ECR Minerals plc is pleased
to announce that the Company has increased its shareholding in Paniai Gold Ltd (�Paniai�)
through the conversion of a total of A$337,937 in
loans to Paniai and accrued interest thereon into 50
million new Paniai shares. ECR is now the holder of
100 million Paniai shares, equating to 26% of Paniai�s issued share capital and making the Company Paniai�s largest shareholder.
Paniai holds 46 million West Wits Mining Ltd (�West Wits�)
performance shares and 12.5 million options to acquire West Wits ordinary
shares exercisable at A$0.08 for 5 years. The
performance shares convert to ordinary shares subject to the Derewo River gold project in Papua, Indonesia achieving
production of 20,000oz gold within 2 years of the project�s acquisition from Paniai by West Wits, which occurred in late July 2011.
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 approximately
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 hosts
significant artisanal gold mining activity and the objectives of the joint
venture are to establish a modern, mechanised
alluvial gold mining operation on a 40 hectare mining licence
and to explore a number of exploration licences for
new gold and gold-copper deposits. Exploration targets include large scale
alluvial gold, porphyry gold-copper and bonanza grade quartz sulphide gold veins. West Wits has a 50% interest in the
initial alluvial mining operation and an interest of up to 80% in exploration
activities.
ECR also holds 11,149,826 West Wits ordinary shares,
which are listed on the Australian Stock Exchange with the ticker WWI.
More information on West Wits and the Derewo River gold project can be found at
www.westwitsmining.com
Placing & SEDA Advance
The Company has arranged a placing (the
"Placing") of 32,460,000 new ordinary shares of 0.1p (�Ordinary
Shares�) at a price of 1p per Ordinary Share to raise GBP324,600
before costs.
Optiva Securities Ltd acted as placing agent for the Company
in the Placing, which is conditional upon admission of the Ordinary Shares
issued and allotted in respect of the Placing to trading on AIM.
The Company has also issued and allotted a total of
5,000,000 Ordinary Shares at 1p per Ordinary Share to YA Global SPV Ltd ("YA
Global") in connection with an advance (the �Advance�) of GBP50,000 under the Company's Standby Equity Distribution
Agreement (SEDA) with YA Global.
The net proceeds of the Placing and the Advance will
be applied primarily for the planned drilling programme
at ECR�s 100% owned El Abra gold prospect in La Rioja
Province, Argentina and for working capital purposes. Drilling at El Abra is expected to commence in the second week of January
2012.
Pursuant to this announcement application is being
been made for a total of 37,460,000 Ordinary Shares to be admitted to trading
on AIM. Dealings are expected to commence on 23 December 2011. Following
admission of these shares the Company will have a total of 639,806,081 Ordinary
Shares in issue. The new Ordinary Shares will rank pari
passu in all respects with the Ordinary Shares of the
Company currently traded on AIM.
Patrick Harford, Managing Director of ECR Minerals plc, comments:
�ECR deliberately positioned itself to acquire a
larger shareholding in Paniai Gold at an appropriate
time, and we believe that time has now come. We expect great progress to be
made at the Derewo River gold project during 2012,
and ECR shareholders now have significant exposure to the success of the
project through the Company�s shareholdings in West Wits and in Paniai Gold.
The proceeds of the small capital raising announced
today are intended to augment ECR�s working capital position ahead of drilling
at the El Abra prospect early in January.
The results of this drilling and the ongoing
metallurgical testwork on samples from El Abra and other prospects in the Sierra de las Minas project area along with the anticipated release
of the Copper Flat project prefeasibility study by THEMAC Resources early next
year are expected to open up a wider range of financing options for the
Company. It is hoped that these options will include low cost gold production
in Argentina, either on a toll treatment basis or using a dedicated processing
plant at Sierra de las Minas.�
About ECR Minerals
ECR is a mineral development company with interests in
the USA, Argentina, Indonesia, Thailand and Australia.