smoke and mirrorsUpdated Resource and outlook disappointing. A clear lack of exploration success at Yaramoka plus a sharp drop in the Reserves and reserve grade. Now at 8.2 gpt...... Digging deeper and you will see that the company estimated its updated Mineral Reserves and Resources using gold price assumptions of US$1,450 per ounce for the Mineral Resource estimates and US$1,300 per ounce for the Mineral Reserve estimate. These assumptions represent increases of US$200 per ounce and US$50 per ounce respectively compared to the price of US$1,250 per ounce utilized for the 2016 Mineral Resources and Mineral Reserves estimate.
Nobody else is using $1450 per ounce for resources! The resource model was also enhanced in terms of contained ounces by the magic of lowering the cut-off grade to 3.5 gpt Au from 5.0 gpt Au. Shazam!
Yaramoko is still a decent mine but will be higher cost ounces now. Going forward, RoxGold will need to divery cash into exploration and development to advance Seguela to production and to drill more at 55.
They won't be starting underground drilling to test deep targets at 55 zone until late next year....
The only saving grace is a period of rising gold prices. Watch out below.