The old Confucian curse “may you live in interesting times” seems as relevant today as when it was first uttered more than 2,500 years ago.
Equity markets around the world took a hammering last week as hostilities in the Ukraine boiled over into an all-out Russian invasion. As seen time and again during the pandemic, in “interesting times” investors flock to gold while energy security risks are driving up petroleum prices.
One of the next generation of Western Australian gold producers, Rox Resources (ASX: RXL), announced a well-received – and well-timed – $4 million capital raising on Friday to boost cash coffers and expand the company’s institutional shareholder base.
The success of the raising confirmed what many on the company’s share register have known for some time – the historic Youanmi gold project near Mt Magnet looks more like the real deal with every passing week and is advancing well towards a restart.
In other news:
- Buru Energy starts key tests on Rafael wet gas discovery
- Finbar builds high as half-year profit jumps 138% to $9.6 million
- Northern Star hits three-pointer with major deal with Perth Lynx
- Focus Minerals updates mineral resources at Coolgardie and Laverton projects
- St George starts drilling target S2, more conductors identified at Mt Alexander
- Hastings says Yangibana rare earths project NPV increases 84% to $1 billion
The Perth company will issue 10 million new fully-paid ordinary shares to key institutional investors at 40¢ per share – a 6% discount to the 15-day volume-weighted average price.
Canaccord Genuity and Taylor Collison Limited acted as joint lead managers, with Tamesis Partners the third joint bookrunner.
The placement news was well received – Rox shares jumped 4% to 43.5¢ yesterday after emerging from a trading halt.
Rox said it had received significant interest from institutional investors following the string of good news that has kicked off the calendar year.
Just last month, the company released an interim 1.34Moz Resource upgrade that bumped up the Youanmi Total Mineral Resource by 80% to about 3Moz. The upgrade took into account about 35,000m of drilling at the Youanmi Deeps in 2021. Results for surface drilling are pending, and investors keenly await the comprehensive upgrade flagged for the June quarter.
Last week, Rox managing director Alex Passmore told delegates at the RIU Explorers Conference in Fremantle that the company had drilled 50,000m in the past 18 months at a discovery cost of just $7 per ounce.
“As a rough rule of thumb in the WA gold sector, we know that 1,000 ounces per vertical metre probably makes a mine, 2,000 probably makes a good mine and 3,000 ounces makes a very good mine. So, 2,900 ounces per vertical metre is a number we are happy with and indicates where our conceptual economics are going,” he said.
Rox is undertaking feasibility studies at Youanmi, with a scoping study planned for April and a definitive feasibility study planned for late 2022.
Gold is flying again because of the Russian invasion of the Ukraine.
But as the international sanctions have demonstrated, Russia’s status as one of the world’s largest and most important gas producers and suppliers will have a major impact on the global economy. Just ask Germany.
Up in Western Australia’s Kimberley region in the onshore Canning Basin, Buru Energy (ASX: BRU) is finally able to kick off the highly anticipated flow testing program at the Rafael 1 wet gas discovery. Buru made the long-awaited announcement on Friday.
Flow testing is the next critical step for the company to quantify the potential of the discovery so that it can gather information on reservoir deliverability, gas composition, reservoir fluids, reservoir pressures and potential reservoir boundaries.
The testing program is expected to take seven to 10 days to complete, subject to any weather or operational delays, and will include a series of flow periods and shut-ins to determine reservoir parameters.
Buru is already benefiting from rising global energy prices, courtesy of its small but steady Ungani oil project that is also in the Canning Basin.
Rising energy prices and the kick-off of testing at Rafael contributed to Buru’s shares jumping 11% to 26¢ yesterday.