Back in March, we introduced a very unique precious metals royalty company to our audience – Vox Royalty Corp. (“Vox”) (TSX-V.VOX, OTCQX: VOXCF, Forum). We followed up this introduction in Part 1 of our recent Stockhouse Metals & Mining Investor series, focusing on Vox as “The High-Growth Mining Royalty Co. Focused on Sector-Leading Returns.” In this article, we’ll provide a bit more colour on the advantages of the royalty model, as well as some very exciting recent news from our friends at Vox.
Investors often look to the royalty business model as a clever way to provide exposure to commodity price upside without the inflationary cost pressures faced by mining operators.
Vox is a returns-focused precious metals royalty company with a portfolio of over 50 royalties and streams spanning eight jurisdictions. Vox was established in 2014 and has since built unique intellectual property, a technically focused transactional team and a global sourcing network which has allowed Vox to target the highest risk-adjusted returns in the mining royalty sector. Since the beginning of 2020, Vox has announced over 20 separate transactions to acquire over 45 royalties. Vox also holds a proprietary database of over 8,000 third party royalties.
Vox in the News
On May 24, 2022, Vox announced that it had achieved record quarterly revenues in the first quarter of 2022.
Highlights:
- Record revenues for the quarter of $1,471,019, an increase of 172% over Q1 2021;
- Record gross profit of $1,164,293 for the quarter;
- Strong balance sheet position at quarter-end, including cash on hand of $5,621,565, working capital of $6,371,247, and total assets of $27,008,128;
- Released its inaugural Asset Handbook for best practice investor transparency;
- Significant operating partner updates in Q1, including:
- Feasibility study released by Gold Standard Ventures for the South Railroad gold project in Nevada;
- 106% increase in mineral resource by ValOre Metals at the Pedra Branca platinum group element project in Brazil;
- Maiden Puzzle North gold resource estimate from Genesis Minerals in Western Australia; and
- 113% increase in gold resource estimate from Norwest Minerals at the Bulgera gold project in Western Australia.
On May 26, 2022, Vox announced that it acquired the producing Wonmunna royalty in Western Australia and provided 2022 revenue guidance.
Transaction Highlights:
- Immediately increases Vox’s annual revenue forecasts through the addition of significant, uncapped royalty revenue;
- Provides exposure to a substantial 84.3Mt Indicated & Inferred iron ore resource, located in the world’s largest iron ore exporting Pilbara iron ore region of Western Australia;
- High-quality operating partner in MinRes, who currently operates two integrated iron ore production hubs (including Vox’s existing Koolyanobbing royalty asset) and two globally significant hard rock lithium mines in Western Australia; and are one of the world’s largest mining services businesses, forecasted to crush and service total mined volumes of 275Mt – 290Mt in 2022;
- Provides upside optionality to potential production expansion from ~5Mtpa to 10Mtpa that is fully permitted and installed on-site, with maximum total life of mine throughput of “total inventory of 50Mt – 60Mt” expected by Vox management based on MinRes public filings;
- Demonstrates Vox’s commitment to low carbon operations as per the ESG Investment Principles outlined in Vox’s 2022 Inaugural Asset Handbook, with installation of a 20-year life, 2.1MW solar array, and battery currently underway at Wonmunna; and
- Improves Vox’s relatively low geopolitical risk profile through increased exposure to Western Australia, which was recently named by the Fraser Institute’s 2021 Mining Survey as the #1 mining jurisdiction globally, based on their Investment Attractiveness Index.
2022 Revenue Outlook
In 2022, Vox estimates royalty revenues to total C$10,000,000 – C$12,000,000. The Company expects revenues to be weighted towards the second half of the year across multiple operations in Western Australia, following expanded production from the Janet Ivy gold mine in the second half of 2022, first ore production from the Otto Bore gold mine, and potential toll-treatment from the Bulong gold royalty later in 2022.
Kyle Floyd, Chief Executive Officer of Vox, commented:
“We expect that 2022 will be a highly productive year of rapid organic portfolio development, accretive royalty acquisitions and expanded capital markets awareness with a potential secondary listing of Vox common shares on the NASDAQ. The current environment for the Vox portfolio of royalties is the strongest it has been over the nine-year corporate history of Vox.”
Vox Portfolio Highlights
- Vox’s precious metals exposure includes gold, silver, and platinum groups metals (PGMs).
- Strong weighting to precious metals royalties by royalty count (over 70%)
- Robust and growing organic cash-flow
- Track record of investing in royalties with significant growth or expansion catalysts
- Built-in diversification
In the 3rd part of our 3-part series, we’ll examine Vox’s future plans as well as the growth potential for the mining royalties market.
For regular updates, visit www.voxroyalty.com.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.