Rox Resources Ltd (ASX: RXL) announced some big news this week with the company locking in $350 million in debt facilities which means its Youanmi gold project in Western Australia is fully funded.
The team at Canaccord Genuity have run the ruler over the company's plans following this announcement, and have come out with a very bullish price target on the company.
More on that later, let's see what Rox announced this week.
Image source: Getty Images
Major milestone reached
The company said on Monday that in addition to $200 million in equity funding raised in December, it had entered into binding commitments for debt facilities with a consortium of banks including international banks as well as Westpac Banking Corporation (ASX: WBC) at home.
Managing director Phill Wilding said it was a major step for the company.
The commitment of debt funding from an impressive selection of Australian and International banks is yet another major milestone for Rox as we accelerate our pathway to production for the Youanmi Gold Project.
The debt funding process included a thorough due diligence process by the banks' Independent Technical Expert, which provides further validation of the robustness of Youanmi and our expectation that it will be a high-margin operation.
We will now work with the Syndicate Banks to achieve financial close, placing us in a position to commence draw down of debt in the September 2026 quarter.
The project is now fully funded through to production, and we look forward to making a Final Investment Decision later in this quarter, before commencing construction activities.
The company has already started development activities at the mine, with a shaft advancing towards the first mining level, the company said in February.
Shares looking cheap
The team at Canaccord Genuity expect the company's capital expenditure to build the Youanmi mine will be $400 million, compared to the company's own estimate of $383 million.
They said while a final investment decision had not yet been made, with early works progressing there was high confidence the project would be signed off.
In parallel, long-lead processing plant equipment had been secured following the appointment of a preferred EPC contractor, helping maintain project development timelines. Formal construction start at Youanmi is slated for early June quarter 2026 with first gold with first gold and ramp up anticipated for the June quarter 2027 or early. Recall that the Youanmi DFS outlines plans for a 7-year underground gold operation producing 117,000 ounces per annum.
Canaccord says it has updated its model based on the new debt announcement and has kept its price target for the ASX gold stock at $1.15, compared with 51 cents currently.
