Echo Resources kicks-off another round of drilling at advanced Yandal gold project

Echo Resources (ASX: EAR) has kicked-off another round of drilling at the Yandal gold project in Western Australia, with this latest campaign designed to establish additional ore sources and extend mine-life at the project.

Under the program, Echo will undertake 17,000m of reverse circulation and 8,400m of aircore drilling, with Bronzewing Northeast to be the first target.

Bronzewing Northeast is about 2.5km from the 2.3 million ounce Bronzewing gold mine and is on the same geological structure.

Other more advanced targets in the current campaign will comprise Ashanti, Mulga, Mt Joel, and Corboys.

Meanwhile, greenfield targets include Ashanti North, Bills Find Northeast, Red Bellied Black, Python and Corboys Southeast prospects.

“Our aircore and reverse circulation drilling has potential to add incremental ounces to enhance our already robust current four-year mine plan and support our mine development objective,” Echo managing director and chief executive officer Victor Rajasooriar said.

A structural review is underway for the Bronzewing and Lotus deposits, and Mr Rajasooriar said once this has been completed, diamond drilling will test the deposits for prospective Bronzewing structural repeats.

He added diamond drilling had the “potential to deliver transformational discoveries for Echo”.

Yandal gold project

The wider Yandal gold project hosts several deposits and numerous greenfield targets and covers 1,600 square kilometres.

In late June, Echo revealed an updated resource for Mt Joel of 1.4Mt at 2.1 grams per tonne gold for 91,600 ounces of the precious metal.

Mt Joel adds the project’s global resource of 28.6Mt at 2g/t for 1.8Moz gold.

As part of Echo’s fast-track to production strategy at Yandal, the project already has existing critical infrastructure including the 2Mtpa Bronzewing processing plant which is currently on care and maintenance.

Other infrastructure includes 240-person accommodation, electrical reticulation and a power station, existing haulage roads, a permitted tailings storage dam, airstrip and process plant spares in inventory.

A bankable feasibility study was completed on Yandal earlier this year which revealed a $42 million capital spend was required to develop an initial four-year operation capable of producing 378,874oz of gold during the period.

The study estimates pre-tax cashflow of $225 million based on a A$1,800/oz gold price.

All in sustaining costs have been calculated at $1,095/oz.

Echo plans to extend the four-year operation by growing its resources and reserves through ongoing exploration.

Today’s news spurred Echo’s share price up more than 12% to reach $0.185 by mid-afternoon.