangible exploration
and evaluation assets as at 30 September 2021, which are
tested annually for impairment, is £3,350,663. Comprising
early stage exploration projects, the impairment assessment
requires management judgement and estimation of a range
of applicable factors.
Relevant disclosures in the financial statements are made
in Note 2 surrounding critical accounting judgements, and in
Note 10 for Intangible assets.
Our work in this area included:
•
•
•
•
•
•
Sample testing of exploration and evaluation expenditure
to assess their eligibility for capitalisation under IFRS 6
by corroborating to the original source documentation.
Inspection of the current exploration licences to verify
they remained valid and that the group held good title.
Review of correspondence (where applicable) with
licensing authorities to ensure compliance and assess
the risk of non-renewal. We assessed the sampling
results and progress of the projects and whether they
indicate the existence of commercially viable projects.
Review and challenge of management’s documented
consideration of impairment by individual project.
Establishing the intention of the Board to undertake
future exploration work.
Review of any internal / external resource estimates
produced during the year.
• Discussion of status of all projects with management.
As disclosed in subsequent events, the group has now
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 exploration permit for the Danglay
project, which originally expired on 30 September 2015,
was renewed in July 2021. There is however continued
uncertainty within the Philippines government regarding
their policy towards the mining sector. This indicates the
existence of a material uncertainty over the recoverability
of the carrying value of the Danglay gold project, which
amounted to £1,261,158 as at 30 September 2021.
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 contained within the annual report.
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. 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 course of 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 this gives rise to a material
misstatement in the financial statements themselves. 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.
19
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 Independent Auditor’s Report continued
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.
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.
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 Report of the Directors, 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 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.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including
fraud is detailed below:
• We obtained an understanding of the group and parent
company and the sector in which they operate to
identify laws and regulations that could reasonably
be expected to have a direct effect on the financial
statements. We obtained our understanding in
this regard through discussions with management,
application of cumulative audit knowledge and
experience of the sector.
• We determined the principal laws and regulations
relevant to the group and parent company in this
regard to be those arising from international accounting
standards, the Companies Act 2006, tax laws and
regulations, local employment law and conditions
stipulated in the exploration licenses.
• We designed our audit procedures to ensure the audit
team considered whether there were any indications of
non-compliance by the group and parent company with
those laws and regulations. These procedures included,
but were not limited to:
o Enquiries of management
o Review of Board minutes
o Review of legal and regulatory correspondence
• We also identified the risks of material misstatement of
the financial statements due to fraud. We considered,
in addition to the non-rebuttable presumption of a
risk of fraud arising from management override of
controls, that the judgements and estimates made by
management in their assessment of the recoverability
of intangible assets represented the most significant
risk of material misstatement. Refer to the key audit
matter above.
• We addressed the risk of fraud arising from
management override of controls by performing audit
procedures which included, but were not limited to: the
testing of journals; reviewing accounting estimates for
evidence of bias; and evaluating the business rationale
of any significant transactions that are unusual or
outside the normal course of business.
20
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
• We obtained sufficient appropriate audit evidence
regarding the financial information of the entities or
business activities within the group to express an
opinion on the consolidated financial statements.
We are responsible for the direction, supervision and
performance of the group audit. We remain solely
responsible for the audit opinion.
Because of the inherent limitations of an audit, there is
a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial
statements or non-compliance with regulation. This risk
increases the more that compliance with a law or regulation
is removed from the events and transactions reflected
in the financial statements, as we will be less likely to
become aware of instances of non-compliance. The risk is
also greater regarding irregularities occurring due to fraud
rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
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.
David Thompson (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
31 March 2022
21
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 Consolidated Income Statement
For the year ended 30 September 2021
ECR Minerals plc company no. 5079979
Proceeds from disposal of licenses
Less: expenditure on licences disposed
Gain on disposal
Continuing operations
Other administrative expenses
Currency exchange differences
Total administrative expenses
Operating loss
Other financial assets – fair value movement
Financial income
Other income
Finance income and costs
Loss for the year before taxation
Income tax
Loss for the year from continuing operations
Loss on disposal of subsidiary
Loss for the year from discontinued operations
Note
Year ended
30 September 2021
£
–
–
Year ended
30 September 2020
£
275,701
(169,509)
–
106,192
3
9
7
5
(1,142,338)
(347,315)
(1,489,653)
(799,585)
(33,497)
(833,082)
(1,489,653)
(726,890)
4,593
(1,485,060)
288
19,021
19,309
(1,465,751)
–
(1,465,751)
–
–
13,683
(713,207)
478
8,316
8,794
(704,413)
–
(704,413)
(1,986,469)
(1,986,469)
Loss for the year - all attributable to owners of the parent
(1,465,751)
(2,690,882)
Earnings per share - basic and diluted
On continuing operations
On discontinued operations
4
(0.16)p
–
(0.14)p
(0.39)p
The notes on pages 27 to 44 are an integral part of these financial statements.
22
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2021
ECR Minerals plc company no. 5079979
Loss for the year
Items that may be reclassified subsequently to profit or loss
Gain on exchange translation
Other comprehensive gain for the year
Total comprehensive loss for the year
Attributable to: -
Loss on continuing operations
Loss on discontinued operations
The notes on pages 27 to 44 are an integral part of these financial statements.
Year ended
30 September 2021
£
Year ended
30 September 2020
£
(1,465,751)
(2,690,882)
52,545
52,545
95,880
95,880
(1,413,206)
(2,595,002)
(1,413,206)
–
(608,533)
(1,986,469)
23
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Consolidated & Company Statement of Financial Position
At 30 September 2021
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
Financial assets at fair value through profi t or loss
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
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
2021
£
30 September
2020
£
30 September
2021
£
30 September
2020
£
Note
8
9
10
11
11
9
12
1,303,557
–
3,321,481
–
183,539
–
1,869,184
–
58,333
–
1,410,144
5,133,826
2,737
–
1,333,282
1,029,067
4,625,038
2,052,723
6,602,303
2,365,086
221,869
31,461
2,982,046
108,617
26,870
1,497,231
878,097
31,461
1,467,835
726,689
26,870
1,207,190
3,235,376
1,632,718
2,377,393
1,960,749
7,860,414
3,685,441
8,979,696
4,325,835
14
202,731
121,622
202,731
121,622
202,731
121,622
41,198
41,198
41,198
93,848
93,848
93,848
7,657,683
3,563,819
8,938,498
4,231,987
13
13
11,290,483
52,593,562
583,998
440,706
(57,251,067)
11,286,928
47,090,048
531,453
440,706
(55,785,316)
11,290,483
52,593,562
–
440,706
(55,386,252)
11,286,928
47,090,048
–
440,706
(54,585,695)
Total equity
7,657,683
3,563,819
8,938,498
4,231,987
The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent
company profi t and loss account. The loss for the parent company for the year was £800,558 (2020: £2,399,369 loss).
The notes on pages 27 to 44 are an integral part of these fi nancial statements. The fi nancial statements were approved and
authorised for issue by the Directors on 31 March 2022 and were signed on its behalf by:
Weili (David) Tang
Non–Executive Chairman
Dr Trevor Davenport
Independent Non-Executive Director
24 ECR MINERALS PLC
ANNUAL REPORT & ACCOUNTS 2021
Consolidated Statement of Changes in Equity
For the year ended 30 September 2021
ECR Minerals plc company no. 5079979
Share
capital
(Note 13)
£
Share
premium
(Note 13)
£
Exchange
reserve
Other
reserves
Retained
reserves
£
£
£
Total
£
Balance at 30 September 2019 11,284,845
–
Loss for the year
–
Loss on exchange translation
45,391,202
–
–
(394,876)
–
95,880
742,698
–
–
(53,383,264)
(2,690,882)
–
3,640,604
(2,690,882)
95,880
Total comprehensive loss
Shares issued
Share issue costs
Share based payments
Recycled through profit or loss
on disposal of subsidiary
Shares issued in payment of
creditors
Total transactions with owners,
recognised directly in equity
–
2,067
–
–
–
15
–
95,880
–
(2,690,882)
(2,595,002)
1,754,986
(77,000)
13,161
–
–
–
–
–
(301,992)
–
–
288,831
1,757,053
(77,000)
–
–
830,449
7,699
–
–
–
–
–
830,449
7,714
2,083
1,698,846
830,449
(301,992)
288,831
2,518,216
Balance at 30 September 2020 11,286,928
47,090,048
531,453
440,706
(55,785,316)
3,563,819
Loss for the year
Gain on exchange translation
Total comprehensive loss
Shares issued
Share issue costs
Share based payments
–
–
–
–
–
–
–
52,545
52,545
3,556
–
–
5,631,514
(128,000)
–
Total transactions with owners,
recognised directly in equity
3,556
5,503,514
–
–
–
–
–
–
–
–
–
–
–
(1,465,751)
–
(1,465,751)
52,545
(1,465,751)
(1,413,206)
–
–
–
–
5,635,070
(128,000)
–
5,507,070
Balance at 30 September 2021 11,290,483
52,593,562
583,998
440,706
(57,251,067)
7,657,683
The notes on pages 27 to 44 are an integral part of these financial statements.
25
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Company Statement of Changes in Equity
For the year ended 30 September 2021
ECR Minerals plc company no. 5079979
Balance at 30 September 2019
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
Balance at 30 September 2020
Loss for the year
Total comprehensive expense
Shares issued
Share issue costs
Total transactions with owners, recognised
directly in equity
Share
capital
(Note 13)
£
Share
premium
(Note 13)
£
Other
reserves
Retained
reserves
£
£
Total
£
11,284,845
–
45,391,202
–
742,698
–
(52,475,156)
(2,399,369)
4,943,589
(2,399,369)
–
2,067
–
–
15
–
–
(2,399,369)
(2,399,369)
1,754,986
(77,000)
13,161
7,699
–
–
(301,992)
–
–
–
288,831
–
1,757,054
(77,000)
–
7,714
2,083
1,698,846
(301,992)
288,831
1,687,768
11,286,928
–
47,090,048
–
440,706
–
(54,585,695)
(800,558)
4,231,987
(800,558)
–
3,556
–
–
5,631,514
(128,000)
3,556
5,503,514
–
–
–
–
(800,558)
(800,558)
–
–
–
5,635,070
(128,000)
5,507,070
Balance at 30 September 2021
11,290,483
52,593,562
440,706
(55,386,253)
8,938,498
The notes on pages 27 to 44 are an integral part of these financial statements.
26
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2021
ECR Minerals plc company no. 5079979
Group
Company
Year ended
30 September
2021
£
Year ended
30 September
2020
£
Year ended
30 September
2021
£
Year ended
30 September
2020
£
Note
Net cash used in operations
20
(1,398,242)
(668,377)
(1,006,026)
(694,408)
Investing activities
Purchase of property, plant & equipment
Increase in exploration assets
Investment in subsidiary
Proceeds from disposal of licenses
R&D tax credits on exploration
Loan to subsidiary
Interest income
8
10
7
(1,171,840)
(1,452,297)
–
–
–
–
288
(186,307)
(180,653)
–
275,701
307,818
–
478
(59,038)
(76,862)
–
–
–
(4,104,759)
260
Net cash generated from / (used in) investing activities
(2,623,849)
217,037
(4,240,398)
(5,963)
–
–
–
–
–
–
(5,963)
Financing activities
Proceeds from issue of share capital (net of issue costs)
5,507,088
1,680,054
5,507,069
1,680,054
Net cash from financing activities
5,507,088
1,680,054
5,507,069
1,680,054
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of the year
1,484,815
1,497,231
1,228,714
268,517
260,645
1,207,190
979,682
227,508
Cash and cash equivalents at end of the year
12
2,982,046
1,497,231
1,467,835
1,207,190
Non-cash transactions:
1. Settlement of creditors of £nil (2020: £7,715) with ordinary shares.
The notes on pages 27 to 44 are an integral part of these financial statements.
27
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Notes to the Financial Statements
For the year ended 30 September 2021
1 General information
The Company and the Group operated mineral exploration
and development projects. The Group’s principal interests are
located in Australia, Argentina and the Philippines.
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 Office T3, Hurlingham
Studios, Ranelagh Gardens, London SW6 3PA. The Company
is quoted 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
a) Statement of compliance
The consolidated financial statements have been prepared in
accordance with international accounting standards (IAS) as
adopted by the UK in conformity with the Companies Act 2006.
The financial statements are prepared on the historical cost
basis or the fair value basis where the fair valuing of relevant
assets or liabilities has been applied.
b) (i) New and amended standards, and interpretations
issued and effective for the financial year beginning 1
October 2020
There were no new standards, amendments or interpretations
effective for the first time for periods beginning on or after
1 October 2020 that had a material effect on the Group or
Company financial statements
(ii) New standards, amendments and interpretations in
issue but not yet effective
At the date of approval of these financial statements, the
following standards and interpretations which have not been
applied in these financial statements were in issue but not yet
effective (and in some cases had not been adopted by the EU):
• Amendments to IAS 1 Presentation of Financial
Statements: Classification of Liabilities as Current or
Non-current and Amendments to IAS 1: Classification of
Liabilities as Current or Non-current – Deferral of Effective
Date – effective 1 January 2023*
*subject to EU endorsement
The Group and Company intend to adopt these standards
when they become effective. The introduction of these new
standards and amendments is not expected to have a material
impact on the Group or Company.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and one of its subsidiaries made
up to 30 September 2021. 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 a going concern. At 31 March 2022, the
Group has cash and cash equivalents of £1,226,328 and no
borrowings.
The Group’s financial projections and cash flow forecasts
covering a period of at least twelve months from the date of
approval of these financial statements show that the Group will
have sufficient available funds in order to meet its contracted
and committed expenditure. Further details are included in
Note 21 to the financial statements.
Based on their assessment of the financial position, the
Directors have a reasonable expectation that the Group and
Company 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.
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
Cash and cash equivalents
16: Interest Rate Benchmark Reform – Phase 2 – effective
1 January 2021*
• Amendment to IFRS 3 Business Combinations – Reference
to the Conceptual Framework – effective 1 January 2022*
• Amendments to IAS 37: Provisions, Contingent Liabilities
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.
and Contingent Assets – effective 1 January 2022*
Property, plant and equipment
• Amendments to IAS 16: Property, Plant and Equipment –
effective 1 January 2022*
• Annual Improvements to IFRS Standards 2018-2020 Cycle
– effective 1 January 2022*
Property, plant and equipment are stated at cost, less
accumulated depreciation and any provision for impairment
losses.
• Amendments to IAS 8: Accounting policies, Changes in
Accounting Estimates and Errors – effective 1 January
2023*
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
28
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
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
Motor vehicles
Land
3 years
5 years
5 years
5 years
Not depreciated
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 continued good title to relevant assets being
held , the discovery of economically recoverable reserves, the
ability of the Group 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
Assets and liabilities arising from a lease are initially measured
on a present value basis. The lease payments are discounted
using the interest rate implicit in the lease. If that rate cannot
be readily determined, the lessee’s incremental borrowing rate
is used, being the rate that the individual lessee would have to
pay to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset. Lease payments are allocated
between principal and finance cost. All other short term 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 e 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.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the income statement, except
where they relate to items that are charged or credited directly
to equity, in which case the related current or deferred tax is
also charged or credited directly to equity.
Investments in subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
The investments in subsidiaries held by the Company
are valued at cost less any provision for impairment that
is considered to have occurred, the resultant loss being
recognised in the income statement.
29
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Notes to the Financial Statements continued
For the year ended 30 September 2021
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 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 awards share options to certain Company
Directors and employees to acquire shares of the Company.
Additionally, the Company has in previous years issued
warrants to providers of equity finance.
All goods and services received in exchange for the grant of
any share–based payment are measured at their fair values.
Where employees are rewarded using share–based payments,
the fair values of employees’ services are determined indirectly
by reference to the fair value of the instrument granted to the
employee.
The fair value is appraised at the grant date and excludes
the impact of non–market vesting conditions. Fair value
is measured by use of the Black Scholes model. The
expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of
non–transferability, exercise restrictions, and behavioural
considerations.
All equity–settled share–based payments are ultimately
recognised as an expense in the income statement with a
corresponding credit to “other reserves”.
If vesting periods or other non–market vesting conditions
apply, the expense is allocated over the vesting period, based
on the best available estimate of the number of share options
expected to vest. Estimates are subsequently revised if there
is any indication that the number of share options expected
to vest differs from previous estimates. Any cumulative
adjustment prior to vesting is recognised in the current period.
No adjustment is made to any expense recognised in prior
years if share options ultimately exercised are different to that
estimated on vesting.
Upon exercise of share options, the proceeds received net of
attributable transaction costs are credited to share capital and,
where appropriate, share premium.
A gain or loss is recognised in profit or loss when a financial
liability is settled through the issuance of the Company’s own
equity instruments. The amount of the gain or loss is calculated
as the difference between the carrying value of the financial
liability extinguished and the fair value of the equity instrument
issued.
Financial instruments
Financial assets
The Group’s financial assets comprise equity investments
held as financial assets at fair value through profit or loss as
required by IFRS 9, and financial assets at amortised cost,
being cash and cash equivalents and receivables balances.
Financial assets are assigned to the respective categories on
initial recognition, based on the Group’s business model for
managing financial assets, which determines whether cash
flows will result from collecting contractual cash flows, selling
the financial assets, or both.
Financial assets at amortised cost are non–derivative financial
assets with fixed or determinable payments that are not
quoted in an active market. These assets are initially measured
at fair value plus transaction costs directly attributable to their
acquisition or issue, and are subsequently carried at amortised
cost using the effective interest rate method, less provision for
impairment under the expected credit loss model.
The Group’s receivables fall into this category of financial
instruments. Discounting is omitted where the effect of
discounting is immaterial.
Equity investments are held as financial assets at fair value
through profit or loss. These assets are initially recognised at
fair value and subsequently carried in the financial statements
at fair value, with net changes recognised in profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Group’s consolidated
statement of financial position) when:
30
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 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
and Company are those requiring the greater degree of
subjective or complete judgement. These relate to:
Capitalisation and recoverability of exploration costs (Note
10):
Capitalised exploration and evaluation costs consist of direct
costs, licence payments and fixed salary/consultant costs,
capitalised in accordance with IFRS 6 “Exploration for and
Evaluation of Mineral Resources”. The group and company
recognises expenditure as exploration and evaluation assets
when it determines that those assets will be successful in
finding specific mineral assets. Exploration and evaluation
assets are initially measured at cost. Exploration and evaluation
costs are assessed for indications of impairment annually.
Where the carrying amount of an asset exceeds its recoverable
amount an impairment is recognised. Any impairment is
recognised directly in profit or loss.
Recoverability of investment in subsidiaries including intra
group receivables (Note 9 and 11)
The recoverability of investments in subsidiaries, including intra
group receivables, is directly linked to the recoverability of the
exploration assets in those entities, which is subject to the
same estimates and judgements as explained above.
•
The rights to receive cash flows from the asset have
expired
Or
•
The Group has transferred its rights to receive cash flows
from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a
third party under a ‘pass-through’ arrangement; and either
(a) the Group has transferred substantially all the risks
and rewards of the asset, or (b) the Group has neither
transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the
asset.
Impairment of financial assets
The Group recognises an allowance for ECLs for all debt
instruments not held at fair value through profit or loss.
The amount of the expected credit loss is measured as the
difference between all contractual cash flows that are due in
accordance with the contract and all the cash flows that are
expected to be received (i.e. all cash shortfalls), discounted at
the original effective interest rate (EIR).
For trade receivables (not subject to provisional pricing) and
other receivables due in less than 12 months, the Group
applies the simplified approach in calculating ECLs, as
permitted by IFRS 9. Therefore, the Group does not track
changes in credit risk, but instead, recognises a loss allowance
based on the financial asset’s lifetime ECL at each reporting
date.
Financial liabilities
All financial liabilities are recognised initially at fair value and, in
the case of loans and borrowings and payables, net of directly
attributable transaction costs.
The Group’s financial liabilities include trade and other payables
and are held at amortised cost. After initial recognition, trade
and other payables are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised
in the statement of profit or loss and other comprehensive
income when the liabilities are derecognised, as well as
through the EIR amortisation process.
Derecognition
A financial liability is derecognised when the associated
obligation is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such
an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in
profit or loss and other comprehensive income.
31
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Notes to the Financial Statements continued
For the year ended 30 September 2021
3 Operating loss
The operating loss is stated after charging:
Year ended
30 September
2021
£
Year ended
30 September
2020
£
Depreciation of property, plant and equipment
Operating lease expenses
Auditors’ remuneration – fees payable to the Company’s auditor for the audit of
the parent company and consolidated financial statements
51,822
31,337
26,000
3,809
23,768
25,750
4 Earnings per share
Basic and Diluted
Year ended
30 September
2021
Year ended
30 September
2020
Weighted number of shares in issue during the year
892,410,767
512,411,527
Loss from continuing operations attributable to owners of the parent
Loss from discontinued operations attributable to owners of the parent
£
(1,413,206)
–
£
(704,413)
(1,986,469)
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
Income tax
The relationship between the expected tax expense based on the corporation tax rate of 19% for the year ended 30 September
2021 (2020: 19%) 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% (2020: 19%)
Expenses not deductible for tax purposes
Loss on disposal of subsidiary 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
2021
£
Year ended
30 September
2020
£
(1,413,206)
(2,690,882)
(268,509)
63,927
–
19,309
51,822
133,451
–
–
–
(511,268)
11,940
344,623
8,794
3,809
142,102
–
–
–
The Company has unused tax losses of approximately £8,100,000 (2020 £6,950,000) to carry forward and set against future
profits; and the Company has capital losses of £197,000 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 regard to the level and
timing of future profits.
32
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
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
Pension contributions
Year ended
30 September
2021
Number
Year ended
30 September
2020
Number
3
3
6
£
61,604
277,353
22,817
1,400
363,174
3
2
5
£
43,270
211,815
18,218
1,721
275,024
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
Pension contributions
£
267,353
22,817
1,316
291,486
£
211,815
16,497
1,315
229,627
Directors’ remuneration
As required by AIM Rule 19, details of remuneration earned in respect of the financial year ended 30 September 2021 by
each Director are set out below:
Year ended 30 September 2021
Director
C Brown
W Tang
A Jones
Year ended 30 September 2020
Director
C Brown
W Tang
Salary
Paid
£
Accrued
£
Consulting
Paid
£
Accrued
£
Pension
£
Total
£
165,000
54,000
22,500
–
4,000
2,500
26,584
241,500
6,500
26,584
–
2,769
–
2,769
1,316
–
–
166,316
87,353
25,000
1,316
278,669
Paid
£
120,000
48,000
168,000
Salary
Accrued
£
10,000
10,000
20,000
Consulting
fees
£
–
23,815
23,815
Pension
£
1,315
–
1,315
Total
£
131,315
81,815
213,130
The highest paid Director received remuneration of £165,000 (2020: £130,000), excluding share–based payments.
33
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Notes to the Financial Statements continued
For the year ended 30 September 2021
7 Finance income
Finance income
Interest on cash and cash equivalents
8 Property, plant and equipment
Group
Cost
At 1 October 2020
Additions
At 30 September 2021
Depreciation
At 1 October 2020
Depreciation for the year
At 30 September 2021
Net book value
At 1 October 2020
At 30 September 2021
Company
Cost
At 1 October 2020
Additions
At 30 September 2021
Depreciation
At 1 October 2020
Depreciation for the year
At 30 September 2021
Net book value
At 1 October 2020
At 30 September 2021
Year ended
30 September
2021
£
288
288
Year ended
30 September
2020
£
478
478
Furniture &
fittings
£
Office Machinery &
equipment
£
Equipment
£
Land and
Building
£
Total
£
2,982
–
18,880
18,360
184,209
328,927
–
206,071
822,705 1,169,992
2,982
37,240
513,136
822,705 1,376,063
2,880
102
14,157
3,258
5,495
46,615
2,982
17,415
52,110
–
–
–
22,532
51,822
74,354
102
4,723
180,517
–
185,341
–
19,825
461,027
822,705 1,303,557
Furniture &
fittings
£
Office Machinery &
equipment
£
Equipment
£
Land and
Building
£
890
–
890
890
–
890
18,880
18,360
3,865
47,995
27,936
51,860
14,157
2,883
17,040
3,865
559
4,424
161
–
387
–
10,896
47,436
–
–
–
–
–
–
–
–
Total
£
23,635
57,051
80,686
18,912
33,42
22,354
548
58,332
The Group and the Company’s property, plant and equipment are free from any mortgage or charge. The comparable table for
2020 is detailed below.
34
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
8 Property, plant and equipment continued
Group
Cost
At 1 October 2019
Additions
At 30 September 2020
Depreciation
At 1 October 2019
Depreciation for the year
At 30 September 2020
Net book value
At 1 October 2019
At 30 September 2020
Company
Cost
At 1 October 2019
Additions
At 30 September 2020
Depreciation
At 1 October 2019
Depreciation for the year
At 30 September 2020
Net book value
At 1 October 2019
At 30 September 2020
9
Investments
Cost as at 1 October 2020
Addition
Disposal
Balance at 30 September 2021
The comparable table for 2020 is detailed below:
Cost as at 1 October 2019
Addition
Disposal
Balance at 30 September 2020
Furniture
& fittings
£
Office
equipment
£
Machinery &
equipment
£
Total
£
19,764
186,307
3,865
180,344
184,209
206,071
3,478
2,017
5,495
18,723
3,809
22,532
12,917
5,963
18,880
12,917
1,240
14,157
–
387
1,041
4,723
180,517
185,341
2,982
-
2,982
2,328
552
2,880
654
102
Furniture
& fittings
£
Office
equipment
£
Machinery &
equipment
£
890
–
890
729
161
890
161
–
12,917
5,963
18,880
12,917
1,240
14,157
–
4,723
3,865
–
3,865
3,478
387
3,865
387
–
Total
£
17,672
5,963
23,635
17,124
1,788
18,912
548
4,723
Investment in
subsidiaries
£
–
272
–
272
Investment in
subsidiaries
£
852,728
–
(852,728)
–
35
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Notes to the Financial Statements continued
For the year ended 30 September 2021
9
Investments continued
Investment in subsidiaries
At 30 September 2021, the Company had interests in the following subsidiary undertakings:
Subsidiaries:
Mercator Gold Australia Pty Ltd
Warm Springs Renewable Energy Corporation
Copper Flat Corporation
Lux Exploration Pty Ltd
Registered office address of the subsidiaries:
Principal
country of
incorporation
Australia
USA
USA
Australia
Principal
activity
Mineral
Exploration
Dormant
Dormant
Mineral
Exploration
Description
and effective
country of
operation
Proportion of
shares held
Australia
100%
USA
USA
Australia
90%
100%
100%
58 Gipps Street, Collingwood Victoria, 3066, Australia
Mercator Gold Australia Pty Ltd
Warm Springs Renewable Energy Corporation
315 Paseo de Peralta, Santa Fe, NM 87501, USA
Copper Flat Corporation (formerly New Mexico Copper Corporation) 315 Paseo de Peralta, Santa Fe, NM 87501, USA
Lux Exploration Pty Ltd
58 Gipps Street, Collingwood Victoria, 3066, Australia
Financial assets at fair value through profit or loss
Quoted investments
At 1 October
Fair value movements
At 30 September
2021
£
26,870
4,591
31,461
2020
£
13,187
13,683
26,870
The financial asset at 30 September 2021 and 2020 comprises shares in Tiger International Resources, Inc., and is held at fair
value through profit or loss in accordance with IFRS 9 Financial Instruments.
10 Intangible assets – exploration and development costs
At 1 October
Additions
R&D tax credit refund
Disposal of Ochre
Disposal of licenses
Translation difference
At 30 September
Group
Company
2021
£
1,869,184
1,452,297
–
–
–
–
2020
£
3,295,996
180,653
(307,818)
(1,156,020)
(169,509)
25,882
2021
£
1,333,282
76,862
–
–
–
–
2020
£
2,272,553
–
–
(939,271)
–
–
3,321,481
1,869,184
1,410,144
1,333,282
An operating segment level summary of exploration and development costs of the Group is presented below:
Danglay Gold Project, Philippines
Central Victorian Gold Projects, Australia
At 30 September
2021
£
2020
£
1,261,158
2,059,322
1,185,297
683,887
3,321,481
1,869,184
36
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
10 Intangible assets – exploration and development costs continued
Danglay Gold Project, Philippines
In 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, entitled ECR to a 25% interest in Cordillera Tiger.
Following the end of the year under review, ECR Minerals received formal recognition for its 25% shareholding in Philippines
based company Cordillera Tiger Gold Resources, Inc. (“Cordillera Tiger”), having invested some £1.2 million in the Danglay gold
project to date.
In July 2021, Cordillera Tiger successfully renewed Exploration License EP-006 at the Danglay gold project, which is located in a
prolific gold and copper mining district in the north of the Philippines.
The ECR Board believes the political climate for the minerals industry in the Philippines is improving and considers that the
Danglay gold project has potential for further exploration to build upon the existing inferred mineral resource estimate of
63,500 ounces of gold at 1.55 g/t gold. This resource was reported by ECR in 2015 to the Canadian NI43-101 standard, based
on exploration carried out at Danglay by ECR during 2014 and 2015. In addition to the resource, an NI43-101 target for further
exploration (conceptual potential quantity and grade of mineralisation expressed as ranges) of 95,000 to 170,000 ounces of gold at
5 to 7.5 g/t was reported.
11 Trade and other receivables
Non-current assets
Amount owed by a subsidiary
Current assets
Amount owed by a subsidiary
Other receivables
Prepayments and accrued income
Inventory – drill rig spares
Group
Company
2020
£
2021
£
2020
£
–
5,133,826
1,029,067
2021
£
–
–
100,406
45,741
75,722
–
24,778
41,032
42,807
818,566
33,919
25,612
–
669,774
15,883
41,032
–
221,869
108,617
878,097
726,689
The short–term carrying values are considered to be a reasonable approximation of the fair value.
37
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Notes to the Financial Statements continued
For the year ended 30 September 2021
12 Cash and cash equivalents
Cash and cash equivalents consisted of the following:
Deposits at banks
Cash on hand
13 Share capital and share premium accounts
Group
Company
2021
£
2020
£
2021
£
2020
£
2,982,046
1,497,231
1,467,835
1,207,190
2,982,046
1,497,231
1,467,835
1,207,190
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
659,198,912
Ordinary
shares
£
9.9p
shares
£
6,591 7,194,816
Deferred Deferred ‘B’
0.099p
shares
£
3,828,359
Deferred
0.199p
shares
£
Total
shares
£
Share
premium
£
Total
£
257,161 11,286,927 47,090,048 58,376,975
357,359,639
3,574
-
-
-
3,574
5,503,514
5,507,088
At 1 October 2020
Issue of shares
less costs
Balance at
30 September 2021 1,016,558,551
10,165
7,194,816
3,828,359
257,161 11,290,501 52,593,562 63,884,063
All the shares issued are fully paid up and none of the Company’s shares are held by any of its subsidiaries.
b)
Potential issue of ordinary shares
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
Exercised during the year
Expired during the year
Weighted
average
exercise price
2021
£
0.051
0.0113
0.0117
5
Number of
options
2021
8,209,968
25,000,000
(16,118,841)
(56,000)
Weighted
average
exercise price
2020
£
0.108
–
Number of
options
2020
9,254,670
–
0.55
(1,044,702)
Exercisable at the end of the year
0.0113
17,035,127
0.051
8,209,968
The options outstanding at 30 September 2021 have a weighted average remaining contractual life of two year and seven months
(2020: one year and seven months).
The options outstanding at the end of the year have the following expiry date and exercise prices:
Date granted
Expiry Date
27 February 2017
30 July 2018
26 February 2022
29 July 2023
Exercise Price in
£0.01725
£0.01125
No. of Options
5,835,127
11,200,000
38
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
13 Share capital and share premium accounts continued
Share-based payments
There were no options issued during the year.
Share warrants
Exercisable at the beginning of the year
Exercised during the year
Expired during the year
Granted during the year
Weighted
average
exercise price
2021
£
0.01625
Number of
warrants
2021
425,384,824
0.0138 (310,603,127)
(4,841,325)
0.0125
49,999,999
0.0375
Weighted
average
exercise price
2020
£
0.01767
-
0.01658
0.01350
Number of
warrants
2020
283,937,327
-
(5,277,778)
146,725,275
Exercisable at the end of the year
0.02878
159,940,371
0.01625
425,384,824
The warrants outstanding at the end of the year have the following expiry date and exercise prices:
Date granted
Expiry Date
Exercise Price
6 June 2017
20 April 2020
30 July 2020
30 July 2020
30 April 2021
5 June 2022
19 April 2022
29 July 2022
29 July 2022
29 April 2023
14 Trade and other payables
Trade payables
Social security and employee taxes
Other creditors and accruals
15 Capital management
£
0.05
0.01
0.021
0.021
0.0375
No. of
Warrants
27,678,195
49,500,000
571,429
32,190,748
49,999,999
Group
Company
2021
£
156,301
34,034
12,397
2020
£
45,032
6,663
69,927
202,731
121,622
2021
£
9,605
19,197
12,397
41,198
2020
£
17,258
6,663
69,927
93,848
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.
39
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Notes to the Financial Statements continued
For the year ended 30 September 2021
16 Related party transactions
Group
Company
2021
£
2020
£
2021
£
2020
£
Amounts owed to Directors
10,606
35,207
10,606
35,207
Details of Directors’ emoluments are disclosed in Note 6. The amounts owed to Directors relate to accrued emoluments,
consulting fees and expenses due.
During the year the Company provided additional advances of £ 10,483 under a loan to Mercator Gold Australia Pty Ltd and
charged expenses and management fees of £131,486. The balance owed to the Company is shown in Note 11.
The Company and the Group have no ultimate controlling party.
17 Commitments and contingencies
Capital expenditure commitment
As at 30 September 2021, the Group had no commitments (2020: £Nil).
The Group is committed to issuing a further AUD 150,000 worth of Ordinary Shares in ECR contingent on commercial production
being established from the Bailieston projects.
Contingencies
The Group entered into no agreements during the year ended 30 September 2021 which would result in disclosure of contingent
assets or liabilities.
18 Financial instruments
Categories of financial instrument
Group
Financial assets (amortised cost)
Trade and other receivables (excluding prepayments)
Inventory
Cash and cash equivalents
Financial assets (fair value through profit or loss)
Equity investments
Financial liabilities (amortised cost)
Trade and other payables
Company
Financial assets (amortised cost)
Trade and other receivables (excluding prepayments)
Cash and cash equivalents
Financial assets (fair value through profit or loss)
Equity investments
Financial liabilities (amortised cost)
Trade and other payables
40
2021
£
100,406
75,722
2,982,046
3,158,174
31,463
31,463
232,185
232,185
2020
£
852,485
1,467,835
2,320,320
31,463
31,463
41,198
41,198
2020
£
67,585
1,497,231
1,546,816
26,870
26,870
114,959
114,959
2019
£
685,657
1,207,190
1,892,847
26,870
26,870
87,185
87,185
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
18 Financial instruments continued
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 2021 and 30 September 2020 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.
Fair value of financial instruments
The fair values of the Company’s financial instruments at 30 September 2021 and 30 September 2020 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 2021
Financial assets at fair value through profit or loss
Group and Company
30 September 2020
Financial assets at fair value through profit or loss
Level 1
£
31,463
31,463
Level 1
£
26,870
26,870
Level 2
£
Level 3
£
–
–
–
–
Level 2
£
Level 3
£
–
–
–
–
Total
£
31,463
31,463
Total
£
26,870
26,870
Liquidity risk
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.
41
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Notes to the Financial Statements continued
For the year ended 30 September 2021
18 Financial instruments continued
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 2021.
Due in less than 1 month
Due between 1 and 3 months
Due between 3 months and 1 year
Due after 1 year
19 Segmental report
2021
£
232,185
–
–
–
232,185
2020
£
121,622
–
–
–
121,622
The Group is engaged in mineral exploration and development. The Chief Operating Decision Maker is considered to be the
Board of Directors, who segment exploration activities by geographical region in order to evaluate performance individually. The
segmental breakdown of exploration assets is shown in Note 10.
Management information in respect of profit or loss expenditures is not segmented but is considered at Group level.
20 Cash used in operations
Group
Company
Year ended
30 September
2021
£
Year ended
30 September
2020
£
Year ended
30 September
2021
£
Year ended
30 September
2020
£
Note
Operating activities
Loss for the year before tax
Adjustments:
Loss on disposal of subsidiary
Depreciation expense property, plant and equipment
(Gain)/Loss on financial assets at fair value
Interest income
Net gain on disposal of licenses
Decrease/(Increase) in accounts receivable
Decrease/(Increase) in inventory
Foreign exchange on operating activities
Increase/(Decrease) in accounts payable
8
(1,413,206)
(2,690,882)
(800,558)
(2,399,369)
-
51,822
(4,593)
(288)
(37,531)
(75,722)
(15)
81,109
1,986,469
3,809
(13,683)
(487)
(106,192)
36
-
69,998
82,546
-
3,442
(4,593)
(260)
(151,408)
-
1,813,804
1,788
(13,683)
-
-
(155,702)
-
-
(52,650)
57,755
Net cash used in operations
(1,398,424)
(668,377)
(1,006,026)
(694,408)
42
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
21 Events after the reporting date
•
•
On 1 October 2021, the Company announced the appointment of Dr Trevor George Davenport (“Trevor” “Dr Davenport”) as
an Independent Non-Executive Director of ECR Minerals plc, with immediate effect.
On 25 October 2021 the Company provided an update to shareholders on drilling progress at historic reserve number 4,
otherwise known as ‘Cherry Tree’, which is part of the Company’s Bailieston Project. A total of 1545 metres of diamond
drilling has been completed to date at the Cherry Tree prospect. The company is currently drilling the final drillhole
(BCTDD010) before moving back to complete drilling of the HR3 ‘Byron’ area. Visual examination of drill core BCTDD009
shows the most intense quartz-sulphidic vein drilled to date at Cherry Tree.Orientated diamond core has delineated sulphidic
fault zones containing broad low-grade gold mineralisation emanating from a central anticlinal hinge zone.
• On 1 November 2021 the Company announced the passing of CEO, Craig Brown.
•
•
•
•
•
•
•
•
•
On 29 November 2021 the Company announced an update to shareholders on its initial successful results from recently
commenced ‘phase 2 drilling’ within HR3 at Bailieston, Victoria, Australia. With permission been granted early October 2021.
Phase two drilling commenced with BH3DD009 across the central portion of the Maori Reef. Drilling was targeted to follow
up the down-dip of an historical Reverse Circulation drillhole intersection which returned 1m @ 11 g/t Au. BH3DD009 was
successful in drilling mineralisation between 47m and 56.7m depth and the best intersection was 0.7m @ 28.06 g/t Au from
52.7m depth.
On 2 December 2021 the Company was pleased to announce that its 25% shareholding in Philippines based company
Cordillera Tiger Gold Resources, Inc. (“Cordillera Tiger”, “Cordillera”) has been formalised and the Company is now in receipt
of the share certificate.
On 15 December 2021 the Company pleased to confirm the grant of exploration licenses EL006907 and EL007484. In
particular, the granting of license EL006907 linking Creswick to Ballarat East-Nerrina goldfield was something our former CEO
Craig Brown always viewed as a key step in developing our Creswick interests and our understanding of the Dimocks Main
Shale. Licence EL007484 is an important addition to our enlarged footprint to the east of Victoria in the Tambo region. There
is a minimum expenditure requirement of $160,050 AUD over the five-year term.
On 22 December 2021 the Company provide updated results from the initial first drill section across the ‘Maori’ Anticline
target within HR3 at Bailieston, Victoria, Australia. Assay results for a further two diamond holes across the first drilled
section of the upper part of the ‘Maori Anticline’ target have now been received. These results follow-up ECR’s previous
announcement released on the 29/11/2021 in regards to hole BH3DD009 where an initial successful result of 0.7m @ 28.06
g/t Au from 52.7m was recorded. Holes BH3DD010 and BH3DD011 were subsequently drilled on the same azimuth, but at
two different angles to test the up and down dip continuance of the grade in BH3DD009.
On 23 December 2021 the Company announced a further to the HR3 drilling update announced on December 22nd,
soil sample results from HR3 have identified further gold anomalies, giving further confidence in our previous geological
interpretations for dilational jog zones within the HR3 goldfield at Bailieston, Victoria, Australia.
On 10 January 2022 the Company plc announced that it has submitted an application to renew current exploration license
EL006184 for an extended five-year term.
On 24 January 2022 the Company announced the appointment of Andrew Scott as a Non-Executive Director. Furthermore,
the company announced the continuous role of the Audit Partner at PKF LittleJohn for an additional period of one more year in
order to aid in the transition of the untimely death of former CEO Craig Brown.
On 24 January 2022 the Company confirmed that it has issued options over 30,000,000 ordinary shares in the Company,
to senior employees and certain directors / PDMRS of the Company. The options vest immediately; have an exercise price
of 2.2p and whilst they can then be exercised at any time for a period of three years, exercise is conditional on the Volume
Weighted Average Price of the shares being 3.75 pence per share for 10 days at the time of exercise (“New Options”).
On 3 February 2022 the Company announced that exploration licences EPM27901, EPM27902 and EPM27903 have been
granted to its subsidiary LUX Exploration Limited (“LUX”), in the Lolworth Region, North Queensland. With the three
exploration licenses covers a total 964km2 with historic stream sediment sampling indicates that the Lolworth Range is
prospective for gold, tungsten and tin.
43
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 Notes to the Financial Statements continued
For the year ended 30 September 2021
21 Events after the reporting date continued
•
•
On 1 February 2022 the Company announced an update regarding the Creswick exploration to shareholders, proposed
development plan for the licence and the search for a new CEO.
On 14 March 2022 the Company announced a current update on drilling at HR3 including results and geological interpretation
completed for BH3DD012, current drilling activities and future drilling plans within EL5433. Diamond drill hole BH3DD012 was
drilled 100m south and parallel to the previously announced hole (BH3DD019). Five mineralised zones have been identified
and correlated to the Maori Anticline.The best intercepts within each of the five mineralised zones include 0.8m @ 3.81 g/t Au
(Zone 1); 0.5m @ 3.87 g/t Au (Zone 2); 0.5m @ 4.26 g/t Au (Zone 3); 0.6m @ 2.25 g/t Au (Zone 4) and 1m @ 0.51 g/t Au (Zone
5).
44
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
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. If you have sold or transferred only part of your holding of ordinary shares in ECR Minerals
PLC, you are advised to consult your stockbroker, bank or other agent through whom the sale or transfer was effected.
ECR MINERALS PLC
(the “Company”)
(Registered in England and Wales No 05079979)
NOTICE OF ANNUAL GENERAL MEETING
Although the COVID-19 crisis is now largely under control and the UK Government has lifted restrictions on public gatherings,
the holding of the Company’s AGM will still be facilitated by the Company remotely to ensure a quorum is present.
Shareholders should therefore not attend the meeting in person and instead are strongly encouraged to submit their proxy
vote, appointing the Chairman of the meeting as their proxy to ensure that their votes are registered. This will ensure that
votes are registered in accordance with shareholders’ wishes regardless of any restrictions or disruption around the AGM and
will also help protect the health and safety of shareholders and directors. This can be done by completing the forms of proxy
in accordance with the instructions set out below, which must be received before the proxy voting deadline of 9.00 a.m. on
Monday 25 April 2022. Further information is contained in the Notes to this Notice of Annual General Meeting.
NOTICE is hereby given that the Annual General Meeting of the Company will be held at Office T3, Hurlingham Studios, Ranelagh
Gardens, London SW6 3PA on Monday 25 April 2022 at 9.00 a.m. for the purpose of considering and, if thought fit, passing
Resolutions 1 to 6 as ordinary resolutions, and Resolutions 7 as a special resolution:
Ordinary Resolutions
1
2
3
4
5
6
To receive, consider and adopt the annual accounts of the Company for the year ended 30 September 2021, together with the
reports of the directors and auditors thereon.
That Weili (David) Tang, a director retiring in accordance with article 79.1.2 of the Company’s articles of association, be re-elected
as a director of the Company.
That Adam Craig Jones, a director retiring in accordance with article 79.1.2 of the Company’s articles of association, be elected as
a director of the Company.
That Dr Trevor George Davenport, 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.
That Andrew Scott, 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.
In view of the recent and untimely death of former CEO Craig Brown, it is in the best interests of the Company for the current
Responsible Individual to extend their position for one more year, and therefore to re-appoint the current RI 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.
7 To authorise the audit committee to determine the remuneration of the auditors of the Company.
8
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 £10,000 provided that this authority shall, unless
renewed, varied or revoked by the Company, expire on 30 June 2023 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 Resolution
9
That, subject to the passing of Resolution 8, the directors be empowered to allot equity securities (as defined by section 560
of the CA 2006) pursuant to the authority conferred by Resolution 6 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 £10,000. 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 2023
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.
45
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021 By order of the board
Weili (David) Tang
Weili (David) Tang
Chairman
Registered Offi ce:
Offi ce T3, Hurlingham Studios
Ranelagh Gardens
London
SW6 3PA
31 March 2022
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 2021, together with the
reports of the directors and auditors on these accounts, be
received, considered and adopted.
Resolution 2: Election of Weili (David) Tang
Resolution 2 proposes that Mr Tang, who was last re-elected
to the Board at the 2020 AGM and who is therefore required to
retire in accordance with article 79.1.2 of the Company’s articles
of association, be re-elected as a director of the Company.
Resolution 3: Election of Adam Craig Jones
Resolution 3 proposes that Mr Jones, who was last re-elected
to the Board at the 2020 AGM and who is therefore required to
retire in accordance with article 79.1.2 of the Company’s articles
of association, be re-elected as a director of the Company.
Resolution 4: Election of Dr Trevor George Davenport
Resolution 4 proposes that Dr Davenport, who was appointed
to Board on 1 October 2021 and who is therefore required
to put himself forward for election in accordance with article
79.1.1 of the Company’s articles of association, be elected as a
director of the Company.
Resolution 5: Election of Andrew Scott
Resolution 5 proposes that Mr Scott, who was appointed to
Board on 24 January 2022 and who is therefore required to put
himself forward for election in accordance with article 79.1.1 of
the Company’s articles of association, be elected as a director
of the Company.
Resolution 6: Re-appointment of auditor
Resolution 6 proposes the reappointment of the Company’s
existing auditor to hold offi ce until the end of the next annual
general meeting.
Resolution 7: Remuneration of auditor
Resolution 7 is to authorise the audit committee of the
Company to determine the remuneration of the Company’s
auditors.
Resolution 8: Authority to allot shares
Resolution 8 is to renew the directors’ power to allot shares
in accordance with section 551 of the CA 2006. The authority
granted at the annual general meeting on 19 April 2021 is due
to expire on the earlier of 30 June 2022 or the proposed date
of the Meeting.
If passed, the resolution will authorise the directors to allot
equity securities up to a maximum nominal amount of £10,000,
which represents approximately 112% of the Company’s
issued ordinary shares as at 23 March 2022 (being the latest
practicable date before publication of this document).
If given, these authorities will expire at the annual general
meeting in 2023 or on 30 June 2023, 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 fl exibility 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 9: Disapplication of pre-emption rights
Resolution 9 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 occasions where it is in the best
interests of the Company not to be required to fi rst offer such
shares to existing shareholders.
Accordingly, resolution 9 will be proposed as a special
resolution to grant such a power and will permit the directors,
pursuant to the authority granted by resolution 6, to allot
equity securities (as defi ned by section 560 of the CA 2006)
or sell treasury shares for cash without fi rst offering them to
existing shareholders in proportion to their existing holdings
up to a maximum nominal value of £10,000 representing
approximately 112% of the Company’s issued ordinary shares
as at 23 March 2022 (being the latest practicable date before
publication of this document). If given, this authority will expire
at the annual general meeting in 2023 or on 30 June 2023,
whichever is the earlier.
46 ECR MINERALS PLC
ANNUAL REPORT & ACCOUNTS 2021
SHAREHOLDER NOTES
The following notes provide more detailed information about
your voting rights, and how you may exercise them.
Shareholders’ attention is drawn to the bold text at Notes 1
and 2 in relation to the ability of shareholders and their proxies
and corporate representatives to attend the meeting in person
1
2
3
A member entitled to attend and vote at the meeting is
ordinarily 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 should be the Chairman of the Meeting to
ensure your vote is counted. 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 using the proxy
form are set out in the notes to the proxy form. If you
appoint a person other than the Chairman of the
Meeting as your proxy they will not be able to attend.
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
9.00 a.m. on 25 April 2022 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.
In the case of a member which is a company, the proxy
form must be executed under its common seal or signed
on its behalf by an officer of the company or an attorney
for the company.
Any power of attorney or any other authority under which
the proxy form is signed (or a duly certified copy of such
power or authority) must be included with the proxy form.
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
4
5
6
7
8
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.
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.
9
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.
10 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.
11 Only those shareholders registered in the Register of
Members of the Company as at 6.00 p.m. on xx April
2022 (or, if the meeting is adjourned, on the date which
is 48 hours (excluding non-business days) before the time
47
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
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.
12 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.
13 You may not use any electronic address provided either in
this notice Meeting or any related documents (including
the form of proxy) to communicate with the Company for
any purposes other than those expressly stated.
14 As at 23 March 2022 (being the last business day
before the publication of this notice), the Company’s
issued ordinary share capital consisted of 1,038,344,551
ordinary shares carrying one vote each. The Company
does not hold any shares in treasury. In addition,
there are 72,674,911 deferred shares of £0.099 each,
3,867,029,332 deferred B shares of £0.00099 each and
129,226,440 new deferred shares of £0.00199 each
which do not carry voting rights.
15 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:
15.1 to do so would interfere unduly with the preparation
for the meeting or involve the disclosure of confidential
information;
15.2 the answer has already been given on a website in the
form of an answer to a question; or
15.3 it is undesirable in the interests of the company or the
good order of the meeting that the question be answered.
Please however note the text in bold at notes 1 and 2
above.
16
Information regarding the meeting is available from
www.ecrminerals.com
48
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
Company Information
DIRECTORS
Weili (David) Tang
Non–Executive Chairman
Adam Craig Jones
Non-Executive Director
Andrew Scott
Non-Executive Director
AUDITOR
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
AIM NOMINATED ADVISER
WH Ireland Group plc
24 Martin Lane
London
EC4R 0DR
REGISTRARS
AIM BROKERS OF RECORD
Computershare Investor Services plc
SI Capital
Dr Trevor George Davenport
Independent Non-Executive Director
The Pavilions
Bridgwater Road
Bristol BS13 8AE
LEGAL ADVISERS
Charles Russell Speechlys LLP
5 Fleet Place
London EC4M 7RD
COMPANY SECRETARY
Weili (David Tang)
Office T3
Hurlingham Studios
Ranelagh Gardens
London SW6 3JA
REGISTERED AND HEAD OFFICE
ECR Minerals plc
Office T3
Hurlingham Studios
Ranelagh Gardens
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
46 Bridge Street
Godalming GU7 1HL
Novum Securities
2nd Floor
Lansdowne House
56 Berkeley Square
London W1J 6ER
BANKERS
Barclays Bank plc
1 Churchill Place
London
E14 5HP
49
ECR MINERALS PLCANNUAL REPORT & ACCOUNTS 2021
NP0322.3539