Yandal Resources Ltd’s (ASX:YRL) progress at Flushing Meadows is being watched intently by Maximus Resources Limited (ASX:MXR) which holds a gold royalty over the growing 190,000-ounce prospect in WA.
The company is making progress at the prospect and has a further resource upgrade pending following a 10,000-metre drilling program which has returned encouraging results.
Open pit potential
Yandal’s goal is to define an open pit development at Flushing Meadows, which has shallow deposit and has been modelled for 1.8 kilometres along strike and to an average depth of 130 metres.
Maximus’ entitlement is structured as follows:
- $200,000 payable to MXR upon commencement of gold production;
- Maximus is entitled to $40 per ounce for the first 50,000 ounces;
- Maximus is entitled to $20 per ounce for a further 100,000 ounces;
- A 3% NSR to MXR for any gold by-products (silver etc); and
- Royalty capped at $4 million.
Part of feasibility study
Yandal’s 10,000-metre drill program began last month and is part of an open pit mining feasibility study.
Workstreams in this study include resource and reserve definition, grade control simulation, metallurgical, geotechnical and hydrogeological studies.
Maximus said it was pleased with the success of the recent drilling campaign and looked forward to Yandal’s updates on its feasibility studies at Flushing Meadows and future resource upgrades.
Royalties a value credit
Maximus considers these royalties to be a significant value credit as they exceed the current market cap of the company with more than $8 million in potential value.
It said the two royalties were becoming more valuable as the price of gold was at near all-time highs and the two companies accelerated their efforts towards production.