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Rox Resources Ltd (ASX:RXL) has completed a prefeasibility study on its Youanmi Gold Project in Western Australia, indicating potential for more than 100 thousand ounces of gold doré to be produced per annum over a mine life of 7.7 years.
Within this framework, the company would achieve a production target of 786 thousand ounces of gold doré over the given period, with the study also confirming a maiden high-grade gold reserve of 546 thousand ounces at 4.4 grams per tonne, whose value was set at A$2,600 per ounce.
The company has agreed to progress Youanmi to the definitive feasibility stage, based on these figures and financials which – according to prefeasibility – confirm a free cash flow of $855 million (pre-tax) and $597 million (post-tax), and AISC of $1,676 per ounce and a payback period (pre-tax) of between 2.9 years (pre-tax) and 3.31 years (post-tax).
This was based on a conservative gold price assumption of A$3,100 per ounce, with the cumulative EBITDA over the life of the project set at around $1,219 million.
Managing Director Robert Ryan said the study had indicated the viability and potential strength of Youanmi, located near Mt Magnet in the state’s Mid West.
“The Pre-Feasibility Study confirms the Youanmi Gold Project as one of the most exciting emerging high-grade gold development projects in Western Australia, a Tier-1 mining jurisdiction,” he said.
“The Project produces 786koz of gold doré over a 7.7-year period, averaging over 100koz per annum and with a low AISC cost of just A$1,676 per ounce, which, at current spot prices, will deliver an operating margin of nearly A$2,000 per ounce.
“The high-grade, high-margin nature of the Project results in very compelling financial metrics and a short payback of less than 3 years at a base case gold price of A$3,100 per ounce.
“The Project financials really move up another gear when run at the current spot price of A$3,500/oz, 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.”
Rox has been trading at 13.2 cents.
