CEO Phill Wilding has given us a lot of hints regarding expectations for the DFS dues in November. There is also new research available.Here is a summary from multiple sources,
Construction Capex around A$280 million with funders already lined up.
DFS assumed gold price at least $1,000 higher than in the PFS (RMS realised a gold price of $4,442 in the last Q).
Phill says that AISC will be slightly higher than in the PFS, expect $1,720 oz.
AISC margin will be around $2,500 oz.
DFS processing will be around 900ktpa throughput (up from 750ktpa) – translating to ~121kozpa Au production, up from 103kozpa in the PFS.
Mine life at 8 years but that’s just the initial LOM,
NPV will lift 24%.
Pre-tax and unleveraged Internal Rate of Return (IRR) should be approximately 55% and 44% post-tax.
We don’t know how many oz will be in the Reserve and won’t until the DFS. But U/G Resource ounces have increased by 21% with more to come, and grades are up (6gpt). The indicated component of the resource now represents >70% of the resource base (at ~1.5Moz Au), which gives confidence that there will be a sharp increase in the current 546koz Reserve and mine inventory.
Likely $2.5 – $3B free cash flow over the LOM, depending on exploration success and the price of gold.
Cash – A$51M, with zero debt – so no dilution expected before the DFS.
Rox’s valuation should be much higher even if the market is painfully slow to recognise it.
The fully-diluted NPV is A$0.52/sh (~70% upside) with upside potential ~A$0.70/sh.
Key milestones ahead.
Met results including final Albion test work.
Progress on the dewatering plan.
Underground re-entry with a new decline.
Exploration results that should grow the DFS Reserve, possibly including highly prospective Currans for the first time. Note that shallow Currans gold is almost certainly oxide gold so it will have a recovery rate around 96% with low processing costs.
In November, we get the DFS.
Construction Financing should be finalised in December this year.
I see the DFS and Capex funding as key market valuation re-rate triggers.
(20min delay)