Gold producer Northern Star injects more cash in junior Echo Resources
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Major gold producer Northern Star Resources has taken a greater stake in junior gold play Echo Resources.
Northern Star (ASX:NST) now owns roughly 19.2 per cent of Echo (ASX:EAR), increasing its ownership from about 16.4 per cent previously.
Investors welcomed the news, with shares reaching an intra-day high of 41c on Monday — a nearly 8 per cent increase before edging back slightly to 38.5c.
The larger rival acquired its initial stake in early December after it purchased 80 million shares on market at 29c apiece.
Echo chief Simon Cochell said at the time the investment was a “clear endorsement” of its Yandal gold strategy.
Less than a year earlier, Echo completed the merger with Metaliko, which gave it a 1600 sq km package of gold-prospective land in Western Australia and a “cost-effective pathway to production” with the ownership of the Bronzewing processing hub.
The company has a resource of 1.7 million ounces of gold, a reserve of 856,000 ounces and is well advanced on a bankable feasibility study.
Northern Star has invested a further $4.8 million in Echo, picking up an additional 13.8 million shares on market at an average price of 34.6c per share.
Echo Resources has been contacted for comment.