Venus Metals will become a major shareholder in joint venture partner Rox Resources after the companies agreed to consolidate their ownership interests in the greater Youanmi gold project in Western Australia.
Shares in Venus jumped more than 20 per cent on the back of the latest announcement to touch 17.5 cents during intraday trading after closing yesterday at 14.5 cents.
The two companies joined forces to acquire the Youanmi gold mine from Oz Youanmi in April 2019, with Rox having the ability to raise its share in the JV from an initial 50 per cent to 70 per cent, a feat it has since achieved. The mine is one of several ventures the two companies share in the Youanmi shear zone.
Under the latest agreement, Venus will receive 110 million shares in Rox. In return Rox will pick up Venus’ gold interests in each of the two companies’ Youanmi JVs including 45 per cent in the Youanmi and Currans Find JVs and 50 per cent of the Venus Metals JV. Importantly, Rox is acquiring the remaining 30 per cent of the OYG JV that includes all mineral interests at the site.
Venus will retain its non-gold interests in the Youanmi, Currans Find and Venus Metals JVs in addition to its interests in non-Youanmi gold assets. The deal will see all gold rights held by the two companies consolidated under single ownership to develop the Youanmi gold project. Venus will retain its current net smelter royalty of 0.7 per cent at the OYG JV tenements while Venus managing director Matthew Hogan will also be appointed to Rox’s board.
According to the deal, Rox will issue 110 million shares at an issue price of 25 cents to Venus representing a total of $27.5 million. Venus says it intends to distribute 55 million of the shares to eligible shareholders while it plans to hold on to the remaining half of the issued shares.
When added to the 5 million Rox shares held by wholly owned subsidiary Redscope Enterprises, Venus will become a major shareholder with an 18 per cent interest. The company has agreed to enter into a voluntary escrow deed for a period of 12 months for the 55 million shares it will retain.
Venus Metals managing director Matthew Hogan said: “This is a win-win transaction for all shareholders in both companies, unlocking considerable value and dramatically simplifying the development pathway for the Youanmi gold project.”
Youanmi is about 480km north-east of Perth and lies in the central part of its namesake greenstone belt. Nearby mines include Agnew with its 2 million ounces, Golden Grove holding 1 million ounces and Kirkalock also containing 1 million ounces.
The mine itself boasts historical production stretching from 1918 through to 1997, for a total of 667,000 ounces going 5.42g/t gold from both open-pit and underground operations.
An intensive exploration campaign throughout 2021 and early 2022 by the new owners saw big jumps in Youanmi’s resources. Near-surface resource increased by 204,000 ounces to break through the one million ounces barrier.
Youanmi’s total resource currently stands a shade under 30 million tonnes, going 3.57g/t for 3.2 million ounces contain gold – a big 93 per cent rise on its June 2021 figure. The project is regarded as having significant upside potential, not least because its scoping study’s production target includes only 20 per cent of the project’s total mineral resource.
The project’s schedule has a pre-feasibility study targeted for this year, a definitive feasibility study in 2024 before a final investment decision in 2025.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
