TIDMECR
AIM: ECR
ECR MINERALS plc("ECR Minerals", "ECR" or the "Company")
AUDITED FINANCIAL STATEMENTS FOR YEARED 30 SEPTEMBER 2017AND
NOTICE OF ANNUAL GENERAL MEETING
LONDON: 29 MARCH 2018 - ECR Minerals plc is pleased to announce
its audited financial statements for the year ended 30 September
2017. The information presented below has been extracted from the
Company's Annual Report and Accounts 2017.
Copies of the Annual Report and Accounts 2017 together with a
notice of annual general meeting will be posted to shareholders
today and will be available today on the Company's website
www.ecrminerals.com and from the Company's registered office at
Unit 117, Chester House, 81-83 Fulham High Street, Fulham Green,
London SW6 3JA. The text of the notice of annual general meeting is
provided below.
Market Abuse Regulations (EU) No. 596/2014
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the
publication of this announcement via Regulatory Information Service
(RIS), this inside information is now considered to be in the
public domain.
FOR FURTHER INFORMATION, PLEASE CONTACT:
ECR Minerals plc Tel: +44 (0)20 7929 1010
David Tang, Non-Executive Chairman
Craig Brown, Director & CEO
Email: info@ecrminerals.com
Website: www.ecrminerals.com
WH Ireland Ltd Tel: +44 (0)161 832 2174
Nominated Adviser
Katy Mitchell/James Sinclair-Ford
Optiva Securities Ltd Tel: +44 (0)203 137 1902
Broker
Graeme Dickson
FlowComms Tel: +44 (0)7891 677 441
Investor Relations
Sasha Sethi
FORWARD LOOKING STATEMENTS
This announcement may include forward looking statements. Such
statements may be subject to numerous known and unknown risks,
uncertainties and other factors that could cause actual results or
events to differ materially from current expectations. There can be
no assurance that such statements will prove to be accurate and
therefore actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers
should not place undue reliance on forward looking statements. Any
forward-looking statements contained herein speak only as of the
date hereof (unless stated otherwise) and, except as may be
required by applicable laws or regulations (including the AIM Rules
for Companies), the Company disclaims any obligation to update or
modify such forward-looking statements because of new information,
future events or for any other reason.
The Directors of ECR Minerals plc (the "Directors" or the
"Board") present their report and audited financial statements for
the year ended 30 September 2017 for ECR Minerals plc("ECR", the
"Company" or the "Parent Company") and on a consolidated basis (the
"Group")
Chairman's Statement
On behalf of the Board of Directors it gives me great pleasure
to present the consolidated financial statements of ECR Minerals
for the year ended September 2017. Although I myself joined ECR
relatively recently as Non-Executive Chairman in August 2017, over
the last year I have observed a period of positive change and
focused restructuring as part of a measured strategy to strengthen
the Company's prospects and carefully lay foundations for growth
and the creation of shareholder value through exposure to ECR's
highly prospective mineral exploration licences in the Australian
State of Victoria, which as a State has an exceptional history of
gold production as well as hosting numerous successful present-day
mining operations.
Following a period of focused and successful structural change
where we saw the repayment of all outstanding debts in September
2016 (including a significant convertible loan facility) closely
followed by a successful share consolidation and significant
reductions in operating and management costs, ECR has deliberately
refocused its efforts upon the Australian assets within its
portfolio, which through their development we believe to have the
potential to generate the most value for our shareholders.
A culmination of much hard work has successfully seen ECR
consolidate its Avoca and Bailieston licences into its Australian
subsidiary and ensure security of tenure through their renewal.
This period also saw ECR deliver two additional gold exploration
projects into its Victorian portfolio when the Company was granted
licences for the Timor and Moormbool tenements. Like Bailieston,
Moormbool is also situated in the heart of one of the principal
modern day mining districts in Victoria, which, as demonstrated by
the success of the nearby Fosterville and Costerfield mines we
consider to be an highly prospective location.
In June of last year ECR secured the support of a cornerstone
investor, the Shenyang Xinliaoan Machinery Company, and immediately
prior to this the Company also completed an oversubscribed placing
for GBP1million to raise a total of GBP1.554 million during the
financial year. These funds were raised with the objective of
furthering our suite of Australian projects and for continuing to
carefully assess potential new opportunities without distracting
from our main objective in Victoria, which is to develop multiple
prospective gold exploration targets, which could cumulatively,
create substantial value for shareholders.
With regards to new opportunities , the Board of Directors
continue to assess potential new opportunities with a strong focus
on gold projects and the rapidly evolving battery metals sector.
Whilst due diligence and careful consideration are paramount in the
evaluation of new opportunities we will not hesitate to act if an
opportunity of sufficient merit becomes available to ECR.
On the operational front, and as previously referenced much of
our efforts this year have been focused on the work required to
secure our existing licences and the submission of applications to
secure the two new licences; In addition to this we have
successfully obtained the permits s to be able to commence
exploration drilling our prospects with the objective of delivering
further value for shareholders at the drill bit. At present we
await the results of a comprehensive geochemical sampling programme
at our highest priority targets within the four licence areas the
results of which will help ECR determine targets for a drilling
programme, which we look forward to updating shareholders on over
the coming months.
In summary, we remain very confident in the prospectivity of our
gold exploration assets and we are optimistic that in due course
our exploration activities in Victoria will bear fruit in the form
of one or more economic gold deposits; ECR has made good progress
toward its goals this year, whilst remaining on a strong financial
footing and with no debt. I am sure that the coming months will see
further positive developments for your Company.
Weili (David) TangChairman28 March 2018
Chief Executive Officer's Report
The Company's focus during the year, and since the year-end, was
very much on exploration for gold in Victoria, Australia, which is
one of the World's major gold producing provinces and hosts the
second largest gold endowment in Australia with total recorded gold
production of around 85 million ounces. In Central Victoria, ECR's
wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd
("MGA") is now the registered holder of the Avoca (EL5387) and
Bailieston (EL5433) exploration licences pursuant to their
acquisition from Currawong Resources Pty Ltd, and has been granted
two new exploration licences, Timor (EL006278) and Moormbool
(EL006280).
At the same time, since October 2016 all the Group's projects
and operations have been thoroughly reviewed, numerous potential
new projects have been evaluated, and a significant reduction in
head office and administration costs has been achieved.
On the corporate front, we were very pleased to welcome Shenyang
Xinliaoan Machinery Co Ltd as ECR's largest shareholder in June
2017, as further discussed in the Chairman's Report. Thanks to this
subscription and to a successful placing, which also took place in
June 2017 and which raised gross proceeds of GBP1 million, ECR is
on a strong financial footing to continue exploration in Victoria
and assess potential new opportunities.
Gold exploration in Victoria, Australia
The Avoca and Bailieston licences remain the core of the
portfolio, and in November 2017 MGA received confirmation of the
renewal of the Avoca licence until 27 November 2021, while the
Bailieston licence was renewed in February 2018 for a five-year
term until 27 March 2023.
In December 2017, ECR announced the results of an interpretation
and targeting study using open-file geophysical data covering the
Avoca, Bailieston, Moormbool and Timor projects. The results were
of great interest, with 27 targets identified within the Avoca and
Timor licences, including 10 high priority areas, and 20 targets
identified within the Bailieston and Moormbool licences, including
5 high priority areas. The high priority targets identified
included areas already considered to be of significant interest by
ECR, such as the Byron, Black Cat and Cherry Tree prospects at
Bailieston, and the magnetic anomaly at Moormbool.
A programme of reverse circulation (RC) drilling comprising
seven holes, for a total of 592m, was completed within the
Bailieston licence in June 2017. Three targets were tested, being
the old Byron Shaft workings, the Scoulars trend and the Maori
trend, which are all within the part of the licence known as HR3.
The results for the Scoulars and Maori trends were consistent with
the geological model, whilst drilling around the Byron Shaft did
not intersect the target mineralisation. The drilling programme was
designed as a low-cost verification of the geological model for the
Bailieston project as a whole, and in this regard was a success.
Although no high-grade mineralisation was intersected, this was not
unexpected given the relatively small size of the programme and the
fact that it was spread over three targets. Drilling on the Maori
trend provided the highest-grade results, with drillhole MGARC07
intersecting 4m at 3.29 g/t Au from 39m downhole, including 2m at
6.21 g/t.
In November 2017, MGA appointed Dr Rodney Boucher, an
experienced Victorian-based geologist, as a consultant to oversee
MGA's exploration activities in Victoria. Dr Boucher has extensive
exploration experience in Victoria, including many years of
involvement with Perseverance Corporation, the developers of the
million-ounce Fosterville gold mine which is now owned by Kirkland
Lake Gold. The Fosterville mine is located in the same district as
MGA's Bailieston and Moormbool gold projects.
Dr Boucher immediately set about reviewing all available data
regarding MGA's four exploration licences, visited most of the
known prospects and carried out geological mapping in key zones. A
programme of geochemical sampling at the higher priority prospects
took place in February 2018, the purpose of which was to augment
existing data and help define drill targets.
A drilling programme to commence in the first half of 2018 is
now being planned and will include multiple target areas. MGA
currently intends to drill in the HR3 area and at the Blue Moon and
Black Cat prospects within the Bailieston licence (EL5433) and at
the Bung Bong prospect within the Avoca licence (EL5387). The
Company will announce the final composition of the drilling
programme and the intended start date after the planning has been
finalised.
Drilling in each area is subject to a final decision by the
Directors, advised by Dr Boucher, as well as the receipt of all
necessary government permits and landowner consents. Considerable
effort has been devoted during 2017 and so far in 2018 towards
permitting activities and liaison with landowners, which is an
essential part of all mineral exploration projects. All required
permits and consents have already been obtained for drilling in the
HR3 area and at the Black Cat prospect within the Bailieston
licence.
Dr Boucher's work so far has led to some potentially significant
geological insights, as outlined below.
Bailieston exploration licence (EL5433)
* Black Cat prospect
Black Cat is characterised by previously defined widespread
anomalous geochemical results, especially to the northeast, which
are not due to downhill dispersion from the main reefs and
therefore must come from hitherto undiscovered sources.
* Blue Moon prospect
There is potential at Blue Moon for a previously unrecognised
finely-disseminated gold system. Previous encouraging rock chip and
soil geochemical results extend over an area approximately 350m
across and open at both ends. There are only a few small workings
at surface, and this may be an indication of finely-disseminated
gold, which is more likely to be suitable for modern bulk mining
methods than the coarse gold targeted by most historical mining in
Victoria.
* Cherry Tree and Cherry Tree South prospects
The Cherry Tree historical workings cover an area 600m by 200m,
while the Cherry Tree South workings extend over an area 250m by
60m, with a wider geochemical footprint and encouraging previous
geochemical results across the full width of the sampling.
* HR3 area
This area encompasses the Byron, Maori, Scoulars, Dan Genders,
Hard Up and Scanlon's reefs, and forms the largest area of
historical workings (700m by 300m) within the tenement package,
especially when considered as part of a larger system connected to
the Bailieston open pit located outside the northern boundary.
MGA's exploration objective at HR3 will be to investigate the
possibility of integrating the various reefs at depth to arrive at
a meaningful modern-day resource.
There is a gap in the historical workings from the HR3 area for
approximately 800m to Cherry Tree to the south and for
approximately 400m to the tenement boundary to the north, and there
is potential in these zones for undiscovered mineralisation,
particularly at depth. This is supported by the limited previous
geochemical sampling.
Avoca exploration licence (EL5387)
* Bung Bong prospect
Bung Bong features a series of historical shafts on shoots up to
100m long punctuated by barren zones and gullies. Road cuttings on
the nearby highway show multiple west-dipping faults linked by
associated quartz vein networks that may have the potential for a
broad zone of significant tonnage.
* Monte Christo prospect
This prospect is of significant interest as it hosts historical
workings extending over a strike length of approximately 1,000m,
punctuated by alluvial cover.
* Surprise prospect
There are numerous historical shafts at Surprise and some
noteworthy historical (late 1990s) drilling results (including 2m
at 3.27g/t gold from 18m in SPAC04 and 5m at 1.4g/t gold from 26m
in SPAC06). The presence of molybdenum with gold in breccia raises
the conceptual possibility of a high tonnage porphyry deposit.
Landowner consent is currently being sought for field mapping and
geochemical surveying, which will enable this concept to be
considered further.
Moormbool exploration licence (EL006278)
Modelling carried out on behalf of MGA has delineated a magnetic
body at depth. The magnetic anomaly has horizontal dimensions of
approximately 3.15km x 3.5km. The corresponding body may be
unmineralised, but there is considered to be some potential for
mineralisation styles such as Woods Point/Walhalla dyke-associated
gold or a VMS (volcanogenic massive sulphide)/Cobar-style
polymetallic deposit as found in central New South Wales.
Alternatively, the anomaly may represent weak magnetite alteration
within a porphyry, similar to the Cadia
gold-copper-porphyry-related deposits in central New South
Wales.
SLM gold project, Argentina
The SLM project is 100% owned by ECR's wholly owned Argentine
subsidiary Ochre Mining SA and comprises three key gold prospects
in La Rioja Province: the El Abra prospect, the JV prospect
(particularly the JV14 zone) and the Maestro Agüero prospect, all
of which are located in a long established mining district known as
Sierra de las Minas. The change in government which took place in
late 2015 made Argentina a significantly more attractive
destination for investment, and following a visit to Argentina by
three members of the Board in December 2016, Exploration Targets
were determined for the El Abra prospect and JV14 zone in
accordance with the JORC Code.
In connection with the Exploration Targets, a programme of
approximately 2,000m of RC drilling has been designed for the JV
prospect, with an additional 300m planned for El Abra. The
objective of these programmes is to enable the estimation of
Mineral Resources compliant with the JORC Code for both prospects.
Preparations for drilling were made by Ochre in the first half of
2017, including the establishment of drill pads, permitting
activities and liaison with the provincial government. As the
Directors are required to prioritise the Group's activities in
order to avoid an excessive drain on its resources at any one time,
the drilling has not yet commenced.
During 2017, discussions continued between Ochre and Esperanza
Resources SA ("Esperanza"), pursuant to the memorandum of
understanding signed between the two companies in 2015. Esperanza
previously operated a processing plant within potential trucking
distance of Ochre's deposits. Whilst this has not progressed, ECR
has taken note of the announcement in October 2017 by a company
listed on the TSX Venture Exchange, Falcon Gold Corporation
("Falcon"), that Falcon has signed an agreement giving it the right
to acquire an initial 80% interest in Esperanza's mineral tenements
located in the Sierra de Las Minas district. Falcon has agreed,
subject to due diligence and TSX Venture Exchange approval, to make
escalating annual payments to Esperanza totalling US$815,000 over a
six-year option period and to issue a total of 5 million Falcon
common shares. During the six-year option period, Falcon would be
expected to make exploration expenditures amounting to
US$5,645,000. After acquiring the 80% interest, Falcon would have
the right, for a period of 24 months, to purchase Esperanza's
residual 20% interest for a further payment of US$4 million and a
1% net smelter return royalty.
If the transaction with Falcon was to progress the memorandum of
understanding between Ochre and Esperanza would fall away however
the Directors view the agreement between Esperanza and Falcon as
encouraging, given that in the Board's view, Ochre's licences are
significantly more prospective than those held by Esperanza.
Danglay gold project, Philippines
Danglay is an intermediate sulphidation epithermal gold deposit
situated within the proli?cally gold-copper mineralised Baguio
District in the northern Philippines. An initial NI43-101 Mineral
Resource was estimated for the project in December 2015, following
extensive exploration carried out by ECR during 2014 and 2015. A
copy of the corresponding NI43-101 technical report is available
for download from the Company's website. As a result of these
activities, ECR is entitled to a 25% interest in the project. No
further work has yet been carried out, and renewal of the project's
Exploration Permit is pending.
In June 2017, Ivor Jones, at that time a director of ECR and its
Chief Operating Officer, visited Danglay, and his observations
confirmed the project's significant exploration potential. The
Directors remain hopeful that the political and legal issues to
which the project is currently subject will be ameliorated in due
course, and that ECR's rights in respect of Danglay are of
significant value. Further discussion of these issues and ECR's
rights is provided in the Strategic Report.
FINANCIAL RESULTS FOR THE YEARED 30 SEPTEMBER 2017
For the year to 30 September 2017 the Group recorded a total
comprehensive expense of GBP562,649, compared with GBP1,016,592 for
the year to 30 September 2016.
The largest contributor to the total comprehensive expense was
the line item "other administrative expenses", which represents the
costs of operating the Group and carrying out exploration at its
projects, where these costs are ineligible for capitalisation under
applicable accounting standards.
The Group's net assets as at 30 September 2017 were
GBP3,735,225, in comparison with GBP2,680,627 at 30 September 2016.
The increase is due to the capitalisation of exploration
expenditure during the year, leading to increased exploration
assets, and the larger cash balance of GBP1,082,994 held by the
Group at 30 September 2017, in comparison with GBP471,809 at the
previous year-end.
Craig BrownChief Executive Officer28 March 2018
Independent Auditor's ReportFor the year ended 30 September
2017
Independent Auditors' Report to the Members of ECR Minerals
Plc
Opinion
We have audited the financial statements of ECR Minerals Plc
(the 'parent company') and its subsidiaries (the 'group') for the
year ended 30 September 2017 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Parent
Company Statement of Financial Position, the Consolidated and
Parent Company Statements of Changes in Equity, the Consolidated
and Parent Company Statements of Cash Flows and notes to the
financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied
in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and as
regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
In our opinion:
-- the financial statements give a true and fair view of the state of the
group's and of the parent company's affairs as at 30 September
2017
and of the group's and parent company's loss for the year then
ended;
-- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union and as
applied
in accordance with the provisions of the Companies Act 2006;
and
-- the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
-- the directors' use of the going concern basis of accounting in the
preparation of the financial statements is not appropriate;
or
-- the directors have not disclosed in the financial statements any
identified material uncertainties that may cast significant
doubt
about the group's or the parent company's ability to continue to
adopt
the going concern basis of accounting for a period of at least
twelve
months from the date when the financial statements are
authorised for
issue.
Our application of materiality
The scope of our audit was influenced by our application of
materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing
and extent of our audit procedures. Group materiality was GBP70,000
based upon gross assets. The Parent Company materiality was
GBP60,000 based upon gross assets and the result for the year. For
each component in the scope of our group audit, we allocated a
materiality that is either equal to or less than our overall group
materiality.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and
assessed the risk of material misstatement in the financial
statements. In particular, we looked at areas involving significant
accounting estimates and judgement by the Directors and considered
future events that are inherently uncertain. As in all of our
audits, we also addressed the risk of management override of
internal controls, including among other matters consideration of
whether there was evidence of bias that represented a risk of
material misstatement due to fraud. The Australian and Argentinian
subsidiary undertakings represent the principal business units
within the Group, upon which we performed audit procedures directly
on significant accounts based on size or risk profile to the Group.
A full scope audit was undertaken on the financial statements of
the Parent Company.
Key audit matters
Key audit matters are those matters that, in our professional How the scope of our audit responded to the key audit matter
judgment, were of most significance
in our audit of the financial statements of the current period and include
the most significant assessed risks of material misstatement (whether or not due
to fraud) we identified, including those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. Key Audit Matter
Recoverability of intangible assets - exploration and development costs The carrying value of all early stage exploration and development projects
The carrying value of intangible assets as at 30 were assessed and tested in accordance with the following criteria:
September 2017 was GBP2,668,747 which comprises
exploration and development projects in Australia, Argentina and the Philippines. There is a The Group holds good title to the licence areas; The Group has planned and budgeted
risk that the carrying value of these early stage projects is impaired and that exploration for further expenditure for mineral resources in the licence areas;
and development expenditure capitalised during the year is not in accordance with IFRS 6. and Exploration and development work undertaken to date has indicated
the existence of commercially viable quantities of mineral resource.
We undertook substantive testing on capitalised expenditure during
the year to ensure it satisfied the criteria under IFRS 6.
We discussed with management the scope of their future budgeted
and planned expenditure on each licence area.
As disclosed in note 10 to the financial statements, the
Group has not yet formally acquired title to its 25%
interest in Cordillera Tiger Gold Resources, Inc ("Cordillera")
which is the holder of the exploration
permit for the Danglay gold project in the Philippines.
The conditions for the earn-in have been satisfied
but the relevant shareholding has yet to be issued, despite the Board of Cordillera authorising
the issue. In addition, the exploration permit for the
Danglay gold project held by Cordillera expired
on 30 September 2015. Cordillera is currently waiting
for the Philippine authority to formally grant its
renewal application. This indicates the existence of
a material uncertainty over the recoverability of
the carrying value of the Danglay gold project, which
amounted to GBP1,160,848 as at 30 September 2017.
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information. Our opinion on the group and parent company
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon. In
connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the directors'
report for the financial year for which the financial statements
are
prepared is consistent with the financial statements; and
-- the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and their environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from
branches
not visited by us; or
-- the parent company financial statements are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are
not made; or
-- we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
group and parent company financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements,
the directors are responsible for assessing the group's and the
parent company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at:
http://www.frc.org.uk/auditorsresponsibilities.This description
forms part of our auditor's report.
1 Westferry CircusCanary WharfLondon E14 4HD
David Thompson (Senior statutory auditor)For and on behalf of
PKF Littlejohn LLPStatutory auditor28 March 2018
Consolidated Income Statement
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Year ended Year ended
30 September 2017 30 September 2016
Note GBP GBP
Continuing
operations
Other (509,545) (677,873)
administrative
expenses
Currency exchange (3,186) 9,399
differences
Total (512,731) (668,474)
administrative
expenses
Operating loss 3 (512,731) (668,474)
Other income - 34,688
Loss on disposal (1) -
of investment
Fair value 9 1,255 (18,893)
movements
- available
for sale financial
asset
(511,477) (652,679)
Financial income 353 484
Financial expense - (267,511)
Finance income 7 353 (267,027)
and costs
Loss for the year (511,124) (919,706)
before taxation
Income tax 5 - -
Loss for the (511,124) (919,706)
year from
continuing
operations
Loss for the year - (511,124) (919,706)
all attributable
to owners of
the parent
Earnings per
share -
basic and diluted
On continuing 4 (0.31)p (0.01)p
operations
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
GBP208,774 (2016: GBP887,844 loss).
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Year ended Year ended
30 September 2017 30September 2016
Note GBP GBP
Loss for the year (511,124) (919,706)
Items that may be
reclassified
subsequently to
profit or loss
Loss on exchange (51,524) (96,886)
translation
Other comprehensive (51,524) (96,886)
expense
for the year
Total comprehensive (562,649) (1,016,592)
expense
for the year
Attributable to:-
Owners of the parent (562,649) (1,016,592)
Consolidated & Company Statement of Financial Position
At 30 September 2017
ECR Minerals plc company no. 5079979
Group Company
30 September 30 September 30 September 30 September
2017 2016 2017 2016
Note GBP GBP GBP GBP
Assets
Non-current
assets
Property, 8 8,694 6,237 7,020 6,237
plant
and
equipment
Investments 9 - - 852,170 740,100
in
subsidiaries
Intangible 10 2,668,747 2,437,608 2,180,312 2,076,104
assets
Other 11 - - 240,970 107,341
receivables
2,677,441 2,443,845 3,280,472 2,929,782
Current
assets
Trade 11 54,888 5,470 281,901 4,147
and
other
receivables
Available 9 22,269 21,014 22,269 21,014
for
sale
financial
assets
Taxation - 38,059 - 10,067
Other - 2,672 - 2,672
current
assets
Cash 12 1,082,994 471,809 1,046,787 443,165
and
cash
equivalents
1,160,151 539,024 1,350,957 481,065
Total 3,837,592 2,982,869 4,631,429 3,410,847
assets
Current
liabilities
Trade 14 102,367 302,242 80,432 268,323
and
other
payables
Interest 15 - - - -
bearing
borrowings
102,367 302,242 80,432 268,323
Total 102,367 302,242 80,432 268,323
liabilities
Net 3,735,225 2,680,627 4,550,997 3,142,524
assets
Equity
attributable
to
owners
of the
parent
Share 13 11,282,812 11,281,628 11,282,812 11,281,628
capital
Share 13 43,823,335 42,441,553 43,823,335 42,441,553
premium
Exchange (218,059) (166,535) - -
reserve
Other 1,381,998 1,147,717 1,381,998 1,147,717
reserves
Retained (52,534,860) (52,023,736) (51,937,148) (51,728,374)
losses
Total 3,735,225 2,680,627 4,550,997 3,142,524
equity
The loss for the Parent Company for the year was GBP208,774
(2016 - GBP887,844 loss).
The financial statements were approved and authorised for issue
by the Directors on 28 March 2018 and were signed on its behalf
by:
Weili (David) Tang Craig Brown
Non-Executive Chairman Director & Chief Executive Officer
Consolidated Statement of Changes in Equity
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Sharecapital Sharepremium Exchangereserve Otherreserves Retainedreserves
(Note 13) (Note 13) Total
GBP GBP GBP GBP GBP GBP
Balance at 1 11,071,602 40,802,469 (69,649) 845,677 (51,104,030) 1,546,069
October 2015
Loss for - - - - (919,706) (919,706)
the year
Gain - - (96,886) - - (96,886)
on exchange
translation
Total - - 96,886 - (919,706) (1,016,592)
comprehensive
expense
Conversion of 34,673 501,582 - - - 536,255
loan notes
Shares issued 147,500 952,500 - - - 1,100,000
Share issue - (55,750) - - - (55,750)
costs
Share based - - - 123,737 - 123,737
payments
Warrants issued - - - 178,303 - 178,303
in lieu
of finance cost
Shares issued 27,853 240,752 - - - 268,605
in payment
of creditors
Total 210,026 1,639,084 - 302,040 - 2,151,150
transactions
with owners,
recognised
directly
in equity
Balance at 30 11,281,628 42,441,553 (166,535) 1,147,717 (52,023,736) 2,680,627
September
2016
Loss for - - - - (511,124) (511,124)
the year
Loss - - (51,524) - - (51,524)
on exchange
translation
Total - - (51,524) - (511,124) (562,649)
comprehensive
expense
Shares issued 1,109 1,552,455 - - - 1,553,564
Share issue - (84,878) - - - (84,878)
costs
Share based - (166,739) - 234,281 - 67,542
payments
Shares issued 75 80,944 - - - 81,019
in payment
of creditors
Total 1,184 1,381,782 - 234,281 - 1,617,247
transactions
with owners,
recognised
directly
in equity
Balance at 30 11,282,812 43,823,335 (218,059) 1,381,998 (52,534,860) 3,735,226
September
2017
Company Statement of Changes in Equity
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Sharecapital Sharepremium Otherreserves Retainedreserves
(Note 13) (Note 13) Total
GBP GBP GBP GBP GBP
Balance at 1 11,071,602 40,802,469 845,677 (50,840,530) 1,879,218
October 2015
Loss for - - - (887,844) (887,844)
the year
Total - - - (887,844) (887,844)
comprehensive
expense
Conversion of 34,673 501,582 - - 536,255
loan notes
Shares issued 147,500 952,500 - - 1,100,000
Share issue - (55,750) - - (55,750)
costs
Share based - - 123,737 - 123,737
payments
Warrants issued - - 178,303 - 178,303
in lieu
of finance cost
Shares issued 27,853 240,752 - - 268,605
in payment
of creditors
Total 210,026 1,639,084 302,040 - 2,151,150
transactions
with owners,
recognised
directly
in equity
Balance at 30 11,281,628 42,441,553 1,147,717 (51,728,374) 3,142,524
September
2016
Loss for - - - (208,774) (208,774)
the year
Total - - - (208,774) (208,774)
comprehensive
expense
Shares issued 1,109 1,552,455 - - 1,553,564
Share issue - (84,878) - - (84,878)
costs
Share based - (166,739) 234,281 - 67,542
payments
Shares issued 75 80,944 - - 81,019
in payment
of creditors
Total 1,184 1,381,782 234,281 - 1,617,247
transactions
with owners,
recognised
directly
in equity
Balance at 30 11,282,812 43,823,335 1,381,998 (51,937,148) 4,550,997
September
2017
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2017
ECR Minerals plc company no. 5079979
Group Company
Year ended Year ended Year ended Year ended
30 September 30 September 2016 30 September 2016 30 September 2016
2016
Note GBP GBP GBP GBP
Net cash flow 22 (569,016) (494,118) (511,307) (483,553)
used
in operations
Investing
activities
Purchase of (6,174) - (4,082) -
property,
plant
& equipment
Increase 10 (231,140) (319,580) (104,209) (257,818)
in
exploration
assets
Investment in - - (112,070) (79,535)
subsidiaries
Loan - - (133,629) -
to subsidiary
Interest 353 484 233 35
income
Net cash used (236,961) (319,096) (353,757) (337,318)
in investing
activities
Financing
activities
Proceeds from 1,468,686 1,100,000 1,468,686 1,100,000
issue
of share
capital
Proceeds from - 418,463 - 418,463
issue of
convertible
loan notes
Repayment of - (248,332) - (248,332)
convertible
loan notes
Finance costs - (55,750) - (55,750)
on
fundraising
Interest paid - (31,385) - (31,385)
and other
financing
costs
Net cash from 1,468,686 1,182,996 1,468,686 1,182,996
financing
activities
Net change in 662,709 369,782 603,622 362,125
cash and
cash
equivalents
Cash and cash 471,809 90,398 443,165 81,040
equivalents
at beginning
of the year
Effect of (51,524) 11,629 - -
changes
in foreign
exchange
rates
Cash and cash 12 1,082,994 471,809 1,046,787 443,165
equivalents
at end of
the year
Non-cash transactions:
1. During the year no convertible loans and interest thereon
were converted into shares (2016: GBP758,554).2. Settlement of
creditors of GBP80,944 (2016: GBP140,863) with ordinary shares.3.
No purchases of assets were settled with ordinary shares (2016:
GBP53,259).
Notes to the Financial Statements
For the year ended 30 September 2017
1General information
The Company and the Group operated mineral exploration and
development projects. The Group's principal interests are located
in Argentina, the Philippines and Australia.
The Company is a public limited company incorporated and
domiciled in England. The registered office of the Company and its
principal place of business is Unit 117, Chester House, 81-83
Fulham High Street, Fulham Green, London SW6 3JA. The Company is
listed on the Alternative Investment Market (AIM) of the London
Stock Exchange.
2Accounting policies
Overall considerations
The principal accounting policies that have been used in the
preparation of these consolidated financial statements are set out
below. The policies have been consistently applied unless otherwise
stated.
Basis of preparation
The financial statements of both the Group and the Parent
Company have been prepared in accordance with International
Financial Reporting Standards (IFRSs) and Interpretations issued by
the IFRS Interpretations Committee (IFRIC) as adopted by the
European Union and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. These are the
standards, subsequent amendments and related interpretations issued
and adopted by the International Accounting Standard Board (IASB)
that have been endorsed by the European Union at the year end. The
consolidated financial statements have been prepared under the
historical cost convention, as modified by the revaluation of
certain financial instruments. The Directors have taken advantage
of the exemption available under Section 408 of the Companies Act
2006 and have not prepared an Income Statement or a Statement of
Comprehensive Income for the Company alone.
The Group and Parent Company financial statements have been
prepared on a going concern basis as explained in the Directors'
Report on page [10].
New Accounting Standards and Interpretations
Effective during the year
During the year the Group has adopted the following standards
and amendments:
-- Annual Improvements to IFRSs 2012-2014 Cycle
-- Amendments to IAS 1: Disclosure Initiative
-- Amendments to IFRS 10, IFRS 12 and IAS 28: Investment Entities:
Applying the Consolidation Exception
-- Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods
of Depreciation and Amortisation
-- Amendments to IAS 27: Equity Method in Separate Financial Statements
The adoption of these standards and amendments did not have any
impact on the financial position or performance of the Group.
Not yet effective
At the date of authorisation of these Group Financial Statements
and the Parent Company Financial Statements, the following
Standards, amendments and interpretations were endorsed by the EU
but not yet effective:
-- Amendments to IFRS 11: Accounting for Acquisitions of Interests in
Joint Operations
-- Amendments to IAS 12: Recognition of Deferred Tax Assets for
Unrealised Losses
-- Amendments to IAS 7: Disclosure Initiative
-- IFRS 15 Revenue from Contracts with Customers including amendments to
IFRS 15
-- Clarifications to IFRS 15 Revenue from Contracts with Customers
-- IFRS 9 Financial Instruments
-- IFRS 16 Leases
In addition to the above there are also the following standards
and amendments that have not yet been endorsed by the EU:
-- IFRS 14 Regulatory Deferral Accounts
-- Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
(effective date
postponed indefinitely by IASB)
-- Amendments to IFRS 2: Classification and Measurement of Share-based
Payment Transactions
-- Annual Improvements to IFRS Standards 2014-2016 Cycle
-- IFRIC Interpretation 22 Foreign Currency Transactions and Advance
Consideration
-- IFRIC 23 Uncertainty over Income Tax Treatments
-- Amendments to IAS 28 Long-term Interests in Associates and Joint
Ventures
-- Annual Improvements to IFRS Standards 2015-2017 Cycle
The Group intends to adopt these standards when they become
effective. The introduction of these new standards and amendments
is not expected to have a material impact on the Group or Parent
Company.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and two of its subsidiaries made up to 30
September 2017. Subsidiary undertakings acquired during the period
are recorded under the acquisition method of accounting and their
results consolidated from the date of acquisition, being the date
on which the Company obtains control, and continue to be
consolidated until the date such control ceases.
The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power over the entity.
Going concern
It is the prime responsibility of the Board to ensure the Group
and Company remains going concern. At 30 September 2017, the Group
had cash and cash equivalents of GBP1,082,994 and no borrowings.
The Group's financial projections and cash flow forecasts covering
a period of at least twelve months from the date of approval of
these financial statements show that the Group will have sufficient
available funds in order to meet its contracted and committed
expenditure. Further details are included in Note 23 to the
financial statements. The Directors are confident in the ability of
the Group to raise additional funding, if required, from the issue
of equity and/or the sale of assets.
Based on their assessment of the financial position, the
Directors have a reasonable expectation that the Group will be able
to continue in operational existence for the next 12 months and
continue to adopt the going concern basis of accounting in
preparing these Financial Statements.
Cash and cash equivalents
Cash includes petty cash and cash held in current bank accounts.
Cash equivalents include short-term investments that are readily
convertible to known amounts of cash and which are subject to
insignificant risk of changes in value.
Property, plant and equipment
Property, plant and equipment are stated at cost, less
accumulated depreciation and any provision for impairment
losses.
Depreciation is charged on each part of an item of property,
plant and equipment so as to write off the cost of assets less the
residual value over their estimated useful lives, using the
straight-line method. Depreciation is charged to the income
statement. The estimated useful lives are as follows:
Office equipment 3 years
Furniture and fittings 5 years
Machinery and equipment 5 years
Expenses incurred in respect of the maintenance and repair of
property, plant and equipment are charged against income when
incurred. Refurbishments and improvements expenditure, where the
benefit is expected to be long lasting, is capitalised as part of
the appropriate asset.
An item of property, plant and equipment ceases to be recognised
upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on cessation of
recognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is
included in the income statement in the year the asset ceases to be
recognised.
Exploration and development costs
All costs associated with mineral exploration and investments
are capitalised on a project-by-project basis, pending
determination of the feasibility of the project. Costs incurred
include appropriate technical and administrative expenses but not
general overheads. If an exploration project is successful, the
related expenditures will be transferred to mining assets and
amortised over the estimated life of the commercial ore reserves on
a unit of production basis. Where a licence is relinquished or a
project abandoned, the related costs are written off in the period
in which the event occurs. Where the Group maintains an interest in
a project, but the value of the project is considered to be
impaired, a provision against the relevant capitalised costs will
be raised.
The recoverability of all exploration and development costs is
dependent upon the discovery of economically recoverable reserves,
the ability of the Company to obtain necessary financing to
complete the development of reserves and future profitable
production or proceeds from the disposition thereof.
Impairment testing
Individual assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may exceed its recoverable amount, being the higher of net
realisable value and value in use. Any such excess of carrying
value over recoverable amount or value in use is taken as a debit
to the income statement.
Intangible exploration assets are not subject to amortisation
and are tested annually for impairment.
Provisions
A provision is recognised in the Statement of Financial Position
when the Group or Company has a present legal or constructive
obligation as a result of a past event, and it is probable that an
outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
Leased assets
In accordance with IAS 17, leases in terms of which the Group or
Company assumes substantially all the risks and rewards of
ownership are classified as finance leases. All other leases are
regarded as operating leases and the payments made under them are
charged to the income statement on a straight line basis over the
lease term.
Taxation
There is no current tax payable in view of the losses to
date.
Deferred income taxes are calculated using the Statement of
Financial Position liability method on temporary differences.
Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases.
However, deferred tax is not provided on the initial recognition of
goodwill or on the initial recognition of an asset or liability
unless the related transaction is a business combination or affects
tax or accounting profit. Deferred tax on temporary differences
associated with shares in subsidiaries and joint ventures is not
provided if reversal of these temporary differences can be
controlled by the Company and it is probable that reversal will not
occur in the foreseeable future. In addition, tax losses available
to be carried forward as well as other income tax credits to the
Company are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the Statement of Financial Position date.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the income statement, except where
they relate to items that are charged or credited directly to
equity, in which case the related current or deferred tax is also
charged or credited directly to equity.
Investments in subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the
entity.
The investments in subsidiaries held by the Company are valued
at cost less any provision for impairment that is considered to
have occurred, the resultant loss being recognised in the income
statement.
Equity
Equity comprises the following:
* "Share capital" represents the nominal value of equity shares,
both ordinary and deferred.
* "Share premium" represents the excess over nominal value of
the fair value of consideration received for equity shares, net of
expenses of the share issues.
* "Other reserves" represent the fair values of share options
and warrants issued.
* "Retained reserves" include all current and prior year
results, including fair value adjustments on available for sale
financial assets, as disclosed in the consolidated statement of
comprehensive income.
* "Exchange reserve" includes the amounts described in more
detail in the following note on foreign currency below.
Foreign currency translation
The consolidated financial statements are presented in pounds
sterling which is the functional and presentational currency
representing the primary economic environment of the Group.
Foreign currency transactions are translated into the respective
functional currencies of the Company and its subsidiaries using the
exchange rates prevailing at the date of the transaction or at an
average rate where it is not practicable to translate individual
transactions. Foreign exchange gains and losses are recognised in
the income statement.
Monetary assets and liabilities denominated in a foreign
currency are translated at the rates ruling at the Statement of
Financial Position date.
The assets and liabilities of the Group's foreign operations are
translated at exchange rates ruling at the Statement of Financial
Position date. Income and expense items are translated at the
average rates for the period. Exchange differences are classified
as equity and transferred to the Group's exchange reserve. Such
differences are recognised in the income statement in the periods
in which the operation is disposed of.
Share-based payments
The Company operates equity-settled share-based remuneration
plans for the remuneration of some of its employees. The Company
awards share options to certain Company Directors and employees to
acquire shares of the Company. Additionally, the Company has issued
warrants to providers of loan finance.
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. Where
employees are rewarded using share-based payments, the fair values
of employees' services are determined indirectly by reference to
the fair value of the instrument granted to the employee.
The fair value is appraised at the grant date and excludes the
impact of non-market vesting conditions. Fair value is measured by
use of the Black Scholes model. The expected life used in the model
has been adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions, and
behavioural considerations.
All equity-settled share-based payments are ultimately
recognised as an expense in the income statement with a
corresponding credit to "other reserves".
If vesting periods or other non-market vesting conditions apply,
the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest.
Estimates are subsequently revised if there is any indication that
the number of share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is recognised
in the current period. No adjustment is made to any expense
recognised in prior years if share options ultimately exercised are
different to that estimated on vesting.
Upon exercise of share options the proceeds received net of
attributable transaction costs are credited to share capital and,
where appropriate, share premium.
A gain or loss is recognised in profit or loss when a financial
liability is settled through the issuance of the Company's own
equity instruments. The amount of the gain or loss is calculated as
the difference between the carrying value of the financial
liability extinguished and the fair value of the equity instrument
issued.
Financial instruments
The Group's financial assets comprise cash and cash equivalents,
investments and loans and receivables. Financial assets are
assigned to the respective categories on initial recognition,
depending on the purpose for which they were acquired. This
designation is re-evaluated at every reporting date at which a
choice of classification or accounting treatment is available.
The Group's loans, investments and receivables are
non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Loans and receivables are
measured at fair value on initial recognition. After initial
recognition they are measured at amortised cost using the effective
interest rate method, less any provision for impairment. Any change
in their value is recognised in profit or loss. The Group's
receivables fall into this category of financial instruments.
Discounting is omitted where the effect of discounting is
immaterial. All receivables are considered for impairment on a
case-by-case basis when they are past due at the Statement of
Financial Position date or when objective evidence is received that
a specific counterparty will default.
Investments that are held as available for sale financial assets
are financial assets that are not classified in any other
categories. After initial recognition, available for sale financial
assets are measured at fair value. Any gains or losses from changes
in the fair value of the financial asset are recognised in equity,
except that impairment losses, foreign exchange gains and losses on
monetary items and interest calculated using the effective interest
method are recognised in the income statement.
Where there is a significant or prolonged decline in the fair
value of an available for sale financial asset (which constitutes
objective evidence of impairment), the full amount of the
impairment, including any amount previously charged to equity, is
recognised in the consolidated income statement. The Directors
consider a significant decline to be one in which the fair value is
below the weighted average cost by more than 25%. A prolonged
decline is considered to be one in which the fair value is below
the weighted average cost for a period of more than twelve
months.
If an available for sale equity security is impaired, any
further declines in the fair value at subsequent reporting dates
are recognised as impairments. Reversals of impairments of
available for sale equity securities are not recorded through the
income statement. Upon sale, accumulated gains or losses are
recycled through the income statement.
Financial liabilities, which are measured at amortised cost, and
equity instruments are classified according to the substance of the
contractual arrangements entered into. An equity instrument is any
contract that evidences a residual interest in the assets of the
entity after deducting all of its financial liabilities. Any
instrument that includes a repayment obligation is classified as a
liability.
Where the contractual liabilities of financial instruments
(including share capital) are equivalent to a similar debt
instrument, those financial instruments are classed as financial
liabilities, and are presented as such in the Statement of
Financial Position. Finance costs and gains or losses relating to
financial liabilities are included in the income statement. Finance
costs are calculated so as to produce a constant rate of return on
the outstanding liability.
Where the contractual terms of share capital do not have any
features meeting the definition of a financial liability then such
capital is classed as an equity instrument. Dividends and
distributions relating to equity instruments are debited direct to
equity.
Compound financial instruments
Compound financial instruments comprise both liability and
either equity components or embedded derivatives.
For compound instruments including equity components, at issue
date the fair value of the liability component is estimated by
discounting its future cash flows at an interest rate that would
have been payable on a similar debt instrument without any equity
conversion option. The liability component is accounted for as a
financial liability. The difference between the net issue proceeds
and the liability component, at the time of issue, is the residual
or equity component, which is accounted for as an equity
reserve.
Embedded derivatives included within compound instruments are
calculated using the Black Scholes model and are also included
within liabilities, but are measured at fair value in the Statement
of Financial Position, with changes in the fair value of the
derivative component recognised in the consolidated income
statement. The amounts attributable to the liability components
equal the discounted cash flows.
Transaction costs that relate to the issue of a compound
financial instrument are allocated to the liability and equity
components of the instrument in proportion to the allocation of the
proceeds.
The interest expense on the liability component is calculated by
applying the effective interest rate for the liability component of
the instrument. The difference between any repayments and the
interest expense is deducted from the carrying amount of the
liability.
Upon conversion of loan note debt the corresponding carrying
value of loan note liability and equity reserve is released, and
the difference between these and the nominal value of the shares
issued on conversion is recognised as a share premium.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the year in which the estimate is revised if the revision affects
only that year or in the year of the revision and future years if
the revision affects both current and future years.
The most critical accounting policies and estimates in
determining the financial condition and results of the Group are
those requiring the greater degree of subjective or complete
judgement. These relate to:
* capitalisation and recoverability of exploration costs (Note
10);
* share-based payments (Note 6 and Note 13);
3Operating loss
Year ended Year ended
30 September 30 September
The operating loss is stated after charging: 2017 2016
GBP GBP
Depreciation of property, plant and equipment 4,653 1,468
Operating lease expenses 24,213 14,126
Share-based payments 67,542 123,737
Auditors' remuneration - fees payable 21,500 22,000
to the Company's auditor for the
audit of the parent company
and consolidatedfinancial
statements
4Earnings per share
Basic and Diluted
Year Year
ended30 September2017 ended30 September2016
Weighted number 166,559,125 9,181,895,384
of shares
in issue during
the year
GBP GBP
Loss from continuing (511,124) (919,706)
operations
attributable
to owners of
the parent
Basic earnings per share has been calculated by dividing the
loss attributable to equity holders of the company after taxation
by the weighted average number of shares in issue during the year.
There is no difference between the basic and diluted earnings per
share as the effect on the exercise of options and warrants would
be to decrease the earnings per share.
PLEASE NOTE THAT THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION. If you are in any doubt as to what action you
should take, please consult your stockbroker or other independent
adviser authorised under the Financial Services and Markets Act
2000 immediately. If you have recently sold or transferred all of
your ordinary shares in ECR Minerals PLC, please forward this
document, together with the accompanying documents, as soon as
possible either to the purchaser or transferee or to the person who
arranged the sale or transfer so they can pass these documents to
the person who now holds the shares.
ECR MINERALS PLC(the "Company")(Registered in England and Wales
No 05079979)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the Annual General Meeting of the
Company will be held at the offices of Charles Russell Speechlys
LLP, 5 Fleet Place, London EC4M 7RD on 24 April 2018 at 10.30 a.m.
for the purpose of considering and, if thought fit, passing
Resolutions 1 to 5 as ordinary resolutions, and Resolutions 6 and 7
as special resolutions:
Ordinary Resolutions
1 To receive, consider and adopt the annual accounts of the
Company for the year ended 30 September 2017, together with the
reports of the directors and auditors thereon.
2 That Weili Tang, a director retiring in accordance with
article 29.1.1 of the Company's articles of association, be elected
as a director of the Company.
3 To re-appoint PKF Littlejohn LLP as auditors of the Company,
to hold office until the conclusion of the next general meeting at
which accounts are laid before the Company.
4 To authorise the audit committee to determine the remuneration
of the Company's auditors of the Company.
5 That the directors be generally and unconditionally authorised
pursuant to and in accordance with section 551 of the Companies Act
2006 (the "CA 2006") to exercise all the powers of the Company to
allot shares or grant rights to subscribe for, or to convert any
security into shares in the Company up to an aggregate nominal
amount of GBP5,000 provided that this authority shall, unless
renewed, varied or revoked by the Company, expire on 30 June 2019
or, if earlier, the date of the next annual general meeting of the
Company, save that the Company may, before such expiry, make offers
or agreements which would or might require equity securities to be
allotted (or treasury shares to be sold) after the authority
expires and the directors may allot equity securities (or sell
treasury shares) in pursuance of any such offer or agreement as if
the authority had not expired.
Special Resolutions
6 That, subject to the passing of resolution ý5, the directors
be empowered to allot equity securities (as defined by section 560
of the CA 2006) pursuant to the authority conferred by resolution 5
for cash, and/or sell treasury shares for cash, as if section
561(1) of the CA 2006 did not apply to any such allotment, provided
that this power shall be limited to the allotment of equity
securities of up to an aggregate nominal value of GBP5,000. The
authority granted by this resolution will expire at the conclusion
of the Company's next annual general meeting after this resolution
is passed or, if earlier, at the close of business on 30 June 2019
save that the Company may, before such expiry make offers or
agreements which would or might require equity securities to be
allotted (or treasury shares to be sold) after the authority
expires and the directors may allot equity securities (or sell
treasury shares) in pursuance of any such offer or agreement as if
the authority had not expired.
7 That the Company be generally and unconditionally authorised
for the purposes of section 701 of the CA 2006 to make one or more
market purchases (as defined in section 693(4) of the CA 2006) of
its ordinary shares with nominal value of GBP0.00001 each in the
Company, provided that:
7.1 the Company does not purchase under this authority more than
24,760,524 ordinary shares;
7.2 the Company does not pay less than GBP0.00001 for each
ordinary share; and
7.3 the Company does not pay more per ordinary share than the
higher of (i) an amount equal to 5 per cent. over the average of
the middle-market price of the ordinary shares for the five
business days immediately preceding the day on which the Company
agrees to buy the shares concerned, based on share prices published
in the Daily Official List of the London Stock Exchange; and (ii)
the amount stipulated by the regulatory technical standards adopted
by the European Commission pursuant to Article 5(6) of the Market
Abuse Regulation (EU) No. 596/2014.
This authority shall continue until the conclusion of the
Company's annual general meeting in 2019 or 30 June 2019, whichever
is the earlier, provided that if the Company has agreed before this
date to purchase ordinary shares where these purchases will or may
be executed after the authority terminates (either wholly or in
part) the Company may complete such purchases.
By Order of the BoardCraig BrownDirector and Company
SecretaryRegistered Office:Unit 117, Chester House81-83 Fulham High
StreetFulham GreenLondon, SW6 3JA
29 March 2018
NOTES ON RESOLUTIONS
The following paragraphs explain, in summary, the Resolutions to
be proposed at the Annual General Meeting (the "Meeting").
Resolution 1: Receipt of the annual accounts
Resolution 1 proposes that the Company's annual accounts for the
period ended 30 September 2017, together with the reports of the
directors and auditors on these accounts, be received, considered
and adopted.
Resolution 2: Election of Weili Tang
Resolution 2 proposes that Mr Weili Tang, who was appointed
since the last Annual General Meeting of the Company and is
retiring in accordance with article 29.1.1 of the Company's
articles of association, be elected as a director of the
Company.
Resolution 3: Re-appointment of Auditor
Resolution 3 proposes the reappointment of the Company's
existing auditor to hold office until the end of the next such
meeting.
Resolution 4: Remuneration of Auditor
Resolution 4 is to authorise the audit committee of the Company
to determine the remuneration of the Company's auditors.
Resolution 5: Authority to allot shares
Resolution 5is to renew the directors' power to allot shares in
accordance with section 551 of the CA 2006. The authority granted
at general meeting on 23 March 2017 is due to expire on 30 June
2018.
If passed, the resolution will authorise the Directors to allot
equity securities up to a maximum nominal amount of GBP5,000, which
represents approximately 202% of the Company's issued ordinary
shares as at 28 March 2018 (being the latest practicable date
before publication of this document).
If given, these authorities will expire at the annual general
meeting in 2019 or on 30 June 2019, whichever is the earlier.
The directors have no present intention to issue new ordinary
shares, other than pursuant to the exercise of options or warrants.
However, the directors consider it prudent to maintain the
flexibility to take advantage of business opportunities that this
authority provides.
As at the date of this document the Company does not hold any
Ordinary Shares in the capital of the Company in treasury.
Resolution ý6: disapplication of pre-emption rights
Resolution 6 is to grant the directors the authority to allot
equity securities for cash or sell any shares held in treasury
otherwise than to existing shareholders pro rata to their holdings,
as there may be occasion where it is in the best interests of the
Company not to be required to first offer such shares to existing
shareholders.
Accordingly, resolution ý6 will be proposed as a special
resolution to grant such a power and will permit the directors to
allot pursuant to the authority to allot granted by resolution 5 to
allot equity securities (as defined by section 560 of the CA 2006)
or sell treasury shares for cash without first offering them to
existing shareholders in proportion to their existing holdings up
to a maximum nominal value of GBP5,000 representing approximately
202% of the Company's issued ordinary shares (excluding treasury
shares) as at 28 March 2018 (being the latest practicable date
before publication of this document). If given, this authority will
expire at the annual general meeting in 2019 or on 30 June 2019,
whichever is the earlier.
Resolution 7
Resolution 7 will be proposed as a special resolution and will
give the Company authority to purchase its own shares in the
markets up to a limit of 10 per cent. of its issued ordinary share
capital. The maximum and minimum prices are stated in the
resolution. Your directors believe that it is advantageous for the
Company to have this flexibility to make market purchases of its
own shares.
Your directors will exercise this authority only if they are
satisfied that a purchase would result in an increase in expected
earnings per share and would be in the interests of shareholders
generally. In the event that shares are purchased, they would
either be cancelled (and the number of shares in issue would be
reduced accordingly) or, in accordance with the CA 2006, be
retained as treasury shares.
As at 28 March 2018, the total number of options and warrants
over shares that were outstanding under all of the Company's share
option plans was 110,636,980 which if exercised would represent
44.7 per cent. of the Company's issued share capital at that date.
If the Company were to purchase its own shares to the fullest
possible extent of its authority from shareholders , the number of
outstanding options could potentially represent 40.6 per cent. of
the issued share capital of the Company.
If given, these authorities will expire at the annual general
meeting in 2019 or on 30 June 2019, whichever is the earlier.
END.
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(END) Dow Jones Newswires
March 29, 2018 02:00 ET (06:00 GMT)
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