| Dear Fellow Investor,
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| Junior mining companies, including royalty companies, announce new deals all the time.
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| But rarely does one see a deal as impactful as one that recently crossed the wires.
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| Vox Royalty’s (VOXR.TO; VOXR.Nasdaq) pick-up of nine advanced development and exploration-stage royalties for approximately $4 million brings the company’s portfolio to almost 70 royalties.
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| The sheer number of royalties in this deal is impressive.
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But — as you’re about to see — it is the potential future cash flow from these new acquisitions that will be truly transformational for the company once realized.
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| One Royalty Alone Could Deliver
$5 Million In Annual Cash Flow
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| Vox was already a unique player in the precious metals royalty space.
Consider that, with the new additions, Vox now controls 46 royalties in the mining-friendly jurisdiction of Australia alone.
And just the two leading royalties in this latest portfolio acquisition give Vox exposure to approximately 50,000 more gold-equivalent ounces under royalty coverage (assuming long-term, broker-consensus commodity prices).
At long-term consensus prices, these 50,000 gold-equivalent ounces would equate to over $80 million of potential royalty-linked revenue, notwithstanding that Vox acquired the portfolio for approximately $4 million.
The company has already demonstrated royalty revenue growth, with six royalty projects currently generating cash flow. But these latest additions are expected to add meaningful near- and long-term cash flow to Vox’s aggressive growth profile.
The anticipated near-term cash flow stems from the production potential at the Red Hill brownfields gold discovery in Western Australia.
Australian major, Northern Star Resources (A$12 billion market capitalization) is the project owner. The Kanowna Belle and Kalgoorlie Superpit Fimiston mills are both located within 20 kilometers trucking distance from Red Hill.
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| Vox now has a 4% Gross Revenue Royalty on the Red Hill mining lease M27/57. The company estimates M27/57 covers the majority of the 2021 resource discovery at Red Hill.
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| The inferred mineral resource currently stands at 1.2 million ounces of gold (32.4 million tonnes at 1.1 g/t) that could be processed at either of the nearby mills, subject to receipt of all regulatory approvals to re-open the mine.
The Red Hill royalty generated A$7.1 million of revenue for the royalty holder between 2003 and 2008 when gold prices were between $400/oz. to $700/oz.
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| Vox estimates that Red Hill has the potential to generate more than $5 million of revenue per year for up to 10 years.
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| We believe that this acquisition has the potential to provide a big boost to the company’s future revenue...which in turn may have meaningful implications for its market valuation.
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| Direct-Ship Copper Ore Possibility Could
Also Result In More Near-Term Cash Flow
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| Also, a possible contributor to future revenue in the near-term is the potential for the Horseshoe Lights 3% Net Smelter Returns copper-gold royalty to direct-ship copper ore.
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| There are historic stockpiles that could be accessed quickly on the project, where a historic 2014 scoping study by ASX-listed operator Horseshoe Metals targeted at a one-million-tonnes per year open-pit mining operation.
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| The historical 2014 scoping study suggested that, if recommissioned, the Horseshoe Lights operation could produce 47,375 tonnes of recovered copper, 12,730 ounces of gold and 271,101 ounces of silver over a six-year mine life.
The historic mine at Horseshoe Lights operated up until 1994 and produced 316,000 ounces of gold and 55,000 tonnes of copper, including over 110,000 tonnes of high grade direct-shipping ore that graded between 20%-30% copper.
To put these very high historical copper grades of 20%-30% into perspective, most current open pit copper mines are mining between 0.5%-1.0% copper.
Again, the remnant direct-ship ore stockpiles could provide early cash flow for Horseshoe Metals and Vox, with longer-term prospects for a heap-leach operation on the main historical resource estimate at Horseshoe Lights.
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| On Pace To Generate $11-$13 Million
In Revenue In 2023
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| The company appears to be on track to deliver yet another record year in revenue in 2023.
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| Vox has grown from $0.1 million of revenue in 2020 to $9.7 million of royalty receipts in 2022.
Based on quarterly earnings releases and company guidance, Vox is on pace to generate between $11 million and $13 million in revenue in 2023.
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| Over the next two to three years, Vox management believes that it could also add royalty revenues from potential production from the Mt Ida, Puzzle North, Brits and Limpopo projects.
Over the next three to five years, the company believes that the Bowdens, Sulphur Springs, South Railroad, Goldlund and Lynn Lake projects have the potential to come into production and deliver royalty revenue to Vox.
The vast majority of these projects are in mining-friendly jurisdictions, with over 80% of Vox’s total royalties in Australia, Canada and the U.S.
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| The Royalty Company To Watch Closely
In This Oversold Gold Market
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| Royalty companies are a unique way to play the mining space.
In essence, they’re built to receive revenue without the same operational risks, operating costs and hassles of typical mining operators...and to diversify their exposure across numerous projects.
That’s why, once these companies reach a level of consistent revenue, the market has often valued them at higher multiples than traditional mining companies.
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| And that’s precisely why, when you step back and look at the opportunity with Vox Royalty, it stands out from the crowd.
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| As this latest transaction makes clear, management is determined to grow the overall portfolio and add assets that can contribute to near- and long-term cash flow.
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| CLICK HERE
To Learn More about Vox Royalty Corp.
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