ECR Minerals: Paniai Gold Update

(London, 15 August 2011)--The sale of the interest held by Paniai Gold Ltd (?Paniai?) in the Derewo River gold project in Papua, Indonesia to West Wits Mining Ltd (?West Wits?) agreed in February 2011 has now completed. The consideration paid by West Wits comprised 80 million West Wits ordinary shares, 46 million performance shares and 12.5 million options exercisable at A$0.08 for 5 years.

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 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 has been the site of significant small scale gold mining and the objectives of the joint venture are to establish a modern, mechanised alluvial gold mining operation and, importantly, to explore the wider project area for new gold and copper-gold deposits. Exploration will initially consist of extensive mapping and sampling and will focus on hardrock gold and copper-gold targets.

The ordinary shares issued by West Wits to Paniai have now been distributed to Paniai shareholders, including ECR, on a pro rata basis. These shares are not subject to trading restrictions.

As a 16% shareholder in Paniai, ECR has received 11,149,826 West Wits ordinary shares worth around A$525,000 based on the 12 August 2011 closing price for West Wits shares on the ASX (ticker: WWI) of A$ 0.047.

Paniai is retaining its West Wits performance shares and options, and intends to actively evaluate possible new mineral projects in Indonesia. As a substantial shareholder in Paniai, ECR expects to benefit from Paniai?s future activities and depending upon the opportunities presented the Company may seek to increase its shareholding. This may be achieved via the conversion of ECR?s outstanding loans to Paniai into shares. The West Wits performance shares issued to Paniai convert to ordinary shares subject to the Derewo River project achieving production of 20,000oz gold within 2 years.

As part of the completion of the transaction with Paniai, West Wits has raised A$3.5m (before costs) through a share placement and Share Purchase Plan (SPP). Approximately A$2m is planned to be applied to the Derewo River gold project with a further A$1.2m to be applied to further drilling of West Wits? Emerald gold project in South Africa. (end of release)