The board of directors of Australian gold mining company Rox Resources Limited has approved the progress of the Youanmi project in the western Murchison region to the definitive feasibility study.
A pre-prefeasibility study (PFS) outlined that long-term development of the high-grade Yuanmi deposit at 100,000 ounces per annum would produce “compelling financials.”
Based on a gold price of A$3,100 ($2,025) per ounce, the PFS delivered an aftertax net present value of A$322-million and a 33% internal return on investment ($210.3 million).
Preparatory work for the start of construction of the mine will require about A$245 million ($165 million).
“The project is designed to produce 786,000 ounces of gold doré over 7.7 years, which is an average of more than 100,000 ounces per year,” the company said. “With an all-in sustaining cost of A$1,676 ($1,095) per ounce, operating margin at current spot prices would be nearly A$2,000 ($1,306) per ounce”.
“The high-grade, high-margin nature of the project results in very compelling financial metrics and a short payback of less than three years at a base case gold price of A$3 100/oz,” said Rox MD Robert Ryan. “The project financials really move up another gear when run at the current spot price of A$3 500/oz ($2,286), with a life-of-mine free cash-flow of $1.2-billion, meaning on average that the project will deliver more than $150-million in free cash-flow per annum".
Following the significant upgrade in the quality of the Yuanmi mineral resource, particularly the underground indicated resource announced earlier this year, the PFS has declared a high-quality first resource of 546,000 ounces at 4.4 g/t. At the same time, according to the company's estimates, the deposit's underground resources have prospects of 1.1 million ounces to 1.8 million ounces, which "could increase annual production and mine life of the project if successfully converted into resources and ultimately reserves."
Rox Resources Limited is a West Australian focused gold exploration and development company with 2 projects: Youanmi Gold Project near Mt Magnet, approximately 480 kilometres northeast of Perth and Mt Fisher – Mt Eureka Project approximately 140 kilometres southeast of Wiluna.
The Company’s main focus is the development of the high-grade, high-margin Youanmi Gold Project that hosts a global mineral resource of 16.2Mt at 4.4g/t for 2.3Moz of gold.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
