ECR Minerals Regulatory News (ECR)

22 Jan 2016 07:00

ECR MINERALS plc

(“ECR Minerals”, “ECR” or the “Company”)

AIM: ECR

US OTC: MTGDY

COLLABORATION WITH METAL TIGER PLC

LONDON: 22 JANUARY 2016 - The directors of ECR Minerals plc are pleased to announce a collaboration with Metal Tiger plc (“MTR”) in relation to ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”).

MGA is estimated to have tax losses of approximately A$66 million as at 30 June 2015 (the “Tax Losses”) which may be available, subject to certain conditions (as described in the announcement of 4 December 2015), to reduce future taxable profits of MGA. MGA is therefore seeking a business opportunity in Australia with the capacity to generate profits.

Facilitation Agreement

Accordingly, MGA, ECR and MTR have entered into a facilitation agreement (the “Agreement”) which provides as follows:

1. In the event that MTR introduces a business opportunity to MGA and MGA proceeds to generate profits from such opportunity, MTR shall receive from MGA a fee (the “Introducer’s Fee”) equal to 25% of the tax which would have been payable by MGA in respect of the profits generated by such activity if not for the availability of some or all of the Tax Losses (only to apply to Tax Losses which have arisen prior to the date of the Agreement, and no fee to be payable in the event that none of the Tax Losses are ultimately available to reduce the taxable profits of MGA).

2. The Introducer’s Fee, if due, shall be payable in respect of each tax year at the time the relevant tax return for the year is no longer open for enquiry, under ordinary circumstances, by the Australian Tax Office (ATO). Currently, such a tax return would be open for enquiry, under ordinary circumstances, for four years from the date of lodgement.

3. Neither ECR nor MGA nor any other person:

(a) makes any warranty or representation, nor gives any assurance whatsoever that the Tax Losses will ultimately be available, in whole or in part, to reduce any future taxable profits of MGA, nor that any taxable profits will in fact arise;

(b) shall be obliged to take, or refrain from taking, any action to ensure that the Tax Losses will ultimately be available, in whole or in part, to reduce any future taxable profits of MGA;

(c) accepts any liability whatsoever to any person in respect of efforts made by MTR or any other person to identify a business opportunity for MGA, except as expressly stated in the Agreement;

(d) shall be under obligation to proceed with any business opportunity or potential transaction which may be introduced by MTR or any other person.

4. In the event MTR introduces a person willing to purchase some or all of ECR’s shares in MGA, or a person willing to enter into a transaction of any other nature in relation to MGA, and in the event such a sale or other transaction is agreed and completed, ECR and/or MGA (as may be applicable) shall pay to MTR 25% of any consideration for the sale or other transaction as and when such consideration is actually received by ECR and/or MGA (as may be applicable).

5. The Agreement may be terminated by any party hereto upon 14 days’ notice in writing to the other parties. Termination shall have no effect on any applicable payment(s) as and when due to MTR under the Agreement, and should MGA or ECR, as the case may be, enter into a sale agreement or other transaction of any nature with a party introduced by MTR as contemplated in clauses 1 and 4 of the Agreement, within two years of termination, then applicable payment(s) to MTR shall apply as and when due as though the Agreement was not terminated at the time the sale or transaction was entered into and/or completed with the party introduced by MTR.

Stephen Clayson, Chief Executive Officer of ECR, commented:

“The directors of ECR are pleased to have established a framework for the introduction of potentially appropriate opportunities for Mercator Gold Australia by Metal Tiger, which has links to Australia through two of its directors, and we hope that the collaboration will prove fruitful.”

The Agreement constitutes a related party transaction under the AIM Rules for Companies, by virtue of Paul Johnson, an executive director of Metal Tiger, having been a director of ECR within the twelve months preceding the date of the Agreement. The current directors of ECR consider, having consulted with Cairn Financial Advisers LLP, the Company’s nominated adviser, that the terms of the Transaction are fair and reasonable insofar as ECR shareholders are concerned.

ABOUT ECR

ECR is a mineral exploration and development company with the right to earn a 50% interest in the Danglay epithermal gold project in the Philippines. Danglay is an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines. An NI43-101 technical report was completed in respect of the Danglay project in December 2015, and is available for download from ECR’s website.

ECR has a 100% interest in the SLM gold project in La Rioja Province, Argentina. Exploration at SLM has focused on identifying small tonnage mesothermal gold deposits which may be suitable for relatively near term production.

FOR FURTHER INFORMATION PLEASE CONTACT:

ECR Minerals plc Tel: +44 (0)20 7929 1010William (Bill) Howell, Non-Executive ChairmanStephen Clayson, Director & CEORichard (Dick) Watts, Technical Director

Email: info@ecrminerals.comWebsite: www.ecrminerals.com

Cairn Financial Advisers LLP Tel: +44 (0)20 7148 7900Nominated AdviserEmma Earl/Jo Turner

Vicarage Capital Ltd Tel: +44 (0)20 3651 2910BrokerRupert Williams/Jeremy Woodgate

Blytheweigh Tel: +44 (0)20 7138 3204Public RelationsTim Blythe/Camilla Horsfall

FORWARD LOOKING STATEMENTS

This announcement may include forward looking statements. Such statements may be subject to a number of 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 as a result of new information, future events or for any other reason.

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