Vox Royalty Corp (CVE:VOX) (OTCMKTS:VOXCF) is set to buy, for US$1.98 million in cash, a royalty on part of Gold Standard Ventures Corp's (TSE:GSV) (NYSEAMERICAN:GSV) (FRA:6AZ) Railroad-Pinion gold project, which sits on the prolific Carlin Trend in Nevada, and is rapidly advancing towards the completion of a feasibility study and a subsequent construction decision.
The company has struck binding agreements with a group of private individuals on the acquisition of a 0.633% net smelter returns (NSR) royalty on the so-called South Railroad part of the project, which comes with advance minimum royalty payments of more than C$120,000 per year.
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The new royalty covers around 35% of the 1.9 million ounces (Moz) resource estimate at South Railroad and provides Vox with immediate annual cashflows of around C$120,000 and, in the medium-term, royalty revenue generation potential of around between C$250,000 and C$750,000 per year averaged across the life of mine based on the pre-feasibility study (PFS), noted Vox.
"Vox is excited to announce its first Nevada gold royalty acquisition over a Carlin Trend project that is rapidly advancing towards feasibility completion in 2021 and a subsequent construction decision," said Spencer Cole, Vox's executive vice-president of North America.
"Vox acquired this royalty from a family associated with the Nevada ranch where the South Railroad project is located.
"The royalty covers approximately 35% of the resource base at South Railroad and most of GSV's ongoing expansion drilling at Dark Star, Pinion and Jasperoid Wash. We look forward to further value being unlocked for Vox shareholders as the South Railroad project is rapidly progressed towards production."
Gold Standard Ventures (GSV) released an updated pre-feasibility study (PFS) on the Dark Star and Pinion deposits at South Railroad in March 2020, which envisaged an eight-year open pit, heap leach mine life producing a total of 923,000 ounces, with 146,000 ounces a year expected to be generated in the first five years of operation at an all-in-sustaining costs (AISC) of US$707 per ounce.
The pre-tax net present value (NPV) was pegged at US$331.4 million at a 5% discount rate, with an initial capex of US$133 million. GSV is expecting to release a feasibility study on South Railroad by the end of 2021.
Investment management group Orion Mine Finance has agreed to provide GSV with a term sheet to provide up to US$200 million of financing support, following the satisfaction of mutually agreed milestones, to help finance the construction of South Railroad.
Railroad Pinion has two adjacent parts - North Railroad, which includes the POD, Sweet Hollow and North Bullion deposits and South Railroad, which includes the Dark Star, Pinion and Jasperoid Wash deposits.
Vox Royalty holds a portfolio of 50 royalties and streams across nine jurisdictions
Contact the author at giles@proactiveinvestors.com