ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd ("MGA") has 100% ownership of the Bailieston and Creswick gold exploration projects in Central Victoria, Australia.
As well as its 100%-owned Bailieston and Creswick projects, MGA has the following interest in the Avoca, Moormbool and Timor projects (the "Projects") which were sold by MGA in 2020:
i. MGA will receive a payment of A$1 for every ounce of gold or gold equivalent of measured resource, indicated resource or inferred resource estimated within the area of one or more of the Projects in any combination or aggregation of the foregoing, up to a maximum of A$1,000,000 in aggregate; and
ii. a payment of A$1 for every ounce of gold or gold equivalent produced from within the area of one or more of the Projects, up to a maximum of A$1,000,000 in aggregate.
For more information regarding MGA's interest in the Avoca, Moormbool and Timor projects, please see the announcement dated 20 April 2020.
ECR has earned a 25% interest in the Danglay epithermal gold project, 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.
ECR holds a net smelter return (NSR) royalty of up to 2% to a maximum of USD 2.7 million in respect of future production from the SLM gold project in La Rioja Province, Argentina.
ECR shares are listed on the AIM market of the London Stock Exchange with the symbol ECR.
Since September 2018, all AIM-listed companies have been required to apply a recognised corporate governance code. The Company has chosen the Quoted Companies Alliance (QCA) Corporate Governance Code published in April 2018 for this purpose. High standards of corporate governance are a priority for the Board, and details of how ECR addresses the key governance principles defined in the QCA code are set out below, and on the Company’s website in accordance with AIM Rule 26.
- Strategy and business model
ECR’s business model and strategy to deliver shareholder value is set out in the most recent Strategic Report, which forms part of the Company's Annual Report & Accounts 2018, together with the Company’s values and risk management approach.
- Understanding and meeting shareholder needs and expectations
The Company maintains a dedicated email address which investors can use to contact the Company. This address is prominently displayed on the Company’s website together with its address and phone number.
Annual general meetings are held, which all members have the right to attend, and during each annual general meeting, time is set aside specifically to allow questions from attending members to be addressed to the Board. As the Company is too small to have a dedicated investor relations department, the CEO is responsible for reviewing all communications received from members and determining the most appropriate response. In addition to these passive measures, the CEO typically engages with members through investor shows once or twice each year, which seems to be effective.
- Stakeholder and social responsibilities
In addition to its members, the Company recognises that its main stakeholder groups are its employees, consultants and contractors, and the communities and governmental authorities where the Company and its subsidiaries operate. Where necessary, the Company dedicates significant time to understanding and acting on the needs and requirements of each of these groups. Board members assess the needs and requirements of the Company’s stakeholders as and when they interact with each stakeholder group, usually through meetings and dialogue, and matters are then be raised at Board level for appropriate action.
With regard to corporate social responsibility, the Board is aware of the impact the activities of the Company and its subsidiaries may have on the communities in which they operate, and aims to ensure this impact is positive.
- Risk management
The Company operates in the mineral exploration and development sector, which is generally high risk but can provide exceptionally high returns for shareholders. The Company maintains a register of risks across a number of categories including personnel, competition, finance, environmental, political, technical and legal.
The risks are identified on an annual basis and discussed with the auditors, and kept up to date with the aid of regular discussions at Board level. For each risk the Board estimates the potential impact and likelihood of adverse events, and identifies mitigating strategies. This register is reviewed periodically as the Company’s situation changes and at a minimum annually to determine whether the systems in place are effective or need updating.
Maintain a dynamic management framework
- Board structure
The Board currently comprises one executive director, one independent non-executive director and one independent non-executive Chairman. The Board meets at least quarterly, and all current directors have attended all Board meetings held in the current financial year (subject to his being a director at that time). Under the Company’s articles of association, each director must periodically offer himself for re-election by vote of the members at the Company’s annual general meeting.
The contracts of engagement for the Company’s nonexecutive directors require that they devote such of their time as is reasonably necessary to perform their duties. In addition, they may provide paid consulting services in respect of work going beyond the role of a non-executive director.
The Company notes that best practice under the QCA code is to have at least half the Board made up of independent non-executive directors.
In addition, the Company notes that its Non-Executive Chairman David Tang has been in post for more than one year and the Board is satisfied as to his independence, especially in light of the periodic requirement for all directors to offer themselves for re-election, which offers shareholders an opportunity to vote on their suitability. During the past twelve months there have been four formal board meetings and all directors in office at the relevant time attended.
- Board diversity and experience
The individuals who have been appointed to the Board have been chosen because of the skills and experience they offer. The members of the Board at the present time are listed elsewhere on this website, together with an outline of their experience, skills and personal qualities relevant to the Company’s business.
The diverse experience and expertise of the directors is intended to ensure that the Board has the skills and capabilities to manage the Company for the benefit of shareholders over the medium to long term. The Company has no specific advisors to the board other than its lawyers and AIM nominated adviser. Craig Brown acts in the role of Company Secretary.
- Board performance & evaluation
Evaluation of the performance of the Board has historically been implemented in an informal manner. From 2019 however, the Board will formally review and consider the performance of each director at or around the time of the Company’s annual general meeting using a process which is currently under development.
On an ongoing basis, Board members maintain a watching brief to identify relevant internal and external candidates who may be suitable additions to or backup for current Board members, however the Board considers that the Company is too small to have an internal succession plan and that it would not be cost effective to maintain an external candidate list prior to the need arising.
- Corporate culture
The Board believes that the promotion of a corporate culture based on sound ethical values and behaviours is essential to maximise shareholder value in the medium to long term. Adherence to these standards is a key factor in the evaluation of performance within the Company, including during annual performance reviews. In addition, staff matters are a standing topic at every Board meeting and the CEO reports on any notable examples of behaviours that either align with or are at odds with the Company’s stated values. The Board believes that the Company’s culture encourages collaborative, ethical behaviour which benefits employees and shareholders. The Board further believes that all employees and consultants worked in line with the Company’s values during the financial year ended 30 September 2018 and since. This has been assessed by the Board in the course of the day to day management of the Company, which is feasible given the relatively small size of the organisation.
- Governance structures
Due to the size of the Company all strategic and major commercial matters are reserved for the Board.
The key Board roles are as follows:
- Chair: The primary responsibility of the Chair is to lead the Board effectively and to oversee the adoption, delivery and communication of the Company’s corporate governance model. The Chair has sufficient separation from the day-today business to be able to make independent decisions. The Chair is also responsible for making sure that the Board agenda concentrates on the key issues, both operational and financial, with regular reviews of the Company’s strategy and its overall implementation.
- Chief Executive Officer (CEO): Charged with the implementation of the strategy set by the Board. Works with the Chair and non-executives in an open and transparent way. Keeps the Chair and the Board as a whole up-to-date with operational performance, risks and other issues to ensure that the business remains aligned with the strategy.
The Board has two committees. They are as follows:
- Audit committee: The audit committee meets to consider matters relating to the Company’s financial position and financial reporting. The audit committee reviews the independence and objectivity of the external auditors. The committee reviews the independence and objectivity of the external auditors, PKF Littlejohn LLP, as well as the amount of non-audit work undertaken by them, to satisfy itself that this will not compromise their independence. Details of the fees paid to PKF Littlejohn LLP during each financial year are given in the annual accounts. The audit committee currently comprises David Tang (Non-Executive Chairman) and Craig Brown (Chief Executive Officer).
- Remuneration committee: The remuneration committee has been established primarily to determine the remuneration, terms and conditions of employment of the executive directors of the Company. Any remuneration issues concerning non-executive directors are also resolved by this committee, although no director participates in decisions that concern his own remuneration. The remuneration committee comprises David Tang (Non-Executive Chairman) and Samuel Garrett (Non-Executive Director).
Due to the nature of the size of the Company all major operational decisions are reserved for the Board. The appropriateness of the Company’s governance structures will be reviewed as the Company evolves, and changes made as necessary.
- Stakeholder communication
On the Company’s website shareholders can find all historical regulatory announcements, notices of general meetings, governance-related materials, interim reports and annual reports. Annual reports and notices of general meetings are posted directly to all registered shareholders, and the outcome of general meetings is disclosed in a clear and transparent manner via regulatory announcements.
The Company’s website allows shareholders and other interested parties to sign up to a mailing list to enable them to directly receive regulatory and other company releases by email. As described earlier, the Company also maintains email and phone contacts which shareholders can use to make enquiries or requests.
The information on this page was last updated on 29 March 2019.
Role of the Board
The principal role of the board of directors of the Company (the "Board" or the "Directors") is to set the Company’s long-term strategy and direction, and to monitor the implementation thereof. The Board meets a minimum of four times a year and holds additional meetings when necessary. The Board receives reports for consideration on all strategic and operational matters of significance.
The Board delegates certain of its responsibilities to the Audit and Remuneration Committees, which operate within defined terms of reference.
The Board comprises a non-executive chairman, a Chief Executive Officer and director, and a non-executive director. The Board considers this to be a suitable size and structure in view of the Group’s present activities and in view of the Company’s listing on AIM.
ECR is committed to high standards of corporate governance and the Board complies with those guidelines of the Quoted Companies Alliance as are commensurate with the size of the Company, the nature of its activities and its stage of development.
The Board as a whole reviews actual and potential conflicts of interest of any of its members and the steps taken to mitigate the effects thereof.
The Directors are responsible for the Company’s internal control systems. Whilst no system can give absolute assurance against material loss or misstatement, the Group’s processes are designed, within the confines of the limited number of personnel employed, to provide reasonable assurance that issues are identified and dealt with in a timely manner.
The Audit Committee comprises David Tang and Craig Brown. It meets when appropriate to assist the Board in meeting its responsibilities for external financial reporting and internal controls. It reviews the scope and results of the audit as well as the cost effectiveness, independence and objectivity of the auditors.
The Remuneration Committee comprises David Tang and Craig Brown and meets when appropriate to review and make recommendations on the remuneration arrangements including bonuses and options for the Company’s executive directors and senior staff, ensuring that it reflects their performance and that of the Group. The remuneration and terms of appointment of non-executive directors are set by the Board as a whole.
The Directors are responsible for preparing the Company's financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. The Directors have elected to prepare the most recent Group and Company financial statements in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the European Union and, as regards the Company financial statements, as applied in accordance with the provisions of the Companies Act 2006. Under company law the Directors must not approve the financial statements unless they are satisfied that the financial statements give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss for that period. In preparing the financial statements the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudentPrior approval of all capital expenditure;
- state whether applicable IFRSs as adopted by the European Union have been followed subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to disclose with reasonable accuracy the financial position of the Company and the Group and enable the Directors to ensure that the financial statements comply with the Companies Act 2006. The Directors are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.
The Directors are responsible for the preparation of a half-yearly financial report under AIM Rule 18. Accordingly, the Company and the Group's most recent condensed interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting as adopted by the European Union and implemented in the UK. The condensed interim financial statements do not include all of the information required for annual financial statements, and should be read in conjunction with the annual financial statements.