In early March, Rox reported a hit of 28m at 34.81 grams per tonne gold at what was then known as Youanmi South.
Two weeks ago, the company confirmed the discovery of what is now known as Paddy’s Lode.
Diamond drilling to follow-up the initial hit returned 5.7m at 8.26gpt gold; 5m at 9.56gpt gold and 3.3m at 8.29gpt gold up to 200m away.
Paddy’s Lode has a similar strike and dip extent to the Youanmi Main lodes with similar mineralised widths.
Previous exploration missed it as mineralisation sits under 20-30m of transported cover.
“It is quite a significant discovery for us because it opens up a whole area to the south of Youanmi that was previously thought to be barren,” Rox managing director Robert Ryan said during a site visit to the project.
Rox also sees the potential for further parallel lodes.
The company has also defined a new exploration corridor within 300m of the Youanmi Main lode, which is open in all directions.
Results from the Midway discovery have included 2.8m at 22.03gpt gold; 3.7m at 10.25gpt gold; and 6.7m at 15.4gpt gold.
Both discoveries were made during a 20,000m program which kicked off in late 2022 and is in its final stages.
“We allowed a couple of thousand metres for exploration at Midway and Youanmi South – both have really come up trumps,” Ryan said.
Youanmi has a long history of gold production with shaft mining kicking off in 1908 and producing 166,000 ounces of gold at 15.2gpt until 1921.
The underground mine reopened from 1937-1942 and produced another 110,000oz.
Open pit mining kicked off in the late 1980s, followed by mechanised underground mining from 1994-97.
Youanmi has been closed since 1997 due to the low gold price at the time.
It has produced 667,000oz of gold at 5.42gpt gold over its history.
Youanmi has a current resource of 3.2 million ounces at 3.6gpt gold.
An October 2022 scoping study, completed under previous management, outlined a A$99 million, 480,000 tonne per annum operation to produce an average 71,000oz per annum at all-in sustaining costs of $1538 an ounce, based on a head grade of 5.5gpt gold.
Ryan, who joined the company only days after the scoping study was released, said the exploration potential is changing the way it thought about development scenarios.
“There’s lots of potential upside to the scoping study we released,” he said.
Ryan now sees a “sizeable” development opportunity at Youanmi.
“It does give us a different outlook of what we can do,” he said.
“It changes the scale of the development we’re looking at.”
Rox believes there is the potential to double the size of the plant to up to 1Mt per annum.
“All of a sudden, you’re looking at 150,000-200,000oz per annum,” Ryan said.
“The only comparable company with that scale and grade at the moment is Bellevue Gold.”
Bellevue is aiming for first production from its namesake WA project later this year. The 1Mtpa project is expected to produce 200,000ozpa at AISC of $1000-1100/oz over at least 10 years.
“The additional capital to go out to 1Mtpa is not that significant,” Ryan said.
“It’s potentially an extra $50 million to double the production rate.”
Bellevue recently joined the ASX 200 and has a market capitalisation of $1.4 billion against Rox’ last market cap of $84 million.
Ryan envisages Rox spending the next 12-18 months drilling to fully understand the potential at Youanmi.
“It’s a system we haven’t found the end of yet,” he said.
“[Drilling] is better than rushing into studies.”
Rox is anticipating heavy news flow through to the end of July as the final results of the drilling program come in.
A resource upgrade before the end of the year is possible.
Youanmi has suffered from fragmented ownership with Rox holding the project under a joint venture with Venus Metals Corporation.
Under a deal signed in late March, Rox will acquire Venus’ interests, ranging from 30-50% of the Younami ground, for 110 million shares.
Ryan said the previous ownership structure was “probably a black mark” to the market.
“It was a big hindrance to getting a number of investors on board,” he said.
Rox shareholders will vote on the transaction on June 23.
