This is a challenging time for gold juniors to get into production
The price of gold has declined although still high on a 3 year chart and better in AU rather than USD.
Cost inflation in the mining sector is especially high and Scoping Studies or FSs from a year ago are already underestimating costs.
Tier one goldies like RMS are struggling as they have low grade reserves with shrinking AISC margins.
Medium Capex projects are struggling to find instos ready to invest.
Take Antipa Minerals AZY and its Minyari project.
1.1 M oz Au @ 1.6 g/t needing a large 3 Mtpa plant to process volumes of relatively low grade ore.
NPV% (post‐tax) $M278
AISC USD 1088 AU 1,630
Modelled on an assumed POG of USD 1,750 but today it's USD 1.644.
Development cost $207m The market reaction has been negative as the AISC margin slips away and the Capex will certainly rise.
The imminent Rox Scoping Study is likely to have key outcomes that will attract instos, including Hawke's Point which already holds a large stake in the company.
With a small 480 Ktpa plant processing high grade ore the Youanmi project Capex will be low, probably around $120m.
With a resource of almost
2.2m oz Au @ 6.89 g/t with a high gold recovery 90 % + for all mineral types Rox is likely to be one of the few juniors to overcome the current headwinds to get into production quickly and generate an exceptional cash flow for a mine life of at least 10 years. .
My opinions DYOR
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