Monday, 29 August 2011

Greystar pupates into Eco Oro

Greystar Resources (formerly TSX: GSL) has been busy attempting to leave its traumatic start to 2011 behind and put its best foot forward. The company has awarded technical contracts to complete a feasibility study for an underground operation at its Angostura Au-Ag project in Santander and it has also decided to change the company name to Eco Oro Minerals (TSX: EOM) to distance itself from the negative reaction ‘Greystar’ seems to provoke in the region. Various walls around department capital Bucaramanga were daubed with anti-Greystar graffiti at the end of 2010 as the company tried to obtain environmental permits for an open pit gold mine which protestors succeeded in blocking with a liberal dose of misinformation on the grounds that it would damage a paramo eco-system that the company was unable to overcome. One can understand where they are coming from but ‘Eco Oro’ sounds like a company trying too hard to be consumer friendly. It suggests that the company will use the best of the best processes that minimize environmental impact and will have remediation and rehabilitation projects that creates a major improvement to the environment. Let’s hope this is the case otherwise the protestors will soon see through this name change.

Since the start of the year, the company formerly known as Greystar has been pupating into – its shareholders hope – something that is much more attractive and palatable. A name change is cosmetic but can be meaningful when the message it sends to stakeholders is that something new and different is happening, which certainly seems to be the case here.

Following the open pit environmental permitting debacle, lead shareholder Amber Capital took control and put former EVP Frederick Felder out to pasture and installed new leadership, making the company more Colombian with power hitter Rafael Nieto Loaiza appointed president and Nieto Loaiza and Juan Esteban Orduz appointed to its board.

The project has been given a make-over as well and Eco Oro plans to issue an optimized preliminary economic assessment for Angostura with a revised mineral resource estimate for an underground operation and a prefeasibility study during the third quarter of 2012, which it says will protect the Paramo, have a greatly reduced environmental impact, minimal and controllable impact on the sub-surface aquifer and minimal water consumption, have no leach pad requirement, and will reduce the overall plant and infrastructure scale.

Eco Oro It will also produce an initial mineral resource estimate for the Mongora deposit by year end where it has completed 54 drill holes and 20,276m. Located 3 km south of Angostura it hosts higher-grade gold mineralization including 2.0m @ 116 g/t Au.

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