Echelon basks in the background of Cazaly exposure

With all the attention on Cazaly Resources Ltd, some may have overlooked its junior partner in the Shovelanna project, Echelon Resources Ltd, which has been swept along for the ride.

Shares in Echelon, which listed in May, have doubled since it announced a placement in September at 27 cent a share. Even in the past few days its been a stellar performance with the stock going from a close of 41 cents a week ago to finish at 56.5 cents yesterday.

Echelon has a number of iron ore projcets on its books but it appears clear that its 14 per cent stake in ELA 46/678, the Shovelanna tenement adjacent to BHP Billiton's Newman operations and is consdiered an extension to orebody 18 which is being mined.

Echelon's connection with Shovelanna emerged in October when it entered into an agreement to provide Cazaly with technical capabilities and committed $2.5 million to fund a drilling program.

As well as an interest in the tenement, Echelon received 5 million options on Cazaly exercisable at $1 on or before December 2\31, 2007. At Cazaly's close last night of $1.50, those options are definitely in the money.