Rox's RRS presentation, page-21

This chart has been generating a lot of interest lately.

It shows the value gap between the price of gold (gold line) and the value of gold miners (orange line) and explorers and developers like Rox (blue line).

Early stage developers like Rox are by far the most undervalued. Rox is valued at $57m today but the value of its likely initial Reserve of 1m ozs with a AISC margin of $1000 oz = $1B free cash flow.

The current value of Rox’s total in ground resource 2.4m oz Au @ 4.3 oz Au is valued at just $24 oz Au while gold is around AU 3,100 oz Au.

The gold price is rising much faster than costs so an increase in the price of gold increases the free cash flow. The higher the POG the better the feasibility metrics and the more likely that Rox will restart the Youanmi mine.

Many commentators in the gold space believe that the value disconnect between the price of gold and the market valuation of explorers and developers is unsustainable. They predict the value gap will close this year. This re-rating could happen in spectacular fashion. Meanwhile, Rox continues to de-risk its Youanmi mine restart and the June PFS is a key milestone. Rox won’t be releasing the Capex, Opex, free cash flow etc early as these need to be released with the whole PFS so they can be reviewed as a whole / in context. But they probably will announce the metallurgical results. Most of the 1.1m oz Au @ 6.1g/t underground resource that Rox is targeting was reported in 2022 as having some ore that required a standard CIL + an Albion circuit to recover 94% of the gold. That produced a clean concentrate that is in high demand. With a much higher price of gold there may be more profit in processing to gold bars rather than concentrate. Rox has already hinted at this. The metallurgy of the MRE resource is a minor risk imo.

Finally, there is a wild card. Venus is drilling their (and potentially Rox’s) lithium at the Deep South prospect at Youanmi. To be a market mover this would need a very large, high grade deposit. The strike length is impressive and the rock chips at up to 4.6 g/t are exceptional but the real test is the current drilling. It’s exploration so who knows? Looks like Pegs in granite so gold is also a possibility.