Rox has delivered an MRE with great potential The number to...

Rox has delivered an MRE with great potential The number to focus on is the underground indicated resource of 1.1Moz at 6.1 g/t Au, that will form the basis for the PFS (Rox will deliver in June).

An MRE with such a high grade strongly suggests high profitability but it is only when we see the Pre-Feasibility Study (PFS) and the Feasibility Study (FS) that investors will be 100% convinced, The PFS is a first look at the cost of mining the gold, detail on how it will be mined, the pre-production costs and most importantly the free cash flow. The FS to follow explores the same metrics but with more detail and greater accuracy.

The PFS and the FS are market movers. Rox would hope to announce the PFS before raising more cash at a much higher share price than now.

If these feasibility studies are positive a company with a market valuation of $66.4m that can deliver a $100m free cash flow PA is obviously very undervalued (and a prime TO target). It was directly after the Capricorn feasibility studies that Regis swooped with a low ball TO bid. Hawke's Point blocked the bid.

Rox had about $4.3 M in cash and cash equivalents at the beginning of this year and they are eking it out. They state they have funding for 1.7 Quarters which is close to the PFS delivery target and they explain that they will be scaling back expenditure. PFS studies are cheap and drilling is costly which is why their exploration plans feature relatively cheap AC and RC drilling at the edges of indicated gold deposits. Between the PFS and the final DFS due in about June next year there is plenty of time and more cash to increase the MRE with deeper diamond drilling and Greenfields exploration.

Meanwhile, Rox is hoping to sell off their non-core assets, Eureka, Fisher Gold and Youanmi Lithium. That would dramatically improve their cash position with no dilution of the share registry. But even if a sale does not proceed Rox will deliver their PFS without another cash raise imo.