Reading the negatives here I wonder if we are all looking at the same metrics. I’ve reproduced them under this post. Some quick responses
@ Yurts: The IRR is very good, note that an IRR needs to be read in conjunction with the NPV to get a more complete picture of the investment return. The Net Present Value (NPV) is $648m or $468m after tax with an 8% discount applied. The market is still only valuing Rox at $59m, way less than many of its peers with a similar resource.
The NPV and IRR will increase dramatically in the DFS as the gold in the Mining Plan is increased and in all likelihood, the price of gold assumption will be higher.
@ CUB: Pleased to read that you think RMS will not be interested in a TO.
I hope you are right because a typical low ball offer by Zep will be at 50 – 100% premium to the share price. A miserable 30 cps at best.
The royalty on Youanmi gold is just $106 oz Au in the PFS based on a price of gold of $3,100. That’s the advantage of being in one of the world’s best mining locations WA.
Ultra fine grinding has been used for decades, the largest open pit mine in Australia uses UFG. Ramelius used it at Tampia and Evolution is a case study of its benefits.
The power costs per oz of gold will not make the mine unprofitable at scale and will become less per Oz of gold produced as the plant is upscaled, as it will be. In the Scoping Study the processing plant was small 480ktpa and double that in the PFS to 750ktpa. But as plants go that is not large because Rox aimed to keep the Capex as low as possible. The plant will be expanded to a 1.1MTPA, if not in the DFS then soon after production. That upscaling will increase the gold oz produced PA and the free cash flow while lowering the AISC.
@Corgi & Boolgeeda Dream: a CR to raise cash for drilling is only a red flag if the amount of cash to be raised is a large proportion of the market cap. The infill drilling campaign last year increased the indicated oz by 20% at an exploration cost of $6.4m. Rox will need to raise around another $5-7m for exploration costs and DFS studies this year. That is not a large dilution. Rox is very aware of the risk of dilution, so they have delayed exploration (even drilling the exciting new high-grade lode at Currans is delayed) to focus on cost effective infill drilling.
(20min delay)