ECR Minerals expects Derewo River boost from West Wits lease sale

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ECR Minerals (LON:ECR, OTC:MTGDY) today hailed gold group West Wits’ plan to use the A$9 million sale of four South African leases to fund the Derewo River project.

ECR holds a 4% direct stake in West Wits and an indirect stake through its 26% holding in Paniai Gold, which owns performance shares and options.

Paniai’s performance shares relate to the Derewo River gold project in Papua Province, Indonesia which is 50% owned by West Wits.

They convert if the project, which covers approximately 129,000 hectares in Indonesia, achieves production of 20,000oz gold by 28 July 2013. Full conversion of the performance shares and options would give Paniai an 18% stake in West Wits.

ECR injected its interest in Derewo River into Paniai Gold in 2009. Paniai subsequently sold the project onto to West Wits.

Patrick Harford, ECR managing director, said today’s news vindicated that decision.

“West Wits now looks set to substantially improve its financial position without the issue of new equity and has stated that the proceeds of the sale of the four leases will be principally applied to development of the Derewo River project, the objectives of which include the commencement of alluvial gold production in the near future.”

“We note that technical due diligence has already been carried out to the satisfaction of the consortium purchasing the South African leases, leaving only legal due diligence outstanding, and on this basis we feel confident that the sale of the leases will proceed to completion,” he added.

ECR is a mineral development company with interests in Argentina, the USA, Indonesia, Thailand and Australia. (Philip Whiterow)

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