Vox Royalty Corp (TSXV: VOX)(OTCQX: VOXCF) is a precious metals royalty and streaming company with a portfolio of more than 50 streams and royalties in eight jurisdictions and with a database of 8000 royalties to work through. They have been listed on the TSX Venture Exchange since May 2020.
Earlier this month, the company entered into a C$10.4 million agreement with Sibanye Stillwater based in South Africa, which included Vox paying C$1.5 million in stock upfront restricted for 2 years, with the balance being paid upon the achievement of certain production milestones.
Among the royalties within the deal is a 1.0% and 0.704% gross receipts royalty over the Dwaalkop and Messina projects located in Limpopo, South Africa. Among the highlights of the transaction is its exposure to 18 million ounces of palladium, platinum, platinum-rhodium, and gold, as well as detailed feasibility studies for both 2017 and 2020. In total there are 50 million ounces of gold equivalent metals to mine. The royalties held by Vox cover the entire project which has previously been in production and includes areas still to be mined.
Sibanye Stillwater has identified Dwaalkop and Messina as top priorities in its 5-year action plan, so Vox should see their returns and return value to investors in a relatively short period of time. As a by-product of these projects, Sibanye Stillwater is also entering into the “clean tech metal space” as there is an abundance of Nickel which is a by-product of mining these other Platinum Group Metals (PGM).
With this deal, Vox Royalty has the potential to earn between CAD$ 1.3 million and CAD$ 3 million annually for decades and looks forward to even greater returns as the deal unfolds. In consideration of the company’s shareholders’ interests, when asked if it would be more prudent to sell on the deal for a profit, the company’s CEO Kyle Floyd said they would listen to the shareholders and may monetize the transaction if it is the most advantageous and also the will of the shareholders. But for now, the feedback from the invested cohort is that they wish to see more of these types of deals being brokered.
As of April 2022, Vox Royalty expects to announce its Q4 results, which will include information about the Janet Ivy gold mine, which it has purchased for a fraction of the asset value and has had great returns on already. Vox Royalty anticipates more transactions like that of Sibanye Stillwater for the coming year and based on the previous earnings reports production assets are likely to double from the current 5 within 2022.
The C$3.71 price level is currently significant volume support in 2022 with the 52-week high @ 33.7000, the 52-week low @ 31.7400. Important Movings include the 50-day & 200-day moving average which are at 2.7876 & 2.4454 respectively which are both under the Volume Point of Control of 2021.
Vox’s CEO Kyle Floyd reiterated the fact that the company has been executing deals at an extremely high level of value due to the team at Vox being very disciplined and very technical by nature, and this is in comparison to other Royalty & Streaming companies that are paying top dollar for deals and trying to scale up to the $billion size.
Kyle Floyd said investors looking to do comparisons between companies within this sector should look to certain company financial evaluations.
1) What is the Price to Book (PB) Price to book is the Market Value of the Company over how much they have paid for the companies assets.
2) Revenue How much have you paid for that revenue? Most royalty companies are paying such a huge premium upfront that when you start deprecating that ore body against the revenue that it brings in, it quickly becomes a cash-flow wash.
3) Operating Cash Flow Operating Cash Flow = (Net Income+Non Cash Expenses-Increase in Working Capital)
Vox Royalty Corp
Price to Book = 4.87 Revenue = $3.99M
Operating Cash Flow = -106.631K
Gold Royalty Corp
Price to Book = 1.55 Revenue = 191.99K Operating Cash Flow = -11.95M
Metalla Royalty & Streaming Ltd.
Price to Book = 3.07 Revenue = N/A Operating Cash Flow = -1.794M
Nova Royalty Corp
Price to Book = 3.80 Revenue = 188.03K Operating Cash Flow = -3.691M