Agree. The last Younami resource upgrade to 3M oz Au back in Jan spiked the share price but not for long. Imo doubts were: Too many inferred gold ozs Refractory ore in part Capex to get into production? Time line to get into production?
In the current quarter the resource increase will likely have a strong conversion of inferred to indicated and measured ozs ie real gold ozs that can inform the DFS as a Reserve. These indicated and measured ozs are pretty much the only gold ozs count when asking for Capex finance (perhaps 20% inferred acceptable). The resource increase will be followed by the Scoping Study that will be robust (as Rox has indicated). Imot the company can get into production with a low Capex and profitable operation featuring a small plant with high grade feed. Rox has already announced a high recovery and low Capex concentrate process for the refractory ore component. We also have the Grace resource update due in Q3, which may grow this resource to more than the current 30K oz Au and convert inferred to indicated and measured. In time Grace is likely to deliver some healthy profits to Rox though the AISC is unknown. The above combination of resource grade, robust Scoping Study and Grace update will hopefully rerate the Rox SP. Interesting that despite the high recovery from refractory ore already announced Rox will announce in Q4 more metallurgic results which would seem to indicate that they are going for an even higher recovery. That means more profit. Imo we will see a rerate this Quarter and one that will hold as Rox completes its all important DFS and early production. There is a CR coming so the rerate scenario needs to play out for Rox. So there is risk but the strategy looks very positive.
My opinion DYOR
RXL Price at posting:
25.0¢ Sentiment: Buy Disclosure: Held
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