Potential takeover on the cards as 1.8moz gold explorer Echo enters trading halt

Pic: Bloomberg Creative / Bloomberg Creative Photos via Getty Images

Advanced gold explorer Echo Resources (ASX:EAR) is in a trading halt pending “a potential change of control transaction”.

Echo’s main game is the medium-sized 1.8moz Yandal gold project redevelopment, which is a stone’s throw from world class operations, including Northern Star’s (ASX:NST) Jundee mine.

The $172m market cap Echo is up about 73 per cent over the past 3 months as it progresses the low capex, infrastructure-rich Yandal project – which includes the mothballed 2 million tonnes a year Bronzewing plant — towards production.

Based on current prices above $2000/oz, Echo estimates that Yandal could generate free cashflow of $297m and an internal rate of return (IRR) of 302 per cent over an initial four-year mine life.

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Echo’s biggest shareholder is cashed up gold major and neighbour Northern Star (ASX:NST), which has accumulated a 21.8 per cent stake in the explorer.

An announcement concerning a potential takeover/change of control could be made tomorrow, with Echo due to come out of the trading halt at the commencement of trade Thursday.