viewRox Resources Limited

Rox Resources will ramp-up 2020 drilling programs after Grace gold discovery


The company is focused on exploration at its West Australian assets, Youanmi Gold Project JV, Mt Fisher Nickel-Gold Project and Mt Eureka JV.

Rox Resources Limited - Rox Resources amps up 2020 drilling programs after Grace Gold discovery

Quick facts: Rox Resources Limited

Price: 0.053 AUD

Market: ASX
Market Cap: $108.64 m

Rox Resources Limited (ASX:RXL) reported a gold discovery at the Youanmi Gold Project in Western Australia during the December quarter and this year plans to update the mineral resource at the joint venture.

The company completed the first phase of a 16,000-metre reverse circulation (RC) drill program in December resulting in the identification of a new high-grade, shallow zone of mineralisation dubbed the Grace prospect.

Best results from Grace include MLRC02 drill hole which returned 5 metres at 125.7 g/t gold from 0 metres with abundant visible gold present.

The visible nuggets were up to 2-3 millimetres in size and intergrown with translucent quartz, which the company interprets to be vein quartz.

Other notable results:

  • 14 metres at 31.3 g/t from 1-metre;
  • 4 metres at 73.8 g/t from 48 metres; and
  • 4 metres at 32.5 g/t from 6 metres.

The company holds 50% of the Youanmi project with the ability to increase up to 70% from co-owner Venus Metals Corporation Limited (ASX:VMC).

Resource definition drilling

Following the success of the first phase drilling program and discovery of Grace, the company redeployed drilling crews to site in late January and drilling is ongoing.

Initially, 5,000 metres of RC and 2,000 metres of diamond drilling is planned to facilitate resource definition.

The project's resource estimate currently totals 12.4 million tonnes at 2.97 g/t for 1,190,600 ounces of gold, which will be updated in due course with the incorporation of the results.

Visible gold encountered in MLRC020 drill hole at Grace.

Currans Find results

Rox and JV partner Venus Metals each hold a 45% interest in the high-grade historic Currans Find prospect in the centre of the Youanmi project.

Best results from drilling at Currans during the previous quarter:

  • 4 metres at 7.02 g/t from 24 metres and 5 metres at 2.41 g/t from 60 metres to end of hole;
  • 4 metres at 0.94 g/t from 32 metres; and
  • 4 metres at 1.92 g/t from 28 metres.

These results were followed up with three RC holes - one of which returned 3 metres at 6.61 g/t from 78 metres.

Mt Fisher Nickel-Gold Project

Results from drilling at Rox's 100%-owned Mt Fisher Nickel-Gold Project over the June quarter prioritised several targets to follow-up and a new drilling program is expected to begin this month.

The Mt Fisher project is close to several gold plants which are underutilised and seeking additional ore sources with Rox investigating the potential for resources to meet that demand.

Mt Eureka JV

In line with its binding terms sheet with Cullen Resources Limited (ASX:CUL) subsidiary Cullen Exploration Pty Ltd, Rox may earn up to a 75% interest in Cullen’s Mt Eureka tenements via expenditure of $2 million in two tranches over two three-year periods.

Completion of this agreement has been delayed for a short time due to the assignment of third-party agreements taking longer than expected. This is now expected early this month.

The acquisition/farm-in adds 40 kilometres of nickel prospective ‘basal contact’ strike length to Rox’s exploration portfolio.

Rox has an extensive reconnaissance drill program planned across the JV area which is set to begin in April 2020 with the aim to grow the existing 78,000 tonnes contained nickel resource in the Fisher East region.

Rox Resources projects in Western Australia.

Financial outlook

As of December 31, 2019, the company’s cash balance was $3.65 million.

A payment of $3.75 million is due by February 15, 2023, from Teck Australia, the wholly-owned Australian subsidiary of Canadian mining giant Teck Resources Ltd (TSE:TECK).

In addition, the company holds 14,527,205 Thor Mining PLC (ASX:THR) CDI’s which have a current market value of $116,000.

During the quarter the company incurred $1.184 million of exploration expenditure and remains well funded with $7.5 million cash and receivables.

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