Annual Report and Accounts
– 2022
The Directors of ECR Minerals plc (the “Directors” or the “Board”) present their report and
audited financial statements for the year ended 30 September 2022 for ECR Minerals plc
(“ECR”, the “Company” or the “Parent Company”) and on a consolidated basis (the “Group”)
CONTENTS
Chairman’s Statement
Chief Executive Officer 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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The Directors of ECR Minerals plc (the “Directors” or the “Board”) present their report and audited financial
statements for the year ended 30 September 2022 for ECR Minerals plc (“ECR”, the “Company” or the “Parent
Company”) and on a consolidated basis (the “Group”)
Chairman’s Statement
Although the year to September 2022 has been a year of significant operational progress, it was overshadowed for the most part
by the untimely and tragic death of long serving CEO Craig Brown. Craig was a close personal friend and confidant of mine, and his
death in October 2021 was a profound shock to us all. A year on and his family are still with us as enthusiastic supporters and
shareholders, keen to see his legacy fulfilled.
As a result of Craig’s death, an interim management committee was set up to oversee the continued smooth running of the
Company, including the ongoing drill campaigns underway in Victoria. This was not without its challenges, but thanks to an
experienced operational team on the ground in Victoria, our now Technical Director Adam Jones oversaw the continued smooth
running and restart of diamond drilling activities at Bailieston.
The search for a CEO to replace Craig started at the end of 2021, and by April 2022, Andrew Haythorpe’s experience as a board
member with numerous listed mining companies put him in pole position as our clear favoured candidate. Since his arrival, Andrew
has adopted a structured and methodical approach in assessing our existing assets and as we have seen post year end, he is now
bringing his own ideas and projects into the fold. The most significant manifestation of this was the announcement post year end
that ECR had been granted a conditional option to acquire the entire issued share capital of Placer Gold Pty Ltd, the beneficial
holder of three granted mining tenements (EPM 27518, EPM 25855 and EPM 19437) located in NE Queensland, together known as
the Hurricane Project. Following a fundraise announced post year end, the Company is now in a position to potentially complete
on the option acquisition once the steps outlined in the agreement have been undertaken. Hurricane is a late-stage exploration
project that offers three tenements all highly prospective for gold and antimony.
ECR’s operational hub is currently centred in the state of Victoria in Australia, and through our wholly owned Australian subsidiary
Mercator Gold Australia Pty Ltd (“MGA”) we have continued to develop our projects at Bailieston and Creswick. Through our other
wholly owned subsidiary LUX Exploration Pty Ltd (“LUX”) we are continuing to develop potential gold and battery metals assets in
the Lolworth Range area in Northern Queensland and following the grant of exploration licences there in February 2022, our field
team have undertaken a comprehensive stream sediment sampling campaign, with some impressive results announced post year
end.
In Victoria, following the discovery of the highest-grade gold intercept yet revealed at the Historic Reserve #3 (HR3) prospect, the
MGA team completed a series of intensive diamond drilling campaigns at HR3, including the prospective Byron, Dan Genders,
Scoulars and Maori Reefs, plus numerous cross-structures. In August 2022, despite delays in receiving assay results from the labs,
results from several holes led to the discovery of two mineralisation corridors within the Maori Anticline at Historic Reserve 3 (HR3).
Post year end, we announced final gold results from the 2022 HR3 drill programme and, along with the earlier results, the full
dataset is now undergoing evaluation prior to announcing our next steps for 2023. Also post year end, a further two exploration
licences were granted to MGA at Bailieston, bringing our total land package there to 179 square km, including our own property at
Nagambie Rushworth Road, acquired in summer 2021.
Of all the Bailieston projects, it was Blue Moon that piqued our new CEO’s interest due to its unusual geology. Blue Moon was finally
drilled at the end of the year in focus, and post year end an encouraging grade from the first Blue Moon drill hole was reported.
Historically, a lot of investor interest has centred on our Creswick project, where ECR also owns a second property at Springmount.
Following a visit to the Creswick tenements with Technical Director Adam Jones earlier this year, Andrew Haythorpe took the
decision that the Company should re-assay the Creswick diamond drill core. This proved to be a master stroke, with high grade
results revealed including 0.7m @47.75 g/t Au see announcement dated 19 October 2022 for the full details of these results. Our
key licence there was renewed during the year for a further 5 years, and along with the grant of the adjacent Ballarat East Nerrina
Goldfield licence, our team are gearing up for a new focus on Creswick in 2023.
ECR (through MGA) also owns two exploration licences in eastern Victoria, known as the Tambo project. Licence EL007484 covering
the Tambo River and Swifts Creek region was granted in December 2021, and this territory will also be in focus for exploration in
2023.
In December 2021, ECR formalised its 25% shareholding in Cordillera Tiger Gold Resources, owner of Exploration Licence EP-006 at
the Danglay Gold Project, N Philippines. April 2022 saw ECR acquire further shares from an existing shareholder to take a majority
70% stake in the project, bringing the nascent value at Danglay back to the fore on our balance sheet. With our focus very much on
Australia, several options are being explored to crystallize value here.
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In maintaining intensive drilling campaigns and exploration activities, ECR’s capital position has reduced during the year, and now
stands at £612,582. Following the previously mentioned post year end fundraising, and the sale of the Bendigo property announced
in August 2022. With further asset disposals under consideration, the costs of our scheduled activities for the coming year are in
hand.
We have significantly advanced the value of our assets across the group during the year, and now with Andrew’s leadership I believe
we have never been better positioned to deliver transformative value to our shareholders.
Weili (David) Tang
Chairman
31 March 2023
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Chief Executive Officer Report
In my first report to you as your CEO, I must first pay tribute to my predecessor Craig Brown. I am under no illusions that his are big
shoes to fill, but it is my sincere hope that with his family seeking fulfilment of his legacy, I and your Board can bring some of these
key assets to fruition.
I would also like to express my gratitude to the Interim Committee of Chairman David Tang, Technical Director Adam Jones, and
Non-Executive Director’s Andrew Scott and Trevor Davenport for overseeing the day to day running of the business before my
arrival.
The early part of the year saw the gold price continue to build, pushing back over US$2,000oz in March, nearly reaching the highs
of US$2,067 oz in March 2020. That was the best performance segment of the year however, as rising interest rates and hawkish
outlooks from the US Fed and the European Central Bank saw the gold price slide lower to close out the ECR financial year at $1,618
oz. It should be remembered that although gold is considered a hedge against rising inflation, higher rates raise the opportunity
cost of holding non-yielding bullion, which will invariably weigh on the gold price. Post year end we have seen a resurgence in value,
which we believe is due to gold’s compelling safe-haven status set against a highly uncertain macro picture.
Since my arrival in April 2022 I have focussed on ECR’s existing drilling operations in Victoria, Australia. I took time to get to know
the projects at Bailieston and Creswick so I could form a judgement on how these assets could fit into an expanding gold exploration
Company. I was very impressed with what I found. I spent time exploring the locations with Adam Jones, and as a geologist I was
highly impressed with both the work he’d overseen to date and also his ideas on further developing each project.
With my knowledge of Northern prior experience exploring in North Queensland, I was already aware of the history and relatively
unexplored nature of Lolworth Range near to the Charters Towers region, and, along with Adam Jones, I am equally enthusiastic
over the opportunity and visible gold observed in the field with assays now returning from the initial field campaign. I also look
forward to exploring and possibly developing the Hurricane project, on which ECR announced a conditional option to buy 100% for
cash and shares in 2023 just after the financial year end.
Victoria Work Overview:
Bailieston:
The Bailieston area is sited 47 km east of Kirkland Lake Gold’s prolific Fosterville gold mine, which produced 509,601 ounces
in 2021, with head grades approaching 23.7g/t. To date, ECR has drilled 9,485m at Bailieston across several projects since Jan
2021. Following the discovery of the highest-grade gold intercept yet revealed at the Historic Reserve #3 (HR3) prospect, the team
completed a series of intensive diamond drilling campaigns at HR3, and in August 2022, results from several holes led to the
discovery of two mineralised corridors within the Maori Anticline at HR3. Post year end, we announced final gold results from the
2022 HR3 drill programme and, along with the earlier results, this full dataset is now being evaluated by our geology team. Also
post year end, a further two exploration licenses were granted at Bailieston, bringing our total land package there to 179 square
km, including our own property at Nagambie Rushworth Road, acquired in summer 2021.
Of particular interest is the Blue Moon project due to its unusual geology and mineralization style. It offers unusually broad width
and consistency (true width up to 7m). RC drilling in 2019 revealed 11m @ 5.13 g/t Au and 21m @ g/t Au, with mineralisation open
to the east, west and down-dip. Once all the results are received, we can then make decisions on next steps.
Creswick:
During the summer of 2022, the management team came to London where I presented our investment case at the Proactive One
2 One event. Post year end I returned to London to attend 121 Mining Investment and Mines and Money. On each visit I was struck
by how much investor interest was centred around Creswick in the wake of works and drilling undertaken there since 2019. It is
also here at Springmount that ECR owns a second property with some historical mine workings on the land. Following my initial
visit to the Creswick tenements with Technical Director Adam Jones earlier this year, we decided re-assay the Creswick diamond
drill core. This proved to be a good decision, and just after our year end, the re assay revealed high grade results including 0.7m
@47.75 g/t Au. Our key license there was renewed during the year for a further 5 years, and along with the grant of the adjacent
Ballarat East Nerrina Goldfield license, armed with the re assay data our team are gearing up for a new focus on Creswick in 2023.
Tambo:
There are two exploration licences one still in application and the other now granted in eastern Victoria, known as the Tambo
project. Licence EL007484 covering the Tambo River and Swifts Creek region was granted in December 2021, and this territory will
also be in focus for exploration in 2023. The territory covers portions of the historic Swifts Creek/Omeo and Tambo River Goldfields
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that have recorded historical gold production totalling 225,000 oz (Geological Survey of Victoria). Tambo is considered to be
prospective for orogenic reef gold and additionally for intrusion-related gold and base metal systems.
N Queensland Work Overview:
Lolworth Range
The Lolworth Range area in North Queensland has been closely monitored by ECR’s Head Geologist Adam Jones for at least
eight years and is considered prospective for gold. In February 2022, exploration licences for tenements EPM27901,
EPM27902 and EPM27903 were granted (they will expire in five years on 31 January 2027). ECR has a commitment
expenditure of AUD$650,000 for the first three years across the three licence areas, and our team wasted no time in getting
on the ground there, undertaking a comprehensive stream sediment sampling campaign, with some impressive results
announced post year end with visible gold in 14% of the first 125 stream sediment samples. This is very encouraging. Further
anomalies with tin and tungsten, plus multiple pegmatites (potential lithium sources) were observed and we are now putting
together a follow up plan of action.
Hurricane Project (Post Year End)
Post year end, ECR was granted a conditional option to acquire the entire issued share capital of Placer Gold Pty Ltd, the beneficial
holder of three granted mining tenements (EPM 27518, EPM 25855 and EPM 19437) located in NE Queensland, together known as
the Hurricane Project. Hurricane was discovered 5 years ago by a geologist who followed the Hodgkinson River tributaries to their
source and discovered numerous gold veins at surface with grades ranging from 1- 20g/t over widths of 0.5-7m. Here ECR has a
conditional option to buy outright for cash and shares in 2023, and with a modest A$200,000 spend commitment, we now have a
drilling campaign planned there for July 2023. The acquisition will complete subject to those results. We consider Hurricane to be
a late-stage exploration project with three tenements all highly prospective for gold and antimony.
Overview of Exploration Licence Portfolio
At the end of the financial year under review, ECR held three granted mineral exploration licences in Victoria (EL005433,
EL006148 and EL006907). The granting of Creswick license EL006907 to the south of EL006148 links Creswick to the Ballarat
East-Nerrina Goldfield. ECR holds granted exploration licence EL5433 at Bailieston and post year end has been granted
Bailieston licenses EK006911 and EL 006912. At Tambo ECR owns granted exploration licence EL007484 covering Swifts Creek
and the Tambo River.
ECR holds three exploration licences (EPM27901, EPM27902 and EPM27903) in the Lolworth area, North Queensland, and
subject to exercise of the option to acquire Placer Gold Ltd (Hurricane Project), will own granted exploration licenses EPM
27518, EPM 25855 and EPM 19437.
These are augmented by exploration licence application EL007296 at Bailieston, exploration licence application EL006713 at
Creswick and exploration license EL007486 at Tambo.
In November 2020, ECR lodged exploration licence application EL007537 for an area which surrounds mining licences
MIN5396 and MIN4847. These mining licences, which are not held by ECR, 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 the
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
In December 2021, ECR formalised its 25% shareholding in Cordillera Tiger Gold Resources, owner of Exploration License EP-006
at the Danglay Gold Project, N Philippines. The project is located in a prolific gold and copper mining district in the north of the
Philippines. April 2022 saw ECR acquire further shares from an existing shareholder to take a majority 70% stake in the project,
bringing the nascent value at Danglay back to the fore on the ECR balance sheet. With our focus very much on Australia, several
options are being explored to crystallize value here. We will report back to the markets in due course.
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 US$500,000 was received, and ECR is entitled to:
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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; and
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.
FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2022
As a Group which is not generating revenue from operations, means that profit and loss is a metric of less utility than in many other
businesses. For the year to 30 September 2022 the Group recorded a total comprehensive loss of £2,614,873, compared with
£1,465,751 for the year to 30 September 2021. This increase is reflected principally in the impairment of Danglay Gold project.
The Group’s net assets at 30 September 2022 were £5,849,083 in comparison with £7,657,684 at 30 September 2021.
We have taken measures to preserve cash going forward, including asset disposals. ECR currently owns two properties in Victoria
at Nagambie-Rushworth Road, Bailieston and at Brewing Lane, Springmount in Creswick. A third property close to Bendigo was
disposed of during the year in question, raising a further A$950,000 (£550,000) toward our project exploration campaigns. Further
disposals are under consideration, and post year end, the Company raised a further £900,000 before expenses. The Group expect
further disposal in 2023, potential fundraising and exercising of outstanding warrants can cover our scheduled exploration costs for
the foreseeable future.
Finally I would like to put on record my thanks to ECR shareholders for their continued support, and secondly for the welcome I
have received from so many I have met at events and shows throughout the year. I fully expect to deliver some meaningful results
from our key projects in the coming year, along with some real shareholder value.
Andrew Haythorpe
CEO
31 March 2023
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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.
Andrew Haythorpe
Chief Executive Officer
Andrew has more than 30 years experience manging listed gold miners and explorers on the ASX and TSX market as well as
working as a mining analyst and actively exploring for gold as a geologist. As a board member with numerous listed mining
companies, he has many years of experience in managing and developing projects. In particular his time as Managing Director
of TSX and ASX-listed Crescent Gold Limited saw him develop the company from an $8 million golf explorer to a $250 million
gold producer within four years. He was also Managing Director of top performing ASX-listed gold producer Michelago
Resources. As an analyst, Andrew was considered a global leader in the Industrial Minerals sector and rated 12th best gold
analyst at Hartley Poynton Ltd. Along with his new role as CEO of ECR Minerals.
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
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.
in Victoria and Vendetta Mining
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.
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
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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.
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Strategic Report
The Directors of the Company present their Strategic Report for the year ended 30 September 2022.
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 and North Queensland, 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.
Andrew Haythorpe, Director & Chief Executive Officer is based in Perth, Australia, while Weili Tang, Non-Executive Chairman, is based
in Canada, 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 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. MGA wholly owned Australian subsidiary Mercator
Gold Holding Pty Ltd
The Company also has a wholly owned Australia subsidiary named Lux Exploration Pty Ltd (“LUX”).
The Group’s activities in the Philippines are administered through a 70% majority shareholding in Philippines Company Cordillera Tiger
Gold Resources, Inc. 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 five 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 revenue.
For the year to 30 September 2022 the Group recorded a total comprehensive loss attributable to shareholders of the Company of
£2,272,658, an increase compared with £1,413,206 for the year to 30 September 2021. The largest contributor to the total
comprehensive loss was impairment of Danglay Gold Project.
The Group’s net assets as at 30 September 2022 were £5,849,083 in comparison with £7,657,683 at 30 September 2021.
Exploration activity took place in Central Victoria, Australia during the year to 30 September 2022, as discussed in the Chief Executive
Officers 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.
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.
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Strategic Report continued
Where a project has been disposed of, the proceeds of that disposal will usually be reinvested in new projects. In the case of very
significant proceeds from a disposal, the Directors would also consider distributions to shareholders.
The Group’s business model is to be an efficient and successful explorer and developer of mineral deposits.
The rights to carry out these activities may be acquired 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
£842,889 of cash and cash equivalents at 30 September 2022, versus £2,982,046 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 and N Queensland, 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, ECR held three granted mineral exploration licences in Victoria (EL005433,
EL006148 and EL006907). The granting of Creswick licences EL006907 to the south of EL006148 links Creswick to the Ballarat
East-Nerrina Goldfield. ECR holds granted exploration licence EL5433 at Bailieston and post year end has been granted
Bailieston licences EK006911 and EL 006912. At Tambo ECR owns granted exploration licence EL007484 covering Swifts Creek
and the Tambo River.
ECR holds three exploration licences (EPM27901, EPM27902 and EPM27903) in the Lolworth area, North Queensland, and
subject to exercise of the option to acquire Placer Gold Ltd (Hurricane Project), will own granted exploration licences EPM
27518, EPM 25855 and EPM 19437.
These are augmented by exploration licence application EL007296 at Bailieston, exploration licence application EL006713 at
Creswick and exploration licences EL007486 at Tambo.
In November 2020, ECR lodged exploration licence application EL007537 for an area which surrounds mining licences MIN5396
and MIN4847. These mining licences, which are not held by ECR, 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 the 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.
9
Victoria Work Overview:
Bailieston:
The Bailieston area is sited 30 km east of Kirkland Lake Gold’s prolific Fosterville gold mine. ECR has drilled 9,485m at Bailieston across several
projects since Jan 2021. Following the discovery of the highest-grade gold intercept yet revealed at the Historic Reserve #3 (HR3) prospect, the
team completed a series of intensive diamond drilling campaign at HR3, including the prospective Byron, Dan Genders, Scoulars and Maori Reefs,
plus numerous cross-structures. In August 2022, despite long delays in assay results from the labs, results from several holes led to the discovery
of two mineralisation corridors within the Maori Anticline at Historic Reserve 3 (HR3). Post year end, the final gold results from the 2022 HR3 drill
programme were reported and along with the earlier results, this full dataset is now undergoing evaluation prior before the next steps are
announced. Also post year end, a further two exploration licences were granted at Bailieston, bringing our total land package there to 179 square
km, including our own property at Nagambie Rushworth Road, acquired in summer 2021.
Of particular interest is the Blue Moon project due to its unusual geology and unique mineralization style. Blue Moon offers unusually broad width
and consistency (true width up to 7m) making it immediately commercially viable. RC drilling in 2019 revealed 11m @ 5.13 g/t Au and 21m @ g/t
Au, with mineralisation open to the east, west and down-dip. Post year end an encouraging grade from the first Blue Moon drill hole was reported,
and again once all the results are in house, decisions can be made on the next steps.
Creswick:
During the summer of 2022, the management team came to London where our CEO presented our investment case at the Proactive One 2 One
event. Post year end, our CEO returned to London to attend 121 Mining Investment and Mines and Money. On each visit a substantial amount of
investor interest was centred around Creswick in the wake of works and drilling undertaken there since 2019. It is also here at Springmount that
ECR owns a second property with some historical mine workings on the property. Following Andrew Haythorpe’s initial visit to the Creswick
tenements with Technical Director Adam Jones earlier this year, he was convinced that the Creswick diamond drill core should be re-assayed. This
proved to be a good decision, and just post year end, the re assay revealed high grade results including 0.7m @47.75 g/t Au. Our key licence there
was renewed during the year for a further 5 years, and along with the grant of the adjacent Ballarat East Nerrina Goldfield license, armed with the
re assay data our team are gearing up for a new focus on Creswick in 2023.
Tambo:
There are two exploration licence applications in eastern Victoria, known as the Tambo project. Licence EL007484 covering the Tambo River and
Swifts Creek region was granted in December 2021, and this territory will also be in focus for exploration in 2023. The territory covers portions of
the historic Swifts Creek/Omeo and Tambo River Goldfields that have a recorded historical gold production totalling 225,000 oz (Geological
Survey of Victoria). The territory is considered to be prospective for orogenic reef gold and additionally for intrusion-related gold and base
metal systems. Work will comm ence here in Q1 2023.
10
Strategic Report continued
N Queensland Work Overview:
Lolworth Range
The Lolworth Range area in North Queensland has been closely monitored by ECR’s Head Geologist Adam Jones for at least eight years and
is considered prospective for gold. In February 2022, exploration licences for tenements EPM27901, EPM27902 and EPM27903 were granted
(they will expire in five years on 31 January 2027). ECR has a commitment expenditure of AUD$650,000 for the first three years across the
three licence areas, and our team wasted no time in getting on the ground there, undertaking a comprehensive stream sediment sampling
campaign, with some impressive results announced post year end that revealed a highly encouraging 14% visible gold strike rate across the
first 125 stream sediment samples. Further anomalies including tin and tungsten traces, plus multiple pegmatites (potential lithium sources)
were observed there, and while we await the remaining sample results, Adam Jones is putting together a follow up plan of action.
Hurricane Project (Post Year End)
Post year end, ECR was granted a conditional option to acquire the entire issued share capital of Placer Gold Pty Ltd, the beneficial holder of three
granted mining tenements (EPM 27518, EPM 25855 and EPM 19437) located in NE Queensland, together known as the Hurricane Project. This is a
project for which our CEO possesses detailed knowledge of through his work with New Energy Minerals Ltd prior to joining ECR. Hurricane was
discovered 5 years ago by a geologist who followed the Hodgkinson River tributaries to their source and discovered numerous gold veins at surface
with grades ranging from 1- 20g/t over widths of 0.5-7m. ECR has a conditional option to buy outright for cash and shares in 2023, and with a
modest A$200,000 spend commitment, now has a drilling campaign planned there for July 2023. The acquisition will complete subject to those
results. The Board consider Hurricane to be a late-stage exploration project with three tenements all highly prospective for gold and antimony.
Danglay Gold Project, Philippines
In December 2021, ECR formalised its 25% shareholding in Cordillera Tiger Gold Resources, owner of Exploration License EP-006 at the Danglay
Gold Project, N Philippines. The project is located in a prolific gold and copper mining district in the north of the Philippines. April 2022 saw ECR
acquire further shares from an existing shareholder to take a majority 70% stake in the project, bringing the nascent value at Danglay back to the
fore on the ECR balance sheet. With our focus very much on Australia, several options are being explored to crystallize value, which will be reported
back to the markets in due course.
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 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.
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 num ber 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
11
Statement in the year in which the decision to discontinue exploration operations is made.
Development Risk
All mineral exploration and development projects may be subject to delays and/or unforeseen difficulties arising from bad weather,
natural disasters, non-availability or delayed availability of licences or permits, changes in the terms on which key licences or permits
are available, commissioning of operations, and the raising of finance, among other factors. The risk of delays and unforeseen
difficulties is mitigated when practical and legal to do so. However, the risk remains that such factors may render a project unfeasible,
or not economically feasible.
Commodity Prices
Changes in the spot and forward prices of the relevant mineral commodity can affect the economic viability of a project at
any stage in its life cycle.
Resource Risk
Mineral deposits are evaluated by their size, grade and by other parameters, and mineral resources and reserves are
typically calculated in accordance with accepted industry standards and codes. Nevertheless, there is always some level of
uncertainty in the underlying assumptions. The Board keeps these assumptions under constant review and adjusts the
Group’s development strategy accordingly.
Mining & Processing Technical Risk
Variations can occur unexpectedly in the technical parameters of a project and can considerably alter its economic viability,
despite the Directors taking as many precautions (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.
Internal Control & Risk Management
The Directors are responsible for the Company’s internal control systems. Whilst no system can give absolute assurance
against material loss or misstatement, the Group’s processes are designed, within the confines of the limited number of
personnel employed, to provide reasonable assurance that issues are identified and dealt with in a timely manner.
The on-going financial performance of the Group is monitored regularly, risks are identified and where necessary adjustments
12
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 2022 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.
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 form is prominently
displayed on the Company’s website together with its address and phone number.
13
Strategic Report continued
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 Com pany 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 num ber 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
The Board of Directors comprises four Directors, one of whom is Chairman as of the year end. In addition, there is an Executive Director
Adam Jones, who also serves as Geological Director, an Independent Non-Executive Director, Trevor Davenport and a Non-Executive
Director, Andrew Scott.
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 Board, through the Chairman and Non-Executive Directors, maintains regular contact with its advisers and public relations consultants
in order to ensure that the Board develops an understanding of the views of major shareholders about the Company. During the past twelve
months there have been 10 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 Directors are
of the opinion that the Board comprises a suitable balance of resource sector, technical, financial, accounting, legal and public markets skills
as well as experience of the Board as a whole and that the recommendations of the QCA Corporate Governance Code have been
implemented to an appropriate level. 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
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.
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.
On an ongoing basis, Board m embers 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.
14
Strategic Report continued
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 2022
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 implem entation 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 (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 10 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 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.
15
Strategic Report continued
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 financial reports, the Directors encourage communication with
shareholders at annual general meetings and by participating in investor presentations, Q&A sessions and via social media.
Environment
Mineral exploration and development has the potential to adversely impact the environment in which it takes place. The Group takes
its environmental responsibilities seriously and the environmental parameters of the activities of the Group are considered carefully
so as to minimise the risk of adverse environmental effects.
Human Rights
The activities of the Group are carried out in accordance with all applicable laws on human rights and with genuine moral concern
for all stakeholders.
Employees
The Group seeks to remunerate its employees fairly, offers flexible working arrangements where practical and encourages employees
to gain exposure to all aspects of the Group’s business. The Group gives full and fair consideration to applications for employment
received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation.
It considers 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.
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 benefit of its members as a
whole, as required by s172 of the Companies Act 2006.
Consider the likely consequences of any decision in the long term;
Act fairly between the members of the Company;
The requirements of s172 are for the Directors to:
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 Chief Executive Officer 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 2023.
Weili (David) Tang
Non-Executive Director/ Chairman
31 March 2023
16
Report of the Directors
For the year ended 30 September 2022
Principal Activities
A full review of significant matters, including likely future developments, is contained in the Chairman’s Statement, Chief Executive
Officer 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
It is the prime responsibility of the Board to ensure the Group and Company remains a going concern. At 17 February 2023, the Group has
cash and cash equivalents of £612,582 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 anticipate having to raise additional funding over the course of the financial year to ensure
sufficient available funds in order to meet its contracted and committed expenditure.
Having considered the prepared cashflow forecasts and the Group budgets, which includes the possibility of Directors cutting expenses in
certain area of operations if required, the progress in activities post year-end, including the anticipated sale of properties held in Australia
and sale of the Philippines, the Directors consider that they will have access to adequate resources in the 12 months from the date of the
signing of these Financial Statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation
of the Financial Statements.
Should the Group be unable raise additional funding in the timescales necessary to continue trading as a going concern, adjustments would
have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities, which might arise, and to
classify non-current assets as current.
The Financial Statements have been prepared on the going concern basis and do not include the adjustments that would result if the Group
was unable to continue as a going concern.
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 (2021:
nil). The Group loss for the year of £2,614,873 (2021 loss of £1,465,751) has been taken to reserves together with the other
comprehensive income and loss.
17
Report of the Directors continued
Directors
The Directors who served during the year and to the date of this report were:
Weili (David) Tang
Adam Jones
Dr Trevor George Davenport
Andrew Scott (appointed 24 January 2022)
Under the Company’s Articles of Association, at every annual general meeting of the Company, any Director:
(cid:127) who has been appointed by the Board since the date of the last annual general meeting; or
(cid:127) who held office at the time of the two preceding annual general meetings and did not retire at either of them; or
(cid:127) 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 2022 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.
Additionally, Directors of the Company who held office at 30 September 2022 held the following share options granted under the
Company’s unapproved share option scheme:
Options
Expiry Exercise
Issued Issued Date Price
Date
Adam Jones 5,000,000 23/01/2022 22/01/2027 £0.022
Andrew Scott 5,000,000 23/01/2022 22/01/2027 £0.022
Andrew Scott 10,000,000 23/01/2022 22/01/2027 £0.044
David Tang 10,000,000 23/01/2022 22/01/2027 £0.022
Share Capital and Substantial Share Interests
On 17 February 2023, the Company was aware of the following holdings of 3% or more in Company’s issued ordinary share
capital of 1,167,441,705 ordinary shares of £0.00001 each.
Registered Shareholder
Barclays Direct Investing Nominees Limited
Hargreaves Lansdown Nominees Limited
Interactive Investor Services Nominees Limited
JIM Nominees Limited
The Bank of New York (Nominees) Limited
Interactive Investor Services Nominees Limited
Interactive Investor Services Nominees Limited
Hargreaves Lansdown Nominees Limited
HSDL Nominees Limited
Hargreaves Lansdown Nominees Limited
HSDL Nominees Limited
HSBC Client Holding Nominee
Number of shares
128,194,799
115,034,384
105,882,906
93,000,513
92,268,566
82,687,109
64,078,679
56,082,157
53,804,016
52,126,802
38,791,052
36,692,698
Holding
10.98
9.85
9.07
7.97
7.90
7.08
5.49
4.80
4.61
4.47
3.32
3.14
18
Report of the Directors continued
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 UK adopted 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;
(cid:127)
(cid:127) make judgements and accounting estimates that are reasonable and prudent;
(cid:127)
state whether UK adopted 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.
(cid:127)
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
and Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and the
Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the financial
statements may differ from legislation in other jurisdictions.
Directors’ and Officers’ Liability Insurance
The Company had in force during the year and has in force at the date of this report a qualifying indemnity in favour of its
Directors against the financial exposure that they may incur in the course of their professional duties as Directors and officers
of the Company and/or its subsidiaries.
Statement on Disclosure of Information to Auditors
Having made the requisite enquiries and in the case of each of the Directors who are Directors of the Company at the date
when this report is approved:
(cid:127) so far as they are individually aware, there is no relevant audit information (as defined by Section 418 of the Companies
Act 2006) of which the Company’s auditors are unaware; and
(cid:127) each of the Directors has taken all the steps that they should have taken as a Director to make himself aware of any relevant
audit information and to establish that the Company’s auditors are aware of the information.
Auditor
PKF Littlejohn LLP has expressed its willingness to continue in office as auditor of the Company and a resolution to confirm the
appointment will be proposed at the forthcoming annual general meeting.
Annual General Meeting
The annual general meeting of the Company will be held at 9.00 am on Monday 24 April 2023 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 2023. By order of the Board
Weili (David) Tang
Director
19
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
2022 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 UK adopted 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 2022 and
of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK adopted 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 UK adopted 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.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which states that the group’s and company’s ability to continue as a going concern is dependent on the
ability to secure additional funding and the Directors consider they have various options to do so, including the issue of equity and asset disposals. As stated in
note 2, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the group’s and company’s ability to continue as a
going concern. Our opinion is not modified in respect of this matter.
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 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 a review of budgets and cash flow forecasts covering a period of at least 12 months from the date of approval of the financial statements,
including challenge of management on the basis of preparation, together with ascertaining the most recent cash position of the group and company, and
identifying subsequent events impacting the going concern position.
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 £100,000 (2021: £55,000) based upon approximately 1.5%
of gross assets. 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 £75,000 (2021:£50,000), based upon 1.5% of gross assets and capped to be below group materiality.
Whilst materiality for the financial statements as a whole was set at £100,000, each significant component of the group was audited to an overall
materiality ranging between £5,000 to £75,000 (2021: between £3,500 to £50,000) with performance materiality set at 60% 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
£5,000 (2021: £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 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 2022 were located in the
United Kingdom, Australia and the Philippines. The audit work on each significant component was performed by us as group auditor based upon
20
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 2022 had ongoing early stage
exploration projects in the Philippines and Australia.
Our work in this area included:
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 2022, which are tested annually for
impairment, is £4,957,218. 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.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
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
produced during the year.
Discussion of status of all projects with management.
internal / external resource estimates
The exploration permit for the Danglay project is due to expire
in July 2023. This was considered an indicator of impairment
under IFRS 6. The Board have determined to impair the carrying
value down to nil as they are not seeking to develop the project
themselves and are, since the year end, seeking to dispose of the
project. Given the lack of an identified purchaser and the
timeframe to the expiry of the licence we consider this an
appropriate treatment.
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.
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.
21
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 directors’ responsibilities statement, the directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group 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
o
o
Enquiries of management
Review of Board minutes
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.
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.
22
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.
Daniel Hutson (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
31 March 2023
15 Westferry Circus
Canary Wharf
London E14 4HD
23
Consolidated Income Statement
For the year ended 30 September 2022
ECR Minerals plc company no. 5079979
Note
Year ended
30 September 2022
Year ended
30 September 202120
£
£
Continuing operations
Other administrative expenses
Impairment of intangible assets
(Gain) or loss on other current assets
Currency exchange differences
Total administrative expenses
Operating loss
Impairment of available for sale assets
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
Loss for the year - all attributable to owners of the parent
10
3
9
7
5
(1,214,398)
(1,576,822)
(18,991)
27,173
(2,783,038)
(1,142,338)
-
(347,315)
(1,489,653)
(2,783,038)
(1,489,653)
12,887
3,623
-
4,593
(2,766,528)
(1,485,060)
651
151,004
151,655
(2,614,873)
-
(2,614,873)
-
-
288
19,021
19,309
(1,465,751)
-
(1,465,751)
-
-
(2,614,873)
(1,465,751)
Earnings per share - basic and diluted
On continuing operations
4
(0.25)p
(0.16)p
The notes on pages 30 to 49 are an integral part of these financial statements.
24
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2022
ECR Minerals plc company no. 5079979
Year ended
30 September 2022
£
Year ended
30 September 2021
£
Loss for the year
(2,614,873)
(1,465,751)
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
342,215
342,215
52,545
52,545
(2,272,658)
(1,413,206)
(2,272,658)
(1,413,206)
The notes on pages 30 to 49 are an integral part of these financial statements.
25
Consolidated & Company Statement of Financial Position
At 30 September 2022
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
Inventory
Financial assets at fair value through profit 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
Total equity
8
9
10
11
11
9
12
14
13
13
Group
Company
30 September
30 September
30 September
Note
2022
£
2021
£
2022
£
7,849
22,543
147,985
5,792,859
5,971,236
1,037,568
-
45,084
233,106
1,315,758
7,286,944
135,925
135,925
135,954
30 September
2021
£
58,333
-
1,410,144
5,133,826
6,602,303
878,097
-
31,461
1,467,835
2,377,393
8,979,696
41,198
41,198
41,198
1,188,192
-
3,760,919
-
4,949,111
148,043
70,641
45,084
842,889
1,106,657
6,055,768
206,684
206,684
206,684
1,303,557
-
3,321,481
-
4,625,038
146,147
75,722
31,461
2,982,046
3,235,376
7,860,414
202,731
202,731
202,731
5,849,084
7,657,683
7,151,069
8,938,498
11,290,980
53,057,125
926,213
440,706
(59,865,940)
5,849,084
11,290,483
52,593,562
583,998
440,706
(57,251,067)
11,290,980
53,057,125
-
440,706
(57,637,742)
7,657,683
7,151,069
11,290,483
52,593,562
-
440,706
(55,386,525)
8,938,498
The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent company profit
and loss account. The loss for the parent company for the year was £2,263,395 (2021: £800,558 loss).
The notes on pages 30 to 49 are an integral part of these financial statements. The financial statements were approved and
authorised for issue by the Directors on 31 March 2023 and were signed on its behalf by:
Weili (David) Tang Dr Trevor Davenport
Non–Executive Chairman
Independent Non-Executive Director
26
Consolidated Statement of Changes in Equity
For the year ended 30 September 2022
ECR Minerals plc company no. 5079979
Balance at 30 September 2020
Loss for the year
Gain on exchange translation
Total comprehensive loss
Shares issued
Share issue costs
Share based payments
Total transactions with owners,
recognised directly in equity
Balance at 30 September 2021
Loss for the year
Gain on exchange translation
Total comprehensive loss
Shares issued
Share issue costs
Total transactions with owners,
recognised directly in equity
Balance at 30 September 2022
Exchange
reserve
Other
reserves
Share
capital
(Note 13)
£
11,286,928
–
–
–
3,556
–
–
3,556
Share
premium
(Note 13)
£
47,090,048
–
–
–
5,631,514
(128,000)
–
5,503,514
11,290,483
52,593,562
–
–
–
497
–
497
–
–
–
463,563
–
463,563
£
531,453
–
52,545
52,545
–
–
–
–
583,998
–
342,215
342,215
–
–
–
Retained
reserves
£
Total
£
(55,785,316) 3,563,819
(1,465,751) (1,465,751)
52,545
–
(1,465,751) (1,413,206)
– 5,635,070
(128,000)
–
–
–
– 5,507,070
£
440,706
–
–
–
–
–
–
–
440,706
(57,251,067) 7,657,683
–
–
–
–
–
–
(2,614,873) (2,614,873)
342,215
–
(2,614,873) (2,272,658)
–
–
–
464,060
–
464,060
11,290,980
53,057,125
926,213
440,706
(59,866,940) 5,848,084
The notes on pages 30 to 49 are an integral part of these financial statements.
27
Company Statement of Changes in Equity
For the year ended 30 September 2022
ECR Minerals plc company no. 5079979
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
Balance at 30 September 2021
Loss for the year
Total comprehensive expense
Shares issued
Share issue costs
Total transactions with owners, recognised
directly in equity
Balance at 30 September 2022
Share
capital
(Note 13)
£
Share
premium
(Note 13)
£
Other
reserves
Retained
reserves
£
£
Total
£
11,286,928
47,090,048
440,706
(54,585,695)
4,231,987
–
–
3,556
–
3,556
–
–
5,631,514
(128,000)
5,503,514
–
–
–
–
–
(800,558)
(800,558)
(800,558)
(800,558)
–
–
-
5,635,070
(128,000)
5,507,070
11,290,483
52,593,562
440,706
(55,386,253)
8,938,498
–
–
497
–
497
–
–
463,563
–
463,563
–
–
–
–
–
(2,251,490)
(2,251,490)
(2,251,490)
(2,251,490)
–
–
–
464,060
–
464,060
11,290,980
53,057,125
440,706
(57,637,742)
7,151,069
The notes on pages 30 to 49 are an integral part of these financial statements.
28
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2022
ECR Minerals plc company no. 5079979
Group
Company
Year ended 30
September
2022
£
(918,135)
Year ended 30
September
2021
£
Year ended 30
September
2022
£
Year ended 30
September
2021
£
(1,398,242)
(733,226)
(1,006,026)
(90,321)
(1,674,046)
-
(10,000)
88,634
–
651
(1,685,082)
464,060
464,060
(2,139,157)
2,982,046
-
842,889
(1,171,840)
(1,452,297)
–
–
–
–
288
(2,623,849)
5,507,088
5,507,088
1,484,815
1,497,231
-
2,982,046
(2,541)
(314,663)
(22,543)
(10,000)
42,952
(659,033)
265
(965,563)
464,060
464,060
(1,234,729)
1,467,835
-
233,106
(59,038)
(76,862)
–
–
–
(4,104,759)
260
(4,240,398)
5,507,069
5,507,069
260,645
1,207,190
-
1,497,835
Note
20
8
10
7
Net cash used in operations
Investing activities
Purchase of property, plant & equipment
Increase in exploration assets
Investment in subsidiary
Investment in available for sale assets
Proceeds from sale of property, plant and equipment
Loan to subsidiary
Interest income
Net cash generated from / (used in) investing activities
Financing activities
Proceeds from issue of share capital (net of issue costs)
Net cash from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of change in foreign exchange rates
Cash and cash equivalents at end of the year
12
Non-cash transactions:
The notes on pages 30 to 49 are an integral part of these financial statements.
29
Notes to the Financial Statements
For the year ended 30 September 2022
1 General information
The Company and the Group operated mineral exploration and development projects. The Group’s principal interests are located in Australia 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 of the Group for the 12 months ended 30 September 2022 have been prepared in accordance with UK adopted
international accounting standards 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 2021
There were no new standards, amendments or interpretations effective for the first time for periods beginning on or after 1 October 2021 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: Classifications of liabilities and Disclosure of Accounting Policies (effective 1 January 2023);
Amendments to IAS 8: Accounting Policies, Changes to Accounting Estimates and Errors (effective 1 January 2023);
Amendments to IAS 12: Income Taxes – Deferred Tax arising from a Single Transaction (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
Where the Group has control over an investee, it is classified as a subsidiary. The Group controls an investee if all three of the following elements are present:
power over the investee, exposure to variable returns from the investee and the ability of the investor to use its power to affect those variable returns.
Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
De-facto control exists in situations where the Group has the practical ability to direct the relevant activities of the investee without
holding the majority of the voting rights. 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.
The consolidated financial statements present the results of the Group as if they formed a single entity. Intercompany transactions
and balances between group companies are eliminated in full.
The consolidated financial statements incorporate the financial statements of the Company and one of its subsidiaries made up to 30
September 2022. 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.
Going concern
It is the prime responsibility of the Board to ensure the Group and Company remains a going concern. At 17 February 2023, the Group has
cash and cash equivalents of £612,582 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 anti cipa te havi ng to rais e additional funding over the cour se of the financi al y ear
to ens ur e sufficient available funds in order to meet its contracted and committed expenditure.
Having considered the prepared cashflow forecasts and the Group budgets, which includes the possibility of Directors cutting expenses in
certain area of operations if required, the progress in activities post year-end, including the anticipated sale of properties held in Australia
and sale of the Philippines, the Directors consider that they will have access to adequate resources in the 12 months from the date of the
signing of these Financial Statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation
of the Financial Statements.
30
Should the Group be unable raise additional funding in the timescales necessary to continue trading as a going concern, adjustments would
have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities, which might arise, and to
classify non-current assets as current.
The Financial Statements have been prepared on the going concern basis and do not include the adjustments that would result if the Group
was unable to continue as a going concern.
Cash and cash equivalents
Cash includes petty cash and cash held in current bank accounts. Cash equivalents include short–term investments that are readily convertible
to known amounts of cash and which are subject to insignificant risk of changes in value.
Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and any provision for impairment losses.
Depreciation is charged on each part of an item of property, plant and equipment so as to write off the cost of assets less the residual value over
their estimated useful lives, using the straight–line method. Depreciation is charged to the income statement. The estimated useful lives are as
follows:
Office equipment
Furniture and fittings
Machinery and equipment
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 the losses to date.
Deferred income taxes are calculated using the Statement of Financial Position liability method on temporary differences. Deferred tax is
generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is
31
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.
Equity
Equity comprises the following:
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
“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
32
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:
(cid:127) The rights to receive cash flows from the asset have expired
Or
(cid:127) 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.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with UK adopted international accounting standards 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.
33
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.
34
3 Operating loss
The operating loss is stated after charging:
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
4 Earnings per share
Basic and Diluted
Year ended
30 September
Year ended
30 September
2022 2021
£
£
104,165
44,843
32,000
51,822
31,337
26,000
Year ended
30 September
2022
Year ended
30 September
2021
Weighted number of shares in issue during the year
1,039,370,796
892,410,767
Loss from continuing operations attributable to owners of the parent
£
(2,614,873)
£
(1,413,206)
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 2022
(2021: 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% (2021: 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
2022
£
Year ended
30 September
2021
£
(2,614,873)
(1,413,206)
(496,826)
11,540
-
4,363
104,165
376,758
–
–
–
(268,509)
63,927
-
19,309
51,822
133,451
–
–
–
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.
35
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 em oluments
Social security costs
Pension contributions
Year ended
30 September
2022
Number
Year ended
30 September
2021
Number
4
3
7
£
140,167
198,739
24,544
1,456
364,906
3
3
6
£
61,604
277,353
22,817
1,400
363,174
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
Directors’ remuneration
£
198,739
-
1,456
200,195
£
267,353
22,817
1,316
291,486
As required by AIM Rule 19, details of remuneration earned in respect of the financial year ended 30 September 2022 by each Director
are set out below:
Director
C Brown
W Tang
A Jones
T Davenport
A Scott
Paid
£
17,727
48,000
30,000
36,000
27,000
158,727
Salary
Accrued
£
-
-
-
-
-
-
Consulting fees
Total
Paid
£
-
28,300
80,808
6,400
7,000
Accrued
£
-
400
-
-
-
122,508
400
£
17,727
76,700
110,808
42,400
34,000
281,635
36
Notes to the Financial Statements continued
For the year ended 30 September 2022
6 Staff numbers and costs continued
Year ended 30 September 2021
Director
C Brown
W Tang
A Jones
Paid
£
165,000
54,000
22,500
241,500
Salary
Accrued Consulting
fees
£
£
–
4,000
2,500
6,500
–
26,584
–
26,584
Pension
£
1,316
–
–
1,316
Total
£
166,316
84,584
25,000
275,900
The highest paid Director received remuneration of £110,808 (2021: £165,000), excluding share–based payments.
7 Finance income
Finance income
Interest on cash and cash equivalents
8 Property, plant and equipment
Group
Year ended
30 September
2022
£
651
651
Year ended
30 S ept em ber
2021
£
288
288
Furniture &
fittings
Office
Equipment
Machinery &
equipment
Land and
Building
Total
£
Cost
At 1 October 2021
Additions
Disposal
£
2,982
699
-
£
37,240
3,999
£
£
513,136
85,623
822,705
1,376,063
90,321
-
(45,036)
(56,485)
(101,521)
At 30 September 2022
3,681
41,239
553,723
766,220
1,364,863
Depreciation
At 1 October 2021
Depreciation for the year
At 30 September 2022
Net book value
At 1 October 2021
At 30 September 2022
Company
Cost
At 1 October 2021
Additions
Disposal
2,982
176
3,158
17,415
7,656
25,071
52,110
96,333
148,443
-
-
-
72,507
104,165
176,672
19,825
461,027
822,705
1,303,557
16,168
405,281
766,220
1,188,192
Furniture
fittings
-
523
&
£
890
699
-
Office
Equipment
Machinery
equipment
&
£
51,860
-
-
(45,036)
£
27,936
1,842
Land
Building
and
Total
£
-
-
-
-
-
-
-
£
80,686
2,541
(45,036)
38,191
22,354
7,989
30,343
37
At 30 September 2022
1,589
29,778
6,824
Depreciation
At 1 October 2021
Depreciation for the year
At 30 September 2022
890
176
1,066
17,040
5,413
22,453
4,424
2,400
6,824
Net book value
At 1 October 2021
At 30 September 2022
-
523
10,896
47,436
7,325
-
-
-
58,493
7,848
38
Notes to the Financial Statements continued
For the year ended 30 September 2022
8 Property, plant and equipment continued
The Group and the Company’s property, plant and equipment are free from any mortgage or charge. The
comparable table for 2021 is detailed below.
Group
Furniture &
fittings
Office
Equipment
Machinery &
equipment
Land and
Building
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
£
2,982
-
2,982
2,880
102
2,982
102
-
£
18,880
18,360
37,240
14,157
3,258
17,415
£
184,209
328,927
513,136
5,495
46,615
52,110
4,723
180,517
£
-
822,705
822,705
-
-
-
-
Total
£
206,071
1,169,992
1,376,063
22,532
51,822
74,354
185,341
19,825
461,027
822,705
1,303,557
Furniture &
fittings
Office
Equipment
Machinery &
equipment
Land and
Building
£
890
-
890
890
-
890
161
-
£
18,880
18,360
37,240
14,157
2,883
17,040
£
3,865
47,995
51,860
3,865
559
4,424
-
387
20,200
47,436
£
-
-
-
-
-
-
-
-
Total
£
23,635
66,355
89,990
18,912
3,442
22,354
548
67,636
39
9 Investments
272
Cost as at 1 October 2021
Additions 22,543
(272)
Disposal
Investment in
subsidiaries
£
Balance at 30 September 2022
The comparable table for 2021 is detailed below:
22,543
Investment in
subsidiaries
£
272
Cost as at 1 October 2020
Addition -
272
Balance at 30 September 2021
Investment in subsidiaries
At 30 September 2022, 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
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%
Corderilla Tiger International Resources Inc. Philippines Mineral Philippines 70%
Exploration
Registered office address of the subsidiaries:
Mercator Gold Australia Pty Ltd
Warm Springs Renewable Energy Corporation
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
Cordillera Tiger International Resources Inc. RM 2 4/F D Restaurant Bldg. Dangwa Terminal Baguio
58 Gipps Street, Collingwood Victoria, 3066, Australia
315 Paseo de Peralta, Santa Fe, NM 87501, USA
Financial assets at fair value through profit or loss
Quoted investments
At 1 October
Additions
Fair value movements
At 30 September
2022
£
31,461
10,000
3,623
45,084
2021
£
26,870
-
4,591
31,461
The financial asset at 30 September 2022 and 2021 comprises shares in Tiger International Resources, Inc., and is held at fair value through
profit or loss in accordance with IFRS 9 Financial Instruments.
40
10 Intangible assets – exploration and development costs
At 1 October
Additions
Impairment
At 30 September
2022
£
3,321,481
1,993,719
(1,554,281)
3,760,919
Group
2021
£
1,869,184
1,452,297
-
3,321,481
2022
£
1,410,144
292,123
(1,554,281)
Company
2021
£
1,333,282
76,862
-
147,985
1,410,144
A summary of exploration and development costs of the Group is presented below:
Danglay Gold Project, Philippines
Central Victorian Gold Projects, Australia
At 30 September
2022
£
-
3,760,919
3,760,919
2021
£
1,261,158
2,060,323
3,321,481
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.
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 for a further two years. In October 2021, 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.
In April 2022, the Cordillera Chairman and Vice President agreed to sell to ECR Minerals his shareholding of 1,499,996. The consideration
for the additional 1,499,996 shares in Cordillera was 1,499,996 Philippine pesos (approx. £22,000), which has been paid for in cash. Following
this acquisition, ECR holds 2,333,329 Ordinary Shares in Cordillera representing 70% of its issued share capital. At that stage the current
management of Cordillera was kept in place.
The carrying value of Danglay as at 30 September 2022 was £1,554,281 which is based on historical spend by ECR Minerals plc. As the
Group’s focus is on gold and battery metals exploration in Australia and as such, upon the conclusion of a review of operations post period,
the Board decided to explore several options in relation to the Danglay project, including potential sale of the asset. Despite numerous interests,
ECR is yet to receive a material offer that would bring value to shareholders. Post period, the Group has significantly reduced spending on
the asset and subsequently produced a sales presentation to distribute to potential buyers. The Board acknowledge the several challenges
in valuing the potential of the Danglay asset such as quantifying the value of Exploration License EP-006, Cordillera holds no value and the
net assets are nil, and Cordillera Tiger Gold Resources Inc recorded no revenues or profits. Under advisement and discussions, the Board
believes it would not be prudent to carry the book value of the asset forward based on the expenditure to date and current market conditions
and has therefore impaired the project in full. Nevertheless, ECR continues to explore other potential sales opportunities for the Danglay
Gold project.
41
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
Group
Company
2021
£
2022
£
2021
£
-
5,792,859 5,133,826
-
100,406
45,741
146,147
938,073
50,933
48,563
818,566
33,919
25,612
1,037,568
878,097
2022
£
-
-
99,365
48,678
148,043
The short–term carrying values are considered to be a reasonable approximation of the fair value.
12 Cash and cash equivalents
Cash and cash equivalents consisted of the following:
Deposits at banks
Cash on hand
Group
2021
£
Company
2022
£
2021
£
2022
£
842,889
2,982,046
233,106
1,467,835
842,889
2,982,046
233,106
1,467,835
13 Share capital and share premium accounts
The share capital of the Company consists of three classes of shares: ordinary shares of 0.001p each which have equal rights to receive
dividends or capital repayments and each of which represents one vote at shareholder meetings; and two classes of deferred shares,
one of 9.9p each and the other of 0.099p each, which have limited rights as laid out in the Company’s articles.
In particular deferred shares carry no right to dividends or to attend or vote at shareholder meetings and deferred share capital is only
repayable after the nominal value of the ordinary share capital has been repaid.
a)
Changes in issued share capital and share premium
Number of
shares
Ordinary
shares
£
Deferred
9.9p
shares
£
Deferred ‘B’
0.099p
shares
£
Deferred
0.199p
shares
£
Total
shares
£
Share
premium
£
Total
£
1,016,558,551
10,147
7,194,816
3,828,359
257,161
11,290,483
52,593,562
58,376,975
47,906,000
1,064,464,551
497
10,644
-
-
-
497
7,194,816
3,828,359
257,161 11,290,980
463,563
53,057,125
464,042
63,884,063
At 1 October 2021
Issue of shares
less costs
Balance at
30 September 2022
All the shares issued are fully paid up and none of the Company’s shares are held by any of its subsidiaries.
42
13 Share capital and share premium accounts continued
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
2022
£
0.0113
0.027
-
0.0175
Number of
options
2022
17,035,127
45,000,000
-
(1,758,143)
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)
Exercisable at the end of the year
0.023
60,276,984
0.0113
17,035,127
The options outstanding at 30 September 2022 have a weighted average remaining contractual life of four year and three months
(2021: two 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
Exercise Price in
27 February 2017 28 October 2024
30 July 2018 29 July 2023
30 July 2018 28 October 2024
23 January 2022 22 January 2027
23 January 2022 22 January 2027
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
Exercisable at the end of the year
£0.01725
£0.01125
£0.01125
£0.022
£0.044
2022
Weighted
average
Number of
warrants
exercise price
2022
£
Weighted
average
exercise price
2021
£
0.01625
0.0138
0.0125
0.0375
0.0375 49,999,999 0.02878
0.02878 159,940,371
(47,906,000)
0.0205 (62,034,372)
- -
0.01
No. of Options
4,076,984
1,200,000
10,000,000
35,000.000
10,000,000
Number of
warrants
2021
425,384,824
(310,603,127)
(4,841,325)
49,999,999
159,940,371
The warrants outstanding at the end of the year have the following expiry date and exercise prices:
Dat e granted
Expiry Date
30 April 2021
29 April 2023
Exercise Price
£
0.0375
No. of
Warrants
49,999,999
14 Trade and other payables
Trade payables
Social security and employee taxes
Other creditors and accruals
Group
Company
2022
£
149,938
16,489
40,257
206,684
2021
£
156,301
34,034
12,397
202,731
2022
£
109,098
2,226
24,601
135,925
2021
£
9,605
19,197
12,397
41,198
43
Notes to the Financial Statements continued
For the year ended 30 September 2022
15 Capital management
The Group’s objective when managing capital is to safeguard the entity’s ability to continue as a going concern and develop its
mineral exploration and development and other activities to provide returns for shareholders and benefits for other stakeholders.
The Group’s capital structure comprises all the components of equity (all share capital, share premium, retained earnings when
earned and other reserves). When considering the future capital requirements of the Group and the potential to fund specific
project development via debt, the Directors consider the risk characteristics of the underlying assets in assessing the optimal
capital structure.
16 Related party transactions
Group
Company
2022
£
2021
£
2022
£
2021
£
Amounts owed to Directors
400
10,606
479
10,606
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 £659,033 under a loan to Mercator Gold Australia Pty Ltd and
charged expenses and management fees of £139,507. 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 2022, the Group has a commitment expenditure of AUD$650,000 for the first three years across the three licence
areas in Lolworth Range.
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 2022 which would result in disclosure of contingent
assets or liabilities.
44
Notes to the Financial Statements continued
For the year ended 30 September 2022
18 Financial instruments
Categories of financial instrument
Group
Financial assets (amortised cost)
Trade and other receivables (excluding prepaym ents)
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 prepaym ents)
Cash and cash equivalents
Long-term borrowings, intra-group
Financial assets (fair value through profit or loss)
Equity investments
Financial liabilities (amortised cost)
Trade and other payables
2022
£
99,072
842,889
941,961
45,084
45,084
206,684
206,684
2022
£
989,006
233,106
5,792,859
7,014,971
45,084
45,084
135,925
135,925
2021
£
100,406
2,982,046
3,082,452
31,463
31,463
232,185
232,185
2021
£
852,485
1,467,835
5,133,826
7,454,146
31,463
31,463
41,198
41,198
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 and cash equivalents are held with major financial institutions. The Group monitors credit risk by reviewing the
credit quality of the financial institutions that hold the cash and cash equivalents and restricted cash. The fair value of cash and cash
equivalents at 30 September 2022 and 30 September 2021 did not differ materially from their carrying value.
Management believes that the Group’s exposure to credit risk is manageable.
The Company manages its current VAT receivables by submitting VAT returns on a quarterly basis. This allows the Company to receive the
VAT in a timely matter while any amounts that may come under scrutiny. Management has no formal credit policy in place for customers
and the exposure to credit risk is approved and monitored on an ongoing basis individually for all significant customers. The maximum
exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position. The Group does
not require collateral in respect of financial assets.
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.
45
Notes to the Financial Statements continued
For the year ended 30 September 2022
18 Financial instruments continued
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. Bank accounts are held in Great British Pounds (“GBP), Australian Dollars (“AUD”) and United States of American Dollars
(“USD”). The Company has payables that originate in GBP, AUD, USD and Philippines Peso (“PHP”). As such the Company is affected by
changes in the GBP exchange rate compared to the following currencies; AUD, USD, and PHP.
As at 30 September 2022
Cash and cash equivalents
Accounts receivable
Accounts payable
Net foreign exchange exposure
Translation to GBP
GBP equivalent
As at 30 September 2021
Cash and cash equivalents
Accounts receivable
Accounts payable
Net foreign exchange exposure
Translation to GBP
GBP equivalent
GBP
233,106
1,037,568
(135,923)
1,134,751
-
1,134,751
GBP
1,467,835
878,097
(41,198)
2,304,734
-
2,304,734
AUD
1,033,117
77,251
(114,461)
995,907
0.5783
1,722,150
AUD
2,126,534
102,765
(161,533)
2,067,767
0.5367
1,109,818
PHP
44,789
-
(220,200)
175,411
0.0153
2,684
PHP
-
-
-
-
-
-
Fair value of financial instruments
The fair values of the Company’s financial instruments at 30 September 2022 and 30 September 2021 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:
(cid:127) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
(cid:127) Level 2: valuation techniques based on observable inputs either directly (i.e. as prices) or indirectly (i.e. derived from prices);
(cid:127) 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 2022
Financial assets at fair value through profit or loss
Group and Company
30 September 2021
Financial assets at fair value through profit or loss
Level 1
£
45,084
45,084
Level 1
£
31,463
31,463
Level 2
£
–
–
Level 2
£
–
–
Level 3
£
–
–
Level 3
£
–
–
Total
£
45,084
45,084
Total
£
31,463
31,463
46
Notes to the Financial Statements continued
For the year ended 30 September 2022
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.
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 2022.
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
2022
£
206,684
2021
£
232,185
–
–
–
–
–
–
206,684
232,185
The Group is engaged in mineral exploration and development and is considered to have one business segment. 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. As disclosed in
the Note 10, the exploration activities in the Philippines have been impaired in full and all remaining mineral exploration assets
are in Australia.
Management information in respect of profit or loss expenditures is not segmented but is considered at Group level.
20 Cash used in operations
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
Impairment of intangible assets
Interest income
Profit and loss on disposal
Decrease/(Increase) in accounts receivable
Decrease/(Increase) in inventory
Foreign exchange on operating activities
Increase/(Decrease) in accounts payable
Net cash used in operations
8
Group
Company
Year ended 30
September
2022
£
Year ended 30
September
2021
£
Year ended 30
September
2022
£
Year ended 30
September
2021
£
(2,614,873)
(1,413,206)
(2,251,490)
(800,558)
104,165
(3,623)
1,576,822
(651)
12,887
(1,896)
5,081
-
3,954
(918,135)
-
51,822
(4,593)
-
(288)
(37,531)
(75,722)
(15)
81,109
(1,398,424)
7,989
(3,623)
1,576,822
(265)
2,086
(159,471)
-
3,442
(4,593)
-
(260)
(151,408)
-
94,726
(733,226)
-
(52,650)
(1,006,026)
47
Notes to the Financial Statements continued
For the year ended 30 September 2022
21 Events after the reporting date
On 4 October 2022, the Company announced an update on the stream sediment sampling campaign currently in progress on its tenements at Lolworth
Range, North Queensland, Australia. ECR Minerals announced that the project is close to 75% complete, that more than 91 samples have been
despatched and awaiting results from the laboratory whilst follow-up sampling work will continue.
On 11 October 2022 the Company provided an update on the second drilling rig stating the rig purchase has now been completed, following the
agreement of a meaningful discount, on what the board consider to be competitive and attractive terms. Arrangements are currently being made for the
rig to be loaded onto a ship for delivery to Melbourne Port.
On 14 October 2022 the Company announced the final gold results from the 2022 drill program at the HR3 prospect at Bailieston. ECR Minerals plc has
100% ownership of the Bailieston Project (EL5433), which contains the gold prospects known as HR3, Cherry Tree, Blue Moon and Black Cat. The projects
are operated by ECR’s Australian wholly owned subsidiary Mercator Gold Australia Pty Ltd (“MGA”). The Company announced the best results in
BH3DD043 with a composited grade of 9.01 g/t Au over a drilled width of 4 metres. Along with further results from the Maori Anticline include 1m @
4.96 g/t Au (BH3DD042) at a depth of 273m. With multiple intersections along strike of the Scoulers Reef including 0.2m @ 9.22 g/t Au (BH3DD042),
0.5m @ 4.55 g/t Au (BH3DD037) and 1m @ 3.34 g/t Au (BH3DD038).
On 19 October 2022 the Company announced results from a re-assay of selected diamond drill core from the Creswick diamond drilling
program completed in 2021. The Company stated that Duplicate sampling of selected quartz-mineralised intercepts from the diamond
drilling campaign of 2021 shows significant increase in reportable gold grades including of 0.7m @ 47.75 g/t Au from 147m in hole CSD001,
1.1m @ 6.13 g/t Au from 98m in hole CJD002 and 1m @ 3.9 g/t Au from 86.5m, also in hole CJD002. Ongoing surface exploration in the
immediate area is testing for follow-up drill targets.
On 27 October 2022 the Company was pleased to announce entering into a Binding Term Sheet pursuant to which it has been granted a conditional
option to acquire the entire issued share capital of Placer Gold Pty Limited (“Placer Gold”) (the “Option”). To secure the option ECR has to pay a A$200,000
(approximately £144k) option fee (“Option Fee”), which is to be satisfied by a contribution to costs, the implementation of a work programme over the
assets (details below) and a balancing cash payment to the shareholders of Placer Gold ("Vendors”). Once the Option Fee has been fully satisfied ECR
can then exercise the Option at any time prior to 30 September 2023, at its absolute discretion. If the Option Fee is fully satisfied and the Option is
exercised, the total consideration for the acquisition of Placer Gold is A$6.9m (approximately £3.8m, including the Option Fee, a further cash payment
of A$200,000 payable in the event of certain milestones being reached, and a 2% net smelter royalty payable in the event the Hurricane Project is taken
into production in the future, capped at £3m).
On 17 November 2022 the Company pleased announce gold results from the first drillhole for 2022 (BBMDD004) completed at Blue Moon
with results from the first diamond drillhole for 2022 are encouraging with 0.5m @ 7.29 g/t Au from 96.9m. Drilling continues with three
out of a planned four-hole program completed to date with samples awaiting results pending.
On 23 November 2022 the Company announced it will issue A$120,000 to GoldOz PL in satisfaction of all fees owing to them as adviser in
connection with the recent option agreement and potential acquisition of Placer Gold Pty Limited as announced on 27 October 2022. This
fee is to be satisfied by a payment of A$60,000 in cash and A$60,000 in shares through the issue of 3,272,608 shares at a price of 1.03p
calculated by reference to the 30 day VWAP.
On 12 December 2022 the Company announced a raise of £900,000 by way of a placing and direct subscription at a price of 0.9p per share.
Both the Placing Shares and the Subscription Shares were also accompanied by the issue of one warrant to subscribe for one ordinary share
in the Company for each new share issued (the “New Warrants”). When issued, the New Warrants will be exercisable at any time, for a
period of 2 years from the date of admission of the Placing Shares and the Subscription Shares (as applicable) at an exercise price of 1.5p
each.
On 12 December 2022 the Company announced the first round of results from the recent stream sediment sampling campaign undertaken
at the Lolworth Range project, North Queensland, Australia. The results ar e as followed 21 out of 125 stream sediment samples to date are
anomalous with gold, with results up to 152.5 ppm Au. 18 of the 125 samples show visible gold and further samples are awaiting results
including 212 stream sediment samples and 33 rock chips and Multiple pegmatites observed throughout the tenements.
On 13 December 2022 the Company are pleased to announce two new exploration tenements have been granted to ECR’s wholly owned
subsidiary Mercator Gold Australia Pty Ltd (“MGA”) at Bailieston, Victoria, Australia. The two new exploration tenements (EK006911 and
EL 006912) adjacent to EL5433 have been formally granted to ECR’s wholly owned subsidiary MGA. Total exploration land package at
Bailieston (EL5433, EL006911, EL006912) now totals 179 square kilometres.
On 22 December 2022 the Company plc announced updated soil sampling results from the on-going geochemistry exploration on EL006184 at
Creswick, Victoria, Australia. These results highlight a potential new parallel gold system within the Dimocks Main Shale (DMS).
On 23 December 2022 the Company announced encouraging Lithium, Tantalum and Niobium anomalies identified within the first round of
results from the recent stream sediment sampling campaign undertaken at the Lolworth Range project, North Queensland, Australia.
On 3 January 2023 the Company announce it has received approval for two new exploration tenements in Victoria, Australia. The New
tenement EL007296 now completes the total exploration package at Bailieston, Victoria. New Creswick tenement EL006713 effectively
connects EL006184 and EL006907, creating a continuous land package from ECR’s Springmount property south through to the outskirts of
Ballarat.
On 23 January 2023 the Company announce updated results from soil sampling and other on-going exploration activities within licence
EL006184 at Creswick, Victoria, Australia.
On 1 February 2023 the Company announced high gold grades from recent in-situ rock chips sited within license EL006184 and newly
48
acquired license EL006713 at the Creswick Project, Victoria, Australia. With results of 0.7m @ 189.42 g/t Au and 0.4m @ 86.51 g/t Au from
(EL006184); 0.25m @ 441.23 g/t Au, 0.15m @ 140.83 g/t Au and 0.25m @ 24.92 g/t Au from (EL006713).
On 15 February 2023 the Company is pleased to announce that it has executed a sale and purchase agreement for the sale of the Company’s
‘Bailieston’ property located at 127 Nagambie-Rushworth Road within the Company’s 100% owned Bailieston license area. For a cash sale
price of A$670,000 has been agreed for the Nagambie-Rushworth Road property, with a deposit of A$67,000 already received.
On 22 February the Company announced that it has executed a sale and purchase agreement for the sale of the Company’s ‘Bailieston’
property located at 127 Nagambie-Rushworth Road within the Company’s 100% owned Bailieston license area for a cash sale price of
A$670,000 has been agreed for the Nagambie-Rushworth Road property, with a 10% deposit already received.
On 24 February the Company was pleased to announce an increase from 70% to 90% with its ownership stake Cordillera Tiger Gold
Resources, Inc (“Cordillera”), owner of Exploration License EP-006 at the Danglay gold project in the north of the Philippines.
On 1 March the Company provided an update on results from three more drill holes from the Blue Moon Prospect, Bailieston, Victoria,
including our best gold intercept for this 2022 drilling campaign in hole BBMDD010. With an impressive composite grade of 6.35m @4.56
g/t from 84.9m down.
On 3 March the Company is pleased to provide an update on the second drilling rig. the rig has arrived 1 March 2023 at Melbourne Port
and the team immediately collected and fitted out the rig with support equipment for deployment.
49
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
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 24 April 2023 at 9.00 a.m. for the purpose of considering and, if thought
fit, passing Resolutions 1 to 7 as ordinary resolutions, and Resolution 8 as a special resolution:
Ordinary Resolutions
1 To receive, consider and adopt the annual accounts of the Company for the year ended 30 September 2022, together
with the reports of the directors and auditors thereon.
2 That Weili (David) Tang be re-elected as a director of the Company.
3
4
5
6
7
That Adam Craig Jones be re-elected as a director of the Company.
That Dr Trevor George Davenport be re-elected as a director of the Company.
That Andrew Scott be re-elected as a director of the Company.
To re-appoint PKF Littlejohn as auditors of the Company to hold office until the conclusion of the next general
meeting at which accounts are laid before the Company and to authorise the audit committee to determine the
remuneration of the auditors of the Company.
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 2024 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
8 That, subject to the passing of Resolution 7, the directors be empowered to allot equity securities (as defined by section
560 of the CA 2006) pursuant to the authority conferred by Resolution 7 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 2024 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.
By order of the board
Weili (David) Tang
Chairman
Registered Office:
Office T3, Hurlingham Studios
Ranelagh Gardens
London
SW6 3PA
31 March 2023
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 2022,
together with the reports of the directors and auditors on these accounts, be received, considered and
adopted.
Resolutions 2-5: Re-election of Directors
Resolutions 2-5 propose that each of the current Directors of the Company, Mr Tang, Mr Jones, Dr
Davenport and Mr Scott, who were each last re-elected to the Board at the 2022 AGM, and who wish to
stand for re-election in order to promote good corporate governance, be re-elected as directors of the
Company. A copy of each Director’s biography can be found on page [6] of the Annual Report.
Resolution 6: Re-appointment of auditor
Resolution 6 proposes the reappointment of the Company’s existing auditor to hold office 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 25 April 2022 is due to expire on the earlier of 30 June 2023
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 85 % of the Company’s issued ordinary shares as at 31 March 2023
(being the latest practicable date before publication of this document).
If given, these authorities will expire at the annual general meeting in 2024 or on 30 June 2024, whichever is
the earlier.
The directors have no present intention to issue new ordinary shares, other than pursuant to the exercise of
options or warrants. However, the directors consider it prudent to maintain the flexibility to take advantage of
business opportunities that this authority provides.
As at the date of this document the Company does not hold any ordinary shares in the capital of the Company
in treasury.
Resolution 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 first 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 defined by section 560
of the CA 2006) or sell treasury shares for cash without first offering them to existing shareholders in proportion
to their existing holdings up to a maximum nominal value of £10,000 representing approximately 85% of the
Company’s issued ordinary shares as at 31 March 2023 (being the latest practicable date before publication
of this document). If given, this authority will expire at the annual general meeting in 2024 or on 30 June
2024, whichever is the earlier.
SHAREHOLDER NOTES
The following notes provide more detailed information about your voting rights, and how you may exercise them.
1
2
3
4
5
6
7
8
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.
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
Thursday 20 April 2023 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 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 & International’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 & International 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 20 April
2023 (or, if the meeting is adjourned, on the date which is 48 hours (excluding non-business days) before the
time of the adjourned meeting) shall be entitled to attend and vote at the meeting or adjourned meeting in
respect of the number of shares registered in their respective names at that time. Changes to the Register of
Members after that time will be disregarded in determining the rights of any person to attend or vote at the
meeting or adjourned meeting.
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 31 March 2023 (being the last business day before the publication of this notice), the Company’s issued
ordinary share capital consisted of 1,167,837,145 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 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.
16
Information regarding the meeting is available from www.ecrminerals.com
Company Information
DIRECTORS
Weili (David) Tang
Non–Executive Chairman
Adam Craig Jones
Non-Executive Director
Andrew Scott
Non-Executive Director
Dr Trevor George Davenport
Independent Non-Executive Director
COMPANY SECRETARY
Weili (David Tang)
Office T3, Hurlingham
Studios, Ranelagh
Gardens London
SW6 3PA
REGISTERED AND HEAD OFFICE
ECR Minerals plc
Office T3, Hurlingham
Studios, Ranelagh
Gardens London
SW6 3PA
Tel: +44 (0)20 7929 1010
Fax: +44 (0)20 7929 1015
info@ecrminerals.com
www.ecrminerals.com
AIM ticker: ECR
Twitter.com/ecrminerals
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
The Pavilions
Bridgwater Road
Bristol BS13 8AE
LEGAL ADVISERS
Charles Russell Speechlys LLP
5 Fleet Place
London EC4M 7RD
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