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Vox Royalty rapidly growing its portfolio of low-risk mining assets backed by cash and management experience

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  • Low geo-political risk portfolio
  • Led by team with over 30 years combined of royalty and streaming experience
  • Significant portfolio growth expected

What Vox Royalty Corp does:

Vox Royalty Corp (CVE:VOX) (OTCMKTS:VOXCF) is a rapidly growing royalty company with a portfolio already spanning several continents. It was founded in 2014 and its shares debuted in Toronto in August 2020. 

Toronto-based Vox holds a portfolio of over 50 royalties and streaming assets in Australia, Canada, Peru, Brazil, Mexico, the United States, Madagascar and Nigeria. It has 35 operating partners. Notably, it says three quarters of its assets are located in low-risk Australia.

Its assets are mainly precious metals, at over 50% of its net asset value (NAV) but the portfolio also contains base and battery metals. The company, which already has a market cap of around C$113 million, says since being founded it has since built unique intellectual property (IP), a technically focused transactional team and a global sourcing network.

How is it doing:

Recently, Vox noted that it was “thrilled” by news from partner Thor Explorations Ltd (TSX-V:THX, AIM:THX, OTC:THXPF, FRA:T2X) that on July 30, it had completed the first gold pour from its Segilola gold mine in Nigeria.

The firm said it expected that the process plant ramp-up at Segilola will continue over the next six weeks with commercial production targeted for September this year. At that stage, Vox expects that the Segilola plant will run at a processing rate of 715,000 tonnes per annum, targeting around 85,000 ounces of gold a year.

And on August 16, Vox told investors it had seen “record royalty revenues, record net incomes and unprecedented organic growth” in its second quarter to end-June, 2021.

The company recorded a net income of US$2 million in the three months, swinging from a loss of US$4.1 million in 2Q, 2020, while revenue came in at US$1.3 million for the quarter with inaugural revenues received from the Janet Ivy royalty (Australia). The company also noted it had lifted its production stage royalty assets from just one in May to five by the end of the period.

The same day, Electric Royalties said it had completed a previously announced graphite royalty portfolio acquisition from Vox Royalty (TSX-V:VOX) (the Graphmada and Yalbra royalties), while at the same time strengthening its corporate relationship with Vox.

Such was the strength of the second quarter, that in late July, as reported, Vox doubled its outlook for royalty revenue for 2021 to between C$4 million and C$5 million, up from C$1.7 million to C$2.5 million.

Vox noted then that the two-fold increase in its guidance was based on public forecasts and other disclosures by the third-party owners and operators of its assets. The big uplift since the last company guidance was mainly due to higher royalty-linked production volumes at the Koolyanobbing iron ore operations across the Deception open pit (Australia) and the recently commissioned Altair open-pit (Burkina Faso).

In June, Vox announced a deal wit Titan Minerals Ltd to acquire four Peruvian gold, silver, and copper royalties for a total cash consideration of US$1 million.

The royalty portfolio comprises a 3% gross revenue royalty over the Cart, Colossus, Jaw and Phoebe projects, all of which are operated by Titan. The royalty tenure is located in geological ‘elephant country’ proximate to numerous world-class orebodies.

And in June this year, Vox announced an agreement to acquire a 0.633% NSR royalty on part of Gold Standard Ventures Corp (TSX-V:GSV)’s (TSE:GSV) Railroad-Pinion gold project, which sits on Nevada’s prolific Carlin Trend, for US$1.98 million in cash.

The new royalty covers roughly 35% of the 1.9 million ounces (Moz) resource estimate at South Railroad and provides Vox with immediate annual cash flows of about C$120,000 and, in the medium-term, royalty revenue generation potential of between C$250,000 and C$750,000 per year averaged across the life of mine based on the pre-feasibility study (PFS), Vox estimates.

And in April this year, Vox Royalty announced an update on its 1% NSR royalty on the Pitombeiras vanadium project in Brazil, where operator Jangada Mines PLC (AIM:JAN, FRA:JMU)  delivered an initial Preliminary Economic Assessment (PEA) that estimates US$271.3 million of total gross revenue for over the lifetime of the project. Production at Pitombeiras is targeted to begin in the first quarter of 2022.

As well, the company said it had entered into a binding agreement with Yilgarn Iron Pty Ltd, a subsidiary of Mineral Resources Limited (ASX:MIN), under which Vox will extinguish the outstanding balance of the Koolyanobbing royalty pre-payment through a A$1,782,032 cash payment.

Following payment of the settlement amount, effective January 1, 2021, Vox will earn revenues from the Koolyanobbing royalty that are estimated to range between A$600,000 and A$800,000.

And in March, Vox announced it had entered into a binding agreement to acquire an A$10 per ounce gold royalty on part of the Bullabulling gold project in Western Australia for a total consideration of up to A$2.2 million.

The company said the acquisition provides it with exposure to one of Australia’s largest undeveloped gold projects at the feasibility stage, adding that Bullabulling hosts a total resource estimate of 91.65 million tonnes at 1.04 g/t gold for 3.08 million ounces.

What the analyst says:

Proactive Research analyst Ryan Long published an update on Vox Royalty on June 9 this year following its binding agreement to acquire an effective aggregate 0.633% net smelter returns (NSR) royalty on part of Gold Standard Ventures Corp’s (CVE.GSV) Railroad-Pinion gold project.

Vox is expected to begin realising revenue immediately after the close of the transaction, due June 30, as the royalty has associated advance minimum royalty payments of over C$120,000 per annum, noted Long.

Gold Standard Ventures has already received a term sheet for a US$200mln financing package from an internationally recognised mining investment management firm, to cover the construction of a heap leach operation at the South Railroad portion of the asset. Having this package in place reduces the development risk associated with the royalty Vox is planning to acquire, he added.

“This is a cashflowing royalty right from the acqusition date. The royalty benefits from an advance minimum royalty payment so Vox will receive around C$120,000 before the mine even starts production so during that three or four year development period while Gold Standard are building the mine, Vox is still going to be generating cashflow from this asset.”

Inflection points:

  • More royalty acquisitions
  • News of activity from operating partners
  • Precious metals prices

What the boss says:

On August 16, in a statement accompanying the second quarter results, CEO Kyle Floyd said: “The second quarter of 2021 saw record royalty revenues, record net incomes and unprecedented organic growth for Vox. Management’s confidence in the underlying performance of the Vox royalty portfolio was demonstrated in our doubling of 2021 annual revenue guidance to C$4M – C$5M.

“This quarter saw exceptional organic growth in our portfolio, further strengthened by first gold pour from our Segilola royalty asset on July 30. We are also excited to grow our strategic partnership with Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF). (TSXV: ELEC), following the completion of our initial graphite royalty transaction. Vox shareholders can look forward to a catalyst-rich second half of 2021, with construction activity at multiple royalty assets, the release of multiple engineering studies and over 80,000m partner-funded drilling expected.”

Contact the writer at [email protected]

Story by ProactiveInvestors


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