Rox Resources puts Youanmi on track for its first gold pour

Rox Resources Limited (ASX:RXL) has spent the year converting Youanmi from a feasibility study into a mine under construction. Underground development is underway, earthworks for the processing plant are complete, key contractors are appointed and the Board has made a Final Investment Decision. The target is first gold in mid-calendar year 2027.

Youanmi moves from study to construction

The Definitive Feasibility Study outlines a 6.8-year operation producing 817,000 ounces of gold, with average annual production of 117,000 ounces and peak output of 176,000 ounces. At the study’s base-case gold price of A$5,200 an ounce, Rox reports a post-tax NPV8 of A$965 million, a 55% post-tax internal rate of return and a pre-production capital requirement of A$383 million. The reported average all-in sustaining cost is A$1,978 an ounce.

Those figures describe a sizeable project for a company that was still operating as an explorer a year earlier. Byrnecut Australia has advanced underground development beyond 2,100 metres, ahead of the rates assumed in the DFS, while a 27,702-tonne run-of-mine stockpile grading 3.06 grams per tonne was recorded at 30 June 2026. Rox is also rehabilitating the historic Youanmi Main decline, which reaches approximately 630 metres below surface, rather than developing an entirely new access route.

Funding assembled, but debt drawdown remains pending

Rox raised A$200 million through an institutional placement and a further A$18 million through an upsized share purchase plan. It also signed a syndicated debt facility comprising a A$300 million senior secured project term loan, a A$20 million cost-overrun facility and a A$30 million bank guarantee facility. However, the debt had not been drawn at year-end and remained dependent on conditions precedent, which the company expected to satisfy in September 2026.

That distinction matters. Rox held A$152.7 million in cash at 30 June, but recorded a net loss of A$35.0 million and operating cash outflows of A$36.5 million for the year. Its going-concern assessment assumes debt drawdown in the December quarter of 2026 and development proceeding in line with budget and schedule. The company says it expects those assumptions to be met, while acknowledging that failure could require alternative funding.

Construction depends on specialist processing

Interquip Construction is the engineering, procurement and construction contractor for the processing plant, with construction costs described as largely fixed and consistent with the DFS. Pacific Energy is supplying a hybrid power solution combining thermal generation, solar capacity and a 9.3MVA battery, while EVOL LNG is responsible for LNG storage and regasification infrastructure. Glencore Technology is supplying and supporting the Ultrafine Grind and Albion Process, the processing route selected for Youanmi’s ore.

Rox reports overall gold recovery of 90.8% in the DFS, with recoveries above 94% achieved in metallurgical test work on flotation concentrate. But the annual report identifies the Albion circuit as a material execution risk: no pilot-scale test work has been conducted, the test work is classified as Class 3, and plant-scale performance could differ from bench-scale results. That risk sits alongside the usual exposure to contractor performance, supply-chain delays, cost escalation and power availability.

Gold protection provides an initial floor

Rox has purchased put options covering about 40,400 ounces, or roughly half of forecast first-year production, at a strike price of A$5,700 an ounce. The options cost A$9.7 million upfront and preserve exposure to higher gold prices, while providing the right rather than the obligation to sell at the strike price. The hedge is limited to the first operating year, leaving later production more exposed to gold-price movements.

The company’s resource and reserve base also remains central to the investment case. The annual report presents a total Mineral Resource of 2.195 million ounces and an Ore Reserve of 727,000 ounces, while the DFS section refers to an earlier 674,000-ounce reserve estimate. Rox says the newer annual resource and reserve statement was reported on 9 September 2026; the difference illustrates why reserve updates and the conversion of resources into mineable material will matter as development advances.

Rox now has less to prove on paper than it did a year ago, but more to deliver in the field. The next decisive markers are financial close and debt drawdown, construction spending against the A$383 million estimate, continued underground development, commissioning of the Albion circuit and whether first gold arrives in the middle of 2027 without a material cost or schedule drift.