Rox considering options to realise value from nickel assets

Special Report: With its focus on developing its Youanmi gold project, Rox Resources (ASX:RXL) is considering a number of options to create value from its nickel assets.

The assets consist of the advanced Fisher East deposits in WA’s Northern Goldfields region

that have a contained resource of 78,000t of nickel, the Collurabbie nickel project about 80km east of Fisher East and the interest that it is earning in the Cullen joint venture to the north.

Rox is considering either a straight sale of the assets or spinning them out into a new ASX-listed company as it believes that they are significantly undervalued within its current structure.

“With our primary focus on the development of Youanmi gold project, our nickel assets are ascribed little value by the market,” managing director Alex Passmore said.

“There is strong market interest in the nickel sector, which presents a great opportunity to attain strong value recognition for the company’s nickel assets, that we believe are currently undervalued to Rox shareholders.

“We are advanced in the process of determining the scenario that will provide the best outcome for Rox shareholders.”

The company plans to finalise the preferred option over the coming months and update the market during the second quarter.

Nickel projects

Fisher East was first discovered by Rox in 2012 and has defined a number of open-ended nickel sulphide deposits at Camelwood, Cannonball and Musket.

The company completed an updated scoping study in late 2018 that considered two primary development scenarios – building a standalone concentrator or toll milling at a nearby operation.

Under either scenario, the study demonstrated that the project had strong economic and technical credentials at a nickel price of US$7.50/lb (current price is ≈US$8.50/lb).

The study also found that increasing resources would also result in significant upside to project economics while capital costs were relatively low with competitive cash operating costs.

This article was developed in collaboration with Rox Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.