In times of uncertainty, investors turn to gold as a safe-haven asset – and since the 1990s there has been plenty for investors to be uncertain about.
Underpinned by a gold price that has increased more than 500% since the start of this century, a raft of ageing and historic gold mines are being revived, where new owners have discovered a fresh vein of precious riches.
Northern Star Resources may be the benchmark of its generation but, more recently, Aeris Resources (ASX: AIS) has delivered significant shareholder value following its acquisition of the Cracow gold mine in Queensland while in Tasmania a new owner is breathing life into the operating Henty gold mine.
This week, Catalyst Metals (ASX: CYL) announced a 13% increase in mineral resource at Henty, after accounting for ounces mined, to demonstrate that its move into the Apple Isle at the start of this year is paying early dividends.
Fellow Perth-based gold hopeful Rox Resources (ASX: RXL) wants to achieve similarly positive returns as it works on bringing the historic Youanmi gold mine, in WA, back into production. Metallurgical test work results from Youanmi announced this week certainly point to a precious future.
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Catalyst acquired Henty with a plan to optimise operations of this small but high-grade underground mine, extend the mine life through exploration and increase production to a rate of 25,000 ounces annually by the end of this calendar year enroute to a target of more than 50,000ozpa.
And Catalyst is being true to its word.
Catalyst poured first gold just one week after receiving the keys to Henty in January, in March Henty’s head grade was upgraded to 4.88g/t – a significant increase from 3.32g/t – and gold recovery was improved from 76.1% to 94.4%.
This week’s announcement bumps the overall mineral resource to 2.5 million tonnes at 4.5g/t for 375,000oz and includes a more than doubling of the resource at Zone 96 to 84,500oz at 6.9g/t.
Gold was hovering around $500/oz when Henty first entered production in 1996. Since then, the mine has produced more than 1.4moz at an average grade of 8.9g/t.
The significant cash produced at Henty will part-fund Catalyst’s advanced exploration push in the Victorian Goldfields around Bendigo, including at the Four Eagles JV, as the company hunts for a Fosterville-style deposit.
Catalyst’s shares are worth $1.98.
A bit like the Henty story, Rox is confident there are more golden days to come at Youanmi.
“It seems like every time Rox pokes a new hole under an old pit or next to an underground working at Youanmi, it strikes more gold,” Rox managing director Alex Passmore said just weeks ago.
When Youanmi shut in 1997, gold was down to $400/oz.
Since acquiring Youanmi in 2019, Rox has been working towards a restart of operations by boosting the mineral resource and economic model.
In June, Rox reported a 39% increase to Youanmi’s mineral resource to 18.1 million tonnes at 2.85g/t for 1.7moz – split between a near-surface resource grading 1.5-2g/t and the Deeps resource with grades around 8g/t.
Rox this week confirmed that metallurgical test work on ore from Deeps had delivered gold recoveries of 95.6%, a significant improvement on the historic performance of 86.8%.
Rox shares are worth 38¢.
The metallurgical test work is part of development studies underway at Youanmi as Rox maps out a way to join the list of ASX stocks that have struck gold with an old mine.