Rox is not given the market credit it deserves for its clear and achievable pathway to production in 2027.It has taken Rox 6 years to reach the DFS stage, and it feels like 60 years, but it’s about average.
The market is favouring exploration companies with growing resources, but investors new to gold company investment are ignoring the challenges ahead.
Companies that are rapidly growing their resources but far from production can be good investments, but no one should have illusions about them..
Many of their timelines are shaky, few have a credible Pathway to Production, and even fewer are really ‘near-term'’.
Take Santana Minerals SMI, now valued at $ 430m, which is more than double Rox’s market value.
SMI has an outstanding resource, but is tied up in NZ Fast Track approvals red tape, demanding thousands of consultant hours with no guarantee of success.
SMI are building a mine in a valley in environmentally zealous New Zealand while Rox are restarting a permitted mine in one of the world’s most attractive mining destinations.
SMI is a Y31+ first gold pour company by which time Rox will have been generating a few hundred million free cash flow PA for years.
Rox will probably launch its first acquisition by the time Santana has its first pour.
In November, in its DFS Rox will have an assumed credible price of gold.
That can’t be said for companies that are many years away from production,
2025 Catalysts for Rox - MRE, DFS, FID and Capex funding.
Waratah Minerals – exploration drilling.
Santana Minerals– exploration and approvals.
Gorilla Gold – exploration (note market valuation of $342m).
@ SmartDude
As you say, an 8-year LOM would be a cash cow, but Youanmi will also have a long life, greater than 10 years.
Stage 1 will mine and process very high-grade underground ore.
Near-mine exploration targets have approximately 6.9Mt to 8.4Mt at a grade ranging from 4.7 g/t Au to 7.0 g/t Au for a total of 1.1Moz to 1.8Moz at 2.5 g/t Au cut-off,
The DFS grade will be higher than the PFS, at least 5 g/t Au.
Note that the worldwide average grade of gold ore has collapsed, from 10g/tonne decades ago to less than 1.5g/tonne today.
Rox is fully focused on growing the high-grade UG reserve, but in the years to come a Stage 2 will add mill capacity and focus on the shallow free milling lower grade ore.
Currently, Rox has 800 oz Au @1.69 g/t that will add several more years to the LOM.
The recovery rate on the oxide gold, such as at Grace will be around 95% with no Albion process required.
At the high gold price low-grade oxide deposits like Rox’s are highly profitable and getting a lot of market support. Saturn has 93.9 Mt at 0.54 g/t for 1.6 m oz of contained gold.
While in Stage 1 processing high-grade ore Rox will be finding a lot more low-grade ore for Stage 2.
The Intercept find shows there is plenty of shallow gold still to be found.
Rox has been doing their homework to make their gold hunting more productive.
In the Step Up campaign the focus has been on uncovering the structural controls for Youanmi gold.
One of the most important things with an orebody is to understand why there is mineralisation, but then to understand what is controlling the distribution of the gold – the latter is what Rox are focussing on.
Rox is getting the stratigraphic info (geology and structure) to prove or disprove theories and find gold extensions.
Rox now has a much better understanding of the Youanmi geology, so exploration drilling will be more efficient and productive and mine plans will be accurate.
This is a transformational year for Rox, the first of many.
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