RNS Tax Loss2 Jul 2024 07:13
Appointment of adviser to realise value from tax losses
ECR Minerals plc (LON:ECR), the exploration and development company focused on gold in Australia, is pleased to announce that it has engaged Argonaut PCF Ltd ("Argonaut") to assist it in realising value from the A$75 million of tax losses through the potential sale of certain of the company's Victorian assets which carry those losses.
Argonaut is an Australian based investment banking and corporate advisory firm focused on the natural resources sector with offices in Perth and Sydney. It typically targets corporate clients with market capitalisations between A$30 million and A$5 billion and has advised on, arranged and participated in excess of A$10 billion of corporate finance transactions over the past decade. With Argonaut's market presence in Australia, ECR considers that this appointment offers a conduit to senior mining executives, mining companies, institutions and other interested parties.
By way of an indicative guide to investors, current tax rates for companies in Australia vary between 25 per cent. and 30 per cent, depending on circumstances, meaning that ECR's tax losses could have a theoretical value to a prospective buyer in the range of approximately A$18 - 22 million. In practice, any valuation will be based on several different attributes of any buyer including its existing profits, type of business, ongoing profit expectations and its own assessment of how quickly the tax losses could be used. Taking these factors into account, the Directors are advised it is unlikely that any buyer would pay more than half of this theoretical value and even then, this is still a very early stage and specialised process. There can be no guarantee that any offer will be received by ECR.
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