Final Results and Notice of Annual General Meeting

LONDON--()--

AIM: ECR

ECR MINERALS plc
(“ECR Minerals”, “ECR” or the “Company”)

AUDITED FINANCIAL STATEMENTS FOR YEAR ENDED 30 SEPTEMBER 2017
AND NOTICE OF ANNUAL GENERAL MEETING

LONDON: 29 MARCH 2018 - ECR Minerals plc is pleased to announce its audited financial statements for the year ended 30 September 2017. The information presented below has been extracted from the Company’s Annual Report and Accounts 2017.

Copies of the Annual Report and Accounts 2017 together with a notice of annual general meeting will be posted to shareholders today and will be available today on the Company’s website www.ecrminerals.com and from the Company’s registered office at Unit 117, Chester House, 81-83 Fulham High Street, Fulham Green, London SW6 3JA. The text of the notice of annual general meeting is provided below.

Market Abuse Regulations (EU) No. 596/2014

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.

FOR FURTHER INFORMATION, PLEASE CONTACT:

ECR Minerals plc         Tel: +44 (0)20 7929 1010
David Tang, Non-Executive Chairman
Craig Brown, Director & CEO
 

Email: info@ecrminerals.com

Website: www.ecrminerals.com

 
WH Ireland Ltd Tel: +44 (0)161 832 2174
Nominated Adviser
Katy Mitchell/James Sinclair-Ford
 
Optiva Securities Ltd Tel: +44 (0)203 137 1902
Broker
Graeme Dickson
 
FlowComms Tel: +44 (0)7891 677 441
Investor Relations
Sasha Sethi

FORWARD LOOKING STATEMENTS

This announcement may include forward looking statements. Such statements may be subject to numerous 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 because of new information, future events or for any other reason.

The Directors of ECR Minerals plc (the “Directors” or the “Board”) present their report and audited financial statements for the year ended 30 September 2017 for ECR Minerals plc
(“ECR”, the “Company” or the “Parent Company”) and on a consolidated basis (the “Group”)

Chairman’s Statement

On behalf of the Board of Directors it gives me great pleasure to present the consolidated financial statements of ECR Minerals for the year ended September 2017. Although I myself joined ECR relatively recently as Non-Executive Chairman in August 2017, over the last year I have observed a period of positive change and focused restructuring as part of a measured strategy to strengthen the Company’s prospects and carefully lay foundations for growth and the creation of shareholder value through exposure to ECR’s highly prospective mineral exploration licences in the Australian State of Victoria, which as a State has an exceptional history of gold production as well as hosting numerous successful present-day mining operations.

Following a period of focused and successful structural change where we saw the repayment of all outstanding debts in September 2016 (including a significant convertible loan facility) closely followed by a successful share consolidation and significant reductions in operating and management costs, ECR has deliberately refocused its efforts upon the Australian assets within its portfolio, which through their development we believe to have the potential to generate the most value for our shareholders.

A culmination of much hard work has successfully seen ECR consolidate its Avoca and Bailieston licences into its Australian subsidiary and ensure security of tenure through their renewal. This period also saw ECR deliver two additional gold exploration projects into its Victorian portfolio when the Company was granted licences for the Timor and Moormbool tenements. Like Bailieston, Moormbool is also situated in the heart of one of the principal modern day mining districts in Victoria, which, as demonstrated by the success of the nearby Fosterville and Costerfield mines we consider to be an highly prospective location.

In June of last year ECR secured the support of a cornerstone investor, the Shenyang Xinliaoan Machinery Company, and immediately prior to this the Company also completed an oversubscribed placing for £1million to raise a total of £1.554 million during the financial year. These funds were raised with the objective of furthering our suite of Australian projects and for continuing to carefully assess potential new opportunities without distracting from our main objective in Victoria, which is to develop multiple prospective gold exploration targets, which could cumulatively, create substantial value for shareholders.

With regards to new opportunities , the Board of Directors continue to assess potential new opportunities with a strong focus on gold projects and the rapidly evolving battery metals sector. Whilst due diligence and careful consideration are paramount in the evaluation of new opportunities we will not hesitate to act if an opportunity of sufficient merit becomes available to ECR.

On the operational front, and as previously referenced much of our efforts this year have been focused on the work required to secure our existing licences and the submission of applications to secure the two new licences; In addition to this we have successfully obtained the permits s to be able to commence exploration drilling our prospects with the objective of delivering further value for shareholders at the drill bit. At present we await the results of a comprehensive geochemical sampling programme at our highest priority targets within the four licence areas the results of which will help ECR determine targets for a drilling programme, which we look forward to updating shareholders on over the coming months.

In summary, we remain very confident in the prospectivity of our gold exploration assets and we are optimistic that in due course our exploration activities in Victoria will bear fruit in the form of one or more economic gold deposits; ECR has made good progress toward its goals this year, whilst remaining on a strong financial footing and with no debt. I am sure that the coming months will see further positive developments for your Company.

Weili (David) Tang
Chairman
28 March 2018

Chief Executive Officer’s Report

The Company’s focus during the year, and since the year-end, was very much on exploration for gold in Victoria, Australia, which is one of the World’s major gold producing provinces and hosts the second largest gold endowment in Australia with total recorded gold production of around 85 million ounces. In Central Victoria, ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) is now the registered holder of the Avoca (EL5387) and Bailieston (EL5433) exploration licences pursuant to their acquisition from Currawong Resources Pty Ltd, and has been granted two new exploration licences, Timor (EL006278) and Moormbool (EL006280).

At the same time, since October 2016 all the Group’s projects and operations have been thoroughly reviewed, numerous potential new projects have been evaluated, and a significant reduction in head office and administration costs has been achieved.

On the corporate front, we were very pleased to welcome Shenyang Xinliaoan Machinery Co Ltd as ECR’s largest shareholder in June 2017, as further discussed in the Chairman’s Report. Thanks to this subscription and to a successful placing, which also took place in June 2017 and which raised gross proceeds of £1 million, ECR is on a strong financial footing to continue exploration in Victoria and assess potential new opportunities.

Gold exploration in Victoria, Australia

The Avoca and Bailieston licences remain the core of the portfolio, and in November 2017 MGA received confirmation of the renewal of the Avoca licence until 27 November 2021, while the Bailieston licence was renewed in February 2018 for a five-year term until 27 March 2023.

In December 2017, ECR announced the results of an interpretation and targeting study using open-file geophysical data covering the Avoca, Bailieston, Moormbool and Timor projects. The results were of great interest, with 27 targets identified within the Avoca and Timor licences, including 10 high priority areas, and 20 targets identified within the Bailieston and Moormbool licences, including 5 high priority areas. The high priority targets identified included areas already considered to be of significant interest by ECR, such as the Byron, Black Cat and Cherry Tree prospects at Bailieston, and the magnetic anomaly at Moormbool.

A programme of reverse circulation (RC) drilling comprising seven holes, for a total of 592m, was completed within the Bailieston licence in June 2017. Three targets were tested, being the old Byron Shaft workings, the Scoulars trend and the Maori trend, which are all within the part of the licence known as HR3. The results for the Scoulars and Maori trends were consistent with the geological model, whilst drilling around the Byron Shaft did not intersect the target mineralisation. The drilling programme was designed as a low-cost verification of the geological model for the Bailieston project as a whole, and in this regard was a success. Although no high-grade mineralisation was intersected, this was not unexpected given the relatively small size of the programme and the fact that it was spread over three targets. Drilling on the Maori trend provided the highest-grade results, with drillhole MGARC07 intersecting 4m at 3.29 g/t Au from 39m downhole, including 2m at 6.21 g/t.

In November 2017, MGA appointed Dr Rodney Boucher, an experienced Victorian-based geologist, as a consultant to oversee MGA’s exploration activities in Victoria. Dr Boucher has extensive exploration experience in Victoria, including many years of involvement with Perseverance Corporation, the developers of the million-ounce Fosterville gold mine which is now owned by Kirkland Lake Gold. The Fosterville mine is located in the same district as MGA’s Bailieston and Moormbool gold projects.

Dr Boucher immediately set about reviewing all available data regarding MGA’s four exploration licences, visited most of the known prospects and carried out geological mapping in key zones. A programme of geochemical sampling at the higher priority prospects took place in February 2018, the purpose of which was to augment existing data and help define drill targets.

A drilling programme to commence in the first half of 2018 is now being planned and will include multiple target areas. MGA currently intends to drill in the HR3 area and at the Blue Moon and Black Cat prospects within the Bailieston licence (EL5433) and at the Bung Bong prospect within the Avoca licence (EL5387). The Company will announce the final composition of the drilling programme and the intended start date after the planning has been finalised.

Drilling in each area is subject to a final decision by the Directors, advised by Dr Boucher, as well as the receipt of all necessary government permits and landowner consents. Considerable effort has been devoted during 2017 and so far in 2018 towards permitting activities and liaison with landowners, which is an essential part of all mineral exploration projects. All required permits and consents have already been obtained for drilling in the HR3 area and at the Black Cat prospect within the Bailieston licence.

Dr Boucher’s work so far has led to some potentially significant geological insights, as outlined below.

Bailieston exploration licence (EL5433)

* Black Cat prospect

Black Cat is characterised by previously defined widespread anomalous geochemical results, especially to the northeast, which are not due to downhill dispersion from the main reefs and therefore must come from hitherto undiscovered sources.

* Blue Moon prospect

There is potential at Blue Moon for a previously unrecognised finely-disseminated gold system. Previous encouraging rock chip and soil geochemical results extend over an area approximately 350m across and open at both ends. There are only a few small workings at surface, and this may be an indication of finely-disseminated gold, which is more likely to be suitable for modern bulk mining methods than the coarse gold targeted by most historical mining in Victoria.

* Cherry Tree and Cherry Tree South prospects

The Cherry Tree historical workings cover an area 600m by 200m, while the Cherry Tree South workings extend over an area 250m by 60m, with a wider geochemical footprint and encouraging previous geochemical results across the full width of the sampling.

* HR3 area

This area encompasses the Byron, Maori, Scoulars, Dan Genders, Hard Up and Scanlon’s reefs, and forms the largest area of historical workings (700m by 300m) within the tenement package, especially when considered as part of a larger system connected to the Bailieston open pit located outside the northern boundary. MGA’s exploration objective at HR3 will be to investigate the possibility of integrating the various reefs at depth to arrive at a meaningful modern-day resource.

There is a gap in the historical workings from the HR3 area for approximately 800m to Cherry Tree to the south and for approximately 400m to the tenement boundary to the north, and there is potential in these zones for undiscovered mineralisation, particularly at depth. This is supported by the limited previous geochemical sampling.

Avoca exploration licence (EL5387)

* Bung Bong prospect

Bung Bong features a series of historical shafts on shoots up to 100m long punctuated by barren zones and gullies. Road cuttings on the nearby highway show multiple west-dipping faults linked by associated quartz vein networks that may have the potential for a broad zone of significant tonnage.

* Monte Christo prospect

This prospect is of significant interest as it hosts historical workings extending over a strike length of approximately 1,000m, punctuated by alluvial cover.

* Surprise prospect

There are numerous historical shafts at Surprise and some noteworthy historical (late 1990s) drilling results (including 2m at 3.27g/t gold from 18m in SPAC04 and 5m at 1.4g/t gold from 26m in SPAC06). The presence of molybdenum with gold in breccia raises the conceptual possibility of a high tonnage porphyry deposit. Landowner consent is currently being sought for field mapping and geochemical surveying, which will enable this concept to be considered further.

Moormbool exploration licence (EL006278)

Modelling carried out on behalf of MGA has delineated a magnetic body at depth. The magnetic anomaly has horizontal dimensions of approximately 3.15km x 3.5km. The corresponding body may be unmineralised, but there is considered to be some potential for mineralisation styles such as Woods Point/Walhalla dyke-associated gold or a VMS (volcanogenic massive sulphide)/Cobar-style polymetallic deposit as found in central New South Wales. Alternatively, the anomaly may represent weak magnetite alteration within a porphyry, similar to the Cadia gold-copper-porphyry-related deposits in central New South Wales.

SLM gold project, Argentina

The SLM project is 100% owned by ECR’s wholly owned Argentine subsidiary Ochre Mining SA and comprises three key gold prospects in La Rioja Province: the El Abra prospect, the JV prospect (particularly the JV14 zone) and the Maestro Agüero prospect, all of which are located in a long established mining district known as Sierra de las Minas. The change in government which took place in late 2015 made Argentina a significantly more attractive destination for investment, and following a visit to Argentina by three members of the Board in December 2016, Exploration Targets were determined for the El Abra prospect and JV14 zone in accordance with the JORC Code.

In connection with the Exploration Targets, a programme of approximately 2,000m of RC drilling has been designed for the JV prospect, with an additional 300m planned for El Abra. The objective of these programmes is to enable the estimation of Mineral Resources compliant with the JORC Code for both prospects. Preparations for drilling were made by Ochre in the first half of 2017, including the establishment of drill pads, permitting activities and liaison with the provincial government. As the Directors are required to prioritise the Group’s activities in order to avoid an excessive drain on its resources at any one time, the drilling has not yet commenced.

During 2017, discussions continued between Ochre and Esperanza Resources SA (“Esperanza”), pursuant to the memorandum of understanding signed between the two companies in 2015. Esperanza previously operated a processing plant within potential trucking distance of Ochre’s deposits. Whilst this has not progressed, ECR has taken note of the announcement in October 2017 by a company listed on the TSX Venture Exchange, Falcon Gold Corporation (“Falcon”), that Falcon has signed an agreement giving it the right to acquire an initial 80% interest in Esperanza’s mineral tenements located in the Sierra de Las Minas district. Falcon has agreed, subject to due diligence and TSX Venture Exchange approval, to make escalating annual payments to Esperanza totalling US$815,000 over a six-year option period and to issue a total of 5 million Falcon common shares. During the six-year option period, Falcon would be expected to make exploration expenditures amounting to US$5,645,000. After acquiring the 80% interest, Falcon would have the right, for a period of 24 months, to purchase Esperanza’s residual 20% interest for a further payment of US$4 million and a 1% net smelter return royalty.

If the transaction with Falcon was to progress the memorandum of understanding between Ochre and Esperanza would fall away however the Directors view the agreement between Esperanza and Falcon as encouraging, given that in the Board’s view, Ochre’s licences are significantly more prospective than those held by Esperanza.

Danglay gold project, Philippines

Danglay is an intermediate sulphidation epithermal gold deposit situated within the prolifically gold-copper mineralised Baguio District in the northern Philippines. An initial NI43-101 Mineral Resource was estimated for the project in December 2015, following extensive exploration carried out by ECR during 2014 and 2015. A copy of the corresponding NI43-101 technical report is available for download from the Company’s website. As a result of these activities, ECR is entitled to a 25% interest in the project. No further work has yet been carried out, and renewal of the project’s Exploration Permit is pending.

In June 2017, Ivor Jones, at that time a director of ECR and its Chief Operating Officer, visited Danglay, and his observations confirmed the project’s significant exploration potential. The Directors remain hopeful that the political and legal issues to which the project is currently subject will be ameliorated in due course, and that ECR’s rights in respect of Danglay are of significant value. Further discussion of these issues and ECR’s rights is provided in the Strategic Report.

FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2017

For the year to 30 September 2017 the Group recorded a total comprehensive expense of £562,649, compared with £1,016,592 for the year to 30 September 2016.

The largest contributor to the total comprehensive expense was the line item “other administrative expenses”, which represents the costs of operating the Group and carrying out exploration at its projects, where these costs are ineligible for capitalisation under applicable accounting standards.

The Group’s net assets as at 30 September 2017 were £3,735,225, in comparison with £2,680,627 at 30 September 2016. The increase is due to the capitalisation of exploration expenditure during the year, leading to increased exploration assets, and the larger cash balance of £1,082,994 held by the Group at 30 September 2017, in comparison with £471,809 at the previous year-end.

Craig Brown
Chief Executive Officer
28 March 2018

Independent Auditor’s Report
For the year ended 30 September 2017

Independent Auditors’ 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 2017 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statement of Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

In our opinion:

  • the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 30 September 2017 and of the group’s and parent company’s loss for the year then ended;
  • the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
  • the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
  • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

  • the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
  • the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Our application of materiality

The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures. Group materiality was £70,000 based upon gross assets. The Parent Company materiality was £60,000 based upon gross assets and the result for the year. For each component in the scope of our group audit, we allocated a materiality that is either equal to or less than our overall group materiality.

An overview of the scope of our audit

As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas involving significant accounting estimates and judgement by the Directors and considered future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. The Australian and Argentinian subsidiary undertakings represent the principal business units within the Group, upon which we performed audit procedures directly on significant accounts based on size or risk profile to the Group. A full scope audit was undertaken on the financial statements of the Parent Company.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter   How the scope of our audit responded to the key audit matter
Recoverability of intangible assets – exploration and development costs

The carrying value of intangible assets as at 30 September 2017 was £2,668,747 which comprises exploration and development projects in Australia, Argentina and the Philippines. There is a risk that the carrying value of these early stage projects is impaired and that exploration and development expenditure capitalised during the year is not in accordance with IFRS 6.

  The carrying value of all early stage exploration and development projects were assessed and tested in accordance with the following criteria:

 

  • The Group holds good title to the licence areas;
  • The Group has planned and budgeted for further expenditure for mineral resources in the licence areas; and
  • Exploration and development work undertaken to date has indicated the existence of commercially viable quantities of mineral resource.

We undertook substantive testing on capitalised expenditure during the year to ensure it satisfied the criteria under IFRS 6.

We discussed with management the scope of their future budgeted and planned expenditure on each licence area.

As disclosed in note 10 to the financial statements, the Group has not yet formally acquired title to its 25% interest in Cordillera Tiger Gold Resources, Inc (“Cordillera”) which is the holder of the exploration permit for the Danglay gold project in the Philippines. The conditions for the earn-in have been satisfied but the relevant shareholding has yet to be issued, despite the Board of Cordillera authorising the issue. In addition, the exploration permit for the Danglay gold project held by Cordillera expired on 30 September 2015. Cordillera is currently waiting for the Philippine authority to formally grant its renewal application. This indicates the existence of a material uncertainty over the recoverability of the carrying value of the Danglay gold project, which amounted to £1,160,848 as at 30 September 2017.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

  • the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
  • the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

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’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

1 Westferry Circus
Canary Wharf
London E14 4HD

David Thompson (Senior statutory auditor)
For and on behalf of PKF Littlejohn LLP
Statutory auditor
28 March 2018

Consolidated Income Statement

For the year ended 30 September 2017

       

ECR Minerals plc company no. 5079979

Year ended

     

Year ended

30 September 2017

30 September 2016

Note

£

£

Continuing operations
Other administrative expenses (509,545) (677,873)
Currency exchange differences  

 

      (3,186)       9,399
Total administrative expenses           (512,731)       (668,474)
 
Operating loss 3 (512,731) (668,474)
Other income 34,688
Loss on disposal of investment (1)
Fair value movements - available for sale financial asset   9       1,255       (18,893)
            (511,477)       (652,679)
 
Financial income 353 484
Financial expense                 (267,511)
Finance income and costs   7       353       (267,027)
 
Loss for the year before taxation (511,124) (919,706)
Income tax   5            
Loss for the year from continuing operations           (511,124)       (919,706)
                     
Loss for the year - all attributable to owners of the parent           (511,124)       (919,706)
 
 
Earnings per share - basic and diluted
On continuing operations 4 (0.31)p (0.01)p
 

The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent company profit and loss account. The loss for the parent company for the year was £208,774 (2016: £887,844 loss).

Consolidated Statement of Comprehensive Income

For the year ended 30 September 2017

               

ECR Minerals plc company no. 5079979

 

Year ended

Year ended

30 September 2017

30 September 2016

Note

£

£

Loss for the year (511,124) (919,706)
 
Items that may be reclassified subsequently to profit or loss
Loss on exchange translation             (51,524)       (96,886)
Other comprehensive expense for the year             (51,524)       (96,886)
Total comprehensive expense for the year             (562,649)       (1,016,592)
 
Attributable to:-
Owners of the parent             (562,649)       (1,016,592)
 

Consolidated & Company Statement of Financial Position

At 30 September 2017

                         

ECR Minerals plc company no. 5079979

 

Group

Company

30 September

30 September

30 September

30 September

2017

2016

2017

2016

Note

£

£

£

£

Assets
Non-current assets
Property, plant and equipment 8 8,694 6,237 7,020 6,237
Investments in subsidiaries 9 852,170 740,100
Intangible assets 10 2,668,747 2,437,608 2,180,312 2,076,104
Other receivables   11                   240,970       107,341
            2,677,441       2,443,845       3,280,472       2,929,782
Current assets
Trade and other receivables 11 54,888 5,470 281,901 4,147
Available for sale financial assets 9 22,269 21,014 22,269 21,014
Taxation 38,059 10,067
Other current assets 2,672 2,672
Cash and cash equivalents   12       1,082,994       471,809       1,046,787       443,165
            1,160,151       539,024       1,350,957       481,065
Total assets           3,837,592       2,982,869       4,631,429       3,410,847
 
                                     
 
Current liabilities
Trade and other payables 14 102,367 302,242 80,432 268,323
Interest bearing borrowings   15                        
            102,367       302,242       80,432       268,323
Total liabilities           102,367       302,242       80,432       268,323
Net assets           3,735,225       2,680,627       4,550,997       3,142,524
Equity attributable to owners of the parent
Share capital 13 11,282,812 11,281,628 11,282,812 11,281,628
Share premium 13 43,823,335 42,441,553 43,823,335 42,441,553
Exchange reserve (218,059) (166,535)
Other reserves 1,381,998 1,147,717 1,381,998 1,147,717
Retained losses           (52,534,860)       (52,023,736)       (51,937,148)       (51,728,374)
Total equity           3,735,225       2,680,627       4,550,997       3,142,524
 

The loss for the Parent Company for the year was £208,774 (2016 - £887,844 loss).

The financial statements were approved and authorised for issue by the Directors on 28 March 2018 and were signed on its behalf by:

Weili (David) Tang           Craig Brown
Non–Executive Chairman Director & Chief Executive Officer

Consolidated Statement of Changes in Equity

For the year ended 30 September 2017

           

ECR Minerals plc company no. 5079979

 

Share
capital

Share
premium

Exchange
reserve

Other
reserves

Retained
reserves

(Note 13)

(Note 13)

Total

£

£

£

£

£

£

Balance at 1 October 2015   11,071,602   40,802,469   (69,649)   845,677   (51,104,030)   1,546,069
Loss for the year (919,706) (919,706)
Gain on exchange translation       (96,886)       (96,886)
Total comprehensive expense       96,886     (919,706)   (1,016,592)
Conversion of loan notes 34,673 501,582 536,255
Shares issued 147,500 952,500 1,100,000
Share issue costs (55,750) (55,750)
Share based payments 123,737 123,737
Warrants issued in lieu of finance cost 178,303 178,303
Shares issued in payment of creditors   27,853   240,752         268,605
Total transactions with owners, recognised directly in equity   210,026   1,639,084     302,040     2,151,150
Balance at 30 September 2016   11,281,628   42,441,553   (166,535)   1,147,717   (52,023,736)   2,680,627
Loss for the year (511,124) (511,124)
Loss on exchange translation       (51,524)       (51,524)
Total comprehensive expense       (51,524)     (511,124)   (562,649)
Shares issued 1,109 1,552,455 1,553,564
Share issue costs (84,878) (84,878)
Share based payments (166,739) 234,281 67,542
Shares issued in payment of creditors   75   80,944         81,019
Total transactions with owners, recognised directly in equity   1,184   1,381,782     234,281     1,617,247
Balance at 30 September 2017   11,282,812   43,823,335   (218,059)   1,381,998   (52,534,860)   3,735,226
 

Company Statement of Changes in Equity

For the year ended 30 September 2017

         

ECR Minerals plc company no. 5079979

 

Share
capital

Share
premium

Other
reserves

Retained
reserves

(Note 13)

(Note 13)

Total

£

£

£

£

£

Balance at 1 October 2015 11,071,602 40,802,469 845,677 (50,840,530) 1,879,218
Loss for the year         (887,844)   (887,844)
Total comprehensive expense         (887,844)   (887,844)
Conversion of loan notes 34,673 501,582 536,255
Shares issued 147,500 952,500 1,100,000
Share issue costs (55,750) (55,750)
Share based payments 123,737 123,737
Warrants issued in lieu of finance cost 178,303 178,303
Shares issued in payment of creditors   27,853   240,752       268,605
Total transactions with owners, recognised directly in equity   210,026   1,639,084   302,040     2,151,150
Balance at 30 September 2016   11,281,628   42,441,553   1,147,717   (51,728,374)   3,142,524
Loss for the year         (208,774)   (208,774)
Total comprehensive expense         (208,774)   (208,774)
Shares issued 1,109 1,552,455 1,553,564
Share issue costs (84,878) (84,878)
Share based payments (166,739) 234,281 67,542
Shares issued in payment of creditors   75   80,944       81,019
Total transactions with owners, recognised directly in equity   1,184   1,381,782   234,281     1,617,247
Balance at 30 September 2017   11,282,812   43,823,335   1,381,998   (51,937,148)   4,550,997
 

Consolidated & Company Cash Flow Statement

For the year ended 30 September 2017

         

ECR Minerals plc company no. 5079979

 

Group

Company

Year ended

Year ended

Year ended

Year ended

30 September 2016

30 September 2016

30 September 2016

30 September 2016

Note

£

£

£

£

 
Net cash flow used in operations   22   (569,016)   (494,118)   (511,307)   (483,553)
Investing activities
Purchase of property, plant & equipment (6,174) (4,082)
Increase in exploration assets 10 (231,140) (319,580) (104,209) (257,818)
Investment in subsidiaries (112,070) (79,535)
Loan to subsidiary (133,629) -
Interest income       353   484   233   35
Net cash used in investing activities       (236,961)   (319,096)   (353,757)   (337,318)
Financing activities
Proceeds from issue of share capital 1,468,686 1,100,000 1,468,686 1,100,000
Proceeds from issue of convertible loan notes 418,463 418,463
Repayment of convertible loan notes (248,332) (248,332)
Finance costs on fundraising (55,750) (55,750)
Interest paid and other financing costs         (31,385)     (31,385)
Net cash from financing activities       1,468,686   1,182,996   1,468,686   1,182,996
Net change in cash and cash equivalents 662,709 369,782 603,622 362,125
Cash and cash equivalents at beginning of the year 471,809 90,398 443,165 81,040
Effect of changes in foreign exchange rates       (51,524)   11,629   -   -
Cash and cash equivalents at end of the year   12   1,082,994   471,809   1,046,787   443,165
 

Non-cash transactions:

1. During the year no convertible loans and interest thereon were converted into shares (2016: £758,554).
2. Settlement of creditors of £80,944 (2016: £140,863) with ordinary shares.
3. No purchases of assets were settled with ordinary shares (2016: £53,259).

Notes to the Financial Statements

For the year ended 30 September 2017

1 General information

The Company and the Group operated mineral exploration and development projects. The Group’s principal interests are located in Argentina, the Philippines and Australia.

The Company is a public limited company incorporated and domiciled in England. The registered office of the Company and its principal place of business is Unit 117, Chester House, 81-83 Fulham High Street, Fulham Green, London SW6 3JA. The Company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange.

2 Accounting policies

Overall considerations

The principal accounting policies that have been used in the preparation of these consolidated financial statements are set out below. The policies have been consistently applied unless otherwise stated.

Basis of preparation

The financial statements of both the Group and the Parent Company have been prepared in accordance with International Financial Reporting Standards (IFRSs) and Interpretations issued by the IFRS Interpretations Committee (IFRIC) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. These are the standards, subsequent amendments and related interpretations issued and adopted by the International Accounting Standard Board (IASB) that have been endorsed by the European Union at the year end. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial instruments. The Directors have taken advantage of the exemption available under Section 408 of the Companies Act 2006 and have not prepared an Income Statement or a Statement of Comprehensive Income for the Company alone.

The Group and Parent Company financial statements have been prepared on a going concern basis as explained in the Directors’ Report on page [10].

New Accounting Standards and Interpretations

Effective during the year

During the year the Group has adopted the following standards and amendments:

  • Annual Improvements to IFRSs 2012–2014 Cycle
  • Amendments to IAS 1: Disclosure Initiative
  • Amendments to IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying the Consolidation Exception
  • Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation
  • Amendments to IAS 27: Equity Method in Separate Financial Statements

The adoption of these standards and amendments did not have any impact on the financial position or performance of the Group.

Not yet effective

At the date of authorisation of these Group Financial Statements and the Parent Company Financial Statements, the following Standards, amendments and interpretations were endorsed by the EU but not yet effective:

  • Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations
  • Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses
  • Amendments to IAS 7: Disclosure Initiative
  • IFRS 15 Revenue from Contracts with Customers including amendments to IFRS 15
  • Clarifications to IFRS 15 Revenue from Contracts with Customers
  • IFRS 9 Financial Instruments
  • IFRS 16 Leases

In addition to the above there are also the following standards and amendments that have not yet been endorsed by the EU:

  • IFRS 14 Regulatory Deferral Accounts
  • Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (effective date postponed indefinitely by IASB)
  • Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions
  • Annual Improvements to IFRS Standards 2014-2016 Cycle
  • IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration
  • IFRIC 23 Uncertainty over Income Tax Treatments
  • Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures
  • Annual Improvements to IFRS Standards 2015-2017 Cycle

The Group intends to adopt these standards when they become effective. The introduction of these new standards and amendments is not expected to have a material impact on the Group or Parent Company.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and two of its subsidiaries made up to 30 September 2017. Subsidiary undertakings acquired during the period are recorded under the acquisition method of accounting and their results consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date such control ceases.

The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Going concern

It is the prime responsibility of the Board to ensure the Group and Company remains going concern. At 30 September 2017, the Group had cash and cash equivalents of £1,082,994 and no borrowings. The Group’s financial projections and cash flow forecasts covering a period of at least twelve months from the date of approval of these financial statements show that the Group will have sufficient available funds in order to meet its contracted and committed expenditure. Further details are included in Note 23 to the financial statements. The Directors are confident in the ability of the Group to raise additional funding, if required, from the issue of equity and/or the sale of assets.

Based on their assessment of the financial position, the Directors have a reasonable expectation that the Group will be able to continue in operational existence for the next 12 months and continue to adopt the going concern basis of accounting in preparing these Financial Statements.

Cash and cash equivalents

Cash includes petty cash and cash held in current bank accounts. Cash equivalents include short–term investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and any provision for impairment losses.

Depreciation is charged on each part of an item of property, plant and equipment so as to write off the cost of assets less the residual value over their estimated useful lives, using the straight–line method. Depreciation is charged to the income statement. The estimated useful lives are as follows:

Office equipment         3 years
Furniture and fittings 5 years
Machinery and equipment 5 years

Expenses incurred in respect of the maintenance and repair of property, plant and equipment are charged against income when incurred. Refurbishments and improvements expenditure, where the benefit is expected to be long lasting, is capitalised as part of the appropriate asset.

An item of property, plant and equipment ceases to be recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on cessation of recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset ceases to be recognised.

Exploration and development costs

All costs associated with mineral exploration and investments are capitalised on a project–by–project basis, pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general overheads. If an exploration project is successful, the related expenditures will be transferred to mining assets and amortised over the estimated life of the commercial ore reserves on a unit of production basis. Where a licence is relinquished or a project abandoned, the related costs are written off in the period in which the event occurs. Where the Group maintains an interest in a project, but the value of the project is considered to be impaired, a provision against the relevant capitalised costs will be raised.

The recoverability of all exploration and development costs is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition thereof.

Impairment testing

Individual assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may exceed its recoverable amount, being the higher of net realisable value and value in use. Any such excess of carrying value over recoverable amount or value in use is taken as a debit to the income statement.

Intangible exploration assets are not subject to amortisation and are tested annually for impairment.

Provisions

A provision is recognised in the Statement of Financial Position when the Group or Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre–tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Leased assets

In accordance with IAS 17, leases in terms of which the Group or Company assumes substantially all the risks and rewards of ownership are classified as finance leases. All other leases are regarded as operating leases and the payments made under them are charged to the income statement on a straight line basis over the lease term.

Taxation

There is no current tax payable in view of the losses to date.

Deferred income taxes are calculated using the Statement of Financial Position liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets.

Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the Statement of Financial Position date.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity, in which case the related current or deferred tax is also charged or credited directly to equity.

Investments in subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The investments in subsidiaries held by the Company are valued at cost less any provision for impairment that is considered to have occurred, the resultant loss being recognised in the income statement.

Equity

Equity comprises the following:

• “Share capital” represents the nominal value of equity shares, both ordinary and deferred.

• “Share premium” represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issues.

• “Other reserves” represent the fair values of share options and warrants issued.

• “Retained reserves” include all current and prior year results, including fair value adjustments on available for sale financial assets, as disclosed in the consolidated statement of comprehensive income.

• “Exchange reserve” includes the amounts described in more detail in the following note on foreign currency below.

Foreign currency translation

The consolidated financial statements are presented in pounds sterling which is the functional and presentational currency representing the primary economic environment of the Group.

Foreign currency transactions are translated into the respective functional currencies of the Company and its subsidiaries using the exchange rates prevailing at the date of the transaction or at an average rate where it is not practicable to translate individual transactions. Foreign exchange gains and losses are recognised in the income statement.

Monetary assets and liabilities denominated in a foreign currency are translated at the rates ruling at the Statement of Financial Position date.

The assets and liabilities of the Group’s foreign operations are translated at exchange rates ruling at the Statement of Financial Position date. Income and expense items are translated at the average rates for the period. Exchange differences are classified as equity and transferred to the Group’s exchange reserve. Such differences are recognised in the income statement in the periods in which the operation is disposed of.

Share–based payments

The Company operates equity–settled share–based remuneration plans for the remuneration of some of its employees. The Company awards share options to certain Company Directors and employees to acquire shares of the Company. Additionally, the Company has issued warrants to providers of loan finance.

All goods and services received in exchange for the grant of any share–based payment are measured at their fair values. Where employees are rewarded using share–based payments, the fair values of employees’ services are determined indirectly by reference to the fair value of the instrument granted to the employee.

The fair value is appraised at the grant date and excludes the impact of non–market vesting conditions. Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non–transferability, exercise restrictions, and behavioural considerations.

All equity–settled share–based payments are ultimately recognised as an expense in the income statement with a corresponding credit to “other reserves”.

If vesting periods or other non–market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior years if share options ultimately exercised are different to that estimated on vesting.

Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital and, where appropriate, share premium.

A gain or loss is recognised in profit or loss when a financial liability is settled through the issuance of the Company’s own equity instruments. The amount of the gain or loss is calculated as the difference between the carrying value of the financial liability extinguished and the fair value of the equity instrument issued.

Financial instruments

The Group’s financial assets comprise cash and cash equivalents, investments and loans and receivables. Financial assets are assigned to the respective categories on initial recognition, depending on the purpose for which they were acquired. This designation is re–evaluated at every reporting date at which a choice of classification or accounting treatment is available.

The Group’s loans, investments and receivables are non–derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are measured at fair value on initial recognition. After initial recognition they are measured at amortised cost using the effective interest rate method, less any provision for impairment. Any change in their value is recognised in profit or loss. The Group’s receivables fall into this category of financial instruments. Discounting is omitted where the effect of discounting is immaterial. All receivables are considered for impairment on a case–by–case basis when they are past due at the Statement of Financial Position date or when objective evidence is received that a specific counterparty will default.

Investments that are held as available for sale financial assets are financial assets that are not classified in any other categories. After initial recognition, available for sale financial assets are measured at fair value. Any gains or losses from changes in the fair value of the financial asset are recognised in equity, except that impairment losses, foreign exchange gains and losses on monetary items and interest calculated using the effective interest method are recognised in the income statement.

Where there is a significant or prolonged decline in the fair value of an available for sale financial asset (which constitutes objective evidence of impairment), the full amount of the impairment, including any amount previously charged to equity, is recognised in the consolidated income statement. The Directors consider a significant decline to be one in which the fair value is below the weighted average cost by more than 25%. A prolonged decline is considered to be one in which the fair value is below the weighted average cost for a period of more than twelve months.

If an available for sale equity security is impaired, any further declines in the fair value at subsequent reporting dates are recognised as impairments. Reversals of impairments of available for sale equity securities are not recorded through the income statement. Upon sale, accumulated gains or losses are recycled through the income statement.

Financial liabilities, which are measured at amortised cost, and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Any instrument that includes a repayment obligation is classified as a liability.

Where the contractual liabilities of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities, and are presented as such in the Statement of Financial Position. Finance costs and gains or losses relating to financial liabilities are included in the income statement. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any features meeting the definition of a financial liability then such capital is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Compound financial instruments

Compound financial instruments comprise both liability and either equity components or embedded derivatives.

For compound instruments including equity components, at issue date the fair value of the liability component is estimated by discounting its future cash flows at an interest rate that would have been payable on a similar debt instrument without any equity conversion option. The liability component is accounted for as a financial liability. The difference between the net issue proceeds and the liability component, at the time of issue, is the residual or equity component, which is accounted for as an equity reserve.

Embedded derivatives included within compound instruments are calculated using the Black Scholes model and are also included within liabilities, but are measured at fair value in the Statement of Financial Position, with changes in the fair value of the derivative component recognised in the consolidated income statement. The amounts attributable to the liability components equal the discounted cash flows.

Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and equity components of the instrument in proportion to the allocation of the proceeds.

The interest expense on the liability component is calculated by applying the effective interest rate for the liability component of the instrument. The difference between any repayments and the interest expense is deducted from the carrying amount of the liability.

Upon conversion of loan note debt the corresponding carrying value of loan note liability and equity reserve is released, and the difference between these and the nominal value of the shares issued on conversion is recognised as a share premium.

Critical accounting estimates and judgements

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on–going basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.

The most critical accounting policies and estimates in determining the financial condition and results of the Group are those requiring the greater degree of subjective or complete judgement. These relate to:

• capitalisation and recoverability of exploration costs (Note 10);

• share–based payments (Note 6 and Note 13);

3 Operating loss

  Year ended   Year ended
30 September 30 September
The operating loss is stated after charging: 2017 2016
£ £
Depreciation of property, plant and equipment 4,653 1,468
Operating lease expenses 24,213 14,126
Share–based payments 67,542 123,737

Auditors' remuneration – fees payable to the Company’s auditor for the audit of the parent company and consolidated
financial statements

  21,500   22,000

4 Earnings per share

               

Basic and Diluted

Year ended
30 September
2017

Year ended
30 September
2016

 
Weighted number of shares in issue during the year               166,559,125   9,181,895,384
 
£ £
Loss from continuing operations attributable to owners of the parent       (511,124)   (919,706)

Basic earnings per share has been calculated by dividing the loss attributable to equity holders of the company after taxation by the weighted average number of shares in issue during the year. There is no difference between the basic and diluted earnings per share as the effect on the exercise of options and warrants would be to decrease the earnings per share.

PLEASE NOTE THAT THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to what action you should take, please consult your stockbroker or other independent adviser authorised under the Financial Services and Markets Act 2000 immediately. If you have recently sold or transferred all of your ordinary shares in ECR Minerals PLC, please forward this document, together with the accompanying documents, as soon as possible either to the purchaser or transferee or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares.

ECR MINERALS PLC
(the “Company”)
(Registered in England and Wales No 05079979)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the Annual General Meeting of the Company will be held at the offices of Charles Russell Speechlys LLP, 5 Fleet Place, London EC4M 7RD on 24 April 2018 at 10.30 a.m. for the purpose of considering and, if thought fit, passing Resolutions 1 to 5 as ordinary resolutions, and Resolutions 6 and 7 as special resolutions:

Ordinary Resolutions

1 To receive, consider and adopt the annual accounts of the Company for the year ended 30 September 2017, together with the reports of the directors and auditors thereon.

2 That Weili Tang, a director retiring in accordance with article 29.1.1 of the Company’s articles of association, be elected as a director of the Company.

3 To re-appoint PKF Littlejohn LLP as auditors of the Company, to hold office until the conclusion of the next general meeting at which accounts are laid before the Company.

4 To authorise the audit committee to determine the remuneration of the Company’s auditors of the Company.

5 That the directors be generally and unconditionally authorised pursuant to and in accordance with section 551 of the Companies Act 2006 (the “CA 2006”) to exercise all the powers of the Company to allot shares or grant rights to subscribe for, or to convert any security into shares in the Company up to an aggregate nominal amount of £5,000 provided that this authority shall, unless renewed, varied or revoked by the Company, expire on 30 June 2019 or, if earlier, the date of the next annual general meeting of the Company, save that the Company may, before such expiry, make offers or agreements which would or might require equity securities to be allotted (or treasury shares to be sold) after the authority expires and the directors may allot equity securities (or sell treasury shares) in pursuance of any such offer or agreement as if the authority had not expired.

Special Resolutions

6 That, subject to the passing of resolution ý5, the directors be empowered to allot equity securities (as defined by section 560 of the CA 2006) pursuant to the authority conferred by resolution 5 for cash, and/or sell treasury shares for cash, as if section 561(1) of the CA 2006 did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities of up to an aggregate nominal value of £5,000. The authority granted by this resolution will expire at the conclusion of the Company's next annual general meeting after this resolution is passed or, if earlier, at the close of business on 30 June 2019 save that the Company may, before such expiry make offers or agreements which would or might require equity securities to be allotted (or treasury shares to be sold) after the authority expires and the directors may allot equity securities (or sell treasury shares) in pursuance of any such offer or agreement as if the authority had not expired.

7 That the Company be generally and unconditionally authorised for the purposes of section 701 of the CA 2006 to make one or more market purchases (as defined in section 693(4) of the CA 2006) of its ordinary shares with nominal value of £0.00001 each in the Company, provided that:

7.1 the Company does not purchase under this authority more than 24,760,524 ordinary shares;

7.2 the Company does not pay less than £0.00001 for each ordinary share; and

7.3 the Company does not pay more per ordinary share than the higher of (i) an amount equal to 5 per cent. over the average of the middle-market price of the ordinary shares for the five business days immediately preceding the day on which the Company agrees to buy the shares concerned, based on share prices published in the Daily Official List of the London Stock Exchange; and (ii) the amount stipulated by the regulatory technical standards adopted by the European Commission pursuant to Article 5(6) of the Market Abuse Regulation (EU) No. 596/2014.

This authority shall continue until the conclusion of the Company’s annual general meeting in 2019 or 30 June 2019, whichever is the earlier, provided that if the Company has agreed before this date to purchase ordinary shares where these purchases will or may be executed after the authority terminates (either wholly or in part) the Company may complete such purchases.

By Order of the Board
Craig Brown
Director and Company Secretary
Registered Office:
Unit 117, Chester House
81-83 Fulham High Street
Fulham Green
London, SW6 3JA

29 March 2018

NOTES ON RESOLUTIONS

The following paragraphs explain, in summary, the Resolutions to be proposed at the Annual General Meeting (the “Meeting”).

Resolution 1: Receipt of the annual accounts

Resolution 1 proposes that the Company’s annual accounts for the period ended 30 September 2017, together with the reports of the directors and auditors on these accounts, be received, considered and adopted.

Resolution 2: Election of Weili Tang

Resolution 2 proposes that Mr Weili Tang, who was appointed since the last Annual General Meeting of the Company and is retiring in accordance with article 29.1.1 of the Company’s articles of association, be elected as a director of the Company.

Resolution 3: Re-appointment of Auditor

Resolution 3 proposes the reappointment of the Company’s existing auditor to hold office until the end of the next such meeting.

Resolution 4: Remuneration of Auditor

Resolution 4 is to authorise the audit committee of the Company to determine the remuneration of the Company’s auditors.

Resolution 5: Authority to allot shares

Resolution 5 is to renew the directors’ power to allot shares in accordance with section 551 of the CA 2006. The authority granted at general meeting on 23 March 2017 is due to expire on 30 June 2018.

If passed, the resolution will authorise the Directors to allot equity securities up to a maximum nominal amount of £5,000, which represents approximately 202% of the Company's issued ordinary shares as at 28 March 2018 (being the latest practicable date before publication of this document).

If given, these authorities will expire at the annual general meeting in 2019 or on 30 June 2019, whichever is the earlier.

The directors have no present intention to issue new ordinary shares, other than pursuant to the exercise of options or warrants. However, the directors consider it prudent to maintain the flexibility to take advantage of business opportunities that this authority provides.

As at the date of this document the Company does not hold any Ordinary Shares in the capital of the Company in treasury.

Resolution ý6: disapplication of pre-emption rights

Resolution 6 is to grant the directors the authority to allot equity securities for cash or sell any shares held in treasury otherwise than to existing shareholders pro rata to their holdings, as there may be occasion where it is in the best interests of the Company not to be required to first offer such shares to existing shareholders.

Accordingly, resolution ý6 will be proposed as a special resolution to grant such a power and will permit the directors to allot pursuant to the authority to allot granted by resolution 5 to allot equity securities (as defined by section 560 of the CA 2006) or sell treasury shares for cash without first offering them to existing shareholders in proportion to their existing holdings up to a maximum nominal value of £5,000 representing approximately 202% of the Company's issued ordinary shares (excluding treasury shares) as at 28 March 2018 (being the latest practicable date before publication of this document). If given, this authority will expire at the annual general meeting in 2019 or on 30 June 2019, whichever is the earlier.

Resolution 7

Resolution 7 will be proposed as a special resolution and will give the Company authority to purchase its own shares in the markets up to a limit of 10 per cent. of its issued ordinary share capital. The maximum and minimum prices are stated in the resolution. Your directors believe that it is advantageous for the Company to have this flexibility to make market purchases of its own shares.

Your directors will exercise this authority only if they are satisfied that a purchase would result in an increase in expected earnings per share and would be in the interests of shareholders generally. In the event that shares are purchased, they would either be cancelled (and the number of shares in issue would be reduced accordingly) or, in accordance with the CA 2006, be retained as treasury shares.

As at 28 March 2018, the total number of options and warrants over shares that were outstanding under all of the Company’s share option plans was 110,636,980 which if exercised would represent 44.7 per cent. of the Company’s issued share capital at that date. If the Company were to purchase its own shares to the fullest possible extent of its authority from shareholders , the number of outstanding options could potentially represent 40.6 per cent. of the issued share capital of the Company.

If given, these authorities will expire at the annual general meeting in 2019 or on 30 June 2019, whichever is the earlier.

END.

Short Name: ECR Minerals plc
Category Code: MSCU
Sequence Number: 644066
Time of Receipt (offset from UTC): 20180328T234803+0100

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ECR Minerals plc

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ECR Minerals plc