Echo Resources just ticked another box as it hustles to get its Yandala Gold Project off the ground
Link copied to
Junior miner Echo Resources (ASX: EAR) has gotten the regulatory go-ahead for its Yandal Gold Project in Western Australia.
The tick of approval from WA’s Department of Mines, Industry Regulation and Safety was a key step before any mining could commence.
Echo CEO Victor Rajasooriar said the company is now free to negotiate project financing and seek board approval for production to commence this year
Echo has also signed a letter of intent with MACA Limited (ASX:MLD) for contracts related to open pit mining and mill refurbishment at the site.
Shares in Echo initially jumped more than 7 per cent to above 20 cents, before easing back to 19.5 cents in morning trade.
Turning it around
The current trading range is still significantly lower than Echo’s 12-month high of more than 40 cents, reached in January last year.
That followed a big investment from industry heavyweight Northern Star (ASX: NST), which increased its holding in the company to almost 20 per cent.
Shares fell as low as 10 cents in November last year before the company announced a capital raising in December.
As part of the rights issue, Echo raised an additional $4 million from Northern Star and MACA Limited, via the issuance of 36,363,637 shares priced at 11 cents per share.
That in turn granted Northern Star the rights to appoint a nominee to Echo’s board and it selected Alan Thom, Northern Star’s head of business development.
Echo said the having received regulatory approval, it’s now carrying out a Bankable Feasibility Study for its Yandal Project, which is expected to be finished by the end of the March quarter.
“We are now in a stronger position to secure project financing and seek the final Board approval required to commence project development during 2019,” Rajasooriar said.