Acquisition27 Oct 2022 08:52
Didn't see this coming
BZN
Acquisition
Share this article
Acquisition
ECR MINERALS PLC
Released 07:28:00 27 October 2022
LONDON--(BUSINESS WIRE)--
ECR MINERALS plc
(“ECR Minerals”, “ECR” or the “Company”)
Proposed Acquisition of Placer Gold Pty Limited
ECR Minerals plc (LON: ECR), the exploration and development company focused on gold in Australia is pleased to announce it has today entered into a Binding Term Sheet pursuant to which it has been granted a conditional option to acquire the entire issued share capital of Placer Gold Pty Limited (“Placer Gold”) (the “Option”).
Placer Gold is the beneficial holder of three granted mining tenements (EPM 27518, EPM 25855 and EPM 19437) located in NE Queensland, together known as the Hurricane Project (“Hurricane Project” or “Hurricane”)) (see Figure 1 and Figure 3 below).
To secure the option ECR has to pay a A$200,000 (approximately £144k) option fee (“Option Fee”), which is to be satisfied by a contribution to costs, the implementation of a work programme over the assets (details below) and a balancing cash payment to the shareholders of Placer Gold ("Vendors”). Once the Option Fee has been fully satisfied ECR can then exercise the Option at any time prior to 30 September 2023, at its absolute discretion. On exercise of the Option, ECR will enter into the transaction documents necessary to effect the acquisition in accordance with the requirements set out in the term sheet. The key details of that agreement are set out below. ECR has today made an initial payment of A$39,500 to the Vendors (a total of approximately £22k) which will be counted towards ECR’s payment of the Option Fee.
If the Option Fee is fully satisfied and the Option is exercised, the total consideration for the acquisition of Placer Gold is A$6.9m (approximately £3.8m, including the Option Fee, a further cash payment of A$200,000 payable in the event of certain milestones being reached, and a 2% net smelter royalty payable in the event the Hurricane Project is taken into production in the future, capped at £3m). However, the acquisition is subject to, inter alia, completion of due diligence to ECR’s satisfaction, all necessary consents, approvals and licence renewals being obtained, and the execution of formal transaction documentation (including a royalty deed and shareholders agreement). Accordingly, at this stage there can be no guarantee that ECR will obtain the Option or acquire Placer Gold. Nevertheless, the Directors have every expectation that the work programme will commence, due diligence enquiries will produce favourable results and that all necessary approvals and renewals will be received, such that the acquisition can proceed as intended.
A further update will be provided if and when ECR satisfies the Option Fee and another announcement will be made if ECR exercises the Option and begins the process of acquiring Placer Gold.
Sign In
Follow the stocks
