market reaction is not unexpected kicking the can down the...

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CashedUpBogun

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24/07/24

17:26

Post #: 74898663
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Originally posted by Sumit000: ↑

Rox is now set to produce gold Dore (bullion) rather than gold concentrate.
That is a breakthrough development that dramatically changes the prospects for the company going forward.
It presents a lot less risk and makes the project much more attractive to instos and funds. The downside of the increased capital cost is well worth it.
The plant has increased in size from the Scoping Study to a medium-sized 750ktpa which is possible because the ore is exceptionally high in grade. The plant will produce an average of 103koz ozs PA with a profit margin of $1,424 per oz gold based on a gold price of $3,100 oz.
At today’s price of gold the profit would be close to $2,000 oz, that's $200m free cash flow per year..
The inferred gold is 29% over the life of the mine in the PFS which is average for a PFS and the 19% in the first 4 years is very low.
Rox has ample time to convert inferred to indicated gold both before the DFS and also while Rox has a free cash flow so can fund its own drilling rather than dilute the share registry.
The production ramp-up is reasonable and makes economic sense. Rox will start by mining and processing the shallower UG ore which is mostly indicated and ramp up to production peaks in years 6,7 and 8 as the higher-grade ore in the deeper part of the resource is mined and processed
These PFS metrics are an excellent start with a lot more to come. Rox has already raised capital to commence drilling its 1,093- 1,836 oz near mine resource so we can expect that campaign to begin soon. The maiden reserve of 546kozs @ 4.5g/t au calculated at a very low $2.600/oz is outstanding and will be much higher in the DFS
It’s obvious from the market’s initial reaction to the PFS that its strengths are underestimated and Rox needs to market it.

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market reaction is not unexpected kicking the can down the road
more studies, more dilutions unless gold goes to $5k
which by then even CAI would be on the radar

RXL Price at posting: 13.0¢ Sentiment: None Disclosure: Not Held
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1 Great analysis

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