Rox Resources said that its fully owned Youanmi gold project in Western Australia will require a pre-production capital expenditure (capex) of A$245m ($160.5m), based on the findings of a pre-feasibility study (PFS).
The capex also includes a contingency of A$15m ($9.8m).
According to the PFS, the Youanmi project will have an average annual gold production of about 103,000 ounces per year. The project is estimated to produce a total gold doré of approximately 786,000 ounces over the life-of-mine.
The gold exploration and development company said that the Western Australian gold project will have a project life of around 7.7 years.
Located in the Murchison region, the Youanmi gold project has a production history of 667,000oz of gold from both open pits and underground mining. The operation at the gold project was closed in 1997.
Rox Resources managing director Robert Ryan said: “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.
“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/oz, which, at current spot prices, will deliver an operating margin of nearly A$2,000/oz.”
The PFS estimates an after-tax net present value (NPV) of A$322m ($210.4m) for the gold project. It also projects a post-tax internal rate of return (IRR) of 33% with an after-tax payback period of 3.3 years.
The Youanmi gold project is estimated to generate a free cash flow of A$597m ($391m) on an after-tax basis over the life of the project.
Rox Resources’ board has approved the progression of the Youanmi project to a definitive feasibility study (DFS) stage. The company plans to deliver the DFS in 2025.
