Member Info for Boffin

In many ways I hope you are correct but they don't update the website regularly. For example there is no mention of anything under "Projects"about Paleo but we ll know its a done deal.

On Bloomberg I just noticed that Adam Jones is recorded as Former Chief Geologist at ECR Minerals .

Has he actually "left the building" ? I don't recall it being mentioned.

If so that suggests we have lost our primary "boots on the ground" exploration surveying expertise/ capacity. I guess that would tie in with emphasis currently on uprating production at various sites but what about Lolworth surveying and drilling program originally planned for this year? Great asset that Mike Parker is I don't see him spending too much time as our field geologist.

My best guess ( and it is just that!) is that much of it is the write down value from the new price of the capital equipment we are picking up as part of this deal

At the time I seem to recall they mentioned recruiting PhD student(s) to do the basic "boots on the ground" investigating and subsequent modelling. Ir that's all they do then it will be 3-4 years from recruitment before we get published data packages. Maybe Australia is different to the UK but here a PhD thesis is required to contain "novel work" which means no publication of substantial content before submitting the thesis for examination.

There are a couple of historic assets that now never get a mention but I am not aware of them being disposed of. Probably not worth much at the moment but shouldn't just be "lost". And a research note like this should at least be comprehensive.

In Feb 2023 ECR announced "ECR Minerals plc (LON: ECR), the gold exploration and development company focused on Australia, is pleased to announce that its shareholding in Cordillera Tiger Gold Resources, Inc (“Cordillera”), owner of Exploration License EP-006 at the Danglay gold project in the north of the Philippines, has increased from 70% to 90%."

In Argentina we sold the SLM project but retained a royalty position. ECR is entitled to an NSR royalty of up to 2% of future production from the SLM gold project, capped at US$2.7 million

A broadly similar deal on the Bailieston project would be mot welcome.A chance to get some benefit for all the effort and investment so far at minimal further cost in cash and time. It would also allow management to focus on existing projects in Queensland and perhaps securing further exploration licences in the region.

Paul Johnson has previous with ECR. He was chairman at the time that Stephen Clayson was CEO. Not an inspiring success!

Its only just morning where I am so just seen this.

Has anyone noticed or commented that John Wilson our CEO is listed on the Volex website as a non exec director?

I would have thought that was a relevant thing to mention in an RNS discussing a joint development agreement. between the two companies

Haven't looked at this board for months but noticed the modest recovery in the SP and wondered if this board had recovered some useful discussion.

I was greeted with seventeen greened out messages on page 1 and nothing that added useful info about AFC

Why oh why did I bother?

The contracts are not necessarily mutually exclusive. Perhaps Nifty lift need a 1kW cell for some machinery and the higher output of AFC cells for the rest.

Actually ECR hit exactly this issue over a decade ago with the Derewo river project in Papua New Guinea. We had clear licenses but just couldn't get the various local and central administration official support to secure the site and eject the swarm of illegal miners who were plundering the asset. It finally dawned on Silver and Harford that so much of the loot was being handed over to various officials from the miners that they were never going to let a properly run business in and our interest was diluted out to a local set up for very little return.

First go and read the accounts pages in the past couple of annual reports. I guarantee you will not find anything called a tax loss in the numbers. What you will find are the accumulated revenue losses.

Calling the losses accrued within Mercator as a tax loss is misleading. So is calling it a potential rebate.

What it does mean is that at some time in the future the first Aus$ 80 million or so of profit revenue they make can be set against the accrued revenue losses and thus will attract no corporation tax . Aus corporation tax is currently circa 30% so the actual tax benefit is 30% of 80 million ie 24 million Aus$. Pretty close agreement to that quoted by Argonaut and I'm confident that at least they understand the situation.

But to get the benefit first either ECR have to make Aus$80million profit or Argonaut have to come up with some kind of deal that the taxman agrees is a legitimate use of the revenue losses that doesn't contravene thee "Continuity of Ownership" test. It's been done before but its rarely easy and Argonaut don't work for free.

I have never said a deal couldn't be done! I even suggested that a well constructed JV might provide a win win. Finding a method which doesn't contravene tax law and a partner who finds it attractive enough may take quite a while. Several previous managements tried and failed.

But please do tell me where a £35 million tax rebate is going to come from

It's quite extraordinary how much the tax loss situation is misunderstood and misrepresented on here.

The top line is that the potential benefit arises from not having to pay corporation tax at 30% on the first Aus$80 million of profit ie Aus$24million , circa £12 million. This is because of losses held within ECR that have accrued over the past 15 years or so.

Thus if ECR cannot "offload" the tax loss then first ECR has to make a profit of Aus$ 80 million and I'll leave it up to you all to argue over when that may happen.

Secondly though, as I have pointed out before, the Australian tax authorities have made it very clear that their "Continuity of Ownership" test means that any purchaser of the part of ECR that holds the tax losses cannot then restructure the resulting company to set existing profitable enterprise against the purchased loss.

That is why it takes very careful specialist handling to create an entity where the tax can be used. An RTO is one way that has been used before but it has to be credible. And given the market cap of ECR and its lack of revenue the tax authorities may rule that to be an illegal contrivance to avoid tax.

One other alternative which may work for ECR is to create a structure holding the losses together with one or more of our licenses. This is then used as collateral for a JV where ECR get some cash and the purchaser gets a share of the resulting entity.

First though we have to find a mining company that values some of our licenses and set up the necessary structure within ECR to make a JV attractive and not upset the tax men.. Simple it isn't

All due respect to the Aussie gold hunters but they mostly ever find enough gold to keep the few people involved going for another year. They aren't trying to to find enough to keep a large group of shareholders satisfied.

They are a bit like bronze age hunter gatherers living hand to mouth to keep a small family group fed and watered. ECR are trying to be modern farmers trying to develop their land well enough to feed cities of people. It requires a fundamentally different mindset and approach.

That's not to say either are guaranteed success but the two differing approaches aren't really comparable

Like you I've been around ECR on and off for a while and was at the 2011 AGM where we got rid of Silver as chair because of all sorts of "controversial" shifting around assets . I won't bore you with the details but at the time ECR was yet again in a precarious position also partly due to the Copper Flats project being mothballed because of the collapse in the world price of copper. At that meeting in 2011 there was an Australian cousin of Harfords whos accountancy business was primarily involved with Au insolvencies which involved a large amount of "financial engineering" to make best use of the losses associated with insolvency. His view at that time was an RTO was in principle possible but finding an appropriate partner for such a weak business as ECR to take over and not be challenged by the tax authorities as a tax evasion contrivance would be difficult. When a year or two later Paul Johnson and Stephen Clayson took over they on several occasions claimed they had commissioned expertise to identify a deal but nothing ever came of it. After that I dropped out for a while and I guess from CB onwards everyone on here will be up to speed

Well I'm sorry but Daramuda is mistaken. You cannot just sell Mercator to another entity and keep the tax loss. It's called in Au tax law "The continuity of ownership test". If you introduce a new beneficial owner they are simply not allowed to use the tax loss held within Mercator to set against current or future taxable profits of the new owner. Nor can they rearrange the business to make it look like profits were made within Mercator. That's what the tax office "advice" I quoted is warning about. That's why it has to be an RTO type of arrangement. As far as ECR is concerned this has been investigated for over10 years right back when that crook Silver and his sidekick Patrick Harford (RIP) were running the show and it hasn't been cracked yet.

I haven't looked in here for quite some time as game changing news seems to be taking some time. I notice though that the old chestnut of monetizing the tax losses is still being discussed. Well its still not happened because unless you can engineer a reverse TO that doesn't fall foul of the Australian tests for such activity then it can't be done. You can't just sell the tax loss containing entity ( in this case the Mercator gold subsidiary) to someone else without losing the tax loss. And for a company in ECR's position that , in my opinion, is unlikely. Otherwise it would have happened already. For a bit of guidance on the issues try taking a look at

https://bristax.com.au/tax-articles/company-carry-forward-tax-losses/

And note particularly the "advice" it contains from the Au tax office

"the company must not enter into a scheme to get around the above tests (i.e. enter into a new business or new transactions before the change in ownership, so that the same business test would be satisfied after the change in ownership).

Taxation Ruling TR 1999/9 states that the Taxation Office will strictly apply these tests with potentially dire consequences for companies whose new owners have pruned the company’s businesses, introduced new profitable activities, restructured or made any other changes."

Buyer beware!

Quite simply outrageous.

Options are issued and dated and thereby specifically linked to reward performance over a given period. This announcement is essentially recognising that things have been and still are progressing too slowly on the commercial front so the SP is going to take longer to rise than was anticipated when the options were first awarded. Tough luck shareholders but the CEO is going to do just fine--- eventually

Moving the goalposts in this fashion is sticking two fingers up to the whole concept of rewarding performance against agreed objectives. ie Objectives met in time, budget and quality criteria.

The ECR website has been down for quite a while. Perhaps an update that hasn't loaded properly? Nothing on the London Stock Exchange to suggest anything fundamental.