Gold soars.

Gold producers are set to reap big rewards.

The rising tide will also lift the out of favour small cap explorers and developers like Rox and those close to production will be the main beneficiaries.

As things stand, Rox is likely to get into production in 2026 when the predicted price of gold will remain high.

Were it not for the Grace folly Rox would be on the brink of production right now.

In November 2019 Rox announced a ‘heavenly’ discovery Alex Passmore called Grace of God. In 2020 Rox claimed to be fast tracking a maiden resource at Grace and said they would be in production in 2021.

Grace turned out to be a small gold resource that is not in the current MRE and is not even claimed to have exploration potential.

Grace cost the company $15m+ including a large bonus for the MD and up to 2 years of delay imo. It also cost the company the bitterness of former holders, some of whom still vent their spleen on this thread.

With a new MD and geos Rox stumbled with Paddy’s Lode and fanciful exploration targets but has shown it can deliver by announcing an outstanding JORC complaint MRE 1.2m oz Au @ 6.1g/t. But the long delay chasing Grace down its rabbit holes is now coming back to bite in the time to production extended.

Nevertheless, the runaway POG has positive implications for the way forward.

Rox could accelerate its feasibility studies with additional cash so after the PFS due in late June Rox could have a large share issue. Hopefully they will be able to raise at 20 cps or higher again to minimise dilution but that remains to be seen. Instos will get a bigger slice of Rox so average down (implications for a possible TO?)

Rox will have an assumed based case price of gold at $3,000 oz plus in its feasibility studies. They are very likely to show a high free cash flow and almost all the MRE will be converted to a Reserve.

The feasibility studies will have a bigger mill and a shorter initial life of mine to capitalise on the high POG. That means a higher pre production cost but with the new feasibility metrics funding should be readily found.

Could Rox make up time lost by getting Capex funding on the basis of an outstanding PFS that includes a Reserve? Very unlikely because of the high margin of error in a PFS. But perhaps on the basis of a truly outstanding FS Rox might be able to go straight to a FID, secure funding and start building their mine It’s possible and it would cut 6 months off the production timeline and see Rox commission a mill in Q4 next year.

The high POG will incentivise TO deals for gold explorers and developers. At least one of the majors have had a close look at Youanmi and turned it down, Mining engineer Jeremy Peters carried out the review. But with the soaring gold price and low market value Rox could finally be a genuine TO target. Ramelius Resources will be looking closely at Rox’s processing model to see if Youanmi ore could be fed into their Mt Magnet mill minimal circuit changes or even a new mill.

A low ball offer is likely but Hawke’s Point wouldn’t sell their stake for less than 50 cps and Rox directors wouldn’t go against them imo. However, Hawkes Point will average down the next CR. Venus with 55m free shares coming out of escrow in June the day before the PFS is due make a profit on a sale at any price and MD Hogan is always open to deals. Q Capital are buying.

Interesting times ahead.