Northern Star Resources is driving Echo Resources’ plan to raise up to $15 million to continue an exploration growth strategy.
The shares are being offered by the West Australian gold developer at 13 cents apiece – a 7.1 per cent discount on the company’s latest trade price prior to launching the raising.
Echo’s largest shareholder Northern Star Resources plans to subscribe for up to $3.4 million of the placement.
The funds will be used to continue exploration in the Yandal greenstone belt in Western Australia, where gold is largely disguised by transported cover.
Echo will fund the use of advanced exploration technology that is needed to unlock the potential of the area, according to managing director and chief executive officer Victor Rajasooriar.
“The decision to raise additional capital now is a strong signal of Echo’s commitment to accelerate the … exploration strategy at the Yandal gold project, which aims to unlock further value from our underexplored but very prospective tenement package,” he said.
The placement will be undertaken in two tranches, with the first tranche resulting in the issue of approximately 87 million shares and the second, 28 million shares, both at 13 cents per share.
Eligible shareholders are able to participate in a share purchase plan to raise up to $3 million, also priced at 13 cent per share.