There are plenty of examples over the years of new owners of gold treatment plants getting excited by the moment and turning things on without a supporting resource base, leaving them to scramble for more ore – which inevitably leads to ruin.
So it’s hats off to the crew at Echo Resources (EAR) for their methodical approach to working up a supporting resource base before flicking the switch on at its Bronzewing processing plant in the Yandal gold belt in Western Australia.
Bronzewing is rated at 2 million tonnes-a-year, and it can now be said that Echo is well on the way to a restart, after more than doubling the resource base at its Orelia deposit to 15.9 million tonnes grading 2.1g/t for 1.1 million ounces (90% in the Indicated classification).
Orelia is 10km south-west of the Bronzewing plant and the growth in its resource base takes Echo’s global resources on the Yandal to 1.7 million ounces. That’s not expected to be the end of the story, with Orelia and a multitude of other deposits and targets on Echo’s big Yandal ground position to serve up more gold over time.
The Orelia upgrade further de-risks a restart of the Bronzewing plant, the cost of which has previously been estimated at all of $12.5 million – an amount more than covered by the projected $41 million in earnings that could pulled in from initial mining starting at the Julius satellite deposit, where a 68,000oz reserve has been outlined.
Because it would probably take no more than six months to refurbish Bronzewing, a move into production in the latter part of next year would now seem possible. That has implications for Echo’s market value. Its shares popped 4c or 29% higher on Thursday to 17.5c, making it a $57 million company.
When the suspected full re-rating to near-term producer status takes hold remains to be seen. But it can’t be far off now thanks to the de-risking influence of the Orelia upgrade.
Plus, a re-rating looms for gold developer Capricorn Metals and Sipa’s desert hunt for a world-class copper-gold discovery gathers momentum. Read more+
