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Sovereign Metals #SVML #SVM – Kasiya – Optimised PFS Results
Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is
pleased to announce the results of an Optimised Pre-feasibility Study (OPFS) for its Kasiya RutileGraphite Project (Kasiya or the Project) undertaken following a strategic investment by Rio Tinto Mining and Exploration Limited (Rio Tinto) in 2023, which established a joint Technical Committee to advance the development of Kasiya.
Following input from various organisations, including world-class consultancies, the Company’s owner’s team, and subject matter experts from Rio Tinto, the OPFS has reconfirmed Kasiya as a leading global future supplier of strategic critical minerals outside of China.
The OPFS proposes a large-scale, long-life operation to deliver substantial volumes of natural rutile and graphite while generating significant returns.
Table 1 summarises the key findings from the OPFS and includes a comparison to the PreFeasibility Study (PFS) results released 16 months ago, in September 2023. It is important to note that the results for the 2023 PFS in Table 1 have not been updated or adjusted for inflation since their release in September 2023.
SUMMARY OF OPTIMISATIONS
The OPFS optimises seven key areas compared to the 2023 PFS as summarised below.
Mining Method
The PFS proposed a 25-year initial LOM based on a hydraulic mining process where slurry material would be screened and pumped overland to processing plants.
Based on findings from the mining trials undertaken as part of the Pilot Mining and Land Rehabilitation (Pilot Phase), the OPFS proposes a large-scale open-pit dry mining operation using draglines and trucking of material to the processing plants. The change in mining method has not changed the initial mine life of 25 years.
Operating Model
The 2023 PFS envisaged mining would take place on a contractor basis.
During the OPFS, Sovereign undertook a trade-off analysis between the following operating options:
• Fully owner-operated mine with draglines and trucks purchased by the owner
• Owner-operated mine with draglines and trucks leased by the owner
• Mining contractor operation using excavators and trucks
Due to the preference for draglines and maintaining flexibility, an owner-operated mine with leased equipment is selected as the preferred operating model.
Plant Configuration
Dry mining Kasiya means the material received at the plant is not pre-wet and pre scrubbed. Therefore, the OPFS proposes a process plant front end consisting of two scrubbers and two oversize screens per 12Mt plant. No further changes are proposed to the processing plant flowsheet.
Plant Location
Per the 2023 PFS, mining would commence in the southern area of the Kasiya deposit, ramping up to 12Mt per annum and then scaling up to 24Mt per annum in Year 5 by constructing a second plant module in the same area, reaching nameplate capacity by the end of the year.
In Year 10 of production, another new 12Mt per annum plant module would be built and commissioned in the northern area of Kasiya, supported by the relocation to the north of one of the southern plants to maintain a steady state of 24Mt per annum.
However, the OPFS has determined the most efficient plant locations to be an initial 12Mtpa South Kasiya plant followed by the construction of another 12Mtpa North Kasiya plant in year 5 of production, negating any relocation requirements in later years.
The OPFS maintains the ROM schedule with operations commencing with 12Mt per annum of throughput during the first four years of production (Stage 1) and expanding to 24Mt per annum in year 5, with full capacity reached by end of year 5 (Stage 2).
Tailings Management
Per the PFS, a conventional process would be used to produce rutile and graphite concentrate with tailings in separate sand and fines streams being pumped to a conventional TSF. Mined out pit areas would be backfilled as part of a rehabilitation process.
The OPFS proposes maximising backfilling of pits as undertaken during the Pilot Phase and the introduction of mud farming on the TSF to accelerate dewatering. This approach has reduced tailings volumes in the TSF by 44% from 187 Mm³ to 105 Mm³.
Mud farming is a technique used by Rio Tinto at operations such as its 100%-owned Weipa bauxite operations in Queensland, Australia, which has been in production since 1963 and produced 35.1Mt of bauxite in 2023.
Water Management
The PFS proposed that the primary water supply for the Kasiya mining complex would be created by building a dam and collecting run-off water from the greater catchment area. Following the introduction of dry mining and mud farming, the size of the water dam proposed in the PFS has been significantly reduced, with less process water required and more process water recovered.
The OPFS mining trials and material deposition tests indicated a water demand of 10.2 Mm³ per annum, almost a 40% decrease in water requirement from the PFS (16.7 Mm³). The effect on the raw water dam wall could be a reduction in volume from 0.79 Mm³ to 0.57 Mm³ and a reduction in dam wall height from 20 metres to 17 metres.
Power
The 2023 PFS envisaged a hybrid hydro-generated grid power plus solar power system solution.
The Malawi grid reliability has improved since completion of the PFS and is expected to further improve considerably with the commissioning of the country’s first HV transmission interconnector to Mozambique in Q2 2025.
This will provide the Project with sufficient power and therefore the OPFS proposes to connect the Project’s power system to the hydro-sourced grid network only. This mitigates any risks associated with commissioning a new solar power project and reducing the overall power tariff by eliminating the need for an Independent Power Producer as per the 2023 PFS.
OPTIMISATION MAINTAINS KASIYA’S GLOBAL LEADER POTENTIAL
Kasiya, located in central Malawi, is the world’s largest known natural rutile deposit and second largest flake graphite deposit.
Natural Rutile is the purest, highest-grade form of naturally occurring titanium feedstock.
Natural Graphite is required for various technological and industrial applications.
Both titanium and graphite have been designated “Critical Minerals” by the USA and the EU.
In December 2024, NATO designated both titanium and graphite as defence-critical, strategic minerals essential for the Allied defence industry.
Over the 25-year LOM, Kasiya is set to produce an average of 222kt of natural rutile and 233kt of natural flake graphite per annum. At steady state throughput of 24 million tonnes of ore per annum the Project is anticipated to produce approximately 246kt of natural rutile and 265kt of natural graphite per annum, positioning Sovereign as potentially the world’s largest producer of natural rutile and natural flake graphite.
Further, the depletion of rutile reserves at Lenoil Company Limited’s Area 1 Mine1 in the coming 2-3 years and the recent cessation of mining activities at Energy Fuels Inc.’s Kwale Operations2 in Kenya means that Sovereign could potentially become the world’s only primary natural rutile producer of scale (see Appendix 2).
The incremental cost of producing a tonne of graphite from Kasiya under the OPFS is US$241/t3. Based on public disclosures by listed graphite companies that have undertaken project studies up to a pre-feasibility stage or later, an incremental graphite cost of production of US$241/t would make Sovereign the world’s lowest-cost graphite producer outside of China (see Appendix 3).
The rutile-graphite-rich mineralisation will be extracted from surface and trucked to the process plant front end to scrub and screen ROM before it enters a Wet Concentration Plant (WCP) where a low-energy requirement, chemical-free process using gravity spirals produces a Heavy Mineral Concentrate (HMC). The HMC is transferred to the dry Mineral Separation Plant (MSP) where premium quality rutile (+95% TiO2) is produced via electrostatic and magnetic separation.
The high quality Kasiya rutile product will be amenable for use in high-end titanium products including aerospace and defence applications.
Graphite rich concentrate is collected from the gravity spirals and processed in a separate graphite flotation plant, producing a high purity, high crystallinity and high value coarse-flake graphite product.
1 In 2024, the previous owner of the Area 1 Mine, Sierra Rutile Limited, was acquired by Lenoil Company Limited, a private company based in Sierra Leone. 2 In 2024, the previous owner of the Kwale Operations, Base Resources Limited was acquired by Energy Fuels Inc., a US-based uranium and critical minerals company.
3 Incremental cost of graphite production is calculated with the following costs attributed to rutile production: all mining costs, all G&A, all material handling costs except for graphitic fines reclamation and graphite concentrate transport, and approximately half of total processing costs. Incremental cost of graphite production therefore includes only those costs incurred on top of primary rutile production to produce an incremental tonne from the process plant and transport the graphite to market. Unit cost of rutile production under this scenario would be US$628/t (FOB Nacala)).
Kasiya’s graphite has been confirmed to produce outstanding anode materials suitable for battery production as well as demonstrating suitability for traditional industrial uses such as the production of refractory materials.
The Project has excellent surrounding infrastructure including sealed roads, a high quality rail line connecting to the deep-water port of Nacala on the Indian Ocean and hydro-sourced grid power.
For the duration of the operation, Kasiya’s highly sought-after rutile and graphite products will be railed directly from a purpose-built rail dry port at the mine site eastward via the Nacala Logistics Corridor (NLC) to the port of Nacala. The southern port of Beira, connecting Kasiya via the recently refurbished Sena Rail Line, offers a secondary export route.
Enquiries
Frank Eagar, Managing Director & CEO
South Africa / Malawi
+27 21 065 1890
Sapan Ghai, CCO
London
+44 207 478 3900
Link here to view full OPFS and Appendices
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ECR Minerals #ECR – Issue of Equity, Total Voting Rights and PDMR Dealings
ECR Minerals plc (LON: ECR), the exploration and development company focused on gold in Australia, is pleased to announce the issue of new ordinary shares of 0.001 pence each in ECR (the “Ordinary Shares”) in respect of the board of directors of ECR’s (the “Board” or the Directors”) ongoing remuneration policy, whereby each Director and certain consultants to the Company are remunerated partially through the issue of new Ordinary Shares.
In accordance with their existing share-based remuneration arrangements, announced originally on 19 September 2023, Nick Tulloch, Chairman, and Mike Whitlow, Managing Director, will each receive 7,954,545 new Ordinary Shares, as payment in lieu of £26,250 of their accrued remuneration for the period from 15 September 2024 to 31 December 2024. The new Ordinary Shares will be issued at a price of 0.33 pence per new Ordinary Share, being a price equal to the issue price of the Company’s subscription announced on 25 November 2024.
As part of this share issuance, Nick Tulloch and Mike Whitlow have each agreed to extend the period of this quarter’s share issue from 14 December 2024 to 31 December 2024 to match the period of other Directors’ share issues. Going forward, Nick Tulloch and Mike Whitlow will revert to £22,500 per quarter which will in the future end on the last day of the relevant month in that quarterly period.
Also on 19 September 2023, it was announced that the Company’s Non-Executive Directors had agreed to subscribe for new Ordinary Shares as payment in lieu of their salary. These arrangements were extended each quarter through to 30 September 2024. As subsequently announced on 2 October 2024, with the salary sacrifice scheme passing its first anniversary, the Board updated the arrangements such that each Director will continue to accept a material part of their remuneration through the issue of new Ordinary Shares for at least a further 12 months. In accordance with these updated arrangements, Andrew Scott and Trevor Davenport*, Non-Executive Directors over the relevant period, will each receive 1,818,181 new Ordinary Shares as payment in lieu of £6,000 of their remuneration for the period from 1 October 2024 to 31 December 2024. The new Ordinary Shares will also be issued at a price of 0.33 pence per new Ordinary Share (the price equal to the issue price of the Company’s subscription announced on 25 November 2024).
A further 1,739,130 new Ordinary Shares will also be issued at a price of 0.33 pence per new Ordinary Share as payment in lieu of £5,739 of the remuneration of a consultant to the Company during the final quarter of December 2024.
Additional Issue of Equity
At the same time, the Company has agreed to issue and allot 2,000,000 new Ordinary Shares as payment in lieu of £6,000 of accrued fees owed by the Company to a professional adviser, in order to assist the Company in conserving its cash resources. These new Ordinary Shares will be issued at a price of 0.30 pence per new Ordinary Share, which was the volume weighted average price for Ordinary Shares over the 14 trading days prior to the date of the invoice.
PDMR Dealings
Pursuant to the arrangements set out above, a total of 23,284,582 new Ordinary Shares will be issued by the Company. Following this issuance, the total numbers of Ordinary Shares that will be held following Admission (as defined below) by the Directors, as Persons Discharging Managerial Responsibility (“PDMRs”) of the Company as at the date of this announcement*, are as follows:
| Name | New Ordinary Shares to be issued | Total Ordinary Shares held in the Company following Admission | As a percentage of the Company’s enlarged issued ordinary share capital following Admission |
| Nick Tulloch | 7,954,545 | 47,384,962 | 2.14% |
| Mike Whitlow | 7,954,545 | 47,384,962 | 2.14% |
| Andrew Scott | 1,818,181 | 19,430,835 | 0.88% |
| Total | 17,727,271 |
The FCA notification in respect of these PDMR dealings, made in accordance with the requirements of the UK Market Abuse Regulation, is appended further below.
* Trevor Davenport retired from his role as a Director at the end of 2024, as indicated in the Company’s announcement of 16 December 2024.
Admission and Total Voting Rights
Application has been made for 23,284,582 new Ordinary Shares to be admitted to trading on AIM (“Admission“) and it is expected that Admission will become effective on or around 15 January 2025. The 23,284,582 new Ordinary Shares will rank pari passu with the existing Ordinary Shares. Upon Admission, ECR’s issued ordinary share capital will comprise 2,215,169,594 Ordinary Shares. This number will represent the total voting rights in the Company, and, following Admission may be used by shareholders as the denominator for the calculation by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.
Nick Tulloch, Chairman of ECR, said: “For a second consecutive year, the Board has agreed to continue a policy of share-based remuneration, aligning ourselves with ECR’s shareholders and preserving the Company’s cash resources for our operations. Entering into 2025, we have a considerable amount to look forward to. At the top of the agenda is our ongoing work to assess the most economical solution to bring the Blue Mountain project into production. We also have follow up campaigns planned at the Lolworth and Tambo projects following last year’s very promising drilling results. Alongside these activities, we are working to close out the proposed sale of our non-core assets, including A$75 million of tax losses, details of which were recently announced on 23 December 2024.”
FOR FURTHER INFORMATION, PLEASE CONTACT:
| ECR Minerals Plc | Tel: +44 (0) 1738 317 693 | ||
| Nick Tulloch, Chairman
Andrew Scott, Director |
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| Email: | |||
| Website: www.ecrminerals.com | |||
| Allenby Capital Limited | Tel: +44 (0) 3328 5656 | ||
| Nominated Adviser
Nick Naylor / Alex Brearley / Vivek Bhardwaj |
info@allenbycapital.com
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| Axis Capital Markets Limited | Tel: +44 (0) 203 026 0320 | ||
| Broker | |||
| Ben Tadd / Lewis Jones | |||
| SI Capital Ltd | Tel: +44 (0) 1483 413500 | ||
| Broker | |||
| Nick Emerson
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| Brand Communications | Tel: +44 (0) 7976 431608 | ||
| Public & Investor Relations | |||
| Alan Green | |||
ABOUT ECR MINERALS PLC
ECR Minerals is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) has 100% ownership of the Bailieston and Creswick gold projects in central Victoria, Australia, has six licence applications outstanding which includes one licence application lodged in eastern Victoria (Tambo gold project).
ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd (“LUX”) which has three approved exploration permits covering 946 km2 over a relatively unexplored area in Lolworth Range, Queensland, Australia. The Company has also submitted a license application at Kondaparinga which is approximately 120km2 in area and located within the Hodgkinson Gold Province, 80km NW of Mareeba, North Queensland.
Following the sale of the Avoca, Moormbool and Timor gold projects in Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX) and the subsequent spin-out of the Avoca and Timor projects to Leviathan Gold Ltd (TSX-V: LVX), MGA has the right to receive up to A$2 million in payments subject to future resource estimation or production from projects sold to Fosterville South Exploration Limited.
MGA also has approximately A$75 million of unutilised tax losses incurred during previous operations
ECR Minerals #ECR – Total Voting Rights
ECR Minerals Plc (LON: ECR), the exploration and development company focused on gold in Australia, announces that the issued share capital of the Company as at the date of this announcement comprises 2,191,885,012 ordinary shares of 0.001 pence each with one voting right per share (“Ordinary Shares”). The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company is 2,191,885,012.
The above figure may be used by shareholders in the Company as the denominator for the calculations by which they determine if they are required to notify their interest in or a change to their interest in the share capital of the Company under the Disclosure Guidance and Transparency Rules of the UK Financial Conduct Authority.
FOR FURTHER INFORMATION, PLEASE CONTACT:
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ECR Minerals Plc |
Tel: +44 (0) 1738 317 693 |
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Nick Tulloch, Chairman Andrew Scott, Director |
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Email: |
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Website: www.ecrminerals.com |
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Allenby Capital Limited |
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Tel: +44 (0) 3328 5656 |
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Nominated Adviser Nick Naylor / Alex Brearley / Vivek Bhardwaj |
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Axis Capital Markets Limited |
Tel: +44 (0) 203 026 0320 |
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Broker |
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Ben Tadd / Lewis Jones |
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SI Capital Ltd |
Tel: +44 (0) 1483 413500 |
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Broker |
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Nick Emerson
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Brand Communications |
Tel: +44 (0) 7976 431608 |
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Public & Investor Relations |
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Alan Green |
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First Class Metals #FCM – The 79th GRP Limited Strategic Funding & Winter Work Programme
First Class Metals PLC (“First Class Metals,” “FCM,” or the “Company”), (LSE: FCM, FWB: WN9), the Ontario focused gold and critical metals explorer is pleased to announce that The 79th GRP Limited (“79th GRP”) has increased its existing loan to the Company (“Loan”) by £200,000, bringing the total Loan to £700,000. This follows the previously announced conditional strategic equity funding by 79th GRP of approximately £2.18 million (“Conditional Equity Funding”). The additional funding underlines 79th GRP’s commitment to advancing the proposed Conditional Equity Funding process and supporting the Company’s strategic objectives as the partnership progresses.
Key Highlights:
· Existing Loan with 79th GRP increased from £500,000 to £700,000: This additional funding comes as a further demonstration of 79th GRP’s commitment to supporting FCM’s strategic goals with the planned Winter Exploration Plans for North Hemlo & Sunbeam now fully funded.
· Funding to advance North Hemlo & Sunbeam properties, including:
o Very Low Frequency (VLF) geophysical survey across priority targets at North Hemlo
o Lake sediment sampling programme to identify additional targets at North Hemlo
o Wide scale lake sediment sampling across ‘newly’ staked claims at Sunbeam to identify new targets
Loan Facility Update:
The new loan agreement increases the total facility from £500,000 to £700,000, to be drawn in a single tranche. Key terms of the loan include:
I. Repayment Date: The Loan is repayable on the earlier of 25 April 2025 and completion of the first stage of the Conditional Equity Funding or, if such should not occur, the day after the relevant general meeting.
II. Interest Only: Interest is payable at a 15% annual rate throughout the term.
III. Secured Facility: The Loan is secured by a debenture over the assets of First Class Metals PLC.
IV. Equity Conversion: The Loan together with accrued but unpaid interest and fees will be capitalised into ordinary shares of the Company at a price of 1.7p per share upon completion of the first stage of the Conditional Equity Funding, as detailed in the announcement dated 18 December 2024.
For more details on the original loan facility, please refer to the announcements dated 13 June 2024 and 8 October 2024.
James Knowles, Executive Chairman, commented:
“This additional £200,000 loan from the 79th GRP underscores their continued confidence in our assets and strategy, as well as their commitment to the previously announced £2.18 million conditional equity investment. Their financial support strengthens our ability to execute fully funded Winter Exploration Plans for North Hemlo and Sunbeam, enabling us to maintain momentum across our portfolio.
This latest funding highlights the alignment between FCM and the 79th Group as we work collaboratively towards completing the conditional investment process. We are excited about the opportunities this partnership presents to drive forward the development of our northern Ontario projects and deliver significant value for our shareholders.”
Marc Sale, Chief Executive Officer, commented:
“I am excited that we can initiate a funded Winter Work Programme which will ensure that, when the spring field season starts, we can maximise the efforts on the two main properties. The Winter Work Programme in conjunction with the stripping and the results from the recently completed soil sampling programmes at North Hemlo and Sunbeam will provide focus in the coming months, the intention being to drill one or both properties.”
Dave Webster, Chairman, The 79th GRP Limited, commented:
“The Seventy Ninth Group is deeply committed to investing heavily in the development of FCM’s assets, aligning with its strategic focus on generating significant value across the portfolio for shareholders. This proactive investment approach underscores the Group’s dedication to driving sustainable growth and maximising value through disciplined and strategic asset management.”
Looking Forward
Following the recent announcement of the conditional subscription agreement with 79th GRP, First Class Metals PLC is pleased to highlight the strengthening of its financial position through the increased loan facility provided by 79th GRP. This additional funding, bringing the Loan to £700,000, ensures that key exploration initiatives, including the funded Winter Work Programme for North Hemlo and Sunbeam, can progress as planned.
The increased loan commitment further demonstrates 79th GRP’s confidence in FCM’s strategy and the potential of our northern Ontario assets. This strategic financial support not only enables us to advance our current exploration programmes but also underscores the growing alignment between the two companies as we work together to create long-term value.
The Board is fully committed to capitalising on these developments and leveraging the opportunities that this strengthened partnership presents. With the support of 79th GRP, we are well-positioned to achieve our objectives and deliver meaningful progress across our portfolio.
We look forward to providing further updates as we continue to advance our projects and deliver value to shareholders.
Ends
For Further Information:
Engage with us by asking questions, watching video summaries, and seeing what other shareholders have to say. Navigate to our Interactive Investor hub here:
For further information, please contact:
James Knowles, Executive Chair
Email: JamesK@Firstclassmetalsplc.com
Tel: 07488 362641
Marc J Sale, CEO
Email: MarcS@Firstclassmetalsplc.com
Tel: 07711 093532
Novum Securities Limited (Financial Adviser)
David Coffman / George Duxberry
Website: www.novumsecurities.com
Tel: (0)20 7399 9400
Axis Capital Markets (Broker)
Lewis Jones / Ben Tadd
Website: Axcap247.com
Tel: (0)203 026 0449
NOTES TO EDITORS
Qualified Person
The technical disclosures contained in this announcement have been drafted in line with the Canadian Institute of Mining, Metallurgy and Petroleum standards and guidelines and approved by Marc J. Sale, who has more than 30 years in the gold exploration industry and is considered a Qualified person owing to his status as a Fellow of the Australian Institute of Mining and Metallurgy.
First Class Metals PLC – Background
First Class Metals listed on the LSE in July 2022 and is focused on metals exploration in Ontario, Canada which has a robust and thriving junior mineral exploration sector. In particular, the Hemlo ‘camp’ near Marathon, Ontario is a proven world class address for gold exploration, featuring the Hemlo gold deposit operated by Barrick Gold (>23M oz gold produced), with the past producing Geco and Winston Lake base metal deposits also situated in the region.
FCM currently holds 100% ownership of seven claim blocks covering over 180km² along a 150km strike of the Hemlo-Schreiber-Dayohessarah greenstone belt, exploring for gold, base metals, and rare earth element mineralization. In addition, FCM is carrying out a joint venture with Palladium One on the West Pickle Lake Property in the region, a drill-proven ultra-high-grade Ni-Cu project.
The flagship property North Hemlo had a high-definition low level magnetic Heli-borne survey flown in April 2022, this was followed with ground prospecting which ultimately defined the ‘Dead Otter Trend’ which is a discontinuous 4.5km gold anomalous trend with a 19.6g/t Au peak grab sample. This sampling being the highest known assay ever recorded on the North Limb of Hemlo.
In October 2022 FCM completed the option to purchase the historical high-grade past-producing Sunbeam gold mine near Atikokan, Ontario, ~15 km southeast of Agnico Eagle’s Hammond Reef gold deposit (3.3 Moz of open pit probable gold reserves).
FCM acquired the Zigzag Project near Armstrong, Ontario in March 2023. The property features Li-Ta-bearing pegmatites in the same belt as Green Technology Metals’ Seymour Lake Project, which contains a Mineral Resource estimate of 9.9 Mt @ 1.04% Li2O. Zigzag was drilled prior to Christmas 2023 and results have now been released.
The significant potential of the properties for precious, base and battery metals relates to ‘nearology’, since all properties lie in the same districts as known deposits (Hemlo, Hammond Reef, Seymour Lake), and either contain known showings, geochemical or geophysical anomalies, or favourable structures along strike from known showings (e.g. the Esa project, with an inferred Hemlo-style shear along strike from known gold occurrences).
ECR Minerals #ECR – Heads of Terms for Proposed Disposal of MGA
ECR Minerals plc (LON: ECR), the exploration and development company focused on gold in Australia, is pleased to announce that, further to previous announcements, it has entered into a non-binding heads of terms (the “Heads of Terms”) with Octo Holdings Pty Ltd (“Octo”) regarding the proposed sale (the “Proposed Disposal”) of the entire issued share capital of ECR’s wholly-owned subsidiary, Mercator Gold Australia Pty Ltd (“MGA”). MGA holds certain of the Company’s exploration assets in Victoria, Australia but will be restructured prior to the Proposed Disposal as described below.
Highlights of the Proposed Disposal pursuant to the non-binding Heads of Terms:
- Total cash consideration to be payable of A$4.5 million
- Payable in two equal cash tranches: the first tranche on completion of the Proposed Disposal
and the second tranche on or before 31 March 2025 - MGA is to be restructured such that the Creswick and Tambo projects will be transferred to another of the Company’s subsidiaries, so that these projects are excluded from the Proposed Disposal
- The Bailieston gold and antimony exploration project will remain in MGA and therefore would be included in the Proposed Disposal
- MGA holds ECR’s A$75 million of tax losses which represent the main asset that is to be disposed
Overview of the Proposed Disposal
Pursuant to the Heads of Terms, Octo has agreed to acquire MGA on a cash-free and debt-free basis. It is proposed that, on or before completion of the Proposed Disposal, ECR will effect a reorganisation of MGA such that the only exploration assets remaining within MGA will be the four exploration tenements collectively known as the Bailieston project (EL5433, EL006911, EL006912, and EL007296), which targets gold and antimony mineralisation over 142 km2 of exploration ground within the Melbourne zone. Although potentially encouraging antimony results have been reported from the Bailieston project (as announced on 3 July 2024), the Bailieston project is considered by the Board to be a non-core asset given ECR’s key focus on gold exploration.
It is proposed that the tenements comprising ECR’s core Creswick and Tambo gold exploration projects, along with the lease of ECR’s premises near Bendigo, Victoria, will be transferred to another of the Company’s wholly owned subsidiaries and so would be excluded from the Proposed Disposal. Furthermore, MGA’s contracts with ECR’s employees, consultants and other suppliers will be similarly transferred such that the Proposed Disposal will have no impact on ECR’s ongoing Victoria operations at the Creswick and Tambo projects. For the avoidance of doubt, ECR’s core Lolworth and Blue Mountain projects and the Kondaparinga project (all of which are based in Queensland) are held via a different ECR subsidiary and will therefore be unaffected by the Proposed Disposal.
Under the Heads of Terms, the consideration to be payable by Octo is to be A$4.5 million and is to be settled in two equal tranches in cash, with the first tranche on completion of the Proposed Disposal and the second tranche on or before 31 March 2025.
The Heads of Terms restate the exclusivity period between ECR and Octo until 31 January 2025 and it is the parties’ expectation that the Proposed Disposal will be concluded before that date. In the event that further time is required to finalise the pre-completion steps summarised in this announcement, then Octo has the right to extend the exclusivity period for a further 28 days in return for the payment of a commitment fee of A$50,000 (which is refundable in certain circumstances), which would be deductible from the first tranche of the consideration.
It is noted that the Heads of Terms are not binding in relation to the terms of the Proposed Disposal, as described above, and that the Proposed Disposal will be subject, among other things, to due diligence by Octo and the execution of a legally binding agreement governing the transaction. There can therefore be no certainty that final binding terms will be agreed, nor as to the timing or final terms, value or conditions of the Proposed Disposal or the final position in respect of the proposed pre- completion restructuring of MGA.
As previously announced, the Proposed Disposal may be considered to be a fundamental change of business pursuant to Rule 15 of the AIM Rules for Companies. If applicable, this would require, amongst other items, the Proposed Disposal to be conditional on the consent of shareholders being given in a general meeting, the publication of a shareholder circular detailing the terms of the transaction and certain other disclosures as set out in the AIM Rules.
Proposed use of proceeds
Subject to its completion, ECR currently intends to use the net proceeds from the Proposed Disposal to advance the exploration and development of its Queensland and Victoria projects, as previously announced. In particular, the Board considers that the stronger balance sheet that the Company would have on completion of the Proposed Disposal will accelerate its ability to commercialise its core projects.
The board will also assess potential additional value-accretive opportunities for the Company.
The Board considers that the combination of the subscription that was announced in November 2024 and the Proposed Disposal proceeds would ensure that ECR would be fully funded for all of its currently planned activities for the medium-term future.
Next Steps
It is proposed that the parties’ legal advisers will now prepare the necessary definitive and binding agreement to effect the Proposed Disposal and, as described above, ECR will organise the pre- completion restructuring of MGA. Octo will conclude any remaining due diligence on MGA and its assets simultaneously with these workstreams.
Nick Tulloch, ECR’s Chairman, said: “These Heads of Terms represent a significant milestone in our strategy to unlock value from our Australian assets. As investors will know, this has been a complex process and it is a credit to the entire ECR team that we are now at this stage. Once completed, the Proposed Disposal will provide significant cash proceeds to strengthen our balance sheet and the simultaneous restructuring has been designed to preserve the core value within ECR without interruption to our ongoing key operations at Creswick and Tambo. Once the Proposed Disposal has been completed, ECR will be fully funded for all of its currently planned activities for the medium-term future.”
Financial information relating to the Proposed Disposal
Set out in the Appendix to this announcement is a summary of the audited Statement of the Financial Position and the Statement of Profit or Loss and Other Comprehensive Income for MGA for the year ended 30 September 2023, being the date to which ECR’s last audit was prepared.
It is noted that this historic financial information does not reflect the proposed pre-completion restructuring of MGA described above. In particular, shareholders should note the following key adjustments to MGA which are anticipated to occur in relation to its proposed pre-completion restructuring:
- All cash balances within MGA at the point immediately prior to completion will be retained by ECR (MGA’s cash balances as at 20 December 2024 are approximately A$10,000)
- MGA’s assets, and particularly the fixed assets and Capitalised Development Expenditure, will be apportioned between the Bailieston, Creswick and Tambo projects, with the Creswick and Tambo projects (comprising the majority of MGA’s assets) being retained by ECR
- Investments by MGA in ECR’s other subsidiaries, Mercator Gold Holding and Lux Exploration, will be written off
- The inter-group loan from ECR to MGA of A$99 million will similarly be written off
- All other liabilities of MGA, save for those in respect of the remaining Bailieston project tenements, will be settled in full
- The majority of the expenses in the Statement of Profit or Loss and Other Comprehensive
Income relate to the Creswick and Tambo projects, as well as the ongoing running of ECR’s administrative functions in Australia and so will continue to be borne by ECR following completion of the Proposed Disposal
Appendix – extracted audited historic financial information on MGA
Mercator Gold Australia Pty Ltd
Statement of Financial Position
For the Year ended 30 September 2023
|
30 September 2023 |
|
| A$ | |
| Current Assets | |
| Cash and cash equivalents | 132,874 |
| Other receivables | 18,903 |
| Inventory | – |
| Total Current Asset | 151,777 |
| Fixed Assets | |
| Fixed Assets | 753,585 |
| Accumulated depreciation | (215,609) |
| Total Fixed Assets | 537,976 |
|
Other Non-Current Assets |
|
| Acquisition of Mining Properties | 50,000 |
| Capitalised Development Expenditure | 7,319,104 |
| Investment in Mercator Gold Holding | 849,800 |
| Investment in Lux Exploration | 636,200 |
| 8,855,104 | |
| Total Assets | 9,544,857 |
| Current Liabilities | |
| Trade and other payables | 61,368 |
| Loan from ECR Minerals Plc | 99,036,939 |
| Total current liabilities | 99,098,307 |
| Non-current Liabilities | |
| Trade and other payables | 2,434,859 |
| 2,434,859 | |
| Total Liabilities | 101,553,166 |
| Net Liabilities | (91,988,309) |
| Equity | |
| Issued capital | 391 |
| Accumulated losses | (91,988,700) |
| Total Equity | (91,988,309) |
Mercator Gold Australia Pty Ltd
Statement of Profit or Loss and Other Comprehensive Income For the Year ended 30 September 2023
|
30 September 2023 |
|
| A$ | |
| Revenue | – |
| – | |
| Income | |
| Interest Income | 3,591 |
| Other income | 4,818 |
| Gross profit | 8,408 |
| Expenses | |
| Accounting and audit fees | 790 |
| Consultants | 99,916 |
| Bank charges | 913 |
| Depreciation expense | 225,817 |
| Insurance | 13,716 |
| Legal fees | 7,652 |
| Development expenses | 1,121,517 |
| Director’s fee | 20,000 |
| General expenses | 24,623 |
| Office expenses | 6,174 |
| Management Fees | 270,620 |
| Rent | 42,317 |
| Travel | 17,240 |
| Employment expenses | 37,153 |
| Loss on investment | – |
| Loss on disposal of asset | 81,734 |
| Total Expenses | 1,970,182 |
| Less: Development expenses Capitalised | (1,121,517) |
| Profit/(Loss) before income tax | (840,256) |
| Income tax expense | – |
| Profit/(Loss) for the year | (840,256) |
FOR FURTHER INFORMATION, PLEASE CONTACT:
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ECR Minerals Plc |
Tel: +44 (0) 1738 317 693 |
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|
Nick Tulloch, Chairman Andrew Scott, Director |
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|
Email: info@ecrminerals.com |
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|
Website: www.ecrminerals.com |
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Allenby Capital Limited |
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Tel: +44 (0) 3328 5656 |
|
|
Nominated Adviser Nick Naylor / Alex Brearley / Vivek Bhardwaj |
|
||
|
Axis Capital Markets Limited |
Tel: +44 (0) 203 026 0320 |
||
|
Broker |
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|
Ben Tadd / Lewis Jones |
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|
|
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SI Capital Ltd |
Tel: +44 (0) 1483 413500 |
||
|
Broker |
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Nick Emerson
|
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|
Brand Communications |
Tel: +44 (0) 7976 431608 |
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|
Public & Investor Relations |
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|
Alan Green |
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ABOUT ECR MINERALS PLC
ECR Minerals is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) has 100% ownership of the Bailieston and Creswick gold projects in central Victoria, Australia, has six licence applications outstanding which includes one licence application lodged in eastern Victoria (Tambo gold project).
ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd (“LUX”) which has three approved exploration permits covering 946 km2 over a relatively unexplored area in Lolworth Range, Queensland, Australia. The Company has also submitted a license application at Kondaparinga which is approximately 120km2 in area and located within the Hodgkinson Gold Province, 80km NW of Mareeba, North Queensland.
Following the sale of the Avoca, Moormbool and Timor gold projects in Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX) and the subsequent spin-out of the Avoca and Timor projects to Leviathan Gold Ltd (TSX-V: LVX), MGA has the right to receive up to A$2 million in payments subject to future resource estimation or production from projects sold to Fosterville South Exploration Limited.
MGA also has approximately A$75 million of unutilised tax losses incurred during previous operations.
Bailieston Project – Background
The Bailieston project targets epizonal gold and antimony mineralisation and lies within the Melbourne zone, located approximately 150km north of the Victorian state capital, Melbourne. The project is located geologically within the orogenic Lachlan Fold Belt (LFB), and is subdivided into geological zones based on distinct geological and metallurgical characteristics.
The project is characterised by gold and antimony mineralisation, and across the zone ECR Minerals holds a total of 142 km2 of exploration ground across four tenements (EL5433, EL006911, EL006912 and EL007296). These tenements enjoy good road access, and contain the historical prospects known as HR3 (Byron-Maori), HR4 (Cherry Tree), Blue Moon, Black Cat and Pontings, all of which have a history of exploration and some modest production. Updates relating to the Bailieston project were recently announced on 10 September 2024 and 3 July 2024 and further information on the Bailieston project can be found on the Company’s website: https://ecrminerals.com
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ECR Minerals #ECR – Operational Update – Tambo Gold Project, Victoria
ECR Minerals plc (LON: ECR), the exploration and development company focused on gold in Australia, is pleased to provide an update on its recently concluded diamond drilling campaign at the Duke of Cornwall Prospect within the Tambo Gold Project in Victoria, Australia (the “Tambo Gold Project”), including the results from Drill Holes DOCD001 and DOCD005.
Summary Of Drilling Results
• Drill Hole DOCD005 returned 1 metre @ 0.72 g/t Au from 108 metres
• Drill Hole DOCD001 returned no significant intercepts
• Best results from the overall programme include 0.4 metres @ 8.51 g/t Au from Drill Hole
DOCD002 and 0.15 metres at 10.6 g/t Au from Drill Hole DOC004
Tambo Gold Project
The diamond drilling campaign consisted of five diamond drill holes (DOCD001 – DOCD005) over a total depth of 428 metres. The campaign’s objective was to investigate the structural controls on gold mineralisation and associated geochemical haloes, particularly beneath and adjacent to the historical Duke of Cornwall mine workings.
Drilling Program Overview (see figure 1 below)
DOCD005 – Northern Extension
DOCD005 was drilled to a total depth of 117.8 metres and intersected two quartz veins at the northern extremities of the Duke of Cornwall Lode system, approximately 70 metres below the historical mine workings. Mineralisation was encountered at one interval (1 metre @ 0.72 g/t Au from 108 metres), with no significant gold intercepts reported from the other intervals tested. Geochemical analysis suggests that the DOCD005 mineralisation area lies outside the primary gold-bearing system which indicates a secondary control plunging the mineralisation along strike. The results are considered to indicate the potential for mineralisation in untested areas which are now better understood from this drilling campaign.
DOCD002 – High-Grade Opportunity
As announced on 20 November 2024, Drill hole DOCD002 was drilled to a total depth of 84.35 metres at the southern end of the Lode and returned a significant best intercept of 0.4 metres @ 8.51 g/t Au, indicating the potential for high-grade zones at depth. This area remains a high-priority target for follow-up drilling to test for continuity and extensions at depth.
DOCD001
No significant gold intercepts have been reported from the intervals tested from drill hole DOCD001 which was drilled to a total depth of 69.7 metres.
Structural Insights
The campaign provided valuable structural data, confirming the association of gold mineralisation with quartz veining adjacent to the main shear zone. A secondary control, possibly plunging concentrations of mineralisation along strike, is starting to be evidenced by the drilling and will be studied in more detail. The Duke of Cornwall Lode system remains largely untested, with approximately 80% of its strike length unexplored.
Programme Summary
The drilling campaign successfully demonstrated that mineralisation continues at depth below the old mine workings in key areas and considerably enhanced the Company’s geological understanding of the prospect. The structural insights gained will inform the design of future campaigns aimed at targeting high-grade zones and testing the unexamined central portions of the Lode. Even holes that encountered no gold mineralisation, DOCD001 and DOCD003, are considered to have added valuable insights, including in the case of DOCD003, delineating the location of the shear zone and controls on mineralisation. It is noted that at surface the rock chip channel sample from the Eastern Cut (0.25 metres @ c. 25 g/t Au as illustrated in Figure 1 in the announcement on 20 November 2024) plots only 10 metres east of the trace of DOCD003, showing the likely secondary controls that have been partially discovered by this first pass drilling programme.
Next Steps
ECR intends to design a follow-up drilling campaign focusing on deeper exploration beneath the high- grade zones identified in DOCD002 and DOCD004 as well as incorporating the structural and geochemical insights gained to explore central portions of the Lode, which remain prospective for gold mineralisation. The Company remains committed to advancing its exploration assets at the Tambo Gold Project while continuing to evaluate potential corporate opportunities. Further updates will be provided in due course.
Lolworth Project update
A number of additional rock chip samples from Lolworth have been sent for laboratory analysis, with the results expected in January 2025. The results from geochemical analysis on samples taken from the Oaky Creek prospect in the central-north area of the Lolworth Project will be announced in due course once received.
The Directors are optimistic regarding the potential of the Lolworth Project and, as announced on 25 November 2024, part of the net proceeds of the Company’s recent fundraise are intended to be used to re-start the field campaign in Lolworth in the second quarter of 2025, drawing on the Company’s partnership with the Geological Survey of Queensland to further investigate the critical minerals potential at the project. On 29 November 2024, the Company announced a collaboration with James Cook University in relation to analysing and interpreting the mineral data from the Lolworth Project area to enhance the understanding of its rare earth elements potential.
Update on potential sale of non-core assets
Further to the Company’s announcement on 26 November 2024 and previously, discussions with the potential buyer of ECR’s subsidiary, Mercator Gold Australia Pty Ltd (“MGA”), in order to effect a sale of the Company’s A$75 million of tax losses continue to progress and the Company expects to reach an agreement in principle on the proposed transaction structure in the coming weeks. Thereafter, it is anticipated that the parties’ respective legal advisers will prepare the formal sale documentation with completion expected within the exclusivity timeframe to 31 January 2025, as previously announced.
As previously announced, the proposed transaction is likely to necessitate a restructuring of MGA as such that it comprises only non-core assets. There can be no certainty that final binding terms will be agreed, nor as to the timings or final terms, structure or quantum of the potential disposal. Depending on the final terms that are agreed for any transaction to realise the tax losses, as well as the structure of the transaction, it is possible, but not guaranteed, that the potential disposal of MGA may be a fundamental change of business pursuant to Rule 15 of the AIM Rules for Companies. If applicable, this would require, amongst other items, the transaction to be conditional on the consent of shareholders being given in a general meeting; a shareholders circular detailing the terms of the transaction and certain other disclosures as set out in the AIM Rules. Further updates on the way forward will be provided in due course as matters are progressed.
Adam Jones, ECR’s Chief Geologist, said: “The initial drilling at Duke of Cornwall has provided valuable structural insights, confirming that mineralisation extends 70 metres below the old workings, though outside the main Lode. The standout result from DOCD002, with 0.4 metres @ 8.51 g/t Au, highlights the potential for high-grade zones at depth, making it a key target for follow-up drilling. Coupled with the promising earlier rock chip results, the Tambo Gold Project demonstrates the significant potential within ECR’s portfolio. The structural and geochemical data from this campaign will play a vital role in advancing our exploration strategy, and we look forward to updating shareholders as we progress.”
Review of Announcement by Qualified Person
This announcement has been reviewed by Adam Jones, Chief Geologist at ECR Minerals Plc. Adam Jones is a professional geologist and is a Member of the Australian Institute of Geoscientists (MAIG). He is a qualified person as that term is defined by the AIM Note for Mining, Oil and Gas Companies.
All sampling and drilling were conducted in accordance with industry best practice, and all assays were performed by an independent, accredited laboratory.
Figure 1: Plan View of Drilling Locations At Duke Of Cornwall Lode
FOR FURTHER INFORMATION, PLEASE CONTACT:
|
ECR Minerals Plc |
Tel: +44 (0) 1738 317 693 |
||
|
Nick Tulloch, Chairman Andrew Scott, Director |
|||
|
Email: info@ecrminerals.com |
|||
|
Website: www.ecrminerals.com |
|||
|
Allenby Capital Limited |
|
Tel: +44 (0) 3328 5656 |
|
|
Nominated Adviser Nick Naylor / Alex Brearley / Vivek Bhardwaj |
|
||
|
Axis Capital Markets Limited |
Tel: +44 (0) 203 026 0320 |
||
|
Broker |
|||
|
Ben Tadd / Lewis Jones |
|||
|
|
|||
|
SI Capital Ltd |
Tel: +44 (0) 1483 413500 |
||
|
Broker |
|||
|
Nick Emerson
|
|||
|
Brand Communications |
Tel: +44 (0) 7976 431608 |
||
|
Public & Investor Relations |
|||
|
Alan Green |
|||
Glossary
Au: Gold
g/t: Grammes per Tonne (Metric)
km: Kilometres (Metric)
km2: Kilometre squared (Metric)
Lode: A deposit of metalliferous ore that fills a fissure
ABOUT ECR MINERALS PLC
ECR Minerals is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) has 100% ownership of the Bailieston and Creswick gold projects in central Victoria, Australia, has six licence applications outstanding which includes one licence application lodged in eastern Victoria (Tambo gold project).
ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd (“LUX”) which has three approved exploration permits covering 946 km2 over a relatively unexplored area in Lolworth Range, Queensland, Australia. The Company has also submitted a license application at Kondaparinga which is approximately 120km2 in area and located within the Hodgkinson Gold Province, 80km NW of Mareeba, North Queensland.
Following the sale of the Avoca, Moormbool and Timor gold projects in Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX) and the subsequent spin-out of the Avoca and Timor projects to Leviathan Gold Ltd (TSX-V: LVX), MGA has the right to receive up to A$2 million in payments subject to future resource estimation or production from projects sold to Fosterville South Exploration Limited.
MGA also has approximately A$75 million of unutilised tax losses incurred during previous operations.