ECR Minerals raises £350,000 after placing 3.5bn shares

ECR Minerals, a mineral mining company, said on Monday they raised £350,000 after placing 3.5bn ordinary shares.

ECR’s £3.5bn ordinary shares of 0.001p were sold at 0.01p. The company said they will use about £323,750 of the money raised to repay debt owed by the ECR under the convertible loan facility with investment fund YA II PN. Remaining funds will be used as working capital.

The company said it does not intend to make further use of the convertible loan facility, or anything similar, in the future.

ECR said they are intend to make an application to admission of placing shares on AIM around 18 July. After admission, the company is expected to have nearly 12bn ordinary shares. The placing shares will be ranked side-by-side the existing ordinary shares in AIM.

Smaller Company Capital was appointed representative of Vicarage Capital, which acted for ECR in the placing. A placing commitment of £60,000 was received from PrimaryBid, the crowdfunding platform for AIM listed companies.

ECR is assessing its Avoca gold project in Victoria, Australia, which has a potential to generate short-term cash flow by reprocessing historical waste dumps to extract remnant gold.

The mining company also said that its Australian subsidiary Mercator Gold Australia (MGA) has agreed to buy Avoca and Bailieston gold projects in Victoria.

MGA had tax losses of about AU$66m as of 30 June 2015, which may reduce MGA’s future taxable profits. At Avoca, the company said there is an opportunity to establish near term gold production from reprocessing of historical mine dumps, with potential sale of gravel and sand by-products.

ECR said they had a right to earn a 50% interest in the Danglay epithermal gold project in the Philippines, which is an exploration project located in a gold and copper mining district.

ECR added that the company’s Ochre Mining has a 100% interest in the SLM gold project in La Rioja Province, Argentina. SLM exploration identifies small tonnage mesothermal gold deposits, which could be used for near term production.

Shares in ECR Minerals were down 28.75% to 0.0114p at 0933 BST.