West Australian focused gold exploration and development company, Rox Resources Limited has released a Scoping Study outlining its preferred path for a return to production at the historic Youanmi Gold Project, near Mt Magnet.
Following a substantial upgrade to the Youanmi underground gold resource in January 2022, and a subsequent increase to the near surface resource in April 2022, Rox commenced scoping work to understand the economics and likely development scenarios for the Youanmi Gold Project. The project-wide resource currently stands at 27.9Mt at 3.57g/t Au for 3.2Moz Au contained gold. The Study is based on this resource estimate.
Rox is targeting average annual gold production of approximately 71koz per annum with an average gold head grade of 5.0g/t Au for total gold production target of approximately 569koz over an 8-year life of mine at Youanmi.
The first three years of the production target are underpinned by 79% / 21% Indicated to Inferred Resource Material in the production target plan. As historic mining centre, the economics for Youanmi benefit from existing infrastructure and mining approvals.
A combination of gold-in-concentrate and carbon-in-leach (CIL) bullion production has been pursued by Rox as the optimum commercialisation strategy for initial cashflow generation at Youanmi. It forecasts total pre-production capital expenditure, working capital and assumed financing charges of approximately $134m.
The Study shows compelling financial outcomes reflecting the high grade and low capital intensity of the Youanmi Gold Project, including:
- Project life of 8 years
- Cumulative EBITDA of approximately $577m over the life of the Project
- Pre-tax undiscounted free cash flow of approximately $418m over the life of the Project
- Pre-tax and unleveraged Net Present Value (NPV5%) of approximately $303m
- Pre-tax and unleveraged Internal Rate of Return (IRR) of approximately 45%
- Pre-tax and unleveraged payback of approximately 3.0 years (from commencing the production target)
The plan retains plenty of upside for future growth, with the production target accounting for only 3% of the near surface mineral resource and about 27% of the underground mineral resource.