Project overview

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, and is available for download here.

Danglay Gold Project

In April 2013 ECR entered into an earn-in and joint venture agreement (the “Agreement”) in relation to the Danglay gold project in the Philippines.  Cordillera Tiger Gold Resources, Inc. (“Cordillera Tiger”) is a Philippine corporation and the holder of the exploration permit (the “EP”) which represents the Danglay project.

Activities under the Agreement commenced in December 2013 and ceased when the Earn-In Option (as that term is defined in the Agreement) was terminated in August 2016. The Philippine mining industry is enduring a period of significant political and regulatory upheaval, which has been particularly intense and unpredictable since June 2016. In light of this, termination of the Earn-In Option was considered a prudent step for the Company to take.

The Agreement gave ECR the exclusive right and option to earn a 25% or 50% interest in Cordillera Tiger and thereby in the Danglay project. Under the terms of the Agreement, ECR was the operator of the Danglay project, through Cordillera Tiger. The completion of various exploration programmes generated valuable data which is relevant to the assessment of the project’s economic potential.

In December 2015, the Company published an NI43-101 technical report (the “Report”) in relation to the Danglay project. The Report also disclosed a target for further exploration, as permitted by NI43-101. The Report supports the disclosure on 5 November 2015 of an inferred mineral resource estimate for oxide gold mineralisation at Danglay.

Under the Agreement, the estimation of this mineral resource and the making of expenditures exceeding US$500,000 in connection with the Danglay project, entitle ECR to a 25% interest in Cordillera Tiger. Both conditions have been satisfied, but the relevant shareholding has yet to be issued.

One of the delaying factors has been a lawsuit which was filed in the Philippines in 2017 against three members of the Cordillera Tiger board. The lawsuit challenged, among other things, the intended issuance of shares in Cordillera Tiger to ECR, by seeking to invalidate a Cordillera Tiger board meeting which took place on 31 March 2017 and at which the Cordillera Tiger board of directors authorised the issuance of a 25% shareholding in Cordillera Tiger to ECR. The plaintiff in the suit was Mr Patric Barry, a director of Cordillera Tiger at the time the suit was initiated. The Company, which was not a party to the lawsuit, considers the suit to have been a transparent and unscrupulous attempt to obstruct Cordillera Tiger’s performance of its contractual obligations and deprive ECR of its rightful shareholding.

A decision in respect of the suit was issued by the court in June 2020, and the Company has been provided with a copy. The Company has also taken Philippine legal advice regarding the implications of the court’s decision, which did not award any damages or costs to the plaintiff. The decision invalidated the 31 March 2017 Cordillera Tiger board meeting, and the earlier appointments of two of the defendants to their positions as directors and officers of Cordillera Tiger. However, as the defendants were all elected as directors of Cordillera Tiger at a June 2017 shareholders’ meeting and as officers at a board meeting which immediately followed, and were re-elected in subsequent years, and as the board resolution for the issuance of ECR’s 25% shareholding in Cordillera Tiger was ratified at the June 2017 shareholders’ and board meetings, the court’s decision does not affect ECR’s entitlement to its interest in Cordillera Tiger. Neither the June 2017 meetings nor those in subsequent years have been successfully challenged. The Company therefore continues to expect that the issuance of its 25% interest in Cordillera Tiger will proceed in due course.

The Company is aware of a news release made in February 2021 by a Canadian company called Tiger International Resources, Inc. (“Tiger International”). The Company considers that this news release makes a number of inaccurate claims regarding Cordillera Tiger, the circumstances surrounding the court case, and the outcome of the case. The Company’s understanding of the facts is that neither Tiger International nor Mr Patric Barry, who is Tiger International’s President, control Cordillera Tiger or have any legal means of doing so. Accordingly, the Company expects that Mr Barry’s unjustified efforts to prevent the issuance of ECR’s 25% interest in Cordillera Tiger will ultimately fail.

Renewal of Cordillera Tiger’s EP for a further two-year term was applied for in September 2015, and in June 2016 the renewed EP was issued to Cordillera Tiger for signature and return to the Philippine authorities. The final renewed EP has yet to be provided to Cordillera Tiger, and the status of the renewal is unclear. Given the political and regulatory uncertainty affecting the mining sector in the Philippines, the delay is not unexpected, and it is likely that the relevant processes will have slowed further because of the COVID-19 pandemic.

The Danglay project remains attractive from a technical standpoint, but due to the high level of political and regulatory risk affecting the Philippine mining sector, only limited efforts by ECR to enforce its rights in respect of Cordillera Tiger have to date been considered commercially justifiable. However, the political climate for the minerals industry in the Philippines appears on course to improve in future, and the directors of ECR are continuing to monitor the situation.