Vox Royalty upgrades reserves/resources at Red Hill, Australia

Vox Royalty Corp. [TSX, NASDAQ-VOXR], a returns focused mining royalty company, updated the Red Hill gold project in Western Australia from its royalty operating partner Northern Star Resources Limited released May 2, 2024. Vox holds a 4.0% gross revenue royalty over mining lease M27/57 at Red Hill.

The Red Hill gold deposit is located 3.5km east of Northern Star’s Kanowna Belle mine and processing plant and 22km north-east of Northern Star’s Kalgoorlie Consolidated Gold Mines Operations (KCGM), which includes the Fimiston processing plant in Western Australia.

KCGM and the Fimiston plant are currently the subject of a major brownfield expansion project by Northern Star. The AUD$1.5 billion KCGM Mill Expansion Project is expected to increase processing capacity from 13Mtpa to 27Mtpa. The Red Hill project was historically mined as an open pit operation between 2001 and 2007, producing approximately 467,000oz.

Spencer Cole, Chief Investment Officer stated: “This significant 58% resource upgrade, maiden reserve declaration and further disclosure around development assumptions at Red Hill is a material milestone for Vox’s gold royalty. Based on the maiden reserves, Vox management estimates that this Red Hill gold royalty has the potential to generate approximately US$10 million in initial annual revenues, over a potential mine life that is still to be determined by Northern Star. In addition to this significant resource increase (estimated using AUD$2,500/oz, which is well below current gold prices of AUD$3,570/oz), the Red Hill deposit remains open at depth. This announcement further validates the Red Hill royalty’s underlying quality, as well as its strategic setting and optionality within Northern Star’s expanding Kalgoorlie production centre. We look forward to further Red Hill development updates over the coming quarters.”

On May 2, 2024, Northern Star announced a 58% mineral resource increase in total ounces to an Inferred mineral resource of 1.9 Moz Au (49.9Mt at 1.2 g/t gold), which represents an overall increase in both tonnage and average grade over the March 2023 estimate of 1.2 Moz Au (32.4Mt at 1.1 g/t Agold.

A maiden reserve declared of 0.6 Moz Au (15.9Mt at 1.1 g/t gold) enabled by recent exploration drilling, which increased confidence in the geological and grade continuity.

Northern Star stated that planned FY25 drilling will focus on the Inferred resource to further increase geological confidence across the mineral resource.

Significant Red Hill drill results reported included drill hole RHDD23069 that returned 136.0m at 1.8 g/t Au. RHDD23072 returned 83.0m at 2.3 g/t Au. RHDD23076 returned 226.8m at 0.9 g/t Au. RHDD23085 returned 33.0m at 2.5 g/t Au and 135.9m at 1.1g/t Au.

In the same announcement, the following commentary and detailed mining assumptions were included.

Reporting of Exploration Results and Estimation of Mineral Resources: “Further drilling will continue to test the current resource area for bulk potential below the Red Hill pit during FY2024 and F2025.”

“The mineral resource estimate has been reported at a 0.5g/t cut-off grade within a pit shell optimised at an AUD$2,500/oz gold price.” Lower than current gold prices of AUD$3,570/oz as of May 1, 2024

Estimation and Reporting of Ore Reserves: “A minimum Pre-Feasibility level study is completed prior to converting an ore zone into ore Reserve.”

“The selected mining method for the Red Hill deposit is a bench mining open pit method, mined using conventional open pit mining methods (drill, blast, load and haul) utilizing 250t class excavators and 180t trucks.”

“Ore from the project will be processed through the Fimiston Processing Plant at the KCGM operation, hence no processing infrastructure is required. Agreements are in place and are current with all key stakeholders including traditional landowner claimants.”

“All required Environmental Studies and Statutory Government Approvals including works approvals and clearing permit are ongoing. A Mining Proposal and Mine Closure Plan will be submitted at later stage in appropriate manner for the operation to recommence.”

“Reserves were estimated using a gold price of AUD$2,000/oz per Northern Star corporate guidance.”

Kalgoorlie Consolidated Gold Mines Operations is a world class asset located adjacent to the City of Kalgoorlie-Boulder approximately 600 km east of Perth, Western Australia. The KCGM Operations include the Fimiston Open Pit (Super Pit), Mt Charlotte Underground Mine and the Fimiston and Gidji Processing Plants.

In 2019 KCGM celebrated its 30th anniversary and poured its 50,000th bar of gold, bringing the total produced from the Golden Mile to over 60 million ounces in the 120 years since the leases was first pegged. On June 22, 2023 the Northern Star Board approved the A$1.5 billion KCGM Mill Expansion Project to increase and modernize KCGM’s processing capacity from 13Mtpa to 27Mtpa, involving a three-year construction phase and a two-year ramp-up phase. The KCGM Expansion is a key growth driver for Northern Star to increase its annual group gold production from its three production centres (Kalgoorlie, Yandal and Pogo) from 1.56Moz in FY23 to approximately 2Moz in FY26.

Vox is a returns focused mining royalty company with a portfolio of over 60 royalties spanning seven jurisdictions. The company was established in 2014 and has since built unique intellectual property, a technically focused transactional team and a global sourcing network which has allowed Vox to target the highest returns on royalty acquisitions in the mining royalty sector. Since the beginning of 2020, Vox has announced over 25 separate transactions to acquire over 60 royalties.