TIDMECR
AIM: ECR
ECR MINERALS plc
("ECR Minerals", "ECR" or the "Company")
AUDITED FINANCIAL STATEMENTS FOR YEARED 30 SEPTEMBER 2019
LONDON: 31 MARCH 2020 - 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 YEARED 30 SEPTEMBER 2019
For the year to 30 September 2019 the Group recorded a total
comprehensive loss of GBP762,586, a small increase compared with
GBP721,460 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 GBP3,640,604,
in comparison with GBP3,651,545 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 GBP171,000) in
relation to MGA's financial year ended 30 June 2018, and
post-period received a further refund of A$555,212 (approximately
GBP295,515) 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 GBP757,210, with
cash outflows of GBP507,250, and a year-end cash balance in the
Group of GBP268,517. 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
GBP60,000 GBP50,000 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 GBP60,000, each significant component of the Group was
audited to an overall materiality ranging between GBP20,000 -
GBP42,000 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 GBP3,000 (2018: GBP2,500). 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 -- Our work in this area included: --
exploration and development costs Sample testing of exploration and
(refer note 10) The group as at 30 evaluation expenditure to assess their
September 2019 had ongoing early stage eligibility for capitalisation under
exploration projects in Philippines, IFRS 6 by corroborating to the
Argentina and Australia. There is a original source documentation. --
risk that the expenditure is not Inspection of the current exploration
correctly capitalised in accordance licences and ensure that they remain
with IFRS 6. There is also a risk that valid and that the Group has good
the capitalised exploration costs are title. -- Review of correspondence
not recoverable and should be (where applicable) with licensing
impaired. The carrying value of authorities to ensure compliance and
intangible exploration and evaluation assess the risk of non-renewal. Assess
assets as at 30 September 2019, which the results and progress of the
is tested annually for impairment, is projects and whether they indicate the
GBP3,295,996. Specifically, there is a existence of commercially viable
dispute over the Danglay Project projects. -- Review and challenge of
(Philippines) where ECR believe they management's documented consideration
have fulfilled the criteria of the of impairment by individual project.
Earn-in and JV Agreement such that ECR Evaluate the key underlying
has earned a 25% interest. Relevant assumptions. -- Establishing the
disclosures in the financial intention of the Board to undertake
statements are made in Note 2 future exploration work. -- Review of
surrounding critical accounting any internal / external resource
judgements, and in Note 10 for estimates produced during the year. --
Intangible assets. 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
GBP1,180,666 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 GBP GBP
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 (550,018)
taxation Income tax 5 (757,210) --
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
GBP GBP
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
(721,460)
(762,586)
Consolidated & Company Statement of Financial Position
At 30 September 2019 ECR Minerals plc company no. 5079979
Group Company
30 30 30 30
September September September September
2019 2018 2019 2018
Note GBP GBP GBP GBP GBP
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
GBP623,683 (2018: GBP373,149 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 Share Exchange Other Retained
capital premium reserve reserves reserves
(Note 13) (Note 13) Total
GBP GBP GBP GBP GBP GBP
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 Share Other Retained
capital premium reserves reserves
(Note 13) (Note 13) Total
GBP GBP GBP GBP GBP
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 Year ended Year ended Year ended
30 30 30 30
September September September September
2019 2018 2019 2018
Note GBP GBP GBP GBP
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 GBP89,684 (2018: GBP15,000) 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 GBP268,517 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 GBP295,515).
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 Year ended
30 September 30 September
2019 2018
The operating loss is stated
after charging: GBP GBP
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
Year ended Year ended
30 September 30 September
Basic and Diluted 2019 2018
Weighted number of shares in issue
during the year 423,047,928 263,542,617
GBP GBP
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 GBP10,000 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 GBP10,000. 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 GBP0.00001 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 GBP0.00001 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 GBP10,000,
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 GBP10,000 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.
END
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CONTACT:
ECR Minerals plc
SOURCE: ECR Minerals plc
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