LONDON: ECR Minerals PLC, an AIM-listed gold exploration and development company focused on Australia, said Tuesday it has agreed to acquire Paleogold Ltd. in a fully funded, staged transaction designed to deliver nearer-term gold production and scalable cash flow.
The acquisition gives ECR interests in gold projects across Queensland, Western Australia and South Australia. Most significantly, through the exercise of an option, ECR will acquire 50% of Lucky Strike Mining Ventures Pty Ltd, which holds the hardrock Maddens Flat group of mines in North Queensland. As part of that option exercise, ECR committed to spending A$1 million on the Maddens Flat group to advance gold production.
ECR also will acquire 20% of Salt Bush Flat Mines Nominees Pty Ltd, owner of the Salt Bush project in South Australia, and has undertaken to spend A$200,000 on that project to prepare it for gold production.
Under the terms of the acquisition, the entire issued share capital of Paleogold will be exchanged for up to 621 million new ECR shares. A total of 207 million shares will be issued on completion. An additional 207 million shares will be issued subject to ECR earning no less than A$5 million in revenue from the Paleogold projects — Lucky Strike, Salt Bush and Tuckanarra.
A final tranche of 207 million shares will be issued on the second anniversary of the acquisition, subject to ECR earning no less than A$10 million in cumulative revenue from the same projects.
The transaction is structured to allow ECR Australia’s existing tax losses to be applied against any future profits generated from the Paleogold projects.
ECR said it is targeting gold production later this year from its 50% interest in the Maddens Flat group, which includes an established processing plant, infrastructure and camp at Maddens Flat Camp. Historical high-grade production from the Maddens Underground Mine includes averages of about 14 grams per tonne of gold, with additional zones grading 6 to 7 ounces per tonne.
The 50-square-kilometer exploration license covering the Maddens Flat group is largely unexplored by modern methods but contains six known mine workings across the tenement. High-grade quartz vein systems at the Maddens mine have historically produced at 25 grams per tonne and above, with continuity at depth and along strike expected but untested.
An additional production pathway from the Salt Bush project in South Australia is targeted for 2027. Exploration upside exists at Tuckanarra, adjacent to Odyssey Gold Ltd.’s reported 407,000-ounce JORC gold resource.
Paleogold’s operational team will join ECR, providing on-site capability and continuity to oversee development and production. Completion of the Paleogold transactions will transform ECR into a multi-asset gold company with a portfolio of 10 projects across four Australian states — Queensland, Western Australia, South Australia and Victoria — adding its first asset with a historic JORC inferred resource.
Consideration for the Paleogold transactions will be satisfied via issuance of new ordinary shares, convertible loan notes, warrants and, for the initial cash consideration, from ECR’s existing cash resources.