Rox Resources (ASX:RXL) and JV partner Venus Metals (ASX:VMC) have reported the completion of a scoping study ahead of a planned PFS at the Youanmi Gold Project in Western Australia.
The results from the scoping study indicate that the project is set to deliver high returns with low capital and operating costs against industry benchmarks.
Results also indicate an average gold production target of about 71koz at an average feed grade of 5.0g/t Au over an approximate eight-year mine life, for a total gold production target of 569koz.
It is also reported that only 20% of the Youanmi Mineral Resource Estimate (MRE) is included in this mining production target, providing additional opportunities to extend project life and increase the overall production rate target.
The scoping study commenced following a substantial upgrade to the project underground gold resource in January and an increase to the near surface resource in April, with a goal of providing further understanding of the project’s economics and development scenarios.
Commenting on the update, Rox Resources Managing Director, Alex Passmore said: “The scoping study highlights the Youanmi Gold Project’s robust financial metrics as a potential long-life, cashflow-producing gold asset in the world-class Western Australian gold jurisdiction.
Rox, like our peers, has not been exempt from the high cost-inflationary environment, and chose to prioritise ‘high-grade’, low-cost ounces through the production target of gold-in-concentrate as the preferred method for commercialisation of the Youanmi project.
Importantly, the study shows low pre-production capital expenditure of approximately $99 million required to establish operations at Youanmi.
Gold-in-concentrate is a proven, highly efficient method for producing saleable gold product, with other Western Australian operations realising strong cash flows from this approach.
“The scoping study highlights the Youanmi Gold Project’s robust financial metrics as a potential long-life, cashflow-producing gold asset in the world-class Western Australian gold jurisdiction.”
Despite the majority of open-pit material and 73% of the underground resource material excluded from the study production target the project financial model demonstrates strong cash flows on this base case.
Through ongoing, systematic and targeted drilling campaigns, we intend to continue to convert inferred resources to the indicated category at the OYG JV, while adding ounces through Resource expansion and regional exploration drilling.
The Youanmi resource remains open down dip and along strike, with the maximum depth of the mine lode interpretation about -600mRL, 1060m below the natural surface. Regional exploration programs are testing more than 50km strike of Youanmi Shear Zone that remains largely untested by historic drilling, with follow up aircore and RC drilling planned along strike and down dip of newly identified mineralisation.
We look forward to continuing progress the project to commercialisation and are targeting a pre-feasibility study in 2023.”
The company also notes that a combination of gold-in-concentrate and carbon-in-leach bullion production is targeted and is considered an optimum commercialisation strategy for the Youanmi project.
This option is projected to provide a shorter pre-production period, lower capital requirements and a shorter payback period, therefore lowering the risks of the project.
In addition, it is reported that an infill drilling program will commence to underpin further feasibility studies and are scheduled to be completed in 2023.
The Youanmi project is located about 480km northeast of the Western Australian capital city of Perth and represents a JV operation between Rox Resources and Venus Metals, with Rox Resources owning 70% interest in all associated tenements and Venus Metals owning the remaining 30% interest.
The project comprises the Youanmi Gold Mine, located near the centre of the project tenement package and boasts a historic production of 667,000 ounces of gold grading 5.42g/t from open pit and underground operations. The total Mineral Resource Estimate (MRE) currently stands at 27.9Mt at 3.57g/t Au for 3.2Moz Au contained gold.
With the scoping study now complete, Rox Resources announces that it remains focused on delivering a preliminary feasibility study (PFS) in 2023 to convert inferred resources to indicated resources.
The PFS will commence in parallel with scheduled infill drilling at the Youanmi project.
Images: Rox Resources Limited