Check out this from ECR Minerals 1/2 yearly report. Looks like...

Check out this from ECR Minerals 1/2 yearly report. Looks like WWI has been offered an extra 30% stake in the (proposed) alluvial operation 2nd hand from Paniai who have negotiated an option over the other 20%. Would make sense - but begs the question: Why is Paniai doing the deals, not WWI?
Funny how we never hear any of this from MQ. I guess he is too busy thinking of another WWI funded Christmas holiday in Switzerland.

WEST WITS MINING (ASX: WWI) & PANIAI GOLD
The acquisition by West Wits Mining Ltd (“West Wits”) of the interest held by Paniai Gold Ltd
(“Paniai”) in the Derewo River project in Papua Province, Indonesia was completed in July 2011, and
ECR notes that since that time West Wits has not been able to gain access to the site of its proposed
alluvial gold mining operations due to the presence of artisanal miners.
West Wits has however announced the sale of certain of its gold exploration projects in South Africa
for a total of A$9 million along with the receipt of A$2 million of this amount, and has stated that it
intends to apply the funds to the development of the Derewo River project, which extends over
approximately 129,000 hectares located within approximately 100km of Freeport McMoRan’s
Grasberg copper-gold mine in the central highlands of Papua Province.
The objectives of the Derewo River project are to establish a modern alluvial gold mining operation
on a 40 hectare mining licence and to explore a number of exploration licences for new deposits. West
Wits has a 50% interest in the proposed initial alluvial mining operation and an interest of up to 80%
in exploration activities, which have been initiated and are reported to be progressing well.
While recognising that West Wits remains well placed to take the Derewo River project forward, in
accordance with ECR’s newly adopted strategy and in view of its relatively minor exposure to the
Derewo River project through the Company’s shareholdings in West Wits and Paniai, it is the Board’s
intention to dispose of ECR’s holding in West Wits, which consists of 11,149,826 ordinary shares, at
an opportune time.
ECR’s shareholding in Paniai now stands at 23%, or 100 million shares, following the conversion in
December 2011 of approximately A$338,000 of loans to Paniai made by the Company. On the basis
that Paniai’s value is highly leveraged to success at the Derewo River project being achieved within a
certain timeframe, the Board considers it appropriate to retain the Company’s shareholding.
Paniai itself holds 46 million West Wits performance shares and 12.5 million options exercisable at
A$0.08 until 28 July 2016. The performance shares convert to ordinary shares subject to the Derewo
River project achieving production of 20,000oz gold before 28 July 2013.
Paniai has also more recently acquired an option over a 30% interest in the initial alluvial mining
operation planned at the Derewo River project. The option is valid for 24 months from 4 February
2012 and is exercisable for consideration of A$2.5 million payable either in cash, in shares of West
Wits, or in a combination of the two. The option has been acquired from West Wits’s local joint
venture partner for consideration of 4 million Paniai shares, 100 million Indonesian rupiah
(approximately US$10,000) and 15 million Paniai options exercisable at A$0.03 per share and valid
for two years.
While Paniai does not presently have the cash resources to exercise the option, an obvious strategy
would be for Paniai to seek to sell the option to West Wits, allowing West Wits to acquire an 80%
interest in the proposed alluvial mining operation at Derewo River should it so wish.
The carrying value of ECR’s shares in Paniai has been impaired in the interim financial statements to
equal 23% of Paniai’s net assets, whereas previously the investment was carried at cost. As a result
the carrying value has been reduced by around 40%.