High-growth precious metals focused royalty company Vox Royalty Corp (TSX-V: VOX) has quickly become the second largest public holder of hard rock mining royalties in Australia.
Vox currently has 37 of its 55 royalties in Australia and has completed more royalty acquisitions in the country over the last five years than any other company in the sector.
The royalty model has generated superior returns over the better part of the last two decades and has become an increasingly popular investment vehicle offering exposure to the mining sector without the risks associated with directly taking a position in mining companies.
Vox typically receives unlimited exploration upside on the properties it holds royalties over and several of its investments have gone on to realise increases of more than 100% in resource and reserve sizes since the initial position was staked.
As a royalty holder, Vox is not obligated to fund the mining operations, with that responsibility left to the operators raise capital to fuel growth.
However, Vox pointed out the royalty interest remains undiluted.
This function works in the favour of the royalty company as continued upside exposure is realised at no further cost.
“Vox is the most notorious royalty acquirer in Australia,” Vox’s executive vice president (Australia) Riaan Esterhuizen told Small Caps.
“Our people (three Australians on our senior executive team), alongside industry leading intellectual property in the form of a proprietary database of 8,000 royalties has given us unique capabilities in sourcing Australian royalties and helping royalty holders unlock value in their non-core assets,” he added.
Current producing royalty assets
Vox holds royalties over five producing operations with that number expected to grow quickly nearing double digits by the end of 2023.
Presently royalty revenues are generated from four (soon to be five) operating mines, including, Janet Ivy, the Koolyanobbing iron ore mine (operated by Mineral Resources, ASX: MIN), and the Higginsville (Dry Creek) gold mine (operated by Karora Resources, TSX: KRR), all three of which are in WA.
Royalties from other regions comprise the Brauna diamond mine in Brazil (Lipari Mineração Ltda); and the Segilola gold project in Nigeria (Thor Explorations, TSX-V: THX), which recently announced the achievement of commercial production.
Significant growth in net asset value and eventually revenue is expected from Vox’s other Australian assets including: Silver Mines’ (ASX: SVL) Bowdens silver project (0.85% gross revenue royalty); Kalamazoo Resources’ (ASX: KZR) Ashburton gold project (1.75% gross revenue royalty, post 250,000oz); Norton Gold Fields’ Bullabulling gold project (A$10/oz royalty, post 100,000oz); Alamos Gold’s (TSE: AGI) Lynn Lake gold project (2% gross proceeds royalty, post initial capital recovery); Gold Standard Ventures’ (TSX: GSV) South Railroad gold project (0.633% net smelter return royalty); and Valore Metals Corp’ (TSX-V: VO) Pedra Branca PGM project (1% net smelter return royalty).
Vox’s royalty portfolio currently comprises a total of 35Moz of gold-equivalent associated resources.
The portfolio is mainly exposed to safe mining jurisdictions with 80% of its royalties covering projects in either Australia, Canada or the USA.
A total 21 of Vox’s assets are at the preliminary economic assessment, feasibility, or care and maintenance stage.
Meanwhile, 27 assets have JORC or NI43-101 compliant resources and three have historical resource estimates.
Approximately 165,000m of drilling is expected to be completed before year-end across 18 of Vox’s royalty assets, based on operator disclosure, with operators actively advancing towards development.