PERTH (miningweekly.com) – A scoping study into the Youanmi gold joint venture (JV), in Western Australia, has estimated that it could produce 71 000 oz/y of gold over a mine life of eight years.

ASX-listed Rox Resources, which holds a 70% interest in the project, on Wednesday noted that the project could produce as much as 569 000 oz over its mine life.

The scoping study also estimated that the project would require a capital investment of A$134-million, including working capital, to support the 480 000 t/y processing plant, with life-of-mine all-in sustaining costs averaging around A$1 538/oz.

The study also estimated a cumulative earnings before interest, taxes, depreciation and amortisation of A$577-million, a pre-tax net present value of A$303-million and an internal rate of return of 45%.

“The scoping study highlights the Youanmi gold project’s robust financial metrics as a potential long-life, cash flow-producing gold asset in a world-class Western Australian gold jurisdiction. Rox, like our peers, has not been exempt from the high cost-inflationary environment, and chose to prioritise high-grade, low-cost ounces through the production target of gold-in-concentrate as the preferred method for commercialisation of the Youanmi project," said Rox MD Alex Passmore.

“Importantly, the study shows low pre-production capital expenditure of approximately A$99-million required to establish operations at Youanmi. Gold-in-concentrate is a proven, highly efficient method for producing saleable gold product, with other Western Australian operations realising strong cash flows from this approach. Despite the majority of openpit material and 73% of the underground resource material excluded from the study production target, the project financial model demonstrates strong cash flows on this base case. Through ongoing, systematic and targeted drilling campaigns, we intend to continue to convert inferred resources to the indicated category at the JV, while adding ounces through resource expansion and regional exploration drilling.”

Passmore pointed out that the Youanmi resource remains open down dip and along strike, and that regional exploration programmes are testing more than 50 km strike of Youanmi Shear Zone that remains largely untested by historic drilling, with follow-up aircore and reverse circulation drilling planned along strike and down dip of newly identified mineralisation.

“We look forward to continuing to rapidly progress the project to commercialisation and are targeting a prefeasibility study in 2023,” he added.