Acquisition

Acquisition

ECR Minerals plc

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.

HIGHLIGHTS

• Conditional option to acquire 100% of Placer Gold, which wholly owns the Hurricane Project located west of Cairns in the Hodgkinson Province, NE Queensland.
• The Hodgkinson Province hosts several goldfields including Palmer River, West Normanby and Hodgkinson. Together these fields have produced more than 45 tonnes of gold from alluvial workings and mines.
• The Hurricane Project has previously been the subject of intensive field work and sampling, and the Directors consider it to be a late-stage exploration project with three tenements all highly prospective for gold and antimony.
• The Hurricane Project does not currently have a JORC-compliant resource, but the Directors believe the physical extent of the identified mineralisation, coupled with rock chip sampling results supports additional exploration and study work ultimately focussed on mine development.
• Payment of a A$200,000 Option Fee to secure the Option (comprised of a A$39,553.25 cash payment on signing of the Binding Term Sheet and the balance amount to be spent on exploration activities over the 12 month Option Period expiring on 30 September 2023) – this will not be recoverable by ECR if the Option is not exercised.
• The total proposed consideration for the acquisition of Placer Gold is A$6.9m (approximately £3.8m) comprised of the Option Fee, a cash payment upon completion of certain milestones and a capped royalty fee (more details below).

About the Hurricane Project

The Hurricane Project area is situated in the Hodgkinson Province of NE Queensland (see Figure 2 below) and located in the Tregoora Belt to the north-west of the Northcote District. The area hosts several goldfields such as the Palmer River, West Normanby and Hodgkinson. Together these fields have produced more than 45 tonnes of gold from alluvial workings and mines.

The Directors consider Hurricane to be a late-stage exploration project. Previously the area has been the subject of intensive field work and sampling with three tenements all highly prospective for gold and antimony, a pathfinder mineral often associated with the presence of gold, see ‘Background to Hurricane’ below.

The Hurricane Project is located approximately 400km due north of the Lolworth Range project, where ECR will shortly complete a soil sampling programme across its three exploration tenements.

ECR CEO Andrew Haythorpe commented: I am pleased and proud to announce that ECR has arranged this conditional option to acquire Placer Gold, which wholly owns the Hurricane Project in North Queensland. This is a project I have detailed knowledge of through work prior to joining ECR. It is also in an area I am very familiar with having worked as a geologist in Far North Queensland and studied at James Cook University. Historic mineral and rock chip samples are detailed in the raft of historical data on Hurricane compiled by Dr Harry Wilhelmij. Hurricane is a later stage gold and antimony property which I believe has exceptional near-term development potential.”

“I believe this potential acquisition could add a new dimension of value to the ECR offering, and on the signing of the associated transaction documents, we expect to be in a position to commence additional exploration and study work on the ground, with the aim of establishing a maiden JORC Resource for the project. We anticipate satisfying the Option Fee and exercising the Option towards the end of the Option Period, after an extensive period of due diligence and additional exploration, and we look forward to providing shareholders with updates as this potential acquisition progresses”

ECR Chairman David Tang added: “I speak for the ECR board when I say I am delighted that having appointed Andrew as CEO earlier this year, he is bringing his own vision and expertise to bear on our asset portfolio. The potential acquisition of the Hurricane Project is an exciting opportunity for ECR as it could bring in a relatively late-stage exploration asset that Andrew and the team can fast-track using our in-house expertise and resources. I look forward to seeing how this potential acquisition progresses”

A map showing the location of the Hurricane Project can be found at Figure 1 below:

https://www.ecrminerals.com/images/2022/ECR_Hurricane_fig1.png

Map showing the location of the Hurricane Project in the Tregoora Belt at Figure 1 below:

https://www.ecrminerals.com/images/2022/ECR_Hurricane_fig2.png

Map showing the location of the Hurricane Project exploration permits at Figure 3 below:

https://www.ecrminerals.com/images/2022/ECR_Hurricane_fig3.png

KEY AGREEMENT TERMS

The binding term sheet agreement provides ECR or its Nominee with a conditional option to acquire 100% of the fully paid ordinary shares in the capital of Placer Gold, a Company 100% owned by Bannister Group Pty Ltd (ACN 128 064 737) and Geoprospect Pty Ltd (ACN 139 704 993) (together, the Vendors).

This consideration for the acquisition is A$6.9m (approximately £3.8m) which comprises:

• The A$200,000 Option fee comprised of an initial sum of $39,553.25 payable on signing of the agreement, with the balance to be spent on exploration activities in accordance with the Option Period Work Program (see below) (“Option Fee”).
• If the balance of the Option Fee (i.e. other than the cash payment of $39,553.25) has not been spent on exploration activities by 31 July 2023, then ECR may elect to pay the remaining balance of the Option Fee to the Vendors in cash.
• A$1,000,000 payable in cash and ECR Shares (comprising a minimum cash payment of AUD$250,000 and a maximum cash payment of AUD$750,000 as determined by ECR is its sole discretion). The ECR Shares to be issued at a price equivalent to the 60-day VWAP prior to Completion.
• A deferred cash payment of A$200,000 (JORC Milestone Cash Payment), payable pro-rata to the Vendors, on the day ECR/Placer Gold announces a maiden mineral resource estimate in accordance with the JORC Code at any of the Tenements.
• A royalty of 2% of the net smelter return on all minerals, mineral products and concentrates subject to a Royalty Cap and Royalty buy back right by ECR, produced and sold from the Tenements (capped at £3m).

ECR and the Vendors will work together to finalise and develop a work program to be implemented during the Option Period (“Option Period Work Program“) by 30 November 2022. The Option Fee (less the initial payment of $39,553.25) will be spent on exploration in accordance with the Option Period Work Program (or paid in cash as mentioned above).

ECR anticipates satisfying the Option Fee and exercising the Option to acquire Placer Gold before the expiry date of 31 October 2023, following:

• an approximate ten month due diligence process including the ongoing satisfaction of the conditions set out below; and
• the implementation of the Option Period Work Program set out above.

Completion of the Acquisition is conditional upon:

• ECR receiving all necessary regulatory, government, shareholder and third-party consents and approvals required to complete the transaction contemplated, including any necessary authorisations and consents;
• completion of due diligence by ECR to the absolute satisfaction of ECR;
• renewal of EPM19437 and renewal of EPM25855, or the approval of such other mining tenement or tenements as may be granted over the relevant ground in lieu of EPM19437 and EPM25855;
• completion of Cultural Heritage Clearance Survey and issue of the Inspection Report;
• execution of Landholder Conduct and Compensation Agreement; and
• the completion and execution of the formal Transaction Documentation (including a Share Sale Agreement, an Escrow Agreement for the ECR Shares and a Royalty Deed).

If the Conditions are not satisfied (or waived by ECR in writing) on or before 5.00pm 31 October 2023 (EST) (or such other date agreed by ECR and the Vendors, in writing), the agreement will be at an end and the parties will be released from their obligations to each other.

As set out above, there can be no assurance that this acquisition will complete but the Directors have every expectation that the transaction will proceed as intended.

BACKGROUND TO HURRICANE

The Hurricane Project area is situated in the Hodgkinson Province of NE Queensland (see Figure 1 and Figure 2 above) which forms the northernmost part of the Palaeozoic Tasman Fold Belt. The Hodgkinson Province hosts several goldfields such as the Palmer River, West Normanby and Hodgkinson. Together these fields have produced more than 45 tonnes of gold from alluvial workings and mines. Within the Hodgkinson Province there are several gold districts, including the Northcote, Tregoora, Atric and Reedy districts which host a total JORC 2004 resource of 11.4 million tonnes at 1.7g/t Au for 618,000oz Au (ASX releases by Bulletin Resources on 3 August 2018 and by Republic Gold Limited on 30 October 2009).

The Hurricane Project is located in the Tregoora Belt to the north-west of the Northcote District, (as shown in Figure 2 above) and consists of three mining tenements EPM 27518, EPM 25855 and EPM 19437, across which three mineralised vein systems are present. The Project does not currently have a JORC-compliant resource, however in the opinion of the Directors, the physical extent of the identified mineralisation, coupled with rock chip sampling results supports additional exploration and study work ultimately focussed on mine development.

ECR has been provided with certain historical data from previous exploratory activities at site. However, this data has not been verified by ECR, accordingly it is provided for guidance purposes only and should not be relied upon:

Historic rock chip samples from surface-oxidised quartz breccia veins appear to contain significant gold grades. Excluding samples collected from the wall rock, the average gold-in-rock chip values reported in historic results include:

• 18.92 g/t Au from seven samples collected along the Typhoon Vein that is +500m long and +0.5m wide (with minimum/maximum grades of 0.08 and 163 g/t Au respectively)
• 2.64 g/t Au from twenty four samples collected along the lenticular Holmes Vein that is +100m long and +60m wide (with minimum/maximum grades of 0.03 and 21.7 g/t Au respectively)
• 1.33 g/t Au from fifty four samples collected along the Tornado Vein that is +700m long and +3.5m wide (with minimum/maximum grades of 0.01 and 17.6 g/t Au respectively)
• 0.79 g/t Au from twenty four samples collected along the Monsoon Vein that is +600m long and +8m wide (with minimum/maximum grades of 0.01 and 3.96 g/t Au respectively) 1.57 g/t Au from the seventy samples collected along the Bouncer/Pederson Vein Systems (with minimum/maximum grades of 0.01 and 9.7 g/t Au respectively).
• Certain of the rock chip samples from the quartz breccia veins contain significant antimony (Sb) grades. Average antimony-in-rock chip values include:
• 19.1% Sb from 24 samples collected within the Holmes Vein with grades ranging from 0.005% to 20.8% Sb in 24 samples
• 13.4% Sb from two samples collected within the Bouncer Vein System
• Rock chip samples from other gold mineralised veins contained less than 0.2% Sb.

In addition, ECR has been provided with the additional information, which has also not been verified by ECR and therefore is provided for guidance purposes only and should not be relied upon, of a 60kg bulk metallurgical surface sample from the Tornado Vein which averaged 4.2 g/t Au.

BACKGROUND TO PLACER GOLD

For the financial period ended 30 June 2022 (unaudited) Placer Gold generated profits of A$35.5k (c.£20k), had a turnover of A$95.8k (c.£54.6k) and gross assets of A$32.5k (c.£18.5k).

REVIEW OF ANNOUNCEMENT BY QUALIFIED PERSON

This announcement has been reviewed by Adam Jones, Technical Director of Exploration at ECR Minerals plc. Adam Jones is a professional geologist and is a Member of the Australian Institute of Geoscientists (MAIG). He is a qualified person as that term is defined by the AIM Note for Mining, Oil and Gas Companies.

MARKET ABUSE REGULATIONS (EU) No. 596/2014

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.

FOR FURTHER INFORMATION, PLEASE CONTACT:

ECR Minerals plc		Tel: [phone]
David Tang, Non-Executive Chairman Andrew Haythorpe, CEO
Email: [e-mail]
Website: www.ecrminerals.com
WH Ireland Ltd		Tel: [phone]
Nominated Adviser Katy Mitchell / Andrew de Andrade
SI Capital Ltd		Tel: [phone]
Broker
Nick Emerson
Novum Securities Limited		Tel: [phone]
Broker Jon Belliss
Brand Communications		Tel: [phone]
Public & Investor Relations
Alan Green

ABOUT ECR MINERALS PLC

ECR Minerals is a mineral exploration and development company. ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) has 100% ownership of the Bailieston and Creswick gold projects in central Victoria, Australia, has six licence applications outstanding which includes one licence application lodged in eastern Victoria. (Tambo gold project). MGA is currently drilling at the Bailieston Blue Moon Project (EL5433) and undertaking geochemical exploration on the Creswick (EL6148) project and has an experienced exploration team with significant local knowledge in the Victoria Goldfields and wider region.

ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd (“LUX”) which has three approved exploration permits covering 946 km² over a relatively unexplored area in Queensland, Australia.

Following the sale of the Avoca, Moormbool and Timor gold projects in Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX) and the subsequent spin-out of the Avoca and Timor projects to Leviathan Gold Ltd (TSX-V: LVX), Mercator Gold Australia Pty Limited has the right to receive up to A$2 million in payments subject to future resource estimation or production from projects sold to Fosterville South Exploration Limited.

ECR holds a 70% interest in the Danglay gold project; an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines, which has a 43-101 compliant resource. ECR also holds a royalty on the SLM gold project in La Rioja Province, Argentina and can potentially receive up to US$2.7 million in aggregate acro

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