Vox Royalty Corp (TSX-V:VOX) said that it recently added three new royalties operated by large-cap operators to its growing portfolio of "under the radar" third-party royalties linked to top-tier mining projects.
The Toronto-based precious metals royalty company boasts a portfolio of over 50 royalty assets located primarily in Australia, Canada and the US.
Vox said it has added a producing royalty over the Wonmunna iron ore mine in Western Australia and two platinum group metals royalties over the Limpopo project in South Africa.
In acquiring these royalties, Vox said it acquired “significant, immediate, incremental revenue at Wonmunna,” which is expected to generate substantial value for Vox shareholders. The move also gives Vox exposure to a multimillion-ounce generational platinum group metals orebody that is actively being reviewed for a near-term mine restart by Sibanye Stillwater.
Investors have few options when seeking investments that are positively correlated with inflation, but insulated from some of the input cost risks associated with inflation, said Vox. However, Vox said it was built to offer investors “leveraged upside to rising commodity prices” without exposure to the operational risks, or rising operating costs of mining companies.
Vox essentially operates a scalable capital light business, in one of the most capital-intensive industries, shielded from operating cost obligations.
In a statement, Vox founder CEO Kyle Floyd said: "The mining royalty market is often overlooked in the world of commodity-linked equities but can be a possible solution to inflation-linked investment worries.”
He added: “Over the last twenty years, major royalty companies have typically performed better than equity market indices, traditional mining companies, physical metals, and the S&P 500. This is why we created Vox: to be the ‘go-to company' for investors in times of high inflation."
Wonmunna Iron Ore Mine
With the recent acquisition of the producing Wonmunna iron ore royalty, Vox now has exposure to a large iron ore resource, in the world's largest iron ore production region. The royalty currently entitles Vox to 1.5% of revenue from the producing mine, operated by the $11 billion Mineral Resources Ltd (ASX:MIN).
Vox gets the benefit of meaningful expected cash flow generated from the production of iron ore at Wonmunna without being exposed to the operating costs to produce the valuable ore. Vox will also benefit from expected increases in production, future new discoveries, and any potential increases in iron ore prices.
The Limpopo royalties
Following its April 2022 acquisition of the Limpopo platinum-group metals royalties, Vox now holds one of the largest royalty company exposures by resource size to green technology critical metals, including rhodium, copper and nickel, that will be needed for the next generation of energy markets, such as hydrogen fuel cells.
"The intensity of platinum and palladium in hydrogen fuel cells is significantly more than in current internal combustion engines. With much of the production of platinum and palladium coming from Russia, these critical metals have potential to see a positive upward cycle, which would make this Limpopo royalty even more valuable," said Floyd.
"Investors in Vox have exposure to one of the largest platinum, palladium, and gold deposits in the world."
For its second quarter ended June 30, 2022, Vox reported record royalty receipts of $3.17 million, a 115% sequential increase from the first quarter this year, and a record gross profit of $1.44 million.
"We are excited about the next chapter of the company's corporate development - a period of expanded investor awareness and rapid expected organic growth from 6 to 10 producing assets by late 2023,” said Floyd.
Investors can read about comprehensive catalysts for the company here.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive