Grinding to fine powder and roasting to oxidize the material, I understand that part.
I know that the black rust can be converted to Iron, when electrolysis of a rusted iron object (antique), in a sodium hydroxide solution as the cathode, but the yellow rust is not converted to iron in this process, it is too far oxidized.
How are you going to make the oxidized powder conductive (like a bar of metal would be), and attach electrically to the power supply? and I do not see how the oxidized powder would convert to iron, unless your plan was to oxidize it further, but I still cannot see how you can do this in an electrolytic cell.
If you can get the black sands ground fine enough, and was able to get the iron compounds all roasted to iron hydroxide (I think it would be difficult to convert all of the forms of iron compounds), (also there could be several deadly gases in the roasting process, including arsenic), iron hydroxide is not soluble worth a darn in acids and gold could be leached without dissolving much of the iron, this sounds easy, but in reality it is not.
In a leaching process not only do we have the problem of iron but also the many forms of compounds it is in, and converting these iron compounds in these black sands and ore, and converting these compounds safely into a form of iron that we can either dissolve the iron from the values or convert the iron to a form that we can dissolve values without attacking the iron compound, these different iron compounds are terribly hard to convert all into one form, dangerous also if your not aware of dangers involved, normally not much value involved for all of the work and costs, many difficulties in acid leaching.
Then there is the smelting process, unless your a large company and your goal is to make iron and collect a little bit of gold in the process, I do not see where the cost would be worth it with black sands, I can see where removing free gold from black sands can be worth processing, but not the tiny bit that is locked up in it, at least from what I have tried so far or learned so far.