Venus Metals sells interests in Youanmi gold project to Rox Resources
The agreement will simplify the ownership structure of the Youanmi gold project.
Venus Metals (ASX: VMC) has agreed to sell each of its interests in the Youanmi gold joint venture projects to Rox Resources (ASX: RXL) in return for 110 million Rox shares.
The joint ventures make up the wider Youanmi gold project in Western Australia.
Under the deal, Rox will acquire Venus’ 30% stake in OYG, its 45% holding in Youanmi JV and Currans Find JV, and its 50% holding in the Venus Metals JV.
The agreement is expected to simplify the ownership structure of the Youanmi gold project, while giving Venus shareholders retained exposure to any upside.
Venus will also retain the non-gold interests in Youanmi JV, Currans Find JV and Venus Metals JV, as well as its non-Youanmi gold assets.
“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,” Venus managing director Matthew Hogan said.
“I’m extremely confident in the capabilities of the Rox board and management team, and very excited to be joining forces with them with the aim of bringing the Youanmi gold mine back into production in the near future,” he added.
‘Logical transaction’
Meanwhile, Rox managing director Rob Ryan said it was a logical transaction that will deliver “compelling value” to both Rox and Venus shareholders.
The deal is also expected to give Rox better access to potential debt providers when trying to secure development capital for Youanmi – along with a positive market re-rating.
As part of the transaction, Venus will undertake an in-specie distribution of 55 million Rox shares to its shareholders, while retaining 55 million, which are subject to 12 months voluntary escrow.
Additionally, Mr Hogan will be appointed to Rox’s board.
Advancing Youanmi gold project
Mr Ryan said 2023 will be a “milestone year” at Youanmi, which has a current inferred resource of 27.9 million tonnes at 3.57 grams per tonne gold for 3.2 million ounces.
Drilling is underway to convert existing inferred resources to indicated status to support pre-feasibility studies.
Since it was discovered in 1901, about 667,000oz of gold was produced from Youanmi at a grade of 5.47g/t gold.
A scoping study on the project indicates annual output of 71,000oz gold is possible, with 569,000oz to be generated over an initial eight year life.