Initiating Coverage on Rox Resources (ASX: RXL)

January 7, 2022

Rox Resources Limited is a West Australian focused gold exploration and development Company. It is the 70% owner and operator of the historic Youanmi Gold Project near Mt Magnet, approximately 480 kilometres northeast of Perth, and also wholly owns the Mt Fisher Gold Project approximately 140 kilometres east of Wiluna.

Rox represents an emerging gold project developer, offering the market with a very clean exposure to gold exploration focussed on two regions. The company is likely to be entering a phase of solid, sequential increases in the Youanmi Resource, and its valuation is likely to improve as the ounces grow and as the market places increasing value of those ounces, from the current A$38.2/oz to A$65/oz as an interim, and eventually into the region of A$252/oz as the project is derisked.

The Youanmi Resource has grown by 466koz over the last two years, and Rox is likely to be entering a discovery sweet spot where it has done the preliminary work to understand the mineral system and ongoing drilling will generate an increased rate of discovery. There are drilling programs in place for the 70% owned Youanmi mine area, the 45-50% owned greater Youanmi region, and for the Mt Fisher/Mt Eureka projects, where there are a number of identified targets, typically seeking extensions to existing Resources. Work has started on the processing elements of a Feasibility Study.

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