- ECR Minerals
- 01 November 2024 10:13:08
Source: Sharecast
The AIM-traded company said the agreement, which followed earlier discussions with interested parties, granted the counterparty exclusive rights to negotiate terms until 28 November.
A deposit had been received as part of the agreement, although the final sale price and transaction structure remained under negotiation, with potential for significant cash consideration if a deal was reached.
While the agreement marked progress, ECR warned that discussions were still in early stages, and no binding terms had been established outside the exclusivity provisions.
If the sale proceeded, MGA could need restructuring to isolate its non-core assets, which would require adherence to Australian regulations governing the transfer of tax losses - particularly as over 80% of MGA’s losses predated changes in 2015 to the ‘similar’ business test, making compliance essential for any buyer.
Should the sale be completed under terms constituting a fundamental change in business, ECR said it could trigger rule 15 of the AIM Rules.
That, it explained, would require shareholder approval and further disclosures in a circular.
“This potential transaction, if concluded, represents a very significant step for ECR having the potential to deliver significant funds to the company,” said managing director Mike Whitlow.
“It aligns with our strategic focus on our core exploration activities and supports our objective of delivering long-term value to our shareholders.
“We look forward to working closely with them through the remainder of this process.”
At 0941 GMT, shares in ECR Minerals were up 15.25% at 0.34p.
Reporting by Josh White for Sharecast.com.
