ECR Minerals Regulatory News (ECR)

18 Feb 2013 15:22

ECR MINERALS plc

("ECR Minerals", "ECR" or the "Company")

AIM: ECR

US OTC: MTGDY

LONDON: 18 FEBRUARY 2013 - ECR Minerals plc is pleased to announce that it has executed a financing package with YA Global Master SPV Ltd ("YA"). The elements of the package are:

a reprofiling of the Company's repayment obligations in respect of the outstanding balance of the USD 1 million loan received from YA in August 2012 (the "Loan"); an equity swap (the "Equity Swap") with a benchmark price of 0.245p (the "Benchmark Price") in relation to 61,224,486 ordinary shares of the Company of 0.1p ("Ordinary Shares"); a modified advance (the "Modified Advance") under ECR's Standby Equity Distribution Agreement ("SEDA") with YA raising GBP 150,000 before costs by the issue of 61,224,489 Ordinary Shares at a price of 0.245p per share; a separate advance (the "Advance") under the SEDA raising GBP 25,000 before costs by the issue of 10,827,197 Ordinary Shares at a price of 0.2309p per share; issue of 10,204,081 Ordinary Shares at 0.245p per share in settlement of £25,000 in fees due to YA in connection with a separate equity swap entered into with YA by the Company in August 2012.

The immediate net proceeds of the financing package will be used to support the general operations of the Company including the evaluation of potential new mineral projects.

The Equity Swap will allow the Company the opportunity to benefit from increases in its share price above the level of the Benchmark Price during the period of the Equity Swap by receiving extra funds from YA, subject to the parameters described below.

LOAN

The original principal amount of the Loan was USD 1 million, which was due to be repaid in twelve tranches of varying sizes, with the final repayment due in July 2013. The final repayment is now due in August 2013, and the amounts and due dates of the remaining repayment tranches have been amended in favour of the Company.

Interest at a rate of 10% per annum on the outstanding principal amount is payable with each repayment tranche and a restructuring fee of USD 29,500 has been paid to YA out of the proceeds of the Modified Advance. The Company has the right to repay the outstanding amount of the Loan early if desired.

The Loan is secured over listed securities held by the Company and under the SEDA. YA has the right to convert the outstanding amount of the Loan into Ordinary Shares at any time based on a price of 1.0938p, being 150% of the volume weighted average price of ECR shares on AIM for the five trading days prior to the date the Loan was originally agreed.

EQUITY SWAP

ECR has entered into the Equity Swap with YA in relation to 61,224,486 Ordinary Shares. The period of the Equity Swap is approximately 6 months.

The Equity Swap provides for monthly payments to either the Company or YA depending on the performance of the ECR share price in relation to the Benchmark Price of 0.245p. It also entails GBP 75,000 of the proceeds of the Modified Advance being withheld by YA and released to ECR in 6 equal monthly instalments (each a "Monthly Instalment").

In a given month, the figure that is 90% of the average of the lowest ten daily volume weighted average prices for ECR shares on AIM shall be deemed to be the market price of the shares (the "Market Price") for the purposes of the Equity Swap.

If the Market Price for a given month is greater than the Benchmark Price, then in respect of 10,204,081 Ordinary Shares (the "Applicable Share Amount"), YA will pay to the Company a proportion of the difference between the Market Price and the Benchmark Price. If the Market Price exceeds 2p, this proportion will be increased.

Any such amount would be received by ECR in addition to the relevant Monthly Instalment, and there is no upper limit on the additional amount that may be received by the Company pursuant to the Equity Swap.

If the Market Price for a given month is less than the Benchmark Price, then in respect of the Applicable Share Amount, ECR will pay to YA the difference between the Market Price and the Benchmark Price. In practice any such payment would be satisfied first by deduction from the relevant Monthly Instalment, however if the Market Price were less than half the Benchmark Price, the amount due to YA would exceed the relevant Monthly Instalment. ECR would therefore not receive the Monthly Instalment and would be required to make a payment to YA.

Under certain circumstances YA has the right to terminate the Equity Swap early and accelerate all the payment obligations, and under certain circumstances, for example if the Company is in material breach of any its obligations to YA, other methods of determining a Market Price for the purposes of terminating the Equity Swap may be applied.

Under no circumstances can YA require ECR to issue any additional shares pursuant to the Equity Swap, and YA and its affiliates are prohibited from holding any net short position in ECR shares.

A commitment fee of GBP 50,000 was payable to YA by the Company in connection with a separate equity swap entered into with YA in August 2012. Of this amount, GBP 25,000 was paid in August 2012 and the remaining GBP 25,000 is now due and has been settled by the issue of 10,204,081 Ordinary Shares. The equity swap entered into in August 2012 remains in effect and will run in parallel with the Equity Swap.

Pursuant to this announcement application has been made for a total of 82,255,767 new Ordinary Shares to be admitted to trading on AIM. Dealings are expected to commence on 21 February 2013. The new Ordinary Shares will rank pari passu in all respects with the Ordinary Shares of the Company currently traded on AIM.

Following admission, the Company's issued ordinary share capital will consist of 1,095,979,200 Ordinary Shares. The Company does not hold any Ordinary Shares in treasury. Therefore the total number of Ordinary Shares with voting rights is 1,095,979,200.

The above figure of 1,095,979,200 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Services Authority's Disclosure and Transparency Rules.

ABOUT YA

YA is advised by Yorkville Advisors, which is an investment manager headquartered in Jersey City, New Jersey, USA. Yorkville is active across North America, Europe and the Asia-Pacific region, and operates in the UK through its affiliated entity Yorkville Advisors UK LLP.

ABOUT ECR MINERALS PLC

ECR is a mineral development company with, among other interests, 100% ownership of the Sierra de las Minas gold project in La Rioja Province, Argentina; a 21% fully diluted stake in THEMAC Resources Group Ltd (TSX-V: MAC), which is focused on the development of the Copper Flat copper-molybdenum-gold-silver porphyry project in New Mexico, USA; and a stake in Paniai Gold Ltd (unquoted), which has exposure to the Derewo River alluvial gold mining and exploration project in Papua, Indonesia.

FOR FURTHER INFORMATION PLEASE CONTACT:

ECR Minerals plc Tel: +44 (0)20 7929 1010

Paul Johnson, Non-Executive Chairman

Stephen Clayson, Director & Chief Executive Officer

Email: info@ecrminerals.com

Website: www.ecrminerals.com

Daniel Stewart & Company plc Tel: +44 (0)20 7776 6550

David Hart/Antony Legge

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