Royalty company has winning recipe for gold sector success
| | Please find below a special message from our advertising sponsor, Vox Royalty. Golden Opportunities is a free service that gives you valuable investment intelligence all year long at no charge, and advertisements allow us to continue sending these reports.
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Offering leverage upon leverage to rising gold prices,
Vox Royalty (VOX.V; VOXCF.OTCQX) is a company to buy and hold for sector-leading returns.
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Leverage is an often-used word in the metals sector, and with good reason.
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In gold bull markets, the major gold miners often deliver significantly better returns than physical gold.
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Then, when generalist investors start rotating into the sector, they eventually find their way to the junior explorers and developers…and that’s where the big potential for profits really kicks in.
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When gold prices rise, the junior sector has a long history of delivering money-multiplying gains, the kind that can turn a modest investment into a small fortune.
Almost in its own special category of leverage, though, are certain royalty companies.
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And as you’re about to see, one royalty company — Vox Royalty (VOX.V; VOXCF.OTCQX) — offers investors leverage upon leverage.
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It’s a recipe for profits you don’t want to pass up.
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Leverage To Capital Investment
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Vox’s investments offer incredible leverage to third party capital investment.
For example, by some measures, its royalty on the Mt Ida project offers 350:1 leverage.
Vox acquired its Mt Ida royalty from a hearing aid technology company for US$200,000, and the operator just committed to investing A$73 million to build the gold mine there.
Another example is Vox’s Janet Ivy gold royalty.
It offers 100:1 leverage, thanks to an acquisition price of A$4 million and a subsequent A$462 million investment by $32 billion operator Zijin Mining to fund the mine’s Binduli heap leach expansion.
That expansion will make Janet Ivy Australia’s largest gold heap leach mine post construction in late-2022, and Vox has managed to wrangle a nice piece of the cash flow from that production.
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Leverage To Metal In The Ground
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And those examples of leverage to capital investment are just the start of the special kinds of leverage Vox offers investors.
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Consider that it’s also a cheap way to buy access to a lot of metal in the ground.
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Vox’s royalty assets are associated with a total of 35 million ounces of gold-equivalent resources.
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On top of massive leverage to in-the-ground resources, Vox also offers leverage to production.
The company is expected to have more than 10 producing royalty assets by the end of 2023, based on its current royalty portfolio.
Investors looking to get exposure to more than 10 producing mines would need to invest in a US$43 billion mining company such as Newmont, which operates 12 gold mines globally, in Freeport-McMoran, which operates 10 mines and has a US$50 billion market cap, or in much larger royalty companies trading at much higher premiums.
What’s Vox Royalty’s current market cap? A mere C$120 million.
That equates to a share price bargain of the first order, especially compared to those two mining industry behemoths.
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Leverage To Exploration Success
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Then there’s the dozens upon dozens of exploration projects that an investment in Vox Royalty gives you exposure to.
The Managing Director of Silver Mines Limited (ASX:SVL), who is the operator of Vox’s Bowdens silver royalty project — the largest primary silver project in all of Australia — recently told Bloomberg:
“’There are 163 million ounces of silver in identified resources, and there’s potential for that to increase as much as three-fold depending on drilling results.”
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That’s just one project among more than 50 that Vox holds in its portfolio.
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So rather than just depending on one or two projects to make a discovery, Vox and its shareholders will benefit from a discovery anywhere within its portfolio.
Here’s the best part: All that exploration takes place on some other company’s dime, which gives Vox a huge advantage over exploration companies.
Simply put, there’s more upside and less operational risk with a royalty company like Vox.
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With five royalties already producing and another five scheduled to come online by 2023 Vox Royalty stands out among its junior royalty brethren.
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In a sign the market is really heating up for these plays, three royalty companies — Ely Gold, Abitibi Royalties and Golden Valley Mines & Royalties — have been snapped up by larger players and provided lucrative exits for their shareholders.
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With consolidation and M&A tailwinds in mind, the investing proposition for Vox Royalty comes down to…
Buying for Vox’s embedded leverage…
...Holding as management continues to deliver and…
...Winning from the sector-leading returns.
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Warnings and Disclaimers: As you know, every investment entails risk. Golden Opportunities hasn’t researched and cannot assess the suitability of any investments mentioned or advertised by our advertisers. We recommend you conduct your own due diligence and consult with your financial adviser before entering into any type of financial investment. This profile should be viewed as a paid advertisement. The publisher and staff
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Opportunities has paid the publisher for the costs and compensation related to the authorship, overhead, design and distributing this online edition, in the amount of $7,500. The publisher may receive revenue, the amount of which cannot be predetermined, from sales resulting from any accompanying offer. Authors of articles contained herein may have been compensated for their services in preparing such articles.
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