Rolling the dice in the Philippines: Established resources with immediate high grade upside
The Company's Batangas gold project is located in a prospective region of the Philippines and will be the developmental focus for RMX going forward.
The project has a current JORC resource of 5.8Mt at 2.2g/t for 408koz of gold and with a number of high grade, near surface targets identified, the potential to grow the resources base is high.
With the market currently attributing little value towards the Company's asset portfolio we see potential upside for risk tolerant investors.
Batangas - a number of high grade targets.
Considering the modest drilling budget, we see it as prudent that RMX drill its highest grade targets in an effort to garner new shareholder enthusiasm about the story.
The Lobo project (194kt at 7.2g/t for 45koz of gold) offers a number of extensional and parallel drilling targets that look highly prospective.
We expect the next phase of drilling to target the Pica and Japanese Tunnel prospects that collectively possess an Exploration Target of 45-120koz Au eq.
Archangel could be the base load.
With a current resource of 5.5Mt at 2g/t for 363koz of gold the Archangel project is a larger scale development opportunity.
In the near term, RMX is aiming to complete a scoping study demonstrating the Bantangas project as a viable development proposition. Conceptually we envisage Archangel serving as the base load ore supply topped up with higher grades from Lobo.
Philippines a solid jurisdiction to operate.
The Philippines has a well established history of mining and is governed under a US based democracy.
The country was recently upgraded to investment grade by Standard and Poors from BBB- to BB+ which will make future financing of development projects more competitive.
Pending outcomes of the Executive Order 79 will likely increase royalty rates but should also improve the regulation and sustainability of mining in the country.
Funded - for now.
The recent rights issue has seen RMX's cash balance increase to ~$1m which is enough to fund a modest drilling campaign and potentially a scoping study. We believe securing additional funding is the biggest challenge facing the Company in the near term.
Alternative routes to further equity placement include selling down at the project level or a JV, either of which may be favourable outcomes for RMX.
Cheap on an EV/Resource metric.
With a 408koz JORC resource RMX is trading on an EV/Resource of $3.70/oz compared to a peer average of $25/oz.
1) Successful upcoming drilling campaign 2) Resource upgrades at Lobo 3) Scoping study outcomes 4) Clarity on future funding.
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