Update on the potential sale of non-core assets

ECR Minerals plc (LON: ECR), the exploration and development company focused on gold in Australia, announces that, further to the Company's announcement on 1 November 2024, discussions with the potential buyer of ECR's subsidiary, Mercator Gold Australia Pty Ltd ("MGA"), have progressed well over the past month.

The proposed transaction concerns the sale of certain non-core assets within the Company's portfolio in Victoria, in order to effect a sale of the Company's A$75 million of tax losses. The potential buyer has engaged consultants to advise on the optimum structure of the proposed transaction. Once this structuring work has been completed, the next stage, provided that the parties agree mutually acceptable terms, would be to prepare the formal sale documentation. As previously announced, the proposed transaction is likely to necessitate a restructuring of MGA as such that it comprises only non-core assets.

Given the level of process and complexity that is likely to be involved, to allow time for these workstreams to conclude, ECR has extended the period of exclusivity with the potential buyer to 31 January 2025. As announced on 1 November 2024, the board of ECR continues to believe that the sale, if realised, would be for a material cash consideration.

Notwithstanding this positive progress, discussions remain at an early-stage and there can be no certainty that final binding terms will be agreed, nor as to the timings or final terms, structure or quantum of the potential disposal of MGA.

Depending on the final terms that are agreed for any transaction to realise the tax losses, as well as the structure of the transaction, it is possible, but not guaranteed, that the potential disposal of MGA may be a fundamental change of business pursuant to Rule 15 of the AIM Rules for Companies. If applicable, this would require, amongst other items, the transaction to be conditional on the consent of shareholders being given in a general meeting; a shareholders circular detailing the terms of the transaction and certain other disclosures as set out in the AIM Rules. Further updates on the way forward will be provided in due course as matters are progressed.

Nick Tulloch, ECR's Chairman, said: "We are pleased to report positive progress on the proposed sale of MGA, including its A$75 million of tax losses, in what is potentially a very complex transaction. With a number of different workstreams, it is likely that the forthcoming holiday period will slow the pace down as we get into the second half of December 2024 and so we have agreed a longer extension to exclusivity with the potential buyer to allow time for its advisers to complete the due diligence and their structuring work. I intend to travel to Australia in the second half of January 2025 to hopefully conclude the process."