Update

Update

ECR Minerals plc

ECR Minerals plc is pleased to provide the following update on its activities and interests.

HIGHLIGHTS

- Permission received for drilling programme at Unchimé iron ore project in Salta Province, Argentina; mobilisation of rig to site in progress

- Sampling underway at Sierra de las Minas gold project area in La Rioja Province, Argentina and geophysical survey planned to take place at El Abra gold prospect during September

- Sale of Derewo River gold project in Papua, Indonesia to West Wits Mining completed by Paniai Gold; approximately A$525,000 worth of West Wits shares received by ECR

- US$1.5M loan secured from YA Global Master SPV Ltd, which is advised by Yorkville Advisors LLC

UNCHIMÉ IRON ORE PROJECT, ARGENTINA

Permission for the drilling programme to be carried out by ECR at the Unchimé iron ore project in Salta Province, Argentina, as described in the Company’s announcement dated 5 July 2011, has been received from the authorities in Salta.

This initial programme will use a single rig to drill up to 10 diamond core holes. The purpose of this drilling is to confirm the scale and tenor of iron mineralisation indicated by reported historical resources estimated following work at Unchimé by the Argentine government in the late 1960s and early 1970s. Mobilisation of the rig to site has commenced along with earthworks to construct drill pads and improve site road access.

Metallurgical testwork on samples taken from Unchimé is currently being carried out in Western Australia on behalf of the Company.

ECR has secured an exclusive option to acquire an ownership interest of up to 80% in the Unchimé project, subject to due diligence. The Company has 60 days from August 2 2011 to complete its due diligence on Unchimé and decide whether to proceed to acquire an initial 70% interest in the project. The planned drilling and ongoing metallurgical testwork are primary elements of the Company’s due diligence.

SIERRA DE LAS MINAS GOLD PROJECT, ARGENTINA

ECR plans to commence a ground based geophysical survey at its 100% owned El Abra gold prospect in La Rioja Province, Argentina during September. The survey will extend over an area approximately 1km by 500m and is intended to enable the definition of optimum targets for the proposed drilling programme at El Abra. The survey will take approximately 3 weeks to complete.

ECR has commenced a further programme of geochemical sampling across the wider Sierra de las Minas project area, of which El Abra is part. This programme is focussed on identifying and prioritising other high grade gold prospects within the project area, some of which are known from historic data. The results of the programme will be announced in due course.

PANIAI GOLD

The sale of the interest held by Paniai Gold Ltd (“Paniai”) in the Derewo River gold project in Papua, Indonesia to West Wits Mining Ltd (“West Wits”) agreed in February 2011 has now completed. The consideration paid by West Wits comprised 80 million West Wits ordinary shares, 46 million performance shares and 12.5 million options exercisable at A$0.08 for 5 years.

Paniai was formed to advance the Derewo River project in joint venture with a local partner, and West Wits has now assumed Paniai’s role in the joint venture. The Derewo River project area extends over 129,000 hectares located within 110km of Freeport’s Grasberg copper-gold complex in the central highlands of Indonesia’s Papua Province.

The Derewo River has been the site of significant small scale gold mining and the objectives of the joint venture are to establish a modern, mechanised alluvial gold mining operation and, importantly, to explore the wider project area for new gold and copper-gold deposits. Exploration will initially consist of extensive mapping and sampling and will focus on hardrock gold and copper-gold targets.

The ordinary shares issued by West Wits to Paniai have now been distributed to Paniai shareholders, including ECR, on a pro rata basis. These shares are not subject to trading restrictions.

As a 16% shareholder in Paniai, ECR has received 11,149,826 West Wits ordinary shares worth around A$525,000 based on the 12 August 2011 closing price for West Wits shares on the ASX (ticker: WWI) of A$ 0.047.

Paniai is retaining its West Wits performance shares and options, and intends to actively evaluate possible new mineral projects in Indonesia. As a substantial shareholder in Paniai, ECR expects to benefit from Paniai’s future activities and depending upon the opportunities presented the Company may seek to increase its shareholding. This may be achieved via the conversion of ECR’s outstanding loans to Paniai into shares. The West Wits performance shares issued to Paniai convert to ordinary shares subject to the Derewo River project achieving production of 20,000oz gold within 2 years.

As part of the completion of the transaction with Paniai, West Wits has raised A$3.5m (before costs) through a share placement and Share Purchase Plan (SPP). Approximately A$2m is planned to be applied to the Derewo River gold project with a further A$1.2m to be applied to further drilling of West Wits’ Emerald gold project in South Africa.

More information on West Wits can be found at www.westwitsmining.com

MERCATOR GOLD AUSTRALIA

The management, operation and control of the business and affairs of ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd (“MGA”) has now reverted back to its directors and therefore to the Company.

MGA has approximately A$100M of tax losses, and ECR is investigating ways in which these tax losses may be utilised for the benefit of the Company.

MGA is currently holding 1,252,650 shares in Reed Resources Ltd (ASX: RDR), the closing price of which on 12 August 2011 was A$0.39, valuing these shares at around A$490,000.

ACS ASIA

ACS Asia, the Thai steel products business in which ECR holds a 70% interest, is experiencing very strong enquiries and the current order book indicates that sales for the calendar year 2011 will be the highest since control of the business was acquired by ECR from Tyco International in late 2008.

THEMAC RESOURCES GROUP LTD

ECR is pleased to note recent announcements by THEMAC Resources Group Ltd (“THEMAC”), in which the Company has a 19.3% shareholding (21.3% fully diluted). THEMAC is focused on the development of the Copper Flat copper-molybdenum-gold-silver project in New Mexico, USA.

On 28 July 2011, THEMAC announced that it had increased the amount of its loan from Tulla Resources Group Pty Ltd, a company controlled by Kevin Maloney, Chairman of THEMAC, from C$5.25M to C$10M. This increase is expected to meet THEMAC’s working capital requirements for the balance of the 2011 calendar year and will primarily be used to fund the drilling programme currently underway at Copper Flat, for permitting costs and to fund the ongoing Copper Flat prefeasibility study, which is expected to be completed in December 2011. THEMAC has appointed M3 Engineering and Technology Corporation to complete the Copper Flat prefeasibility study, with input from other consultants.

FINANCING

ECR has secured a US$1.5M loan from YA Global Master SPV Ltd (“YA Global”), which is advised by Yorkville Advisors LLC. The loan will be repaid in eight installments, with the final installment due in August 2012.

Interest at a rate of 10% per annum on the outstanding loan amount is payable with each installment and an implementation fee of 10% has been paid to YA Global in respect of the loan.

The loan is secured over listed securities held by the Company and under the Standby Equity Distribution Agreement (“SEDA”) entered into by the Company with YA Global in April 2010.

YA Global has the right to convert the outstanding loan amount at any time into ordinary shares of the Company of 0.1p (“Ordinary Shares”) at 150% of their volume weighted average price (VWAP) for the five trading days prior to August 12 2011.

Yorkville Advisors LLC is an investment manager headquartered in Jersey City, New Jersey. 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.

Patrick Harford, Managing Director of ECR Minerals plc, comments:

“It is gratifying to be able to report strong progress by ECR in substantially all of its activities.

In Argentina, the Company is now proceeding to drill the Unchimé project and given the anticipated future demand for iron ore, both locally and for export, we look forward to the drilling results with optimism.

The recent rise in the price of gold and the optimistic projections being made by many gold market observers, including major banks, have given added excitement and impetus to ECR’s gold activities. ECR is fortunate to have been able to bring a number of gold prospects in Argentina into its asset base with minimal cash expenditure to date. It is planned that a geophysical survey will commence shortly at the El Abra prospect, and further sampling is already taking place at other prospects within the Sierra de las Minas project area, including sampling of newly discovered mineralised veins.

Additionally, THEMAC Resources has an extensive ongoing drilling programme at the Copper Flat project in New Mexico. The results of this programme are expected to substantially improve THEMAC’s knowledge of the Copper Flat deposit and are awaited with great interest.

The YA Global loan is expected to enable ECR to conduct the planned work programmes at Sierra de las Minas and Unchime without any immediate dilution to shareholders or the premature disposal of assets, while the West Wits shares distributed by Paniai combined with the Reed Resources shares issued to MGA in July have immediately put approximately a further A$1M worth of tradeable shares on ECR’s group balance sheet and added an entirely new dimension to ECR’s gold interests.”

ECR Minerals plc
Michael Silver, Chairman
Patrick Harford, Managing Director
Stephen Clayson, Director & Chief Financial Officer
Luca Tenuta, Non-Executive Director
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Email:[e-mail]
Website:www.ecrminerals.com

Daniel Stewart & Company plc
Oliver Rigby/Tessa Smith
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Old Park Lane Capital plc
Michael Parnes
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Blythe Weigh Communications
Ana Ribeiro
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Barry Kaplan Associates
Larry Kaplan
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