Acquisition of New Polymetallic Mining Concession

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

15 July 2024

Echo Energy PLC

("Echo" or the "Company")

Acquisition of New Polymetallic Mining Concession, Peru

&

 Convertible Loan Note Draw Down

Ana Lucia Project is a high priority target close to existing, defined resources

Echo (LON:ECHO), the Latin America focused natural resources company, announces the acquisition, via the Company's 50%-owned Peruvian joint venture, Boku Resources SAC ("Boku"), of the Ana Lucia polymetallic concession in the Ancash region of central Peru (the "Ana Lucia Project").

The Ana Lucia Project consists of a group of concessions, approximately 80 km from the city of Huaraz, that cover 2,100 hectares and were previously owned by Compañía Minera Ares SAC, part of Hochschild Mining PLC (LON: HOC). Boku has acquired the Ana Lucia Project for an administrative fee of approximately US$36,000, plus a Net Smelter Return (NSR) Royalty of 1% payable from production. The NSR is effectively capped at $10,000 as Boku has an exclusive option to remove the NSR with a single payment of $10,000.

The Ana Lucia Project comprises a system of 17 identified quartz-tourmaline breccias which contain lead, zinc sulphides with anomalous silver, and gold. The largest of the breccias already found has dimensions of up to 200 m x 45 m with surface samples grading 0.6 g/t Au, 20 g/t Ag, and 0.2% Pb.  The area remains highly prospective for further discoveries in the opinion of Boku's management and given local precedence.

The Ana Lucia Project is considered by Boku's management to be comparable to both the Soledad Project, belonging to Chakana Copper Corp. (TSX: PERU.V), located 30 km to the north, and the formerly operating Cerro Bayo mine (PRIV) which lies only 1 km from Ana Lucia. Breccia bodies like these tend to occur in clusters with the pipes having a small surface expression but often, with a large vertical extent, can be very high-grade and can coalesce at depth making them attractive targets.

The Soledad Project is a good example and is formed from a system of multiple quartz-tourmaline breccias. It has a defined underground Inferred Resource of 4.8 Mt at 0.72 g/t Au, 61 g/t Ag, and 0.97% Cu, plus an additional Inferred Open Pit Resource of 1.9 Mt at 1.29 g/t Au, 37.1 g/t Ag, and 0.65% Cu (2022, CIM Standard for Mineral Resources and Mineral Reserves 2014) following over 60 km of drilling. 

The former Cerro Bayo Mine also hosts several breccia bodies with an Inferred Resource of approximately 7 Mt and dimensions of 160 m x 60 m (source: Internal technical note prepared by Compañía Minera Ares SAC.). The owner previously carried out a 90 t/d small-scale mining operation with average grades of 8% Pb, 300 g/t Ag, <1% Cu, and 0.4% Zn which operated for over 10 years and closed in the last 4 years, and the small-scale mining option is one that Boku sees could, with additional work, potentially be applied to the Ana Lucia Project.

Stephen Birrell, Chief Executive Officer of Echo, commented:

"The Ana Lucia Project is considered by Boku as having significant potential for developing a small-scale mining operation, similar to that operated at Cerro Bayo, following only a small amount of initial work.  A more extensive appraisal programme, including investment in exploration geology to fully assess the geological potential, preparing an NI 43-101 and carrying out a feasibility study, seems justified on the potential that Boku sees in the area.  Ana Lucia is now a priority project for Echo and its partner.

Along with its Tesoro gold project and access to several gold-rich tailings resources, Boku now has a strategic holding in some near-term developments and will look to advance them as quickly as it can down the production timeline."

Convertible Loan Note Draw Down

Echo is also pleased to announce a second draw of the convertible loan note of £150,000 providing a capital injection of £135,750 after the deduction of fees. The conditional convertible loan note, announced on 6 June 2024 is for a £500,000 facility, of which £230,000 has now been drawn.

For further information please contact:

About Echo

Following the partial divestment of its assets in Argentina, Echo entered into a 50:50 joint venture in Peru in July 2024 with an experienced local partner for precious metals (gold/silver) mining and the cleaning of known tailings deposits containing Measured and Indicated resources of gold and silver. Through the JV, known as Boku Resources, Echo has secured an opportunity to scale operations in Peru producing gold and silver through primary mining and tailings cleaning, owning 50% of the production and resources. Initially, Boku intends to establish formalised artisanal and small mining operations on its 100% held Tesoro Gold concession, southern Peru, targeting early cash flow generation by Q4 2024 from an initial 147 oz/month of gold production (estimated) through an existing tolling plant.

Qualified Persons Statement

The scientific and technical information contained within this announcement has been reviewed and approved by Dr Alberto Rios Carranza, a geologist with over 27 years' experience, who holds a doctorate cum laude awarded by the Polytechnical University of Madrid, Spain and who has published or co-authored over 17 scientific papers on the mineralisation across Peru. Alberto is a member of the Geological Society of Peru, the Colombian Society of Geology and the Institute of Mining Engineers of Peru. He is a Qualified Person as defined by the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009.

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