Rox Resources’ managing director Alex Passmore told delegates at the 2022 Diggers and Dealers Mining Forum in Kalgoorlie that the Youanmi gold project was on track for Final Investment Decision in 2023, but echoed many of the gold companies at the conference in prioritising cost per ounce over volume.
Rox (ASX: RXL) is targeting a restart of operations at Youanmi, located about 500km northeast of Perth. The historic Youanmi mine was mothballed in 1993 when the gold price was $400 per ounce. The last parcel of ore was mined at 14.6 grams per tonne.
Today, Youanmi has a Total Mineral Resource of 3.2Moz at 3.57 grams per tonne. The company has more than doubled the Youanmi Resource since acquiring the project in 2019.
Mr Passmore told delegates to expect another Resource upgrade within the quarter from ongoing exploration campaigns, most recently highlighted by outstanding results from recent drilling at the Grace Area.
Mr Passmore said the company was looking at early development and cash flow generating opportunities and the Grace Area, where mineralisation starts from surface, could form a key part of that plan.
“We have a large resource at a high grade at a compelling evaluation. We believe that valuation gap is going to close as we move towards to development,” he said.
The historic Youanmi mine and associated infrastructure is a key advantage to rapidly restarting operations, once FID is reached.
“In terms of the infrastructure we’ve got, and the head start we’ve got, it is substantial,” Mr Passmore said.
“There is an existing decline in place to 650m below ground, and a 3.2Moz resource waiting to be mined. There is definitely an interesting mine here, and the economics are likely to be very robust.”
Cost pressures have been a broad theme among presenters, and Youanmi has not been immune from these.
Mr Passmore said that due to current market conditions, the company was favoring an initial smaller scale operation to process sulphide ore, with low upfront capex, that can then be scaled up once the operation is in steady state.
“When we look at capital-efficient routes to revenue, we look to combined concentrate and gold dore product stream is favourable, particularly in today’s cost environment,” he said.
“We have a mine site that is very detailed, probably at DFS level, we’ve got advanced metallurgical testwork and, given the current significant cost pressures being felt across the industry, with the various options and trade-offs that we’ve considered we are favouring a low capital high-return operation that will be scaled up in the future.”
Rox’ second gold project, Mt Fisher, is located in the Mt Fisher greenstone belt in the northern Goldfields.
The company has commenced diamond drilling targeting a strong electromagnetic (EM) conductor down plunge of the high-grade historical Mt Fisher Gold Mine, and results are pending for its recent 2,200m RC drilling program at the Damsel prospect, which features large-scale gold anomalies and geological features consistent with major gold systems in the Yilgarn.
“We’ve a very large land position of about 850km2, and we are actively exploring out there for orogenic gold and VMS-style mineralisation,” he said.
“It is very much underexplored… the Dam Damsel area has seen some exceptional results recently. They will contribute to a resource estimate.”