ECR Minerals converts loans to Paniai Gold into shares

ECR Minerals Plc has converted a total of A$337,937 loans to Paniai Gold Ltd ("Paniai") and accrued interest in the company into 50 million new Paniai shares, making it as the largest shareholder of Paniai, the company announced on Tuesday.

The company said that with the conversion, ECR is now the holder of 100 million Paniai shares, equating to 26% of Paniai?s issued share capital and making the company as Paniai?s largest shareholder.

Paniai holds 46 million West Wits Mining Ltd (?West Wits?) performance shares and 12.5 million options to acquire West Wits ordinary shares exercisable at A$0.08 for 5 years. The performance shares convert to ordinary shares subject to the Derewo River gold project in Papua, Indonesia achieving production of 20,000oz gold within 2 years of the project?s acquisition from Paniai by West Wits, which occurred in late July 2011.

Paniai was formed to advance the Derewo River project in joint venture with a local partner, and West Wits has now assumed Paniai?s role in the joint venture. The Derewo River project area extends over approximately 129,000 hectares located within 110km of Freeport?s Grasberg copper-gold complex in the central highlands of Indonesia?s Papua Province.

The Derewo River hosts significant artisanal gold mining activity and the objectives of the joint venture are to establish a modern, mechanised alluvial gold mining operation on a 40 hectare mining licence and to explore a number of exploration licences for new gold and gold-copper deposits.

Exploration targets include large scale alluvial gold, porphyry gold-copper and bonanza grade quartz sulphide gold veins. West Wits has a 50% interest in the initial alluvial mining operation and an interest of up to 80% in exploration activities.

ECR also holds 11,149,826 West Wits ordinary shares, which are listed on the Australian Stock Exchange with the ticker WWI. (romel)