ECR Minerals plc (LON: ECR), the exploration and development company focused on gold in Australia announces that, in order to diversify the Company’s business, the Board is currently considering prospective investments in producing helium assets in the US.
The Company’s shareholders may be aware of the recent excitement around helium prospects following a sustained price increase for the gas. With no natural or manufactured substitute currently available and critical applications in electronics, defence, space and medical devices (amongst others), the Board believes there is good reason to expect this robust pricing to be maintained. Given the roles of ECR’s chairman and managing director at Voyager Life plc, there is now strong in-house understanding of the helium sector and the most suitable economic models. This will enable the Board to review potential opportunities in the helium sector in-house and therefore limit external overhead expenditure.
In assessing potential helium investments, the Board’s strategic focus will be on assets which have recognised or historic helium production and access to existing infrastructure (a gathering system and processing facility) and are either: (i) in production; (ii) capable of near-term production; or (iii) able to process helium.
As an established market, one of the world’s existing largest helium producers and with extensive and developed infrastructure, the US is considered the most likely location to target potential new opportunities.
Over the past 12 months, ECR has implemented a low-cost operating structure and, should the Company expand its operations into the helium market, it is intended that this principle will be adhered to. The Company would seek an appropriate level of outsourcing and would work with trusted partners to ensure that any Company funds committed would be spent on operations and not on overheads. In addition, should any investment require the issue of new ordinary shares in the Company, such new ordinary shares will not be issued at a discount to the current market price of an ordinary share.
Nick Tulloch, Chairman of ECR Minerals plc, commented:
“We have spent many months streamlining ECR’s business and improving its efficiency. The robust model that we have established now allows us to consider other opportunities.
“As stake holders in ECR, we naturally have an acute focus on our share price and I can reassure shareholders that any investment would be based on attractive terms to our Company in addition to having a probability of material upside.
“Although it is often tempting to think that the important part of developing a natural resources play is to find the resource, in fact we consider that it is production and sales that really define a company. There are many substantial resource deposits globally that are simply not economic – or possible – to extract and sell. This is particularly the case with helium. Despite its high value, it is not a straightforward element to process or transport.
“Therefore, as we examine this possible expansion of ECR, it is critical that we source assets that are capable of near term production, and therefore sales, of helium and access to nearby infrastructure, both gathering lines and a processing plant, is a must.”
For further information please contact:
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ECR Minerals Plc Nick Tulloch, Chairman Andrew Scott, Director
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Tel: +44 (0) 1738 317 693 |
