The sale allows ECR to focus on its core gold exploration activities in Australia
ECR Minerals has announced the sale of SLM Gold Project. (Credit: Pixabay/Adam Radosavljevic )
ECR Minerals plc (LON: ECR), the precious metals exploration and development company, is pleased to announce the sale of its wholly owned Argentine subsidiary Ochre Mining SA (“Ochre”), which holds the SLM gold project in La Rioja, Argentina.
HIGHLIGHTS:
ECR retains an NSR royalty of up to 2% to a maximum of USD 2.7 million in respect of future production from the SLM gold project;
The purchaser, Hanaq Argentina SA (“Hanaq”), is a Chinese-owned company engaged in lithium, base and precious metals exploration in Northwest Argentina including Salta, Jujuy and La Rioja, with a highly experienced management team;
The sale allows ECR to focus on its core gold exploration activities in Australia.
Craig Brown, Chief Executive Officer, commented:
“We are pleased to retain exposure to potential upside from the SLM gold project in the form of a royalty on future production, and we believe that Hanaq has the operational capabilities and access to Chinese investment capital necessary to put the SLM project into production, subject to the usual prerequisites.
Moreover, the transaction enables ECR to concentrate its resources on our core gold exploration activities in Australia.”
Further Information:
Ochre’s sole asset is the SLM gold project, which comprises seven mining licences in La Rioja, Argentina. Hanaq has purchased 100% ownership of Ochre from ECR. The consideration for the acquisition is the grant to ECR of a 2% net smelter return (NSR) royalty in respect of four of the licences, and a 1% NSR royalty in respect of the other three licences. The NSR is capped at USD 2.7 million in aggregate (across all licences). This is the equivalent of approximately £2.07 million, based on 1.3031 GBP/USD exchange rate (Bloomberg closing rate 04/02/2020).
The directors of the Company understand that the founder and CEO of Hanaq Group, of which Hanaq Argentina SA is part, is Mr Xiaohuan (Juan) Tang, who has a substantive track record in Latin America, including responsibility for the successful permitting of the Pampa de Pongo iron ore project in Peru in his former capacity as General Manager of Jinzhao Mining Peru. Pampa de Pongo is one of the largest iron ore deposits in Latin America. Mr Tang has degrees from Tsinghua University in China, and Imperial College, Cambridge University and Oxford University in the UK.
Commencement of production at the SLM project under Hanaq’s ownership is not a certainty, and is subject, inter alia, to further exploration and feasibility studies being successfully completed (if deemed necessary by Hanaq) and to the necessary permits for production being obtained. Upon the receipt of any future royalties, the Company intends to apply the funds to its exploration and development activities.
The book value of Ochre and the SLM project in ECR’s unaudited half-yearly results for the six months ended 31 March 2019 was £1,072,210. In its audited financial statements for the year ended 30 September 2019, Ochre reported no turnover and no profits, and net assets of approximately £170,000 (equivalent). Ochre has one employee.
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.
Source: Company Press Release