Gold con would be circa 31g/t, low grade and not marketable. Even if you could get a higher-grade con you have the issue of where to send it. Without any domestic outlets you're left with international solutions, and all the sovereign risk that brings.
So RXL are left with trying to build a refractory gold mine with their own sulphide treatment solution, in this case UFG and Albion.
The numbers are OK. On face value it appears to not lose money, but with a lot of money to be spent over a very long time you have to seriously think about alternative options for your investment dollars. It's probably 6+ years to recoup an investment, and even then you're not seeing returns that reflect the risk. IRR of 33% is simply too low for such a high-risk project.
Not sure what Canaccord are thinking with a 51cps price target. Appears to be based solely on EV/oz and certainly doesn't reflect the additional investment required to bring these oz to market.
Unfortunately, IMO Youanmi is destined to have to wait for someone else to crack the Australian refractory gold market. Maybe that's what Canaccord are pricing in?
A hold at current pricing on speculation of some sort of outcome at Wiluna.
RXL Price at posting:
15.0¢ Sentiment: Hold Disclosure: Not Held
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