Rox Resources Ltd (ASX: RXL) has made a final investment decision to proceed with its $383 million Youanmi gold project in Western Australia, following the recent locking in of funding for the new mine.
Approvals in place
The company said in a statement to the ASX on Tuesday that it had received a key approval from the Department of Mines, Petroleum and Exploration, which would allow it to break ground on key elements of the project.
The company said:
This key approval allows construction to commence for the new Processing Plant, Tailings Storage Facility, and Power Station/Solar Array, as well as the redesign of the existing West Main Waste Rock Dump (to become the new Run-of-Mine (ROM)). The MDCP approval, supported by $350 million credit commitments from the previously announced syndicate of banks and the $200 million placement plus $18 million share purchase plan, allowed the Board to approve the final investment decision for Youanmi. Rox and the Syndicate Banks are now working towards execution of finance documents and satisfaction of typical conditions precedent. Financial close and first debt draw down is expected in the September 2026 quarter.
Rox said it would now start bulk earthworks and issue contracts for the power station and oxygen plant, while most early works streams had already started, and the construction of the accommodation facilities was ongoing.
Rox Managing Director Phill Wilding said it was a major milestone for the company.
Following the commitment of debt funding and receipt of the MDCP, the Board of Rox has now made its Final Investment Decision, paving the way for construction of the Youanmi Gold Project to begin. The project is now fully funded through to production, and over coming months we will work towards financial close while ramping up on-site construction activity. This is a pivotal milestone for Rox Resources, allowing us to remain on schedule with our pathway towards production as we prepare for our first gold pour by mid-2027.
Shares looking cheap
The analyst team at Canaccord Genuity recently ran the ruler over the Youanmi project and its implications for the Rox share price, and they believe there is significant upside to be had.
Canaccord said it had updated its model based on the recent new debt announcement and had kept its price target for the ASX gold stock at $1.15, compared with 50 cents currently.
The Youanmi project is expected to produce an average of 117,000 ounces of gold per year over a seven-year mine life, with a payback period of 1.9 years.
The post This ASX gold company has pulled the trigger on a new mining project in Western Australia appeared first on The Motley Fool Australia.
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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.