Vox Royalty (TSX-V:VOX) Corp has acquired two royalties, which cover the Limpopo PGM project in South Africa operated by Sibanye Stillwater Ltd, the world's largest primary producer of platinum.
The deal, worth C$10.4 million, struck with a private company, gives Vox exposure to a "fully constructed world-class 18 million ounce PGM resource with near-term restart potential from a US$10 billion operator", noted Riaan Esterhuizen, Vox's executive president of Australia.
"With mine infrastructure already in place, feasibility studies underway and a financially strong operating partner in Sibanye-Stillwater, we see tremendous upside for these assets.
"Based on the existing resource alone and not considering the upside from the fact that the resource is open at depth, we see this asset as holding potential to become a high-tonnage, multi-decade operation," he added.
Limpopo, on the Bushveld complex, was last mined in 2009 via the existing Baobab shaft and concentrator, which are both in place and subject to ongoing re-opening feasibility studies by Sibanye.
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The Baobab operation produced between 2002(3) and 2009 and reached a maximum extraction rate of 75,000 tonnes per month (tpm) before being placed on care and maintenance in 2009.
Notably, the deal also significantly increases Vox's exposure to 'battery metals' such as rhodium, copper and nickel. In 2007, Lonmin Plc (LSE:LMI) produced 73,600 ounces of PGMs, along with 752 million tons (MT) of nickel and 513 million tons (MT) of copper at the Limpopo project.
The royalties include a 1% gross receipts royalty over the Dwaalkop project and a 0.704% gross receipts royalty over the Messina project, which collectively cover the full extent of Limpopo.
Under the terms of the purchase and sale agreement, Vox will issue shares worth C$1.5 million upon closing and make additional cash payments or issue additional Vox Shares (at Vox's sole election) upon achievement of certain production milestones.
Closing of the transaction is expected in the first quarter of 2022.
Vox was established in 2014 and has a portfolio of over 50 royalties and streams spanning eight jurisdictions.
Contact the author at giles@proactiveinvestors.com