ECR is a mineral exploration and development company, incorporated in the UK.

ECR’s wholly owned Australian subsidiary Mercator Gold Australia (MGA) has agreed to acquire 100% ownership of the Avoca and Bailieston gold projects in Victoria, Australia. Mercator Gold Australia is estimated to have tax losses of approximately AUD 66M as at 30 June 2015, which may be available, subject to certain conditions (as described in ECR’s announcement dated 4 December 2014), to reduce MGA’s future taxable profits.

ECR has the right to earn a 50% interest in the Danglay epithermal gold project in the Philippines. Danglay is an advanced exploration project located in a prolific gold and copper mining district in the north of the Philippines. An NI43-101 technical report was completed in respect of the Danglay project in December 2015, and is available for download from ECR’s website.

ECR’s wholly owned subsidiary Ochre Mining has a 100% interest in the SLM gold project in La Rioja Province, Argentina. Exploration at SLM has focused on identifying small tonnage mesothermal gold deposits which may be suitable for relatively near term production.

 

ECR shares are listed on the AIM market of the London Stock Exchange with the symbol ECR.

MERCATOR GOLD plc
(“Mercator Gold”, “Mercator” or “the Company”)

AIM: MCR

US OTC: MTGDY

 

LONDON: 13 OCTOBER 2008

HIGHLIGHTS

  • Mercator’s Australian subsidiary Mercator Gold Australia Pty Ltd (MGA) has entered voluntary administration ahead of an intended refinancing.
  • As previously announced on 25 September 2008, MGA is working towards refinancing the Meekatharra mining operations. A refinancing, if effected, will in due course allow MGA to resume normal trading. The Administration has the effect of delaying MGA’s obligations to its creditors.
  • Terms for the proposed refinancing of MGA in conjunction with the Tulla Resources Group Pty Ltd (‘Tulla’) are still being negotiated under the auspices of the Administrators.
  • Although trading in Mercator Gold shares has been suspended, the Company remains active, and is presently evaluating additional projects.

Further to the announcement that MGA, a 100 per cent owned subsidiary of Mercator Gold plc, has been placed into voluntary administration (‘the Administration’), Mercator announces that Martin Jones, Darren Weaver and Andrew Saker of Ferrier Hodgson (‘the Administrators’) have been appointed as joint and several administrators of MGA as of 9 October 2008.

Mercator and the MGA board of directors are working closely with the Administrators in order to bring about the best possible outcome to the Administration. It is intended to enter into a Deed of Company Arrangement (“DOCA”) under which MGA would be granted a period of six months to seek refinancing for the business. During this period there is a moratorium of all creditors. The DOCA will require the approval of the bank and major creditors of the business and it is expected that the creditors’ meeting to approve this will take place in the next four to five weeks time. MGA holds all of Mercator’s West Australian mining and exploration assets. Should creditors approve the DOCA at the second creditors meeting, control of the company reverts back to its directors.

The Administration was precipitated by discussions with MGA’s bank (‘the Bank’), MGA’s largest creditor after the parent company. The Bank is keen to ensure a restructuring of the debt facilities it provides to MGA. In view of the generally strained financial environment the assistance of the Bank in this process is greatly appreciated by the Board. Concurrently, MGA is in negotiations with Tulla regarding a proposed refinancing of MGA which could provide greater financial stability to MGA going forward.

As a consequence of the suspension of mining of the Surprise pit MGA became unable to fulfil its obligations under its hedging programme. Accordingly, the hedging programme has been closed out by the bank.

Ongoing Activities at Meekatharra

It is the intention of the Administrators to suspend all mining and milling activities at the Meekatharra mine site. Essential maintenance to the Bluebird mill will be carried out, and work will continue on the deviation of the Great Northern Highway to allow continued mining of the Surprise pit in the future. A re-estimation of the remaining reserves in the Bluebird pit will also take place.

Mercator Gold plc

Mercator Gold plc remains active and adequately funded. The Company is currently evaluating additional projects, and any developments on this front will be announced as appropriate.

Mercator owns 10 million shares in ASX-listed Silver Swan Group, as well as 4 million performance shares.

For further information please contact:

Mercator Gold plc Tel: +44 (0)20 7929 1010
Patrick Harford, Managing Director   +61 (0)428 103 447
Michael Silver, Chairman   +44 (0) 20 7929 1010
Email:This email address is being protected from spambots. You need JavaScript enabled to view it.    
   
   
   
Bankside Consultants Ltd Tel: +44 (0)20 7367 8888
Simon Rothschild    
Oliver Winters    
   
   
   

 

Administrators of Mercator Gold Australia Pty Ltd:

Ferrier Hodgson Tel: +61 (0) 8 9214 1444
Level 26, BankWest Tower    
108 St George's Terrace    
Perth WA 6000    
Australia    
   
   
   

 

AIM: MCR

 

Click Here for the full text PDF version of this Press Release