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 is pleased to provide an update on Paniai Gold Limited (“Paniai”), which is focused on the development of the Derewo River gold project in Papua Province, Indonesia. Paniai holds a 50% interest in a joint venture over the Derewo River project with a local company.

The joint venture intends to mine sizable bodies of gold bearing gravels identified within the Derewo River project area, and will additionally undertake exploration for new gold and copper-gold deposits. The Derewo River project is located less than 100 kilometres from the Grasberg copper-gold mine operated by Freeport McMoRan Copper & Gold.

Paniai expects to list on the National Stock Exchange of Australia (NSX) during the fourth quarter of 2010. Mercator holds 50 million shares in Paniai, which is expected to equate to around 16% of Paniai’s issued share capital post-listing. An underwriting of A$1.8 million in respect of Paniai’s listing has been agreed with an Australian broking house focused on the resources sector.

Derewo River Gold Project

Much progress has been made by Paniai on the Derewo River project, including:

  • Commencement of initial base camp construction.
  • Purchase and transport to site by heavy-lift helicopter of major capital items including wheel loader and excavator.
  • Agreement with the indigenous Wolami people signed, setting out terms of compensation, access etc., in one of the first such agreements to be signed in Papua Province.
  • AMDAL (environmental impact study) completed and submitted for approval as a precursor to the grant of Paniai’s 491 hectare mining/exploitation licence application.
  • On site security personnel put in place; BRIMOB (police) and private security.

New Indonesian Mining Laws

Indonesia has now passed and implemented new mining laws, with a number of positive implications for Paniai:

  • Foreign companies are now entitled to hold, until after the fifth year of production, a 100% interest in projects.
  • The term of exploration licences (in the case of metals, including gold) has been increased to 8 years.
  • The maximum allowable exploration landholding has been increased to 100,000 hectares.

The new laws were passed by Indonesia’s parliament in Jakarta in December 2008, but it was not until February of this year that the manner of their implementation was devised in conjunction with the provincial authorities, which will now have a greater role in regulating mining activities. This process, which is normal in Indonesia, caused a hiatus in licensing activity that has only very recently abated.

Paniai has been working to ensure that its licences and applications in Papua Province comply with the new laws, and the first stage of this process is now complete.

Formal recognition of Paniai’s exploration licence applications (first submitted in December 2008) by the central government of Indonesia in Jakarta has been received, with the next stage being formal recognition of the grant of Paniai’s initial 40 hectare mining/exploitation licence and acceptance of the AMDAL (environmental impact study) submitted by Paniai as a precursor to the grant of a further 491 hectare mining/exploitation licence application.

It is expected that these two objectives will be achieved by the end of June 2010, which will then permit Paniai’s Indonesian legal counsel to complete their due diligence investigations ahead of the publication of a listing document.

Patrick Harford, Managing Director of Mercator Gold plc, comments:

“Indonesia’s Papua Province is one of the most prospective areas for mineral exploration in the world, and is the subject of a great deal of interest from both Indonesian and foreign exploration and mining companies.

Paniai is committed to the development of the Derewo River project and is investigating a number of opportunities that may allow it to expand its ground position in the region.”

 

For further information please contact:

Mercator Gold plc
Michael Silver, Chairman Tel: +44 (0) 20 7929 1010
Patrick Harford, Managing Director +1 646 239 9087
Email:This email address is being protected from spambots. You need JavaScript enabled to view it.
Daniel Stewart & Company plc
Oliver Rigby Tel: +44 (0) 20 7776 6550
Old Park Lane Capital plc
Forbes Cutler Tel: +44 (0) 20 7518 2603
Director of Corporate Broking
Bankside Consultants Ltd Tel: +44 (0) 20 7367 8888
Simon Rothschild
Oliver Winters
Barry Kaplan Associates
Larry Kaplan Tel: +1 732 747 0702

 

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