Shares in Greystar Resources (LON:GSL) shot up to 350p this morning on news that the AIM listed mining group had received a positive decision from Colombian authorities over its Environmental Impact Assessment for the proposed Angostura gold and silver project. The 44% share bounce reflected investor relief that the company would not now have to completely redesign the project following an earlier rejection of the EIA in late April. Today’s news effectively reverses a decision by Colombia’s Ministry of the Environment, Housing and Territorial Development (MAVDT), which had asked Greystar to produce a new EIA after it retrospectively applied tough new mining rules that were introduced in February. As a result, MAVDT is now set to move forward with a review of the existing EIA.

Shares in Greystar collapsed from 407p to 237p in late April after the Colombian authorities requested a new EIA that excluded mining and exploration from the “Paramo” ecosystem. Likewise, they also requested that the new Angostura EIA adjust the occupied area to an elevation below 3,200 metres. As currently designed, almost all the project facilities and infrastructure are at a higher elevation than 3,200 metres. At the time, Greystar said it was unsure whether the new demands were feasible and whether or not the project would be economically viable under the new rules.

Steve Kesler, Greystar’s president and chief executive, said: “We are very pleased with the Ministry’s decision to reinstate our EIA as filed. We are committed to the highest standards of environmental stewardship in the development of the Angostura project. We believe that Angostura can be developed in a sustainable fashion that respects the integrity of the environment while delivering economic benefits to all stakeholders. We will continue to work closely with the Colombian Government and MAVDT to resolve all concerns related to the development of Angostura.”

Greystar is in the midst of completing a Definitive Feasibility Study (DFS) on the Angostura project that is expected to be published in the second half of 2010. In addition, it has begun the process of securing US$650m in project finance from international sources. The company continues to carry out exploration at the project with a total of six drill rigs focused on three targets; Angostura high grade, Mongora and La Plata.

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