ROX Resources Soars with High-Grade Gold Find (ASX:RXL)
Emerging Australian explorer ROX Resources Ltd [ASX:RXL] has watched its share price soar this morning on the back of promising results at its Youanmi Gold Project.
The RXL share price is up 50% or 1.2 cents to 3.6 cents.
The company announced this morning that drilling at Youanmi has returned extremely high-grade gold mineralisation.
The Youanmi Gold Project is located 480km northeast of Perth and shares a rich geology with historic projects like Penny West, owned by Ramelius Resources Ltd [ASX:RMS].
New high-grade targets
The Youanmi Gold Project is a joint venture between RXL and fellow Australian exploration company Venus Metals Corporation Ltd [ASX:VMC].
Last week RXL announced it would increase its stake at Youanmi from 50% to 70% at the cost of $2 million in cash and $1 million in RXL share to VMC.
As of 2019, the project had an estimated gold resource of 2.4Mt at 2.97 grams per tonne for 1,190,600 ounces of gold.
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The results released today could mean this resource is in for an upgrade.
The current drill program, which commenced late last month, has begun to return assay results.
Deepest drilling highlights include 25m at 34.79g/t from 143m. That intersection included six metres at 140.7g/t from 150m.
The current phase of drilling involves 3,000m of depth testing and infill drilling.
Given the high-grade results, RXL said they are planning to expand the drilling program.
In good company
There are certain things speculative investors look out for when eyeing off junior gold explorers.
Sometimes they look to see if the company owns tenements with a history of previous production.
They’ll also pay attention to the geology of the project. If the project neighbours other well-endowed producers then the potential for a good find could be higher.
In RXL’s case it’s both.
Youanmi produced an estimated 667,000oz of gold at 5.47 g/t since discovery in 1901.
Now, bear in mind that this has come over three distinct periods, with the latest being 1987–97.
It’s not uncommon for projects to changes hands over time.
This can happen for any number or reasons including unfavourable gold prices, corporate mismanagement, or technological limitations.
The Youanmi Gold Project is also located on some favourable geology.
If you follow us here at The Daily Reckoning Australia, then you might have read about Yilgarn Craton.
Youanmi is situated in this geology, which has spawned several major mines in the past and is sometimes described as ‘Australia’s premier gold and nickel province’.
These factors certainly do not guarantee success or RXL will even make it to the development stage, but they are attractive characteristics nonetheless.
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