Junior miners start off building a resource but Rox has now...

Junior miners start off building a resource but Rox has now moved on from that stage and is building a reserve.

Along the way Rox will be finding new gold ozs at locations such as the Hanging Wall but the main game now is to build a reserve.

Unlike a resource a reserve has no inferred ozs, it has indicated and measured ozs which provide a high level of confidence that the gold is actually there to be mined.

Financiers only consider reserves, they demand surety before they advance funds.

A reserve informs a Definitive Feasibility Study (DFS) which sets out to a high degree of confidence how profitable Youanmi will be.

Rox have said that they hope to produce a DFS towards the end of this year.

In turn, a strong DFS will attract the Capex needed to start mining.

In converting resource gold ozs to reserve gold ozs Rox’s long term planning will pay off. Rox is a rare company in having JORC competent staff, which is why they could calculate the last Deeps JORC inhouse (verified by an independent expert).

That same expertise can now assist with targeting the drill holes needed to convert the resource to a reserve.

The forthcoming exploration plan will provide more details but it is interesting that the initial target zones announced were almost all in the Deeps.

That raises the likelihood that the Near Surface Resource (to 160m) has already been drilled to an extent where a reserve can be calculated. Looking at the history of Near Surface Resource intense drilling that is a very likely.

So Rox may announce not just a Near Surface Resource but a Reserve.

Reserves are always smaller than resources eg Ramelius’s Penny resource was 300,000 ozs and the reserve 230,000 ozs.

Rox’s shallow gold should have a better conversion rate than the Deeps. That’s because of more shallow drilling (including historical) and the cost and time to DD to the depths of the main Youanmi pit.

Rox’s current resource for the Near Surface is 800,000 oz Au @ 1.69g/t inferred and indicated (with no information on how much of that is indicated).

Safe to assume that the resource has been grown by additional drilling and lowering the cut off grade of Grace to produce more gold ozs at around 3-4 g/t.

If Rox can build a reserve of around 1m oz of gold at 3- 4g/t it would be game changer but even half that would also be a huge step forward.

The Near Surface Reserve will be cheap to mine at less than $1,000 oz au producing a cash flow of $1,600 oz AU. That is hugely profitable and there will be competition to fund the Capex. With the Near Surface mining underway Rox will then turn to the Deeps, a world class high grade reserve that will keep the Younami mine operational for many years to come.