Robex Resources (RBX.V) has now completed about 41,000 metes of drilling in its Nampala project where it planned to tackle eight different zones this year. Three zones were focusing on resource definition drilling, three zones were expected to be zoomed in on for exploration purposes while two additional areas will be drilled as part of a condemnation drill program. The combination of the (ongoing) drill program and the information collected from the production process has allowed the company to refine the density model and the accuracy of resource model while good metallurgical results have allowed the operator to reduce the cutoff grade from 0.38 g/t to 0.25 g/t.
The combination of the lower cutoff grade and the additional drill campaigns allowed Robex to increase its indicated resource to 869,000 ounces of gold including 435,000 ounces in oxide mineralization. The transition zone contains an additional 163,000 ounces of gold in the indicated resource category and considering the recovery rates of the transitional zones have been satisfying, Robex will now try to include the gold in the transition zone in the mine plan. The average recovery rate of the oxide rock in the mill is estimated at 88.9% while 71.9% of the gold in the transition zone is expected to be recovered.
Robex planned to drill just over 170,000 meters with three drill rigs this year but the COVID-19 outbreak has obviously delayed parts of the drill program. To make up for the lost time, Robex Resources will now accelerate its drill program using 7 drill rigs.
Robex Resources is currently facing a court case as a group of shareholders is suing Robex over management compensation. You can see the management compensation here below (as per the most recent management information circular).
Although Robex Resources seems to have its ducks in a row and the current gold price but with a current market cap (and enterprise value) of around C$300M, we’d need to see much larger resource and amount of gold in the mine plan to be charmed by Robex. The company is currently trading at C$675 per ounce of gold in the oxide category and approximately C$320 per ounce in the total resource estimate (across all weathering types and resource categories) which appears to be more than reasonable for an African project. But of course, with about 130,000 meters of drilling to be conducted and assayed, there may be some positive surprises.
Disclosure: The author has no position in Robex Resources. Please read our disclaimer.