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ECR Minerals plc is pleased to announce its audited financial statements for the year ended 30 September 2019. The information presented below has been extracted from the Company’s Annual Report and Accounts 2019.

Copies of the Annual Report and Accounts 2019 will be posted to shareholders today and will be available on the Company’s website (www.ecrminerals.com). The text of the notice convening the Company’s annual general meeting, which will be posted to shareholders shortly, is provided below. The Company intends to holds its annual general meeting at 9am on 27 April 2020 at Chester House, 81-83 Fulham High Street, Fulham Green, London SW6 3JA. Following the recent Government restrictions placed on public gatherings as a result of COVID 19, the directors strongly urge all shareholders to vote by proxy, submitting such votes by no later than 9am on 23 April 2020.

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
SI Capital Ltd		Tel: +44 (0)1483 413 500
Broker
Nick Emerson

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 2019 for ECR Minerals plc (“ECR”, the “Company” or the “Parent Company”) and on a consolidated basis (the “Group”)

Chairman’s Statement
ECR’s focus is firmly on gold exploration in Australia, in both Victoria in the east of the country, and Western Australia. In Australia, ECR, through its wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”), benefits from being part of one of the most active and successful gold mining and exploration industries in the world. This is all the more exciting given that the gold price is currently trading at levels not seen since 2013, despite recent falls and expected ongoing increased volatility associated with the impact of the COVID-19 pandemic on financial markets.

Currently, the suspension of many international travel routes as well as domestic movement restrictions within the UK and Australia has affected the Group’s operations, but due to the nature of present activities, the impact has been minimal. In the medium term, we expect to be able to resume normal operations as restrictions are lifted. In the meantime, the Board will be taking measures to conserve cash where possible. Our thoughts go out to all those more severely affected by the pandemic.

During the financial year ended 30 September 2019 and since the year-end, MGA has continued to develop its business through both exploration work and by rationalising its portfolio of projects. In the latter respect, the Company completed the sale of its Argentine subsidiary Ochre Mining SA (“Ochre”) in February 2020 and retains an NSR royalty of up to 2% to a maximum of USD 2.7 million in respect of future production from the SLM gold project. Further information on this transaction is provided in the Chief Executive Officer’s Report, the Strategic Report, and in Note 21 to the financial statements.

In addition, post year-end, MGA has been granted five exploration licences which comprise the Windidda project in Western Australia, with a further four exploration licence applications withdrawn. Fieldwork has yet to begin at Windidda, but MGA has completed geophysical modelling and review of historical activity reports in order to better understand the potential prospectivity of the project.

In Victoria, where the company is now concentrating on two projects, Bailieston and Creswick, a significant amount of boots-on-the-ground activity took place during the financial year under review. This included drilling at Bailieston and Creswick, and completion of whole-of-bag testing on drill samples from Creswick in an effort to better assess the degree of the nugget effect which pertains to the deposit. The results of these programmes are discussed in the Chief Executive Officer’s report.

We look forward to further exciting developments in the year ahead.

Weili (David) Tang
Chairman

Chief Executive Officer’s Report
As in the previous financial year, the centre of the Group’s operations was Victoria, Australia, with significant exploration programmes completed in the Bailieston and Creswick gold project areas.

With the gold price having traded at record levels in Australian dollar terms earlier this calendar year, there is currently a very high level of interest in gold exploration and mining in Australia, including in Victoria and Western Australia, and a number of expressions of interest in ECR’s projects have been received from third parties.

Accordingly, as well as seeking to add value through our own exploration activities, the Company is actively considering potential transactions which may create value for the Company and its shareholders.

BAILIESTON GOLD PROJECT, VICTORIA
The westernmost part of the Bailieston project area is approximately 30km east of Kirkland Lake Gold’s renowned Fosterville gold mine, and abuts an exploration licence applied for by Newmont Exploration Pty Ltd, a subsidiary of Newmont, one of the world’s largest gold mining companies, to the north. MGA completed drilling at two prospects within the Bailieston project area in the first quarter of calendar year 2019.

Blue Moon Prospect, Bailieston
During the financial year and since the year-end, the principal focus of work in the Bailieston project area has been the Blue Moon prospect, where reverse circulation (RC) drilling by MGA returned an intercept of 2 metres at 17.87 g/t gold within a zone of 15 metres at 3.81 g/t gold from 51 metres in hole BBM007, and confirmed the prospect as a new gold discovery.

Twelve holes were drilled for a total of 1,718 metres, with other highlights including 3 metres at 3.88 g/t gold within a zone of 11 metres at 2.42 g/t gold from 169 metres in BBM006. The drilling results indicate that the host sandstone is thicker and the gold grades significantly higher on the westerly section, and further exploration will therefore seek to follow the system to the west, subject to agreeing access with landowners.

Black Cat Prospect, Bailieston
MGA completed a reconnaissance rotary air blast (RAB) drilling programme targeting numerous quartz reefs at the Black Cat prospect. A total of 18 shallow holes were completed for 485 metres of drilling. The Black Cat prospect is among the high priority targets identified by a geophysical interpretation and targeting study completed for MGA in late 2017. The prospect had never been drilled before.

Significant intersections from the RAB programme included 7 metres at 1.76 g/t gold from 35 metres in hole BCD11, 3 metres at 4.26 g/t gold from 16 metres in BCD18, and 1 metre at 6.3 g/t gold from 18 metres in BCD03. These are encouraging results, and the potential for supergene enriched mineralisation at the water table interface and for deeper primary mineralisation could be investigated by further drilling.

CRESWICK GOLD PROJECT, VICTORIA
In February 2019 MGA completed a total of 1,687 metres of reverse circulation (RC) drilling in 17 holes at Creswick, targeting multiple quartz vein orientations within the Dimocks Main Shale (“DMS”). The initial results of RC drilling at Creswick by MGA were announced on 8 May 2019.

Drilling identified more extensive quartz than anticipated, in a zone exceeding 60 metres in width (more than twice the 25 metres expected), with quartz identified in more than one third of the 1,687 metres drilled. Gold mineralisation was identified in the majority of holes, with grades in nine holes ranging from 0.6 g/t gold to 44.63 g/t gold (1.44 oz/t).

MGA’s geologists hypothesised an extreme nuggety distribution of gold based on the results of drilling and other observations, including capturing a small 0.27 g nugget in gravity tests conducted on a single sample bag.

In order to assess the significance of this effect, MGA’s consultants devised a testing program using gravity and electrostatic concentration (GEC) on full bags of RC drill cuttings, which would constitute the whole sample recovered from each metre of drilling (less sub-samples obtained at the time of drilling via a splitter mounted on the drill rig).

In nuggety gold systems, increasing sample size increases the chance of nuggets being captured in the sample, and thus being appreciated as part of the gold endowment of the system.

Typically, only a small sub-sample of the drill cuttings generated by each metre of RC drilling is analysed (assayed) for gold. In the case of MGA’s 2019 RC drilling at Creswick, two sub-samples of approximately 2 kilograms were obtained from the rig-mounted splitter, out of up to approximately 30 kilograms of cuttings per metre. The first sub-sample was sent for assay by the Leachwell method at Gekko Systems, an independent laboratory in Victoria, and the results were announced on 8 May 2019.

Using the GEC method on the full bags, MGA was able to subject larger, more representative sample sizes to analysis. A total of 129 ‘full-bag’ samples were analysed using the GEC process. In parallel, 74 duplicate sub-samples obtained at the time of drilling via the rig-mounted splitter were analysed by the Leachwell method at Gekko Systems. This was done to enable comparison with the assay results (obtained by the same method) for the first set of sub-samples, to assist in classifying the nugget effect as extreme, major or minor.

Grade variability due to the nugget effect was demonstrated by the results of the exercise, but some consistency between results was also seen, and indicates the nugget effect may be less severe than initially thought.

Overall, MGA’s work at Creswick has confirmed the presence of nuggety gold mineralisation in the Dimocks Main Shale (DMS) at Creswick, some of which is very high grade.

MGA’s tenement position at Creswick covers approximately 7 kilometres of the DMS trend, and the 2019 drilling only tested approximately 300 metres of this. ECR therefore believes there is significant potential upside in the project.

More recently, MGA commissioned Dr Dennis Arne to carry out an alteration study of cuttings (chips) generated by the 2019 RC drilling at the Creswick project in 2019. Dr Arne is a preeminent consulting geochemist in Victoria, whose experience includes previous and on-going reviews of geochemistry at the highly successful Fosterville gold mine in Central Victoria owned by Kirkland Lake Gold.

Dr Arne has been working with fresh (unoxidised) RC chips from Creswick to determine whether the observed quartz veining is associated with the presence of ferroan carbonate. Ferroan carbonate is intimately associated with all Central Victorian gold deposits that have not been contact metamorphosed.

The amount of ferroan carbonate generally increases as mineralised structures are approached. It can therefore be used for vectoring within alteration systems associated with gold mineralisation, particularly when integrated with geochemical data, and can be used to distinguish between mineralised and non-mineralised quartz veins.

The results of the study were announced on 27 March 2020, and showed good indications of hydrothermal fluid flow related to gold mineralisation in a number of drill holes at Creswick. Importantly, the variation in the results, with some areas ‘lighting up’ and others not, is potentially useful for identifying gold-bearing shoots.

WINDIDDA GOLD PROJECT, WESTERN AUSTRALIA
In late 2018, MGA applied for a total of nine exploration licences in Western Australia to comprise the Windidda project, of which five have now been granted. The remaining four licence applications have been withdrawn, in light of objections to the expedited grant procedure from native title parties and the findings of preliminary desktop work to assess the prospectivity of the licence areas. This work suggests that the southern parts of the project are potentially prospective for komatiite hosted nickel-copper-PGE (platinum group element) mineralisation, as well as orogenic gold.

DANGLAY GOLD PROJECT, PHILIPPINES
There were no significant developments with regard to the Danglay project during the financial year under review, nor have there been any since the year-end. Further information regarding the Company’s interest in the project is provided in the Strategic Report and Note 10 to the financial statements.

DISPOSAL OF OCHRE MINING SA AND SLM GOLD PROJECT
Subsequent to the year-end, the Company sold its wholly owned Argentine subsidiary Ochre Mining SA, which holds the SLM gold project in La Rioja, Argentina. The sale allows ECR to focus on its core gold exploration activities in Australia.

The purchaser, Hanaq Argentina SA (“Hanaq”), is a Chinese-owned company engaged in lithium, base and precious metals exploration in Northwest Argentina including Salta, Jujuy and La Rioja, with a highly experienced management team.

ECR retains an NSR royalty of up to 2% to a maximum of USD 2.7 million in respect of future production from the SLM gold project. The Directors believe that Hanaq has the operational capabilities and access to Chinese investment capital necessary to put the SLM project into production, subject to the usual prerequisites such as further exploration and feasibility studies being successfully completed (if deemed necessary by Hanaq) and to the necessary permits for production being obtained.

The founder and CEO of Hanaq Group, of which Hanaq Argentina SA is part, is Mr Xiaohuan (Juan) Tang, who has a substantive track record in Latin America, including responsibility for the successful permitting of the Pampa de Pongo iron ore project in Peru in his former capacity as General Manager of Jinzhao Mining Peru. Pampa de Pongo is one of the largest iron ore deposits in Latin America. Mr Tang has degrees from Tsinghua University in China, and Imperial College, Cambridge University and Oxford University in the UK.

FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2019
For the year to 30 September 2019 the Group recorded a total comprehensive loss of £762,586, a small increase compared with £721,460 for the year to 30 September 2018.

The largest contributor to the total comprehensive loss 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. Significant components include consultancy and professional fees, public relations and promotional activities, rent and travel expenses.

The Group’s net assets at 30 September 2019 were £3,640,604, in comparison with £3,651,545 at 30 September 2018. The decrease is due to increased exploration assets as a result of the capitalisation of exploration expenditure during the year being offset by a reduction in cash and cash equivalents.

The financial statements of the Company’s Argentine subsidiary Ochre Mining SA (which was sold subsequent to the year-end but remained a part of the group at 30 September 2019) were prepared in accordance with IAS 29 “Financial Reporting in Hyperinflationary Economies”. More information is provided in Note 2 to the Group financial statements.

During the year, MGA received a significant cash refund under the Australian government’s R&D Tax Incentive scheme. MGA received a cash refund of qualifying research and development (R&D) expenditure of A$318,972 (approximately £171,000) in relation to MGA’s financial year ended 30 June 2018, and post-period received a further refund of A$555,212 (approximately £295,515) in relation to the fifteen month period ended 30 September 2019. In the second period, MGA’s financial year-end changed to 30 September from 30 June in order to align it with the rest of the Group.

The qualifying R&D activities pertain to research into turbidite-hosted gold deposits within MGA’s exploration licences in Victoria. These two refunds have had a significant positive effect on the Group’s cash position.

Craig Brown
Chief Executive Officer

Independent Auditor’s Report
For the year ended 30 September 2019

Independent Auditor’s Report to the Members of ECR Minerals Plc

Opinion
We have audited the financial statements of ECR Minerals Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 September 2019 which comprise the Consolidated Income Statement, 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.

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 2019 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.

Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that the Group’s ability to meet contracted and committed expenditure for the 12 months from the date of approval of the financial statements is reliant on further fundraising and additional cash inflows from the planned sale of assets. The total comprehensive loss for the Group during 2019 was £757,210, with cash outflows of £507,250, and a year-end cash balance in the Group of £268,517. The Group will require further funding within a period of 12 months from the date of approval of the 2019 financial statements in order to avoid a cash deficit, which is not yet committed. In addition, the potential impact of COVID-19, whilst not yet fully understood, will likely have an impact on the operations of the business and the ability to raise additional equity funds.

As stated in note 2, these events or conditions, along with the other matters as set forth in the Chairman’s statement in relation to COVID-19, indicate that a material uncertainty exists that may cast significant doubt on the Group’s and Company’s ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

Our application of materiality

Group materiality 2019	Group materiality 2018	Basis for materiality
£60,000	£50,000	2% gross assets (2018: gross assets and loss before tax)

Our calculated level of materiality has increased in comparison to the previous year. The reason for this is the increase in gross assets. We believe assets to be the main driver of the business as the Group is still in the exploration stage and therefore no revenues are currently being generated. From a group perspective the key benchmark is gross assets, given that current and potential investors will be most interested in the recoverability of the exploration and evaluation assets.

Whilst materiality for the financial statements as a whole was set at £60,000, each significant component of the Group was audited to an overall materiality ranging between £20,000 – £42,000 with performance materiality set at 70%. We applied the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.

We agreed with the audit committee that we would report to the committee all audit differences identified during the course of our audit in excess of £3,000 (2018: £2,500). There were no misstatements identified during the course of our audit that were individually, or in aggregate, considered to be material.

An overview of the scope of our audit
In designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas requiring the directors to make subjective judgements, for example in respect of significant accounting estimates including the carrying value of assets and the consideration of future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

An audit was performed on the financial information of the group’s operating entities which for the year ended 31 December 2019 were located in the United Kingdom, Australia and Argentina. The group also has operations in the Philippines, for which a separate entity does not exist. The audit work on each significant component was performed by us as Group auditor to component materiality.

The key balance in the overseas entities, Mercator Gold Australia Pty Ltd and Ochre Mining SA, are the exploration and evaluation intangible assets. The significant risk and key audit matter is in relation to the valuation of these assets, to confirm that no impairment is required in line with IFRS 6.

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.

In addition to the matter described in the material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. In relation to Going Concern, the group and parent company are not revenue generating and are reliant on fundraises for cash inflows. Other sources of funds comprise R&D claims, the exercise of share warrants and options, and potential sale of assets.

Key Audit Matter

How the scope of our audit responded to the key audit matter

Recoverability of intangible assets – exploration and development costs (refer note 10) The group as at 30 September 2019 had ongoing early stage exploration projects in Philippines, Argentina and Australia. There is a risk that the expenditure is not correctly capitalised in accordance with IFRS 6. There is also a risk that the capitalised exploration costs are not recoverable and should be impaired. The carrying value of intangible exploration and evaluation assets as at 30 September 2019, which is tested annually for impairment, is £3,295,996. Specifically, there is a dispute over the Danglay Project (Philippines) where ECR believe they have fulfilled the criteria of the Earn-in and JV Agreement such that ECR has earned a 25% interest. Relevant disclosures in the financial statements are made in Note 2 surrounding critical accounting judgements, and in Note 10 for Intangible assets.

Our work in this area included: ▪ Sample testing of exploration and evaluation expenditure to assess their eligibility for capitalisation under IFRS 6 by corroborating to the original source documentation. ▪ Inspection of the current exploration licences and ensure that they remain valid and that the Group has good title. ▪ Review of correspondence (where applicable) with licensing authorities to ensure compliance and assess the risk of non-renewal. Assess the results and progress of the projects and whether they indicate the existence of commercially viable projects. ▪ Review and challenge of management’s documented consideration of impairment by individual project. Evaluate the key underlying assumptions. ▪ Establishing the intention of the Board to undertake future exploration work. ▪ Review of any internal / external resource estimates produced during the year. ▪ Discussion of status of all projects with management. As disclosed in 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 £1,180,666 as at 30 September 2019.

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 receivedfrom 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 Statement of Directors’ Responsibilities, 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/ auditors responsibilities. This description forms part of our auditor’s report.

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

David Thompson (Senior statutory auditor)
For and on behalf of PKF Littlejohn LLP
Statutory auditor
30 March 2020

Consolidated Income Statement
For the year ended 30 September 2019 ECR Minerals plc company no. 5079979

 

			Year ended		Year ended
			30 September 2019		30 September 2018
	Note		£		£
Continuing operations Other administrative expenses			(833,203)		(544,521)
Currency exchange differences			(6,051)		(6,912)
Gain from hyperinflation adjustment			113,310		–
Total administrative expenses			(725,945)		(551,433)
Operating loss	3		(725,945)		(551,433)
Loss on disposal of investment					–
Other financial assets – fair value movement	9		(8,112)		(971)
Aborted transaction option fee			(25,000)		–
			(759,056)		(552,404)
Financial income	7		1,846		1,386
Financial expense					1,000
Finance income and costs			1,846		2,386
Loss for the year before taxation Income tax	5		(757,210)		(550,018) –
Loss for the year from continuing operations			(757,210)		(550,018)
Loss for the year – all attributable to owners of the parent			(757,210)		(550,018)
Earnings per share – basic and diluted On continuing operations	4		(0.18)p		(0.21)p

Consolidated Statement of Comprehensive Income
For the year ended 30 September 2019 ECR Minerals plc company no. 5079979

		Year ended		Year ended
		30 September 2019		30 September 2018
		£		£
Loss for the year		(757,210)		(550,018)
Items that may be reclassified subsequently to profit or loss Loss on exchange translation		(5,375)		(171,442)
Other comprehensive loss for the year		(5,375)		(171,442)
Total comprehensive loss for the year		(762,586)		(721,460)
Attributable to: – Owners of the parent		(762,586)		(721,460)

Consolidated & Company Statement of Financial Position
At 30 September 2019 ECR Minerals plc company no. 5079979

			Group				Company
			30 September		30 September		30 September		30 September
	Note		2019 £ £		2018 £		2019 £		2018 £
Assets
Non-current assets
Property, plant and equipment	8		1,041		3,033		548		1,764
Investments in subsidiaries	9		–		–		852,728		852,728
Intangible assets	10		3,295,996		2,859,474		2,272,553		2,256,309
Other receivables	11		–		–		983,864		538,494
			3,297,038		2,862,507		4,109,694		3,649,295
Current assets
Trade and other receivables	11		108,653		79,413		616,190		471,670
Financial assets at fair value through profit or loss	9		13,187		21,299		13,187		21,299
Cash and cash equivalents	12		268,517		781,142		227,508		749,025
			390,357		881,854		856,885		1,241,994
Total assets			3,687,395		3,744,361		4,966,578		4,891,289
Current liabilities
Trade and other payables	14		46,791		92,816		22,990		75,662
			46,791		92,816		22,990		75,662
Total liabilities			46,791		92,816		22,990		75,662
Net assets			3,640,604		3,651,545		4,943,589		4,815,627
Equity attributable to owners of the parent
Share capital	13		11,284,845		11,283,756		11,284,845		11,283,756
Share premium	13		45,391,202		44,460,171		45,391,202		44,460,171
Exchange reserve			(394,876)		(389,501)		–		–
Other reserves			742,698		1,381,998		742,698		1,381,998
Retained losses			(53,383,265)		(53,084,879)		(52,475,157)		(52,310,298)
Total equity			3,640,604		3,651,545		4,943,589		4,815,627

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 £623,683 (2018: £373,149 loss).

The financial statements were approved and authorised for issue by the Directors on 30 March 2020 and were signed on its behalf by:

Weili (David) Tang
Non–Executive Chairman

Craig Brown
Director & Chief Executive Officer

Consolidated Statement of Changes in Equity
For the year ended 30 September 2019 ECR Minerals plc company no. 5079979

Consolidated Statement of Changes in Equity
For the year ended 30 September 2019
ECR Minerals plc company no. 5079979
	Share capital	Share premium	Exchange reserve	Other reserves	Retained reserves
	(Note 13)	(Note 13)				Total
	£	£	£	£	£	£
Balance at 30 September 2017	11,282,812	43,823,335	(218,059)	1,381,998	(52,534,860)	3,735,226
Loss for the year	–	–	–	–	(550,018)	(550,018)
Gain on exchange translation	–	–	(171,442)	–	–	(171,442)
Total comprehensive expense	–	–	(171,442)	–	(550,018)	(721,460)
Shares issued	929	649,071	–	–	–	650,000
Shares issue costs	–	(27,220)	–	–	–	(27,220)
Share based payments	–	–	–	–	–	–
Warrants issued in lieu of finance cost	–	–	–	–	–	–
Shares issued in payment of creditors	15	14,985	–	–	–	15,000
Total transactions with owners, recognised directly in equity	944	636,836	–	–	–	637,780
Balance at 30 September 2018	11,283,756	44,460,171	(389,501)	1,381,998	(53,084,878)	3,651,546
Loss for the year					(757,210)	(757,210)
Loss on exchange translation			(5,375)			(5,375)
Total comprehensive expense	–	–	(5,375)	–	(757,210)	(762,586)
Shares issued	1,039	737,745				738,784
Shares issue costs		(38,040)				(38,040)
Share based payments		180,476		(639,300)	458,824	–
Warrants issued as placing costs						–
Share issued in payment of creditors	50	50,850				50,900
Total transactions with owners, recognised directly in equity	1,089	931,031	–	(639,300)	458,824	751,644
Balance at 30 September 2019	11,284,845	45,391,202	(394,876)	742,698	(53,383,264)	3,640,604

Company Statement of Changes in Equity
For the year ended 30 September 2019 ECR Minerals plc company no. 5079979

		Share capital		Share premium		Other reserves		Retained reserves
		(Note 13)		(Note 13)						Total
		£		£		£		£		£
Balance at 30 September 2017		11,282,812		43,823,335		1,381,998		(51,937,148)		4,550,997
Loss for the year		–		–		–		(373,149)		(373,149)
Total comprehensive expense		–		–		–		(373,149)		(373,149)
Shares issued		929		649,071		–		–		650,000
Share issue costs		–		(27,220)		–		–		(27,220)
Shares issued in payment of creditors		15		14,985		–		–		15,000
Total transactions with owners, recognised directly in equity		944		636,836		–		–		637,780
Balance at 30 September 2018		11,283,756		44,460,171		1,381,998		(52,310,297)		4,815,628
Loss for the year								(623,683)		(623,683)
Total comprehensive expense		–		–		–		(623,683)		(623,683)
Shares issued		1,039		737,745						738,784
Share issue costs				(38,040)						(38,040)
Lapsed or expired share based payments				180,476		(639,300)		458,824		–
Shares issued in payment of creditors		50		50,850						50,900
Total transactions with owners, recognised directly in equity		1,089		931,031		(639,300)		458,824		751,644
Balance at 30 September 2019		11,284,845		45,391,202		742,698		(52,475,156)		4,943,589

Consolidated & Company Cash Flow Statement
For the year ended 30 September 2019 ECR Minerals plc company no. 5079979

			Group				Company
			Year ended 30 September		Year ended 30 September		Year ended 30 September		Year ended 30 September
	Note		2019 £		2018 £		2019 £		2018 £
Net cash used in operations	20		(773,318)		(563,850)		(761,915)		(547,730)
Investing activities
Increase in exploration assets	10		(436,522)		(302,794))		(16,244)		(75,998)
Investment in subsidiaries					–		–		(558)
Loan to subsidiary					–		(455,370)		(297,524)
Interest income			1,846		1,386		1,268		1,268
Net cash used in investing activities			(434,676)		(301,408)		(460,346)		(372,812)
Financing activities
Proceeds from issue of share capital (net of issue costs)			700,744		622,780		700,744		622,780
Net cash from financing activities			700,744		622,780		700,744		622,780
Net change in cash and cash equivalents			(507,250)		(242,478)		(521,517)		(297,762)
Cash and cash equivalents at beginning of the year			781,142		1,082,994		749,025		1,046,787
Effect of changes in foreign exchange rates			(5,375)		(59,374)		–		–
Cash and cash equivalents at end of the year	12		268,517		781,142		227,508		749,025
Non-cash transactions:

1. Settlement of creditors of £89,684 (2018: £15,000) with ordinary shares.

Notes to the Financial Statements
For the year ended 30 September 2019

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

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

2 Accounting policies

Overall considerations

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

Basis of preparation
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 14.

New accounting standards and interpretations
At the date of approval of these financial statements, certain new standards, amendments and interpretations have been published by the International Accounting Standards Board but are not as yet effective and have not been adopted early by the Group or Company. All relevant standards, amendments and interpretations will be adopted in the Group’s and Company’s accounting policies in the first period beginning on or after the effective date of the relevant pronouncement.

Standards that came into effect during the year

During the year the Group and Company have adopted the following standards and amendments:

• IFRS 9 Financial Instruments

The adoption of this standard and amendments did not have any impact on the financial position or performance of the Group or Company. The accounting policies surrounding financial instruments have been updated as appropriate in order to comply with the new standard. The key change for the group is in relation to ‘available for sale’ financial assets – this classification no longer exists under IFRS 9 and these assets are now recognised as financial assets at fair value through profit or loss. This has not resulted in any adjustments being recorded in the current year or in respect of previous years.

Standards issued but 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:

• IFRS 16 Leases (effective 1 January 2019)
• Annual Improvements to IFRS Standards 2015-2017 Cycle (effective 1 January 2019)

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

• Amendments to IFRS 3 Business Combinations (effective 1 January 2020)
• Amendments to IAS 1 and IAS 8 Definition of Material (effective 1 January 2020)

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

Hyperinflation

Application of IAS 29 in financial reporting of Argentine subsidiary

IAS 29 “Financial Reporting in Hyperinflationary Economies” requires that the financial statements of entities whose functional currency is that of a hyperinflationary economy to be adjusted for the effects pf changes in a suitable general price index and to be expressed in terms of the current unit of measurement at the closing date of the reporting period. Accordingly, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be computed in the non-monetary items.

In order to conclude on whether an economy is categorized as hyperinflationary under the terms of IAS 29, the Standard details a series of factors to be considered, including the existence of a cumulative inflation rate in three years that approximated or exceeds 100%. Considering that the downward trend in inflation in Argentina observed in the previous year has reversed and observing a significant increase in inflation during 2018, which exceeded the 100% three-year cumulative inflation rate, and that the rest of the indicators do not contradict the conclusion that Argentina should be considered a hyperinflation economy for accounting purposes, the Group considered that there was sufficient evidence under the terms of IAS 29 as from July 1, 2018, and, accordingly, applied IAS 29 as from that date in the financial reporting of its subsidiaries with the Argentine peso as functional currency.

According to this principle, the financial statements of an entity that reports in the currency of a hyperinflationary economy should be stated in terms of the measuring unit current on the date of the financial statements. All statement of financial position amounts that are not stated in terms of the measuring unit current on the date of financial statements must be restated by applying a general price index. All income statement components must be stated in terms of the measuring unit current on the date of the financial statements, applying the change in the general price index that occurred since the date when revenues and expenses were originally recognised in the financial statements.

The inflation adjustment on the initial balances was calculated by means of conversion factor derived from the Argentine price indexes published by the National Institute of Statistics.

The main procedure for the above-mentioned adjustment are as follows:

• Monetary assets and liabilities which are carried at amounts current at the balance sheet date are not restated because they are already expressed in terms of the monetary unit current at the balance sheet date.
• Non-monetary assets and liabilities which are not carried at amounts current at the balance sheet date, and components of shareholders’ equity are adjusted by applying the relevant conversion factors.
• All items in the income statement are restated by applying the relevant conversion factors.
• The effect of inflation on the Company’s net monetary position is included in the Consolidated income statement, in Finance costs, under the caption “Inflation adjustment results”.
• The ongoing application of the re-translation of comparative amounts to closing exchanges rates under IAS 21 and the hyperinflation adjustments required by IAS 29 will lead to a difference in addition to the difference arising on the adoption of hyperinflation accounting.

The comparative figures in these consolidated financial statements presented in a stable currency are not adjusted for subsequent changes in the price level or exchange rates. This resulted in an initial difference, arising on the adoption of hyperinflation accounting, between the closing equity of the previous year and the opening equity of the current year. The Company recognised this initial difference directly in the Translation reserve, in the Statement of changes in equity

Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and two of its subsidiaries made up to 30 September 2019. Subsidiary undertakings acquired during the period are recorded under the acquisition method of accounting and their results consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date such control ceases.

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

Going concern
It is the prime responsibility of the Board to ensure the Group and Company remains a going concern. At 30 September 2019, the Group had cash and cash equivalents of £268,517 and no borrowings. Subsequent to the year-end, the Company’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd received a significant cash refund under the Australian government’s R&D Tax Incentive scheme of AUD 555,212 (approximately £295,515). Once received, these funds were available for use anywhere within the Group.

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, based on the potential sale of certain assets for cash, and/or, if required, the potential to raise equity financing. Further details are included in Note 21 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 and Company will be able to continue in operational existence for the next 12 months and continue to adopt the going concern basis of accounting in preparing these Financial Statements.

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 continued good title to relevant assets being held (or, in the case of the Company’s interest in the Danglay gold project, to good title being secured), the discovery of economically recoverable reserves, the ability of the Group to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition thereof.

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

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

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

Leased assets
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 valueadjustments on available for sale financial assets (prior to adoption of IFRS 9 from 1 October 2018), as disclosed in the consolidated statement of comprehensive income.
• “Exchange reserve” includes the amounts described in more detailin the following note on foreign currency below.

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

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

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

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

Share–based payments
The Company awards share options to certain Company Directors and employees to acquire shares of the Company. Additionally, the Company has in previous years issued warrants to providers of 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

Financial assets
The Group’s financial assets comprise equity investments held as financial assets at fair value through profit or loss as required by IFRS 9, and financial assets at amortised cost, being cash and cash equivalents and receivables balances. Financial assets are assigned to the respective categories on initial recognition, based on the Group’s business model for managing financial assets, which determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Financial assets at amortised cost are non–derivative financial assets with fixed or determinable payments that are not quoted in an active market. These assets are initially measured at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment under the expected credit loss model.

The Group’s receivables fall into this category of financial instruments. Discounting is omitted where the effect of discounting is immaterial.

Equity investments are held as financial assets at fair value through profit or loss. These assets are initially recognised at fair value and subsequently carried in the financial statements at fair value, with net changes recognised in profit or loss.

Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:

• The rights to receive cash flows from the asset have expired

Or

• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to

pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets
The Group recognises an allowance for ECLs for all debt instruments not held at fair value through profit or loss.

The amount of the expected credit loss is measured as the difference between all contractual cash flows that are due in accordance with the contract and all the cash flows that are expected to be received (i.e. all cash shortfalls), discounted at the original effective interest rate (EIR).

For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date.

Financial liabilities
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables and are held at amortised cost. After initial recognition, trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process.

Derecognition
A financial liability is derecognised when the associated obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income.

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):

Capitalised exploration and evaluation costs consist of direct costs, licence payments and fixed salary/consultant costs, capitalised in accordance with IFRS 6 “Exploration for and Evaluation of Mineral Resources”. The Group and Company recognises expenditure in exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral assets. Exploration and evaluation assets are initially measured at cost. Exploration and evaluation costs are assessed for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. Any impairment is recognised directly in profit or loss.

3 Operating loss

				Year ended 30 September 2019		Year ended 30 September 2018
		The operating loss is stated after charging:		£		£
		Depreciation of property, plant and equipment		1,701		5,662
		Operating lease expenses		23,746		22,875
		Auditors’ remuneration – fees payable to the Company’s auditor for the audit of
		the parent company and consolidated financial statements		21,500		21,500
4		Earnings per share
		Basic and Diluted		Year ended 30 September 2019		Year ended 30 September 2018
		Weighted number of shares in issue during the year		423,047,928		263,542,617
				£		£
		Loss from continuing operations attributable to owners of the parent		(757,210)		(550,018)

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

Details of share options and warrants that could potentially dilute earnings per share in future periods is set out in Note 13.

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

the person who now holds the shares. If you have sold or transferred only part of your holding of ordinary shares in ECR Minerals PLC, you are advised to consult your stockbroker, bank or other agent through whom the sale or transfer was effected.

ECR MINERALS PLC
(the “Company”)
(Registered in England and Wales No 05079979)
NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the Annual General Meeting of the Company will be held at Chester House, 81-83 Fulham High Street, Fulham Green, London SW6 3JA on 27 April 2020 at 9.00 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 adoptthe annual accountsof the Company for the year ended30 September 2019,together with the reports of the directors and auditors thereon.

2 That Craig William Brown, a director retiringin accordance with article 79.1.2of the Company’s articles of association, be elected as a director of the Company.

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

4 To authorise the audit committeeto determine the remuneration of the auditorsof 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 £10,000 provided that this authority shall, unless renewed, varied or revoked by the Company, expire on 30 June 2021 or, if earlier, the date of the next annual general meeting of the Company, save that the Company may, before such expiry, make offers or agreements which would or might require equity securities to be allotted (or treasury shares to be sold) after the authority expires and the directors may allot equity securities (or sell treasury shares) in pursuance of any such offer or agreement as if the authority had not expired.

Special Resolutions

6 That, subject to the passing of Resolution 5, the directors be empowered to allot equity securities (as defined by section 560 of the CA 2006) pursuantto the authority conferred by Resolution 5 for cash,and/or sell treasuryshares for cash, as if section 561(1) of the CA 2006 did not apply to any such allotment, providedthat this power shall be limited to the allotment of equity securities of up to an aggregate nominal value of £10,000. The authority granted by this resolution will expire at the conclusion of the Company’s next annual general meeting after this resolution is passed or, if earlier, at the close of business on 30 June 2021 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 45,093,078 ordinary shares;

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

7.3 and 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 2021 or 30 June 2021, 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
30 March 2020

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 2019, together with the reports of the directors and auditors on these accounts, be received, considered and adopted.

Resolution 2: Election of Craig William Brown

Resolution 2 proposes that Mr Brown, who held office at the time of the two preceding annual general meetings and did not retire at either of them and is retiring in accordance with article 79.1.2 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 annual general 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 the annual general meeting on 23 April 2019 is due to expire on 27 April 2020 (i.e. the proposed date of the forthcoming annual general meeting).

If passed, the resolution will authorise the directors to allot equity securities up to a maximum nominal amount of £10,000, which represents approximately 222% of the Company’s issued ordinary shares as at 27 March 2020 (being the latest practicable date before publication of this document).

If given, these authorities will expire at the annual general meeting in 2021 or on 30 June 2021, whichever is the earlier.

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

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

Resolution 6: Disapplication of pre-emption rights

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

Accordingly, resolution 6 will be proposed as a special resolution to grant such a power and will permit the directors, pursuant to the authority 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 £10,000 representing approximately 222% of the Company’s issued ordinary shares as at 27 March 2020 (being the latest practicable date before publication of this document). If given, this authority will expire at the annual general meeting in 2021 or on 30 June 2021, whichever is the earlier.

Resolution 7: Purchase of own shares

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% 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.

If given, this authority will expire at the annual general meeting in 2021 or on 30 June 2021, whichever is the earlier.

As at 27 March 2020, the total number of outstanding options and warrants over ordinary shares in the Company was 292,147,295 which represents approximately 65% of the Company’s voting rights at that date. If the Company were to purchase its own ordinary shares to the fullest possible extent of its authority from shareholders (existing and being sought), this number of outstanding options and warrants could potentially represent 81% of the voting rights of the Company as at 27 March 2020.