(Alliance News) - ECR Minerals PLC on Wednesday said it has sold its gold project in Argentina to a Chinese firm in order to focus on the company's core gold exploration activities in Australia.
Shares in ECR were up 12% at 0.70 pence each in London.
The London-based precious metals explorer has sold its Argentinian subsidiary Ochre Mining SA, which holds the SLM gold project in La Rioja, to Hanaq Argentina SA.
The consideration for the acquisition is the grant to ECR of a 2% net smelter return royalty in respect of four SLM licences, and a 1% royalty return in respect of the other three remaining SLM licences. The net smelter return royalty is capped at USD2.7 million.
Craig Brown, ECR's chief executive, said: "We are pleased to retain exposure to potential upside from the SLM gold project in the form of a royalty on future production, and we 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.
"Moreover, the transaction enables ECR to concentrate its resources on our core gold exploration activities in Australia."
The book value of Ochre Mining and the SLM project in ECR's results for the six months ended March 31, 2019, was GBP1.1 million. In the year ended September 30, 2019, Ochre Mining reported no turnover and no profits, and net assets of GBP170,000
By Tapan Panchal; tapanpanchal@alliancenews.com
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ECR Minerals (ECR)