TIDMECR
AIM: ECR
US OTC: MTGDY
ECR MINERALS plc
("ECR Minerals", "ECR" or the "Company")
AUDITED FINANCIAL STATEMENTS FOR YEARED 30 SEPTEMBER 2016 AND
NOTICE OF ANNUAL GENERAL MEETING
ECR Minerals plc is pleased to announce its audited financial
statements for the year ended 30 September 2016. The information
presented below has been extracted from the Company's Annual Report
and Accounts 2016.
Copies of the Annual Report and Accounts 2016 together with a
notice of annual general meeting will be posted to shareholders
today and will be available shortly on the Company's website
www.ecrminerals.com and from the Company's registered office at
Unit 117, Chester House, 81-83 Fulham High Street, Fulham Green,
London SW6 3JA. The text of the notice of annual general meeting is
provided below.
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: +44 (0)20 7929 1010
William (Bill) Howell, Non-Executive Chairman
Craig Brown, Director & CEO
Ivor Jones, Director & COO
Email:
info@ecrminerals.com
Website:www.ecrminerals.com
Cairn Financial Advisers LLP Tel: +44 (0)20 7213 0880
Nominated Adviser
Emma Earl / Jo Turner
Optiva Securities Ltd Tel: +44 (0)203 137 1902
Broker
Graeme Dickson
FlowComms Tel: +44 (0)7891 677 441
Investor Relations
Sasha Sethi
Blytheweigh Tel: +44 (0)20 7138 3204
Public Relations
Tim Blythe / Camilla Horsfall / Nick Elwes
FORWARD LOOKING STATEMENTS
This announcement may include forward looking statements. Such
statements may be subject to numerous 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 because of new information,
future events or for any other reason.
The Directors of ECR Minerals plc (the "Directors" or the
"Board") present their report and audited financial statements for
the year ended 30 September 2016 for ECR Minerals plc ("ECR", the
"Company" or the "Parent Company") and on a consolidated basis (the
"Group")
Chairman's Statement
The period since my address to shareholders in last year's
annual report has been one of substantial change for ECR. The long
bear market phase in the mining industry exacted a heavy toll on
the Company, as did adverse political changes during 2016 in the
Philippines, which for the preceding two years was the focus of
ECR's operations.
However, as things stand today, ECR has been rejuvenated.
Moreover, widespread positive sentiment has returned to the mining
markets, and the ECR team is doing its utmost to capitalise on
these more favourable conditions to deliver lasting appreciation in
the Company's share price.
Since March 2015, ECR's exploration focus was mainly on its
interests in the Danglay Project in the Philippines. This
culminated in December 2015, when the Company's consultants
finalised a Mineral Resource and NI 43-101 Technical Report.
However, there was a sense of political change for the worse for
the mining industry in the Philippines, and ECR decided to change
its direction.
ECR subsequently entered into an agreement to acquire the Avoca
and Bailieston gold projects areas in Victoria, Australia.
Primarily, ECR was attracted to the Australian projects for the
following reasons:
-- the significant exploration potential of the Avoca and Bailieston
project areas;
-- an improved political climate for mining investment in Victoria;
-- the presence of successful modern gold mining operations nearby,
particularly at the Fosterville and Costerfield mines;
-- the reduction in recent years of the costs of key mining inputs in
Australia, such as skilled labour rates and consulting charges;
and
-- the comparative weakness of the Australian dollar against the US
dollar, meaning that the Australian dollar gold price is
currently
only around 10% below a record high set in 2016, whereas the US
dollar
gold price remains around 35% below a record high set in
2011.
Much of 2016 was spent prioritising the multiple opportunities
presented by the Avoca and Bailieston gold projects, to which the
Group's wholly owned Australian subsidiary has 100% ownership
rights, as well as restructuring ECR and its management team.
Touching upon the Philippine licences - the Group announced in
February 2017 that the Board of ECR were considering an impairment
against the carrying value of the investment in Danglay within the
financial statements for the year ended 30 September 2016. Having
considered the project in detail and in particular taking into
account the relevant expertise and knowledge of Ivor Jones who has
wealth of experience in the Philippines, the ECR Board has decided
that whilst the project has a number of material risks (described
below), impairment of this investment is not required at this time
as we believe that the Danglay assets have significant potential.
Whilst noting that the mining industry in the Philippines region
continue to face an uncertain operating environment which of course
presents risks to Group's operations there, the Board is also aware
that there is a significant gold industry in the Philippines and
there continues to be many mines in production.
Shareholders should also note that although the exploration
permit renewal for Danglay has not been issued, it was forwarded by
the Philippine Mines and Geosciences Bureau on 30 May 2016 to ECR's
local partner Cordillera Tiger Gold Resources Inc. ("Cordillera
Tiger") who signed and returned it. Accordingly although it cannot
be guaranteed, the Board of ECR is confident that if pursued the
exploration permit renewal would be granted.
Additionally, the Company is pleased to advise shareholders in
relation to Tiger International Resources Inc.'s claims that ECR
has not fulfilled its obligations under the earn-in and joint
venture agreement as announced on 24 February 2017 to the market.
On 31 March 2017, Cordillera Tiger confirmed to the Group that they
had passed a board resolution to issue the 25% shareholding.
In addition to switching the Group's operational focus to the
Australian and Argentinian assets, the year under review also saw a
period of restructuring of ECR and its management team as further
described below.
In August 2016, Stephen Clayson resigned as a Director and CEO
of the Company, having served in that role since 2013, dealing with
numerous legacy issues and tending to ECR's operations and
administration. In addition, Richard (Dick) Watts also left the
Board as a non-executive director in October 2016.
Both were enthusiastic about the potential of the Avoca and
Bailieston projects, but felt it was time for fresh thinking to
take the Company forward. On behalf of the Board, I would like to
thank Stephen and Dick for their service to ECR through a difficult
period.
In their place, I am pleased to welcome Craig Brown, Christian
Dennis and Ivor Jones as, respectively, director & CEO,
non-executive director, and director & COO.
Craig Brown, a Chartered Accountant with more than 20 years'
experience in senior management and finance roles in the mining
industry, joined ECR as Finance Director in May 2016. Craig had
previously worked with Stephen Clayson in relation to Kryso
Resources plc ("Kryso"), which is now known and listed on AIM as
China Nonferrous Gold Ltd ("CNG"). Craig was appointed as CEO of
ECR in September 2016.
Craig was a co-founder of Kryso, an executive director from its
listing on AIM in 2004 until 2013, and as a consultant for several
years thereafter. He was instrumental in advancing Kryso/CNG
through the process of defining a five million ounce JORC Mineral
Resource at the Pakrut gold project in Tajikistan, completing a
bankable feasibility study for the project, obtaining debt and
equity finance for mine development, and commencing construction of
the mine and infrastructure. The first gold pour at the Pakrut mine
took place in 2015.
Ivor Jones is a professional geologist with 30 years' global
experience across all aspects of exploration and mining, including
project evaluation, resource estimation and the preparation of JORC
and NI43-101 reports, in relation to both precious and base metals
deposits. Ivor joined ECR in November 2016. His previous roles
include Group General Manager of Geosciences with Snowden Mining
Industry Consultants from 2009 until 2014. More recently, he has
been practicing as an independent geological consultant. Ivor is
based in Australia and has a key role to play in helping ECR
maximise the value of its existing projects and interests, and in
evaluating new opportunities for the Company.
Christian Dennis is the CEO and founder of Optiva Securities
Ltd, a well-known London stockbroking and investment management
firm. Christian has more than 25 years' experience advising,
financing and investing in exploration and mining companies, and is
well placed to provide his expertise to ECR as it grows and
develops.
At the same time as Christian joined the Board in September
2016, Optiva arranged equity financing of GBP500,000 for ECR, which
enabled the Group to repay and retire the Yorkville Advisors
convertible loan note facility. In a further element of financial
restructuring, the Company completed a capital reorganisation in
November 2016 to bring the number of ordinary shares in issue into
line with AIM market norms.
Turning to the future, ECR announced details of planned
exploration programmes for the Bailieston gold project in Australia
in November 2016 and the SLM gold project in Argentina in February
2017, and we look forward to implementing these exciting programmes
in the coming months. The Group will also continue to evaluate
potential new projects and business areas.
We look forward to providing further updates on these
endeavours, and on behalf of the Board, I would like to thank all
ECR shareholders for their support and confidence.
William Howell
Chairman
31 March 2017
Chief Executive Officer's Report
As noted in the Chairman's Statement, the past year has seen
many changes at ECR. The composition of the Board has changed
almost completely; and in terms of activities, the Group is now
primarily focused on the Avoca and Bailieston gold projects in
Australia and the SLM gold project in Argentina, and is no longer
the operator of the Danglay gold project in the Philippines.
I was appointed as the Chief Executive Officer of ECR in
September 2016. This appointment was shortly followed by the
appointment to the Board of Ivor Jones and Christian Dennis.
Prior to co-founding Kryso, I worked in senior roles for Gulf
International Minerals and Nelson Gold, both of which also
successfully put gold mines into production during my tenure. I
very much hope to have similar success at ECR.
It is very difficult to develop a mine without supportive
shareholders and financiers, and I am pleased to say that since my
appointment as CEO of ECR, we have been supported by:
-- Optiva Securities Ltd, the Company's broker, who arranged an equity
financing of GBP500,000 (before costs) in September 2016.
-- Shenyang Xinliaoan Machinery Co Ltd ("Shenyang"), who in February 2017
conditionally agreed to subscribe for a 29.9% shareholding in
the
Company at a price of 1p per share to raise proceeds for ECR
(before
costs) of approximately GBP553k ("Subscription").
Crucially, Shenyang, who are based in the People's Republic of
China, have agreed to a twelve-month lock-up in respect of
subscription shares to be issued to them, which is a real vote of
confidence in ECR and its strategy. In addition, upon completion of
the Subscription, Shenyang will receive warrants exercisable at 2p
and 5p, which is indicative of the level of share price
appreciation Shenyang believes is possible.
Pending completion of the Shenyang Subscription, a GBP100,000
non-refundable deposit has been received, to be converted into
ordinary shares at a price of 2p per share in the event the
Subscription is not completed by 31 March 2017. Following
completion of the Subscription, Shenyang will be able to recommend
up to two directors who may be appointed as members of the
Board.
The proceeds of the Shenyang investment will be utilised for our
planned drilling programmes in Australia and Argentina, and for
working capital, including as necessary for the review of potential
new projects and business areas.
AVOCA AND BAILIESTON GOLD PROJECTS, AUSTRALIA
It was announced on 3 March 2016 that ECR's wholly owned
subsidiary Mercator Gold Australia Pty Ltd ("MGA") had agreed to
acquire 100% ownership of two Exploration Licences in Victoria,
EL5387 (Avoca project) and EL5433 (Bailieston project) from
Currawong Resources Pty Ltd ("Currawong").
The process of transferring the licences from Currawong to MGA
has not yet been finalised, but the transfer of EL5433 has now been
completed and the transfer of EL5387 is near completion. In the
meantime, the Directors consider MGA's rights in respect of the
licences to be secure under the terms of the agreement with
Currawong, and for practical purposes, consider MGA to be the owner
of the licences.
In addition, MGA has applied for two new Exploration Licences in
Victoria. EL6278 (the Timor Project) is adjacent to the Avoca
project and has now been granted, and EL6280 (the Moormbool
Project) is in the vicinity of the Bailieston project and is in the
process of being reviewed for Native Title considerations. More
details of the Group's exploration strategy for these licences will
be announced in due course.
The Avoca and Bailieston projects are located in the Australian
state of Victoria, one of the world's major historical gold
producing regions. Following a re-evaluation of the Group's
strategy for the Victorian projects, the Directors decided to
prioritise the drilling of selected targets, initially at the
Bailieston project. Bailieston is located near two significant
operating gold mines, including the Fosterville mine, which is 30km
from Bailieston and which produced its one millionth ounce of gold
in 2016.
The Fosterville mine is now owned by TSX-listed Kirkland Lake
Gold following its merger with Newmarket Gold, which was also
listed on the TSX. We consider this transaction to be indicative of
a healthy level of international interest in the Victorian gold
sector, which benefits from the state's prospective geology,
security of tenure, improvements in the state's political climate
for mining, ready availability of skills and services, and ease of
access.
The Bailieston Project has a history of producing high-grade
material from underground workings, including from the historic
workings in the Byron area, which ECR has selected as its initial
drilling target. The Group is in possession of a basic dataset
encompassing the original nineteenth and early twentieth century
production records for the Byron Shaft as well as the results of
relatively recent exploration work, including drilling and
trenching, carried out since 1980.
A reverse circulation ("RC") drilling programme of approximately
550 metres is planned for the Byron area, which is one of three
high priority hard-rock drilling targets identified at Bailieston.
Drilling is intended to commence as soon as practicable after
finalising certain government requirements.
At the Avoca Project, the Group has identified nine initial
hard-rock targets for drilling, with the highest ranked target
being the mineralisation near the old Pyrenees mine. The Pyrenees
Mine has never been drilled, but historic production reported
relatively high grades over the strike length. Deep lead (buried
alluvial) gold deposits have been confirmed as an additional target
type warranting further evaluation at Avoca.
The Timor Project is ECR's most recent acquisition, and presents
a series of old mines which the Board considers has very good
prospectivity. The primary target at this early stage of review is
the Leviathin group of mines. The old hard rock mines recovered
good grades on the mined mineralisation, and importantly the
mineralisation was not a single vein, but multiple veins. In
addition, the trend is directly upstream from one of the state's
most significant deep lead alluvial gold mines, inferring that the
source of the gold was from the Leviathin area. ECR is very excited
about the potential of this exploration opportunity.
Further information regarding the drilling targets at the
Bailieston Project is available in the Group's announcement dated 9
November 2016.
MGA is estimated to have tax losses of approximately AUD 66
million as at 30 June 2016. These tax losses may be available,
subject to certain conditions, including compliance at all relevant
times with the "continuity of ownership test", as that term is used
in the context of Australian taxation, to offset against MGA's
future taxable profits which would otherwise be taxable; for
example such profits as might arise from future mining activities
at the Group's Australian projects.
SLM GOLD PROJECT, ARGENTINA
Following a visit to Argentina by three of the Directors in
December 2016, it was decided to recommence ECR's on-the-ground
activities to advance SLM, which had been paused since mid-2015.
The SLM project is 100% owned by ECR's wholly owned Argentine
subsidiary Ochre Mining SA and comprises three key gold prospects
in La Rioja Province: the El Abra prospect, the JV prospect
(particularly the JV14 zone) and the Maestro Agüero prospect.
Exploration Targets have been determined for the El Abra
prospect and JV14 zone in accordance with the JORC Code, and
drilling at El Abra and JV14 is planned for 2017. The objective of
the drilling will be to enable the estimation of Mineral Resources
for both El Abra and JV14.
Further information and explanation regarding the Exploration
Targets and planned drilling, details of which were announced on 27
January 2017, is provided in a technical report entitled
'Exploration Target - Sierra de las Minas' which is available on
ECR's website.
The change in the national government which occurred in late
2015 has made Argentina a more attractive destination for
investment, and it is evident from the recent site visit by the
Directors, and review of the results of previous exploration by ECR
and other parties, that the El Abra prospect and JV zone remain
highly prospective.
DANGLAY GOLD PROJECT, PHILIPPINES
The Danglay (formerly Itogon) gold project was the main focus of
ECR's activities during 2014 and 2015. The project is an
intermediate sulphidation epithermal gold deposit situated within
the proli?cally gold-copper mineralised Baguio District in the
northern Philippines.
The Exploration Permit (the "EP") comprising the Danglay project
expired on 30 September 2015, and an application for renewal of the
EP is pending. A new government took office in the Philippines on
30 June 2016, and unfortunately, the new administration has adopted
a far from supportive stance towards the mining industry. Despite
this, the Group is not currently aware of any reason that the
pending application for renewal of the Danglay EP would not be
granted, although there can be no guarantee that it will be
granted, and no certainty as to the likely timeframe.
In 2013, ECR entered into an Earn-in and Joint Venture Agreement
(the "Agreement") in respect of the Danglay project with
TSXV-listed Tiger International Resources, Inc. ("Tiger
International") and Cordillera Tiger Gold Resources, Inc.
("Cordillera Tiger"), which is a subsidiary of Tiger International.
The original terms of the Agreement were announced by ECR on 29
April 2013, with a further announcement on 20 October 2015 in
respect of certain subsequent amendments to the Agreement.
In August 2016, ECR gave notice to terminate the Company's
Earn-in Option, as that term is defined in the Agreement, in
respect of the Danglay project. Following the termination of the
Earn-in Option, ECR is no longer the operator of the project.
However, the Company has earned a 25% interest in Cordillera Tiger
and in turn the project, regardless of the termination of the
Earn-in Option. As provided in the Agreement, ECR has contributed
more than US$500,000 of expenditures in relation to Danglay and
completed a Mineral Resource estimate which has been disclosed by
Tiger International in accordance with Canadian NI 43-101. In
fulfilling these two conditions, ECR has earned a 25% interest in
Cordillera Tiger.
Since the termination of the Earn-in Option, attempts to
establish a meaningful dialogue with Tiger International regarding
the future of the project, including the possibility of seeking a
third party to provide funding for further exploration activities
at Danglay, have met with a very disappointing response.
Tiger International presently refuses to acknowledge ECR's 25%
interest in Cordillera Tiger and the Danglay project, and have made
a number of inaccurate public statements regarding the project and
ECR. In particular, Tiger International has criticised the adequacy
of the exploration data produced by the Group in its past work
programmes at Danglay. The Directors consider these criticisms to
be without basis.
In January 2017, ECR appointed legal counsel to begin the
process of enforcing the Company's rights in relation to Danglay
either in court or through arbitration. In parallel, the Company
has submitted a proposal to Tiger International to encourage an
amicable resolution of the dispute. On 31 March 2017, Cordillera
Tiger confirmed to the Group that they had passed a board
resolution to issue the 25% shareholding to ECR.
Danglay, with its NI 43-101 Mineral Resource and target for
further exploration, remains a project of intrinsic interest, and
the Directors are hopeful that the political situation for the
mining industry in the Philippines may improve in future. We are
also confident that the dispute with Tiger International is capable
of being resolved in ECR's favour. However, depending on the
outcome of the current uncertainties, the Directors may need to
fully impair the carrying value of ECR's investment in the Danglay
project in the Group's next set of financial statements. The
carrying value of the investment in the Group's audited financial
statements for the year ended 30 September 2016 is
GBP1,164,982.
FINANCIAL RESULTS FOR THE YEARED 30 SEPTEMBER 2016
For the year to 30 September 2016 the Group recorded a total
comprehensive expense of GBP1,016,592, compared with GBP4,683,279
for the year to 30 September 2015. Some GBP3,217,484 of the prior
year's expense occurred due to an impairment provision against the
carrying value of the deferred tax asset in the Company's wholly
owned subsidiary Mercator Gold Australia Pty Ltd. In the audited
financial statements for the year ended 30 September 2016, the
largest contributor to the total comprehensive expense was the line
item "other administrative expenses", which represents the costs of
operating the Group and carrying out exploration at its projects,
whose cost is ineligible for capitalisation under applicable
accounting standards.
The Group's net assets as at 30 September 2016 were
GBP2,680,627, in comparison with GBP1,546,069 at 30 September 2015.
The increase is due to the capitalisation of exploration
expenditure during the year, leading to increased exploration
assets, and the larger cash balance of GBP471,809 held by the Group
at 30 September 2016, in comparison with GBP90,398 at the previous
year-end.
OUTLOOK
Looking forward, we expect to generate significant news flow and
market interest as we progress to drilling in Australia and
Argentina. We are striving to advance ECR's current projects, but
will not hesitate to think 'outside the box' in considering other
projects and opportunities that the Board considers to be in line
with the Group's strategy and which will add value for
shareholders.
I would like to thank my fellow Directors along with our key
consultants and staff and, most importantly, our shareholders, for
their commitment to the reinvigorated ECR.
Craig Brown
Chief Executive Officer
31 March 2017
Independent Auditor's Report
For the year ended 30 September 2016
Independent Auditors' Report to the Members of ECR Minerals
Plc
We have audited the financial statements of ECR Minerals Plc for
the year ended 30 September 2016 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Parent
Company Statements of Financial Position, the Consolidated and
Parent Company Statements of Changes in Equity, the Consolidated
and Parent Company Cash Flow Statements, and the related notes. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union and, as regards
the Parent Company financial statements, as applied in accordance
with the provisions of the Companies Act 2006.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditors' report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Directors' Responsibilities
Statement, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of whether the accounting policies are
appropriate to the Group's and the Parent Company's circumstances
and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the
Directors; and the overall presentation of the financial
statements. In addition, we read all the financial and
non-financial information in the Annual Report to identify material
inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired
by us in the course of performing the audit. If we become aware of
any apparent material misstatements or inconsistencies we consider
the implications for our report.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the state of the
Group's and of the Parent Company's affairs as at 30 September
2016
and of the Group's loss for the year then ended;
-- the financial statements have been properly prepared in accordance
with IFRSs as adopted by the European Union;
-- the Parent Company financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union and as
applied
in accordance with the provisions of the Companies Act 2006;
and
-- the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Emphasis of matter - going concern and recoverability of the
Danglay gold project, Philippines
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosure made in
note 2 to the financial statements concerning the Group's and
Company's ability to continue as going concerns. Financial
projections and cash flow forecasts prepared by the Directors show
that fulfilment of the conditional terms set out in the
subscription agreement with Shenyang Xinliaoan Machinery Co.
Limited ("Shenyang") is required in order for the Group and Company
to meet their contracted and committed expenditure during a period
of at least twelve months from the date of approval of these
financial statements. If the terms of the subscription agreement
are not fulfilled, the Group and Company would need to seek
alternative sources of funding to enable them to meet their
liabilities as they fall due.
We also draw your attention to the disclosures to the financial
statements, and as commented on in the Chairman's Statement and
Chief Executive Officer's Report, regarding uncertainty over the
recoverability of the exploration costs relating to the Danglay
gold project, Philippines. The Group has not yet formally acquired
title to its 25% interest in Cordillera Tiger Gold Resources, Inc
and renewal of the exploration permit is currently outstanding and
at the discretion of the Mines and Geosciences Bureau in the
Philippines. The carrying value of the Danglay gold project as at
31 December 2016 was GBP1,164,982.
These two matters indicate the existence of material
uncertainties which may cast significant doubt about the Group's
and Company's ability to continue as going concerns and on the
recoverability of the Danglay gold project, Philippines. The
financial statements do not include the adjustments that would
result if the Group and / or Company were unable to continue as
going concerns and if the carrying value of the Danglay gold
project was required to be impaired.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the state of the
Group's and the Parent Company's affairs as at 30 September 2016
and
of the Group's loss for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the Parent Company financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union and as
applied
in accordance with the provisions of the Companies Act 2006;
and
-- the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the Strategic Report and the Directors'
Report for the financial year for which the financial statements
are
prepared is consistent with the financial statements; and
-- the Strategic Report and the Directors' Report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Group and the
Company and its environment obtained in the course of the audit, we
have not identified any material misstatements in the Strategic
Report and the Directors' Report.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from
branches
not visited by us; or
-- the parent company financial statements are not in agreement with the
accounting records and returns; or
-- certain disclosures of Directors' remuneration specified by law are
not made; or
-- we have not received all the information and explanations we require
for our audit.
David Thompson (Senior statutory auditor) 1 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory auditor London E14 4HD
31 March 2017
Consolidated Income Statement
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Year ended Year ended
30 September 2016 30 September 2015
GBP GBP
Continuing operations
Exploration expenses - (65,990)
Other administrative (677,873) (941,359)
expenses
Currency exchange 9,399 (22,356)
differences
Total administrative (668,474) (1,029,705)
expenses
Operating loss (668,474) (1,029,705)
Other income 34,688 -
Loss on disposal - (124,579)
of available
for sale financial asset
Fair value movements (18,893) (12,552)
- available
for sale financial asset
Reclassification of fair - (14,750)
value movements on
disposal of available
for sale assets
(652,679) (1,181,586)
Financial income 484 28
Financial expense (267,511) (321,180)
Finance income and costs (267,027) (321,152)
Loss for the year (919,706) (1,502,738)
before taxation
Income tax - (3,217,484)
Loss for the year from (919,706) (4,720,222)
continuing operations
Loss for the year - (919,706) (4,720,222)
all attributable
to owners of the parent
Earnings per share -
basic and diluted
On continuing operations (0.01)p (0.13)p
The Company has elected to take the exemption under section 408
of the Companies Act 2006 from presenting the parent company profit
and loss account. The loss for the parent company for the year was
GBP887,844 (2015: GBP4,674,506 loss).
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Year ended Year ended
30 September 2016 30September 2015
GBP GBP
Loss for the year (919,706) (4,720,222)
Items that may be reclassified
subsequently to profit or loss
Reclassification to Profit - 14,750
and loss on disposal
of available for sale assets
(Loss)/Gain on exchange (96,886) 22,193
translation
Other comprehensive expense (96,886) 36,943
for the year
Total comprehensive expense (1,016,592) (4,683,279)
for the year
Attributable to:-
Owners of the parent (1,016,592) (4,683,279)
Consolidated & Company Statement of Financial Position
At 30 September 2016
ECR Minerals plc company no. 5079979
Group Company
30 September 30 September 30 September 30 September
2016 2015 2016 2015
GBP GBP GBP GBP
Assets
Non-current
assets
Property, 6,237 7,705 6,237 7,705
plant
and
equipment
Investments - - 740,100 703,740
in
subsidiaries
Intangible 2,437,608 2,132,224 2,076,104 1,797,460
assets
Other - - 107,341 10,907
receivables
2,443,845 2,139,929 2,929,782 2,519,812
Current
assets
Trade 5,470 74,233 4,147 35,674
and
other
receivables
Available 21,014 39,277 21,014 39,277
for
sale
financial
assets
Taxation 38,059 2,514 10,067 1,837
Other 2,672 2,672 2,672 2,672
current
assets
Cash 471,809 90,398 443,165 81,040
and
cash
equivalents
539,024 209,094 481,065 160,500
Total 2,982,869 2,349,023 3,410,847 2,680,312
assets
Current
liabilities
Trade 302,242 351,850 268,323 349,990
and
other
payables
Interest - 451,104 - 451,104
bearing
borrowings
302,242 802,954 268,323 801,094
Total 302,242 802,954 268,323 801,094
liabilities
Net 2,680,627 1,546,069 3,142,524 1,879,218
assets
Equity
attributable
to
owners
of the
parent
Share 11,281,628 11,071,602 11,281,628 11,071,602
capital
Share 42,441,553 40,802,469 42,441,553 40,802,469
premium
Exchange (166,535) (69,649) - -
reserve
Other 1,147,717 845,677 1,147,717 845,677
reserves
Retained (52,023,736) (51,104,030) (51,728,374) (50,840,530)
losses
Total 2,680,627 1,546,069 3,142,524 1,879,218
equity
The loss for the parent company for the year was GBP887,844
(2015: GBP4,674,506 loss).
The financial statements were approved and authorised for issue
by the Directors on 31 March 2017 and were signed on its behalf
by:
William Howell Craig Brown
Non-Executive Chairman Director & Chief Executive Officer
Consolidated Statement of Changes in Equity
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Share Share Exchange Other Retained
capital premium reserve reserves reserves
Total
GBP GBP GBP GBP GBP GBP
Balance 10,483,166 40,131,118 (91,842) 485,160 (46,398,558) 4,609,044
at 1
October
2014
Loss for - - - - (4,720,222) (4,720,222)
the year
Reclassification
of fair
value
movements
to
Income
Statement - - - - 14,750 14,750
on
disposal
of
available
for sale
assets
Gain - - 22,193 - - 22,193
on exchange
translation
Total - - 22,193 - (4,705,472) (4,683,279)
comprehensive
expense
Conversion 548,544 357,055 - - - 905,599
of
loan notes
Shares 6,556 288,444 - - - 295,000
issued
Share based - - - 288,831 - 288,831
payments
Warrants - - - 71,686 - 71,686
issued
in lieu
of finance
cost
Shares 33,336 25,852 - - - 59,188
issued
in payment
of
creditors
Total 588,436 671,351 - 360,517 - 1,620,304
transactions
with
owners,
recognised
directly
in equity
Balance 11,071,602 40,802,469 (69,649) 845,677 (51,104,030) 1,546,069
at 30
September
2015
Loss for - - - - (919,706) (919,706)
the year
Reclassification
of fair
value
movements
to
Income
Loss - - (96,886) - - (96,886)
on exchange
translation
Total - - (96,886) - (919,706) (1,016,592)
comprehensive
expense
Conversion 34,673 501,582 - - - 536,255
of
loan notes
Shares 147,500 952,500 - - - 1,100,000
issued
Share issue - (55,750) - - - (55,750)
costs
Share based - - - 123,737 - 123,737
payments
Warrants - - - 178,303 - 178,303
issued
in lieu
of finance
cost
Shares 27,853 240,752 - - - 268,605
issued
in payment
of
creditors
Total 210,026 1,639,084 - 302,040 - 2,151,150
transactions
with
owners,
recognised
directly
in equity
Balance 11,281,628 42,441,553 (166,535) 1,147,717 (52,023,736) 2,680,627
at 30
September
2016
Company Statement of Changes in Equity
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Share Share Other Retained
capital premium reserves reserves
Total
GBP GBP GBP GBP GBP
Balance 10,483,166 40,131,118 485,160 (46,180,774) 4,918,670
at 1
October
2014
Loss for - - - (4,674,506) (4,674,506)
the year
Reclassification - - - 14,750 14,750
of fair
value
movements
to
Income
Statement
on
disposal
of
available
for sale
assets
Total - - - (4,659,756) (4,659,756)
comprehensive
expense
Conversion 548,544 357,055 - - 905,599
of
loan notes
Shares 6,556 288,444 - - 295,000
issued
Share based - - 288,831 - 288,831
payments
Warrants - - 71,686 - 71,686
issued
in lieu
of finance
cost
Shares 33,336 25,852 - - 59,188
issued
in payment
of
creditors
Total 588,436 671,351 369,517 - 1,620,304
transactions
with
owners,
recognised
directly
in equity
Balance 11,071,602 40,802,469 845,677 (50,840,530) 1,879,218
at 30
September
2015
Loss for - - - (887,844) (887,844)
the year
Total - - - (887,844) (887,844)
comprehensive
expense
Conversion 34,673 501,582 - - 536,255
of
loan notes
Shares 147,500 952,500 - - 1,100,000
issued
Share issue - (55,750) - - (55,750)
costs
Share based - - 123,737 - 123,737
payments
Warrants - - 178,303 - 178,303
issued
in lieu
of finance
cost
Shares 27,853 240,752 - - 268,605
issued
in payment
of
creditors
Total 210,026 1,639,084 302,040 - 2,151,150
transactions
with
owners,
recognised
directly
in equity
Balance 11,281,628 42,441,553 1,147,717 (51,728,374) 3,142,524
at 30
September
2016
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2016
ECR Minerals plc company no. 5079979
Group Company
Year ended Year ended Year ended Year ended
30 September 30 September 2015 30 September 2016 30 September 2015
2016
GBP GBP GBP GBP
Net cash flow (494,118) (654,704) (483,553) (595,822)
used
in operations
Investing
activities
Purchase of - - - -
property,
plant
& equipment
Increase (319,580) (719,108) (257,818) (632,398)
in
exploration
assets
Cash - 10,125 - -
introduced
with
re-admission
of subsidiary
Investment in - - (79,535) (79,732)
subsidiaries
Proceeds from - 68,022 - 68,022
sale
of available
for
sale
investments
Investment in - (39,276) - (39,276)
available
for
sale
investments
Interest 484 28 35 28
income
Net cash used (319,096) (680,209) (337,318) (683,356)
in investing
activities
Financing
activities
Proceeds from 1,100,000 295,000 1,100,000 295,000
issue
of share
capital
Proceeds from 418,463 494,774 418,463 494,774
issue of
convertible
loan notes
Repayment of (248,332) - (248,332) -
convertible
loan notes
Finance costs (55,750) (38,956) (55,750) (38,956)
on
fundraising
Interest paid (31,385) (1,384) (31,385) -
and other
financing
costs
Net cash from 1,182,996 749,434 1,182,996 750,818
financing
activities
Net change in 369,782 (585,479) 362,125 (528,360)
cash and
cash
equivalents
Cash and cash 90,398 642,056 81,040 609,400
equivalents
at beginning
of the year
Effect of 11,629 33,821 - -
changes
in foreign
exchange
rates
Cash and cash 471,809 90,398 443,165 81,040
equivalents
at end of
the year
Notes to the Financial Statements
For the year ended 30 September 2016
1 General information
The Company and the Group operated mineral exploration and
development projects. The Group's principal interests are located
in Argentina, the Philippines and Australia.
The Company is a public limited company incorporated and
domiciled in England. The registered office of the Company and its
principal place of business is Unit 117, Chester House, 81-83
Fulham High Street, Fulham Green, London SW6 3JA. The Company is
listed on the Alternative Investment Market (AIM) of the London
Stock Exchange.
2 Accounting policies
Overall considerations
The principal accounting policies that have been used in the
preparation of these consolidated financial statements are set out
below. The policies have been consistently applied unless otherwise
stated.
Basis of preparation
The financial statements of both the Group and the Parent
Company have been prepared in accordance with International
Financial Reporting Standards (IFRSs) and Interpretations issued by
the IFRS Interpretations Committee (IFRIC) as adopted by the
European Union and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. These are the
standards, subsequent amendments and related interpretations issued
and adopted by the International Accounting Standard Board (IASB)
that have been endorsed by the European Union at the year end. The
consolidated financial statements have been prepared under the
historical cost convention, as modified by the revaluation of
certain financial instruments. The Directors have taken advantage
of the exemption available under Section 408 of the Companies Act
2006 and have not prepared an Income Statement or a Statement of
Comprehensive Income for the Company alone.
New Accounting Standards and Interpretations
Effective during the year
During the year the Group has adopted the following standards
and amendments:
-- Annual Improvements to IFRSs 2010-2012 Cycle
-- Annual Improvements to IFRSs 2011-2013 Cycle
-- Amendments to IAS 19: Defined Benefit Plans: Employee Contributions
The adoption of these standards and amendments did not have any
impact on the financial position or performance of the Group.
Not yet effective
At the date of authorisation of these Group Financial Statements
and the Parent Company Financial Statements, the following
Standards, amendments and interpretations were endorsed by the EU
but not yet effective:
-- Amendments to IFRS 11: Accounting for Acquisitions of Interests in
Joint Operations
-- Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods
of Depreciation and Amortisation
-- Annual Improvements to IFRSs 2012-2014 Cycle
-- Amendments to IAS 1: Disclosure Initiative
-- Amendments to IAS 27: Equity Method in Separate Financial Statements
-- Amendments to IFRS 10, IFRS 12 and IAS 28: Investment Entities:
Applying the Consolidation Exception
-- IFRS 15 Revenue from Contracts with Customers including amendments to
IFRS 15
-- IFRS 9 Financial Instruments
In addition to the above there are also the following standards
and amendments that have not yet been endorsed by the EU:
-- IFRS 14 Regulatory Deferral Accounts
-- Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
(effective date
postponed indefinitely by IASB)
-- Amendments to IAS 12: Recognition of Deferred Tax Assets for
Unrealised Losses
-- Amendments to IAS 7: Disclosure Initiative
-- Clarifications to IFRS 15 Revenue from Contracts with Customers
-- Amendments to IFRS 2: Classification and Measurement of Share-based
Payment Transactions
-- Annual Improvements to IFRS Standards 2014-2016 Cycle
-- IFRIC Interpretation 22 Foreign Currency Transactions and Advance
Consideration
The Group intends to adopt these standards when they become
effective. The introduction of these new standards and amendments
is not expected to have a material impact on the Group or
Company.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and two of its subsidiaries made up to 30
September 2016. Subsidiary undertakings acquired during the period
are recorded under the acquisition method of accounting and their
results consolidated from the date of acquisition, being the date
on which the Company obtains control, and continue to be
consolidated until the date such control ceases.
The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power over the entity.
Going concern
It is the prime responsibility of the Board to ensure the Group
and Company remains going concern. At 30 September 2016, the Group
had cash and cash equivalents of GBP471,809 and no borrowings. The
Group's financial projections and cash flow forecasts covering a
period of at least twelve months from the date of approval of these
financial statements show that, provided the terms of the
subscription by Shenyang are fulfilled in accordance with the terms
set out in the Subscription Agreement dated 26 February 2017, the
Group will have sufficient available funds in order to meet its
contracted and committed expenditure. Whilst the Directors are
confident the conditional terms of the Subscription Agreement will
be met satisfactorily, these had not been entirely fulfilled at the
date of approval of the financial statements. The Group has to date
received the non-refundable deposit of GBP100,000 from Shenyang in
connection with the conditional subscription. In addition, the
Directors are confident in the ability of the Group to raise
additional funding, if required, from the issue of equity and/or
the sale of assets.
On the basis of their assessment of the financial position, the
Directors have a reasonable expectation that the Group will be able
to continue in operational existence for the next 12 months and
continue to adopt the going concern basis of accounting in
preparing these Financial Statements.
Cash and cash equivalents
Cash includes petty cash and cash held in current bank accounts.
Cash equivalents include short-term investments that are readily
convertible to known amounts of cash and which are subject to
insignificant risk of changes in value.
Property, plant and equipment
Property, plant and equipment are stated at cost, less
accumulated depreciation and any provision for impairment
losses.
Depreciation is charged on each part of an item of property,
plant and equipment so as to write off the cost of assets less the
residual value over their estimated useful lives, using the
straight-line method. Depreciation is charged to the income
statement. The estimated useful lives are as follows:
Office equipment 3 years
Furniture and fittings 5 years
Machinery and equipment 5 years
Expenses incurred in respect of the maintenance and repair of
property, plant and equipment are charged against income when
incurred. Refurbishments and improvements expenditure, where the
benefit is expected to be long lasting, is capitalised as part of
the appropriate asset.
An item of property, plant and equipment ceases to be recognised
upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on cessation of
recognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is
included in the income statement in the year the asset ceases to be
recognised.
Exploration and development costs
All costs associated with mineral exploration and investments
are capitalised on a project-by-project basis, pending
determination of the feasibility of the project. Costs incurred
include appropriate technical and administrative expenses but not
general overheads. If an exploration project is successful, the
related expenditures will be transferred to mining assets and
amortised over the estimated life of the commercial ore reserves on
a unit of production basis. Where a licence is relinquished or a
project abandoned, the related costs are written off in the period
in which the event occurs. Where the Group maintains an interest in
a project, but the value of the project is considered to be
impaired, a provision against the relevant capitalised costs will
be raised.
The recoverability of all exploration and development costs is
dependent upon the discovery of economically recoverable reserves,
the ability of the Company to obtain necessary financing to
complete the development of reserves and future profitable
production or proceeds from the disposition thereof.
Impairment testing
Individual assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may exceed its recoverable amount, being the higher of net
realisable value and value in use. Any such excess of carrying
value over recoverable amount or value in use is taken as a debit
to the income statement.
Intangible exploration assets are not subject to amortisation
and are tested annually for impairment.
Provisions
A provision is recognised in the Statement of Financial Position
when the Group or Company has a present legal or constructive
obligation as a result of a past event, and it is probable that an
outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
Leased assets
In accordance with IAS 17, leases in terms of which the Group or
Company assumes substantially all the risks and rewards of
ownership are classified as finance leases. All other leases are
regarded as operating leases and the payments made under them are
charged to the income statement on a straight line basis over the
lease term.
Taxation
There is no current tax payable in view of the losses to
date.
Deferred income taxes are calculated using the Statement of
Financial Position liability method on temporary differences.
Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases.
However, deferred tax is not provided on the initial recognition of
goodwill or on the initial recognition of an asset or liability
unless the related transaction is a business combination or affects
tax or accounting profit. Deferred tax on temporary differences
associated with shares in subsidiaries and joint ventures is not
provided if reversal of these temporary differences can be
controlled by the Company and it is probable that reversal will not
occur in the foreseeable future. In addition, tax losses available
to be carried forward as well as other income tax credits to the
Company are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the Statement of Financial Position date.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the income statement, except where
they relate to items that are charged or credited directly to
equity, in which case the related current or deferred tax is also
charged or credited directly to equity.
Investments in subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the
entity.
The investments in subsidiaries held by the Company are valued
at cost less any provision for impairment that is considered to
have occurred, the resultant loss being recognised in the income
statement.
Equity
Equity comprises the following:
* "Share capital" represents the nominal value of equity shares,
both ordinary and deferred.
* "Share premium" represents the excess over nominal value of
the fair value of consideration received for equity shares, net of
expenses of the share issues.
* "Other reserves" represent the equity component of convertible
debentures issued, plus the fair values of share options and
warrants issued.
* "Retained reserves" include all current and prior year
results, including fair value adjustments on available for sale
financial assets, as disclosed in the consolidated statement of
comprehensive income.
* "Exchange reserve" includes the amounts described in more
detail in the following note on foreign currency below.
Foreign currency translation
The consolidated financial statements are presented in pounds
sterling which is the functional and presentational currency
representing the primary economic environment of the Group.
Foreign currency transactions are translated into the respective
functional currencies of the Company and its subsidiaries using the
exchange rates prevailing at the date of the transaction or at an
average rate where it is not practicable to translate individual
transactions. Foreign exchange gains and losses are recognised in
the income statement.
Monetary assets and liabilities denominated in a foreign
currency are translated at the rates ruling at the Statement of
Financial Position date.
The assets and liabilities of the Group's foreign operations are
translated at exchange rates ruling at the Statement of Financial
Position date. Income and expense items are translated at the
average rates for the period. Exchange differences are classified
as equity and transferred to the Group's exchange reserve. Such
differences are recognised in the income statement in the periods
in which the operation is disposed of.
Share-based payments
The Company operates equity-settled share-based remuneration
plans for the remuneration of some of its employees. The Company
awards share options to certain Company Directors and employees to
acquire shares of the Company. Additionally, the Company has issued
warrants to providers of loan finance.
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. Where
employees are rewarded using share-based payments, the fair values
of employees' services are determined indirectly by reference to
the fair value of the instrument granted to the employee.
The fair value is appraised at the grant date and excludes the
impact of non-market vesting conditions. Fair value is measured by
use of the Black Scholes model. The expected life used in the model
has been adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions, and
behavioural considerations.
All equity-settled share-based payments are ultimately
recognised as an expense in the income statement with a
corresponding credit to "other reserves".
If vesting periods or other non-market vesting conditions apply,
the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest.
Estimates are subsequently revised if there is any indication that
the number of share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is recognised
in the current period. No adjustment is made to any expense
recognised in prior years if share options ultimately exercised are
different to that estimated on vesting.
Upon exercise of share options the proceeds received net of
attributable transaction costs are credited to share capital and,
where appropriate, share premium.
A gain or loss is recognised in profit or loss when a financial
liability is settled through the issuance of the Company's own
equity instruments. The amount of the gain or loss is calculated as
the difference between the carrying value of the financial
liability extinguished and the fair value of the equity instrument
issued.
Financial instruments
The Group's financial assets comprise cash and cash equivalents,
investments and loans and receivables. Financial assets are
assigned to the respective categories on initial recognition,
depending on the purpose for which they were acquired. This
designation is re-evaluated at every reporting date at which a
choice of classification or accounting treatment is available.
The Group's loans, investments and receivables are
non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Loans and receivables are
measured at fair value on initial recognition. After initial
recognition they are measured at amortised cost using the effective
interest rate method, less any provision for impairment. Any change
in their value is recognised in profit or loss. The Group's
receivables fall into this category of financial instruments.
Discounting is omitted where the effect of discounting is
immaterial. All receivables are considered for impairment on a
case-by-case basis when they are past due at the Statement of
Financial Position date or when objective evidence is received that
a specific counterparty will default.
Investments that are held as available for sale financial assets
are financial assets that are not classified in any other
categories. After initial recognition, available for sale financial
assets are measured at fair value. Any gains or losses from changes
in the fair value of the financial asset are recognised in equity,
except that impairment losses, foreign exchange gains and losses on
monetary items and interest calculated using the effective interest
method are recognised in the income statement.
Where there is a significant or prolonged decline in the fair
value of an available for sale financial asset (which constitutes
objective evidence of impairment), the full amount of the
impairment, including any amount previously charged to equity, is
recognised in the consolidated income statement. The Directors
consider a significant decline to be one in which the fair value is
below the weighted average cost by more than 25%. A prolonged
decline is considered to be one in which the fair value is below
the weighted average cost for a period of more than twelve
months.
If an available for sale equity security is impaired, any
further declines in the fair value at subsequent reporting dates
are recognised as impairments. Reversals of impairments of
available for sale equity securities are not recorded through the
income statement. Upon sale, accumulated gains or losses are
recycled through the income statement.
Financial liabilities, which are measured at amortised cost, and
equity instruments are classified according to the substance of the
contractual arrangements entered into. An equity instrument is any
contract that evidences a residual interest in the assets of the
entity after deducting all of its financial liabilities. Any
instrument that includes a repayment obligation is classified as a
liability.
Where the contractual liabilities of financial instruments
(including share capital) are equivalent to a similar debt
instrument, those financial instruments are classed as financial
liabilities, and are presented as such in the Statement of
Financial Position. Finance costs and gains or losses relating to
financial liabilities are included in the income statement. Finance
costs are calculated so as to produce a constant rate of return on
the outstanding liability.
Where the contractual terms of share capital do not have any
features meeting the definition of a financial liability then such
capital is classed as an equity instrument. Dividends and
distributions relating to equity instruments are debited direct to
equity.
Compound financial instruments
Compound financial instruments comprise both liability and
either equity components or embedded derivatives.
For compound instruments including equity components, at issue
date the fair value of the liability component is estimated by
discounting its future cash flows at an interest rate that would
have been payable on a similar debt instrument without any equity
conversion option. The liability component is accounted for as a
financial liability. The difference between the net issue proceeds
and the liability component, at the time of issue, is the residual
or equity component, which is accounted for as an equity
reserve.
Embedded derivatives included within compound instruments are
calculated using the Black Scholes model and are also included
within liabilities, but are measured at fair value in the Statement
of Financial Position, with changes in the fair value of the
derivative component recognised in the consolidated income
statement. The amounts attributable to the liability components
equal the discounted cash flows.
Transaction costs that relate to the issue of a compound
financial instrument are allocated to the liability and equity
components of the instrument in proportion to the allocation of the
proceeds.
The interest expense on the liability component is calculated by
applying the effective interest rate for the liability component of
the instrument. The difference between any repayments and the
interest expense is deducted from the carrying amount of the
liability.
Upon conversion of loan note debt the corresponding carrying
value of loan note liability and equity reserve is released, and
the difference between these and the nominal value of the shares
issued on conversion is recognised as a share premium.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the year in which the estimate is revised if the revision affects
only that year or in the year of the revision and future years if
the revision affects both current and future years.
The most critical accounting policies and estimates in
determining the financial condition and results of the Group are
those requiring the greater degree of subjective or complete
judgement. These relate to:
-- Capitalisation of exploration costs
-- Share-based payments
3
Operating loss
Year ended Year ended
30 September 30 September
The operating loss is stated after charging: 2016 2015
GBP GBP
Depreciation of property, plant and equipment 1,468 3,111
Operating lease expenses 14,126 13,583
Share-based payments 123,737 288,831
Auditors' remuneration - fees payable 22,000 24,750
to the Company's auditor for the
audit of the parent company and consolidated
financial statements
4 Earnings per share
Basic and Diluted Year ended Year ended
30 September 30 September
2016 2015
Weighted number of shares 9,181,895,384 3,744,400,803
in issue during the year
GBP GBP
Loss from continuing operations (919,706) (4,720,222)
attributable
to owners of the parent
Basic earnings per share has been calculated by dividing the
loss attributable to equity holders of the company after taxation
by the weighted average number of shares in issue during the year.
There is no difference between the basic and diluted earnings per
share as the effect on the exercise of options and warrants would
be to decrease the earnings per share.
PLEASE NOTE THAT THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION. If you are in any doubt as to what action you
should take, please consult your stockbroker or other independent
adviser authorised under the Financial Services and Markets Act
2000 immediately. If you have recently sold or transferred all of
your ordinary shares in ECR Minerals PLC, please forward this
document, together with the accompanying documents, as soon as
possible either to the purchaser or transferee or to the person who
arranged the sale or transfer so they can pass these documents to
the person who now holds the shares.
ECR MINERALS PLC
(the "Company")
(Registered in England and Wales No 05079979)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the Annual General Meeting of the
Company will be held at the offices of Charles Russell Speechlys
LLP, 5 Fleet Place, London EC4M 7RD on 24 April 2017 at 10.00 a.m.
for the purpose of considering and, if thought fit, passing
Resolutions 1 to 5 as ordinary resolutions, and Resolution 6 as a
special resolution:
Ordinary Resolutions
1 To receive, consider and adopt the annual accounts of the
Company for the year ended 30 September 2016, together with the
reports of the directors and auditors thereon.
2 That Craig William Brown, a director retiring in accordance
with article 29 of the Company's articles of association, be and is
hereby re-elected as a director of the Company.
3 That Ivor William Osborne Jones, a director retiring in
accordance with article 29 of the Company's articles of
association, be and is hereby re-elected as a director of the
Company.
4 That Christian Gabriel St. John-Dennis, a director retiring in
accordance with article 29 of the Company's articles of
association, be and is hereby re-elected as a director of the
Company.
5 To appoint PKF Littlejohn LLP as auditors of the Company and
to authorise the directors to determine their remuneration.
Special Resolution
6 That the articles of association in the form presented to the
meeting be adopted as the new articles of association of the
Company in substitution for, and to the exclusion of, the existing
articles of association of the Company.
By Order of the Board
Craig Brown
Director and Company Secretary
Registered Office:
Unit 117, Chester House
81-83 Fulham High Street
Fulham Green
London, SW6 3JA
31 March 2017
NOTES ON RESOLUTIONS
The following paragraphs explain, in summary, the Resolutions to
be proposed at the Annual General Meeting (the "Meeting").
Resolution 1: Receipt of the annual accounts
Resolution 1 proposes that the Company's annual accounts for the
period ended 30 September 2016, together with the reports of the
directors and auditors on these accounts, be received, considered
and adopted.
Resolutions 2 to 4: Re-election of directors
Mr Craig Brown, Mr Ivor Jones and Mr Christian St. John-Dennis
who were all appointed since the last Annual General Meeting of the
Company are retiring in accordance with article 29 of the Company's
articles of association. Each Mr Craig Brown, Mr Ivor Jones and Mr
Christian St. John-Dennis is offering himself for re-election by
the members.
Resolution 5: Appointment and remuneration of auditor
Resolution 5 proposes to appoint PKF Littlejohn LLP as the
Company's auditors and to authorise the directors to set the
auditors' remuneration.
Resolutions 6: Adoption of new articles of association
It is proposed that the Company adopts new articles of
association ("New Articles").
The Company's articles of association were adopted in 2009 and
have not been substantially revised since then. The principal
change introduced by the New Articles is the removal of the
provisions relating to the regulations applicable to the Company
which would be relevant only if the Company had a secondary listing
on the ASX and the directors do not consider that there are any
advantages to seeking a secondary listing on the ASX. Otherwise,
the provisions in the New Articles are broadly similar to those in
the current articles of association of the Company.
A copy of the proposed New Articles will be available for
inspection during normal business hours (Saturdays, Sundays and
public holidays excepted) at the Company's registered office up
until the close of the Meeting. Copies will also be available on
the day of the Meeting at the offices of Charles Russell Speechlys
LLP, 5 Fleet Place, London EC4M 7RD from 9.45 a.m. until the
conclusion of the Meeting.
A copy of the New Articles will also be found in the Investor
Relations section of the Company's website at www.ecrminerals.com
from the passing of the resolution onwards.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20170331005471/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
March 31, 2017 10:12 ET (14:12 GMT)
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