ECR Minerals has announced a collaboration with Metal Tiger in relation to ECR’s wholly-owned Australian subsidiary Mercator Gold Australia (MGA). ECR also has an interest in advanced exploration projects in the Philippines and Argentina.
MGA is estimated to have tax losses of approximately A$66 million as at June 30, 2015 which may be available, subject to certain conditions, to reduce future taxable profits of MGA. MGA is therefore seeking a business opportunity in Australia with the capacity to generate profits.
Accordingly, MGA, ECR and Metal Tiger have entered into a facilitation agreement which provides:
- In the event that Metal Tiger introduces a business opportunity to MGA and MGA proceeds to generate profits from such opportunity, Metal Tiger shall receive from MGA a fee equal to 25% of the tax which would have been payable by MGA in respect of the profits generated by such activity if not for the availability of some or all of the tax losses.
- The introducer’s fee, if due, shall be payable in respect of each tax year at the time the relevant tax return for the year is no longer open for enquiry, under ordinary circumstances, by the Australian Tax Office (ATO). Currently, such a tax return would be open for enquiry, under ordinary circumstances, for four years from the date of lodgement.
- Neither ECR nor MGA nor any other person:
- Makes any warranty or representation, nor gives any assurance whatsoever that the tax losses will ultimately be available, in whole or in part, to reduce any future taxable profits of MGA, nor that any taxable profits will in fact arise;
- Shall be obliged to take, or refrain from taking, any action to ensure that the tax losses will ultimately be available, in whole or in part, to reduce any future taxable profits of MGA;
- Accepts any liability whatsoever to any person in respect of efforts made by Metal Tiger or any other person to identify a business opportunity for MGA, except as expressly stated in the agreement;
- Shall be under obligation to proceed with any business opportunity or potential transaction which may be introduced by Metal Tiger or any other person.
- In the event Metal Tiger introduces a person willing to purchase some or all of ECR’s shares in MGA, or a person willing to enter into a transaction of any other nature in relation to MGA, and in the event such a sale or other transaction is agreed and completed, ECR and/or MGA shall pay to Metal Tiger 25% of any consideration for the sale or other transaction as and when such consideration is actually received by ECR and/or MGA.
- The agreement may be terminated by any party hereto upon 14 days’ notice in writing to the other parties.
ECR’s CEO Stephen Clayson said, “The directors of ECR are pleased to have established a framework for the introduction of potentially appropriate opportunities for Mercator Gold Australia by Metal Tiger, which has links to Australia through two of its directors, and we hope that the collaboration will prove fruitful.”
ECR is an AIM-listed mineral exploration and development company with the right to earn a 50% interest in the Danglay epithermal gold project in the Philippines. D
anglay is an advanced exploration project in a prolific gold and copper mining district in the north of the Philippines.
ECR also 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.