Vox Royalty - GDX,FNV,RGLD & WPMComparing 3 large precious metals royalty companies and the VanEck Vectors Gold Miners UCITS ETF (GDX), shows how the Gold miners and large-cap royalty firms have a similar relationship within the market.
Recently the price action in Vox Royalty has started to find that it too can benefit from a rising market and good news flow. In the past VOX Royalty has been a more volatile ride but steady progress towards their goal of building a portfolio and bringing value to their shareholders.
A few months ago news of Letters of Intent and Public Offerings was announced. The raising of capital was to purchase royalties and assuming completion of the transactions under LOI and a midpoint of 25 royalties acquired, the Company’s portfolio will consist of seven producing assets (an increase of 75% compared to its four producing or construction-stage assets in 2020). In addition, six of the royalty assets subject to LOIs are currently in a development stage and the remaining 16 royalty assets are in the exploration stage (based on an assumed acquisition of 25 royalties). Assuming 25 of the royalties under LOI are purchased, the Company projects that the underlying royalties are expected to generate between C$3 million and C$7 million of incremental revenue in 2023.
Royalty
Vox Royalty - Strong closeGold has once again held the $1800 level and is relatively strong after the US cpi print.
Precious metals holding their head against transitory inflation and a strengthening US dollar.
Small-cap companies should lead Large caps, so I am keeping an eye on Vox Royalty who finished with a nice green candle and towards the highs of the day.
Tradigview technicals are signalling a buy, getting above the recent swing highs are key to a continuing uptrend, so I am looking for price to now stay above the daily 20 ema.
$1800 for Gold could be major support$1800 for the gold bugs seems to be a Goldilocks number. Recent support has been tested several times but a break out from the recent downtrend at first looked like a false breakout. If we were to take that swing high on this latest bullish move, the consensus target of $2000 should be easily met, even $2100 is doable.
For the likes of a royalty company the fluctuations in the metals is less relevant but a higher precious metal market does bring outside interest back into these assets, so the likes of Vox Royalty will be benefiting from the current appreciation in the yellow metal. They both have shown a swing low buy the dip from mid-June, so some correlation currently on show.
Recent News Flow - Vox Royalty
The Silicon Review
"The company is currently evaluating more than $500 million in royalty deals and should continue to lead the industry in growth as it has for the last two years."
Electric Royalties Ltd.
TORONTO, CANADA – July 5, 2021 – Vox Royalty Corp. (TSXV: VOX) (“Vox” or the “Company”) is pleased to announce that it has entered into definitive transaction documentation with Electric Royalties Ltd. (TSXV: ELEC) (“Electric Royalties”) for Electric Royalties to acquire a portfolio of two graphite royalties from Vox for C$2,850,000 in shares of Electric Royalties and a C$50,000 cash non-refundable exclusivity payment (the “Transaction”), as announced in a prior press release dated May 18, 2021.
Vox has now closed above the 2.56 level and is showing strength with daily swing of higher highs and higher lows. When the share price closes above the 2.88 level, the corrective cycle will have a higher probability of returning to an impulsive move higher.
Tweets on Charts - VOX stoch divergenceJust adding a new chart to show how Twitter and Tradingview are now working well together
Stochastic Divergence On VoxThe price action formed on 12th/13th April 2021 is turning out to be a real demand area, where the professionals were most probably buying into the sell off.
The recent Stochastic divergence as price revisited that demand zone has proven itself to be a decent signal for those willing to get long.
The moving averages are now acting as the roadblocks and a close this week above the daily 50 exponential moving average (ema) will be a catalyst for more retail buying up to the 200 ema.
VOX: another month of exciting royalty operator partner newsflowLooking to see if this positive news flow can get the share price back above June's recent swing high. Positive divergence between price and the stochastics are encouraging but confirmation is needed.
Riaan Esterhuizen, Executive Vice President – Australia stated, “Yet another month of exciting royalty operator
partner newsflow for Vox shareholders relating to discoveries, resource expansions, project financing and ESG best
practice. We are particularly excited by the exceptional Puzzle North drilling results including 60m @ 3g/t and the
Pitombeiras 221% mineral resource increase. Vox investors can look forward to a catalyst-rich H2 2021, including
maiden mineral resources for royalty-linked Puzzle North, McTavish and mining studies for Lynn Lake Nickel and
Pitombeiras.”
Summary of Exploration Updates
• Growth in Puzzle North discovery with exceptional new wide shallow intercepts by Genesis;
• Resource estimate update at Pitombeiras and 221% increase in Measured and Indicated Resources(3);
• Commencement of a modern mining study for the potential restart of mining operations at the Lynn Lake
nickel-copper-cobalt sulphide project by Corazon;
• Capital raising to fund exploration activities at the Kookynie gold project by Metalicity; and
• Partnership for Karora to become one of the world’s first net zero greenhouse gas junior gold mining
companies.
Kookynie (Pre-Feasibility) – Exceptional Growth in Puzzle North Discovery
• Vox holds a A$1/t production royalty on part of the Kookynie gold project1;
• On June 15, 2021, Genesis announced that:
o Reverse circulation drilling continues to confirm the potential to grow all key deposits which form
the Ulysses Gold Project, including the royalty-linked Puzzle North deposit;
o Puzzle North has been expanded with significant new shallow results, which are some of the most
outstanding drilling results ever reported by Genesis in the history of the Ulysses Project, including
the following drilling highlights:
▪ 60m @ 3.03g/t Au from 106m (hole 21USRC855)
▪ 84m @ 1.98g/t Au from 84m (hole 21USRC912)
▪ 40m @ 2.52g/t Au from 44m (hole 21USRC911)
o Management of Genesis commented that:
▪ “The Puzzle North discovery is developing into a significant zone of shallow gold
mineralisation that clearly has the makings of a new open pit mine.”
▪ “The recent drilling may have a significant impact on our development plan – particularly
the exciting shallow results at Puzzle North and the high-grade zone at Admiral deeps –
and we are considering the possibility of including these new elements in our Feasibility
Study.”
• Vox Management Summary: Puzzle North is shaping up to be an exciting gold discovery and operator
guidance suggests that this has the potential to be a new open pit mine, which may be included in the
upcoming Ulysses feasibility study. This exploration royalty acquired in 2020 has growing potential to
generate revenue for Vox shareholders.
Pitombeiras (PEA Stage) – 221% Increase in Measured & Indicated Resources(3)
• Vox holds a 1% net smelter royalty over the Pitombeiras vanadium-iron ore project;
• On June 16, 2021, Jangada announced an updated resource estimate(3) at Pitombeiras North and South
Targets, with the following highlights:
o 221% increase in Measured and Indicated Resources (“M&I”) based on two of eight identified
targets (see technical note 3 below for further detail):
▪ M&I Resources of 5.10Mt at 0.46% V2O5, 9.04% TiO2 and 46.06% of Fe2O3
▪ Inferred Resource of 2.33Mt at 0.41% V2O5, 8.26% TiO2 and 43.18% of Fe2O3
o Exploration potential remains open along strike and at depth - Jangada has established a target to
potentially delineate 10Mt of total mineral resources.
o Drilling programme at Goela target started in late April 2021 and is expected to be concluded by
end of June 2021
o Updated Preliminary Economic Assessment (“PEA”) to be completed in Q3 2021 following the
delivery of the updated mineral resources for both Pitombeiras and Goela, which will include new
metallurgical tests.
• Vox Management Summary: A resource increase of >200% is uncommon in the mining industry and
generally indicates strong momentum in exploration success. The updated Pitombeiras PEA in Q3
2021 will provide guidance for potential royalty revenue that could commence as early as Q1 2022,
based on prior guidance from operator Jangada. The pace of this royalty development continues to
exceed Vox management expectations.
Lynn Lake Nickel (Exploration) – Mining Studies Commence at Lynn Lake Nickel Project
• Vox holds a 2% gross revenue royalty (post initial capital recovery) on part of the Lynn Lake nickel-coppercobalt project (“Lynn Lake”);
• On May 26, 2021, Corazon announced:
o International mining consultants Palaris have been engaged to undertake mining studies for the
potential recommencement of mining operations at Lynn Lake with modern mining and processing
practices - scope of work includes:
▪ Undertaking individual bridging studies in key areas to identify a viable basis of project
design before progressing into future study phases; and
▪ Determining the favoured path forward, utilising “best-fit” mining and processing
techniques to deliver an attractive, long-life mining operation at Lynn Lake.
o Studies are expected to be completed in the following quarter and will feed into more detailed work
designed to advance the development of the Lynn Lake Project.
• Vox Management Summary: Lynn Lake was mined for 24 years until 1976 and was one of North
America’s major nickel operations, producing 206,200t nickel and 107,600t copper. Since 1976 mining
studies undertaken for a potential re-start of the mine have only considered historical mining and
processing methods. This modern mining study accelerates this royalty from exploration to early
development.
Kookynie (Advanced Exploration) – Equity Raise for Advancement of Kookynie Gold Project
• Vox holds a A$1/t ore production royalty (with gold grade escalator1
) on part of the Kookynie gold project
held by Metalicity; and
• On June 15, 2021, Metalicity announced that it has received firm commitments for a strongly supported
A$3,000,000 equity raise. The funds raised will be used to advance the Kookynie gold project, continue to
develop its maiden JORC resource estimate (including royalty-linked McTavish deposit), together with
providing working capital and funding for potential new opportunities.
• Vox Management Summary: This equity raise will fund a maiden resource estimate for the McTavish
gold deposit on Vox’s royalty tenure, which should re-rate the value of this exploration royalty.
Higginsville – Dry Creek (Producing) – Partnership to Become Net Zero Greenhouse Gas Emissions Company
• Vox holds a price-linked production royalty(2) that is equal to A$0.60/gram gold produced at current gold
prices (effective 0.85% net smelter return economics) on part of the Higginsville gold mine held by Karora;
and
• On June 14, 2021, Karora announced a new partnership with The Net Zero Company to commit to and to
implement a pathway to becoming one of the world’s first net zero junior gold mining companies, as follows:
o Karora will work with The Net Zero CompanyTM to seek to ensure its approach to setting and
achieving GHG reduction targets is inline with best practices based on available science to achieve
the aspirations of the Paris Agreement. As the program is further outlined and targets are identified,
updates will be provided to the market.
o Karora's initial focus will be on Scope 1 and 2 emissions reductions, followed by Scope 3 emissions
reductions to work toward its goal of reaching True Net Zero (Scope 1, 2 and 3) status.
o Progress on the GHG reduction program will be included in Karora's inaugural ESG Report which
is expected in early 2022.
• Vox Management Summary: This progressive partnership demonstrates Environmental, Social &
Governance (ESG) best practice by Karora management. The quality, responsibility and track record
of the Karora management team is what Vox looks for in our royalty operating partners.
Vox Royalty Exploration UpdateVox Royalty tells shareholders to look forward to a ‘catalyst-rich’ second half of 2021
www.proactiveinvestors.co.uk
Vox Royalty Corp (CVE:VOX) provided its shareholders with funding and exploration updates from five of its 50 operating partners.
The high-growth precious metals-focused royalty company noted each partner had been busy advancing their respective projects with studies, sampling and drill programs.
Highlights from the exploration update include, the expansion of the Puzzle North discovery at the Australian Ulysses project, a 221% increase in measured and indicated resource at Pitombeiras in Brazil and the commencement of a modern mining study for the potential restart of mining operations at the Lynn Lake nickel-copper-cobalt sulphide project in Canada.
Vox Royalty DYORSpencer Cole, Executive Vice President of North America stated: "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. 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."
www.juniorminingnetwork.com
Transaction Highlights
The acquisition provides exposure to one of Nevada's most rapidly advancing gold development projects at the pre-feasibility stage South Railroad Project ("South Railroad") that hosts a total resource estimate of 85Mt @ 0.7g/t Au, 4.1g/t Ag for 1.856Moz Au, 5.251Moz Ag(2).
The Royalty covers large portions of the Dark Star, Pinion and Jasperoid Wash deposits at South Railroad as well as portions of the POD and Bald Mountain zones in the North Railroad portion ("North Railroad") of Railroad Pinion.
GSV released an updated Pre-Feasibility Study on the Dark Star and Pinion deposits at South Railroad on March 24, 2020 ("PFS")(1), which envisaged an 8-year open pit, heap leach mine life producing a total of 923Koz, with 146Koz per annum expected to be produced in the first 5 years of operation at an all-in sustaining cost ("AISC") of US$707/ounce and initial capex of US$133M.
GSV is expecting to release a feasibility study on South Railroad by 2021 year-end.
Orion Mine Finance ("Orion"), a global alternative investment management firm with approximately US$6.3 billion under management as of 31 December 2020, has agreed to provide GSV with a term sheet to provide up to US$200 million of financing support to GSV, following the satisfaction of mutually agreed milestones, to help finance the construction of South Railroad.
Vox Management Summary: The South Railroad royalty in Nevada covers approximately 35% of the 1.9Moz resource estimate(2) of a rapidly advancing gold project offering near-term development catalysts (2021 feasibility study completion), immediate annual cashflows to Vox of approximately C$120,000 in advance minimum royalty payments and, in the medium-term, royalty revenue generation potential of approximately C$250,000 – C$750,000 per annum averaged across the life of mine based on the PFS(1).
Vox Royalty rapidly grows its portfolio of low-risk mining assets backed by cash and management experience
www.proactiveinvestors.com
Here's Why We're Not Too Worried About Vox Royalty's (CVE:VOX) Cash Burn Situation
ca.finance.yahoo.com
Financial Times
markets.ft.com
What is an NSR, or EIS?bit.ly
What Is a Feasibility Study?
A feasibility study is an analysis that takes all of a project's relevant factors into account—including economic, technical, legal, and scheduling considerations—to ascertain the likelihood of completing the project successfully. Project managers use feasibility studies to discern the pros and cons of undertaking a project before they invest a lot of time and money into it.
What is an NSR?
A Net Smelter Returns ("NSR") royalty is an agreement where the mining company agrees to pay the royalty owner a percentage of the revenue less refining costs.
What is an EIS?
The environmental impact statement (EIS) is a government document that outlines the impact of a proposed project on its surrounding environment. In the United States, these statements are mandated by federal law for certain projects. Environmental impact statements are meant to inform the work and decisions of policymakers and community leaders.
Vox Royalty to purchase new Gold royalty$VOX.CA
Vox Royalty Corp (VOX.CA) Spencer Cole says the Vox Royalty is set to buy, for US$1.98 million in cash, a royalty on part of Gold Standard Ventures Corp's (TSE:GSV) Railroad-Pinion gold project.
Cole says the 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.
Vox Royalty - Vanadium and Gold updatebit.ly ,
A busy year for Vox Royalty in2 021, Vox’s partners announced 80k meter drilling for 2021,
Investors should expect multiple resource updates which will add considerable value to Vox’s current royalties.
Pitombeiras (PEA Stage) – PEA Update and Drilling update
• Vox holds a 1% net smelter royalty over the Pitombeiras vanadium-iron ore project;
• On May 4, 2021, Jangada announced additional drilling results and an updated mineral resource and PEA timing:
◦ 22 drill holes for 1,466m completed with 18 holes intersecting vanadiferous titanomagnetite mineralisation;
◦ Upgraded and expanded Mineral Resource Estimate and revised PEA scheduled for completion in Q3 2021; and
◦ PEA focus is on evaluating a Direct Shipping Ore operation for the export of a saleable magnetite concentrate containing a minimum of 62% Fe and additional credit from 25% contained V2O5.
The Pitombeiras project should be fast-tracked towards productions around Q1 2022.
Battery metals are becoming more important as the world moves towards electrification.
As well as Vanadium Vox across its 50 royalties has several copper projects all well capitalised, moving towards final investment decisions and production.
last year Vox lead the industry in acquisitions, bringing regular organic news flow over the next few months investors should expect new updates on new gold royalties.
youtu.be
Vox Royalty Operating Partners UpdateThis piece from Proactive Investors outlines VOX Royalties developments prior to the news that the company had reported record first-quarter 2021 revenue of US$539,980, as the company received initial revenue from its Koolyanobbing iron ore royalty in Australia.
Vox Royalty Corp (CVE:VOX) (OTCMKTS:VOXCF) updated investors with recent developments from its operating partners, which continue to add organic value to its royalty and stream portfolio.
"We are excited to share another month of highly productive operator newsflow particular to some of our development stage royalties," said Riaan Esterhuizen, the group's executive vice-president for Australia.
READ: Vox to monetize non-core graphite royalties for C$2.9M and partner with Electric Royalties
"These updates include A$20 million raised to fund construction, commencement of early-works, significant statutory permitting progress, over 30,000m of planned drilling on our royalty properties and numerous high-grade gold and silver drilling results," he added.
Regarding the Bulong gold project in Western Australia, where Vox holds a 1% net smelter return (NSR), on May 5, operator Black Cat Syndicate Limited (ASX: BC8) reported it had received firm commitments for an around A$20 million equity raise, to be used for extension and exploration drilling, mill equipment purchases, feasibility studies and other working capital.
Elsewhere, on April 15, 2021, partner Venturex Resources Limited (ASX:VXR) (FRA:IHB) said it had received approval for its Sulphur Springs project management plan, meaning it can now upgrade the 7.6km access road to the Sulphur Springs mine site in the Pilbara, an early critical step.
Contractors have also arrived on site to commence geotechnical and hydrogeological investigations, after which Venturex is planning a 3,565m drill program to upgrade the majority of inferred resources with the open pit shell to the indicated category.
Vox holds a A$2 per tonne production copper-zinc royalty on the Sulphur Springs project and an effective A$0.80/tonne production royalty on the Kangaroo Caves deposit - part of the overall project.
At the feasibility-stage Lynn Lake gold project in Manitoba, Canada, owned by Alamos Gold Inc (TSE:AGI) (NYSE:AGI) (FRA:1AL), where Vox holds a 2% gross gold proceeds royalty on part of the deposit, Alamos continues to advance permitting of the project, with approval of its Environmental Impact Statement expected in mid-2022, following which, Alamos expects to make a construction decision.
Finally, at Silver Mines Ltd's (ASX:SVL) (OTCMKTS:SLVMF) (FRA:SWQ) Bowdens silver-lead-zinc project in Australia, Vox holds a 0.85% gross revenue royalty on the asset and a 1% gross revenue royalty over surrounding regional exploration tenure.
On May 18, this year Silver Mines announced a major expansion of the drilling program at Bowdens - a 30,000m program has started with four rigs, expected to continue to at least the end of 2021.
That news followed high-grade assay results recently returned from one drill hole, which established the Bowdens Silver "Aegean Zone" as a significant target for underground mining scenarios. Intercepts included 8m at a grade of 543 g/t silver from 307m, including 3m at 1,302 g/t silver from 312m.
Vox is a precious metals royalty and streaming company with a portfolio of 50 royalties and streams spanning nine jurisdictions.
Contact the author at giles@proactiveinvestors.com
VOX HighlightsFirst Quarter 2021 Highlights
• Record revenue of $539,980 and gross profit of $479,271 reported for the quarter, with inaugural revenues received from
the Koolyanobbing royalty;
• Increased producing royalty asset count from one asset at May 2020 listing to four assets by Q1 2021 quarter-end;
• Strong balance sheet position at period end, including cash on hand of $10,723,135, working capital of $9,117,150 and
total assets of $29,024,889;
• Completed three portfolio transactions to acquire an additional ten royalties, reaching a total critical mass of 50 royalties
and streams;
• Completed an overnight marketed public offering for aggregate gross proceeds of C$16.85M;
• Subsequent to March 31, 2021:
- Announced a strategic partnership with Electric Royalties Limited (TSX-V: ELEC) and the potential
divestment of two non-core graphite royalties for C$2.9M; and
- The Company appointed PricewaterhouseCoopers LLP as their auditors effective April 30, 2021.
About the Koolyanobbing Royalty
The Koolyanobbing royalty is an uncapped royalty of 2% on the average/tonne Free on Board ("FOB") sales value of iron ore extracted from the Deception Deposit on mining lease M77/1258.
Prior to Vox acquiring the Koolyanobbing royalty from Vonex Limited ("Vonex") in 2020, a historical pre-payment of the royalty in the sum of A$3,000,000 was made by Cliffs Asia Pacific Iron Ore Pty Ltd to Vonex. As previously disclosed in Vox's filing statement dated May 12, 2020, no royalty cash flows are payable to Vox until this pre-payment amount has been exhausted. The outstanding balance as of December 31, 2020, was A$1,782,032.
Vox has entered into a binding agreement with Yilgarn Iron Pty Ltd pursuant to which Vox will extinguish the outstanding balance of the Koolyanobbing pre-payment through a cash payment of A$1,782,032 within five business days from the execution date of the agreement. Following payment of the settlement amount, effective January 1, 2021, Vox will earn royalty revenues from the Koolyanobbing royalty.
Royalty revenues associated with the Koolyanobbing (Deception Pit) royalty over the past two years and forecast for 2021 are as follows:
2019 = $724,198
2020 = $493,769
2021 Forecast = $600,000 – $800,000
The Deception Pit and the Altair Pit to the north are currently being mined at a rate of 1.1Mtpa – 1.3Mtpa. Historical royalty attributable annual production on the Vox royalty tenure (M77/1258, see Figure 2) has averaged 180,000t – 360,000t and Vox management expect this royalty attributable production rate to increase in coming years as mining transitions further north within M77/1258.
For more information on Koolyanobbing, please visit the Mineral Resources website at: www.mineralresources.com.au
VOX to sell x2 graphite royaltiesVox Royalty Corp (CVE:VOX) (OTCMKTS:VOXCF) revealed that it has struck a non-binding letter of intent with Electric Royalties Ltd (CVE:ELEC) (OTCMKTS:ELECF) for it to acquire a portfolio of two graphite royalties from Vox. The rapidly growing Toronto-based royalty company with a portfolio already spanning several continents, said the graphite portfolio consists of a 2.5% gross concentrate sales royalty on graphite production at the Graphmada Graphite Mining Complex in Madagascar; and a 0.75% gross revenue royalty on the Yalbra graphite exploration project in Western Australia. "The total consideration for the transaction is C$2,850,000 in shares of Electric Royalties and a C$50,000 cash non-refundable exclusivity payment," said the company.
Royalty and Streaming - Precious MetalsFranco-Nevada (FNV) is the largest company within the Royalty market.
April 2021,
TORONTO, April 19, 2021 /PRNewswire/ - Franco-Nevada has acquired 14.7% of Vale's outstanding Participating Debentures ("Royalty Debentures") from the Brazilian Development Bank ("BNDES") and the Government of Brazil for $538M. The Royalty Debentures provide holders with life of mine net sales royalties on Vale's Northern and Southeastern Iron Ore Systems and on certain copper and gold operations (together, the "Royalty"). This transaction provides royalty exposure to some of the world's largest and most profitable integrated iron ore mines with reserve weighted mine lives of 30 years and potential for multiple additional decades through reserve growth. The Royalty covers a total of 15.6 thousand square kilometers of mineral properties held by Vale in Brazil, also offering exposure to a number of development properties. The Royalty currently generates an annualized pre-tax cash yield of 10% based on acquisition cost and the most recent semi-annual Royalty Debenture payment. The amount of production capacity subject to the Royalty is expected to grow by approximately +60% by 2026 which would imply an 8% yield on investment at that time, assuming consensus long term iron ore prices.
Vox Royalty (OTCPK:VOXCF)
www.voxroyalty.com
− BULONG (Gold) (Black Cat Syndicate)
Western Australian open pit gold project, mining commencement targeted for Q4 2021 with 1.5Mtpa mill optioned for purchase in Feb-2021
− BRITS (Vanadium) (Bushveld Minerals) Adjacent to producing open pit vanadium mine, royalty covers outcropping Brits deposit with “potential to provide additional feed tonnage for Vametco and, if required, concentrate feed for the Vanchem plant”
− MT IDA (Gold) (Aurenne Ularring)
Western Australian toll-treatment open pit gold operation targeted by former ASX operator Alt Resources Ltd, prior to $32M takeover by Private Equity group Aurenne in 2020
− PITOMBEIRAS (Vanadium) (Jangada Mines) Brazilian direct-ship open pit vanadium project targeting first production in Q1 2022 in PEA
− OTTO BORE (Gold) (Northern Star)
Toll-treatment feed for Thunderbox gold mine
− LYNN LAKE (Gold) (Alamos Gold)
Feasibility stage Canadian project (2018 study, 10 year mine life) in advanced permitting, royalty covers part of MacLellan deposit, +17000m drilling program in 2021, construction decision targeted for 2022
− BOWDENS (Silver) (Silver Mines Ltd)
Feasibility stage project (2018 study, 16 year mine life), largest undeveloped primary silver project in Australia, 275Moz Ag Equivalent resource, progressing final permitting
− GRAPHMADA (Graphite) (Bass Metals)
Graphite mine in production 2019/2020, currently on care & maintenance post COVID19, operator reviewing feasibility on expanded restart scenario
− ASHBURTON (Gold) (Kalamazoo Resources)
Former Northern Star Resources project, 1.65Moz @ 2.5g/t Au resource (Feb-2013), management targeting 2Moz – 3Moz exploration target and “advancing development plans”
− PEDRA BRANCA (PGM) (ValOre Metals)
World class PGM resource in Brazil, mineral resource
of 1.1Moz @ 1.22 g/t PGE+Au Inferred (May 2019),
2018 PEA targeted annual production of 64Koz
PGM+Au over 13 year mine life
− SULPHUR SPRINGS (Cu-Zn-Ag) (Venturex)
Feasibility stage project (2018 study), 10 year mine life targeted, in Western Australia in final stages of permitting & optimization
− MONTANORE (Silver-Copper) (Hecla Mining)
3rd largest silver-copper deposit in USA, permitting update expected in mid-2021, historical 2011 PEA targeted 15 year mine life
Royal Gold (RGLD)
May 2021
DENVER--(BUSINESS WIRE)-- Royal Gold, Inc. (NASDAQ: RGLD) (together with its subsidiaries, “Royal Gold” or the “Company,” “we,” “us,” or “our”) reports net income of $54.0 million, or $0.82 per share, on revenue of $142.6 million in its third quarter of fiscal 2021 ended March 31, 2021 (“third quarter”). Adjusted net income1 was $55.2 million, or $0.84 per share, after excluding discrete tax expense items of $0.04 per share and a $0.03 per share gain on the change in fair value of equity securities, and a reversal of $0.01 per share for the tax effected change in fair value of equity securities.
Third Quarter 2021 Highlights:
Revenue of $142.6 million, an increase of 5% over the prior year quarter
68% of revenue from gold and 12% from silver at average prices of $1,794 per ounce of gold and $26 per ounce of silver
Operating cash flow of $92.2 million
Volume of 79,500 GEOs2
$150 million of debt, net cash3 of $220 million, with available liquidity of $1.2 billion
Paid quarterly dividend of$0.30 per share, a 7% increase over the prior year quarter
Khoemacau construction 92% complete, 80% base silver stream fully funded
Advanced meaningful social initiatives with Pueblo Viejo joint venture and Golden Star
Post-Quarter Events:
Debt free after repayment of credit facility balance on April 1
Khoemacau stream rate increased to 84% of payable silver
Osisko Gold Royalties (OR)
Financial Highlights
Earned 19,960 GEOs1 (Q1 2020 –18,159 GEOs)
Record revenues from royalties and streams of $49.0 million (Q1 2020 – $37.8 million)
Cash margin4 of 94% from royalty and stream interests (Q1 2020 – 91%)
Consolidated cash flows from operating activities of $21.3 million (Q1 2020 – $23.8 million)
Operating cash flows from the royalty and stream segment2 of $36.7 million
Operating cash flows from the mining exploration and development segment3 (i.e. Osisko Development Corp. – TSX-V:ODV) of ($15.4) million
Net earnings attributable to Osisko’s shareholders of $10.6 million, or $0.06 per basic share (Q1 2020 – net loss of $13.3 million, or $0.09 per basic share)
Adjusted earnings5 of $18.4 million, or $0.11 per basic share3 (Q1 2020 – $7.5 million, or $0.05 per basic share)
Adjusted earnings5 from the royalty and stream segment2 of $23.4 million, or $0.14 per basic share5
Adjusted loss5 from the mining exploration and development segment4 of $5.0 million, or $0.03 per basic share5
Sandstorm Gold (SAND) released its Q1 2021 financial results. www.sandstormgold.com
ELY Gold Royalties (OTCQX:ELYGF) announced the acquisition of three patented mining claims within the Tonopah West property. In FY 2020, ELY generated gross revenues of C$4.12 million ($3.34 million). Its cash balance increased to C$7.38 million ($6 million).
GDX, Gold Futures & RoyaltiesWith inflation expectations high and the purchasing power of fiat currency under threat, the traditional store of value is gold. Retail traders have fallen fowl to the manipulation of the yellow metal with the likes of JP Morgan paying $920 million in settlements. New regulations could turn the tide which will allow the price and fundamentals to make sense once again. One way of getting around the inflationary pressures and the price volatility within the precious metals space, is to invest in a royalty company.
Red Cloud Securities likes Vox Royalty, as does Crux Investor.
From Red Cloud:
Vox Royalty Corp. (TSXV:VOX, BUY, C$5.70 target, David A. Talbot) announced it has recognized preliminary record revenue of C$668k (or US$540k) in Q1/21, below our expectations of C$766k. There were no operating costs attached (cash operating margin was 100%) for the quarter as all revenue stemmed from royalties, not streams. Key highlights in the quarter included initial revenue from the Koolyanobbing royalty (uncapped at 2% of FOB sales value royalty) which had iron ore mined at the recently commissioned Altair Pit; increased production from the Hidden Secret deposit, covered by the Dry Creek royalty of Karora Resources (TSX:KRR, BUY, C$9.00 target, David A. Talbot); and rebounding diamond prices in the quarter associated with the Brauna royalty. We believe the company’s revenue should continue to rise going forward, at least through 2023, and expect seven paying royalties by year-end (up from just a single royalty one year ago). FY21 guidance is also forecasted for C$1.7M to C$2.5M, while we forecast about US$2.9M given our higher gold price assumption. With the combination of ongoing royalty acquisitions, and further increases in revenue and earnings as recently acquired royalties come online (read more), we expect the valuation gap between VOX and peers to diminish. VOX currently trades at a P/NAV of 0.7x peers at 1.2x.
Underlying Fundamentals
Inflation has superseded the global pandemic as the primary risk affecting every corner of the globe. The Federal Reserve insists that the inflationary pressures are transient, not pervasive, though the CPI / PCE data shows that CPI has jumped month-on-month at the fastest rate in several years.
Commodity prices have run up to all-time highs as bottlenecks in supply chains create an imbalance to increasing demand on a year-on-year basis, but we have also seen a massive rise in inflationary pressures from the price of energy, particularly through the price of oil. But to the frustration of the retail investor, the price of gold has failed to go parabolic.
The largest economies are looking to spend big on infrastructure, and technologies are pushing towards a global target of net-zero carbon emissions over the next few decades. Gold’s usage within safety-critical technologies and components, fuel cell technology and carbon capture industries are pushing the physical demand at an increased pace with the current industrial/technology markets equating to approximately 7% of total demand.
In the long term, gold serves as a strong strategic component in many portfolios, not only for its diversification benefits but also for its returns. As a store of wealth, protection against diminishing US dollar purchasing power and as a very liquid Tier 1 asset, pension funds and institutional money managers tend to allocate 5%-10% of the portfolio to the precious metal.
Consumer demand driven by the Indian and Chinese markets is a large proponent of gold jewellery, and the Jewellery markets equate to 34% of the total gold demand. As the overall economic outlook and Risk-On markets do well, these consumers purchase more gold. When times are uncertain, as we witnessed in 2020 during the peak of the COVID-19 pandemic, the consumers reduce their purchases of jewellery, but the institutions step into the market to de-risk their portfolio, as Gold is a safe haven portfolio hedge, which decreases the price volatility during the uncertain times.
The New Regulatory Framework
Gold is a High-Quality Liquid Assets and as of 2019, the Bank of International Settlements (BIS) reclassified physical gold as a Tier 1 asset. Gold was previously viewed as a risky asset, classified as a Tier 3 asset, which meant that gold could only be carried on banks’ balance sheet at 50% of the market value for reserve purposes. Since the Great Financial Crash, a lot has been done within the banking system to try and protect the broader economy from banks blowing up, as Lehman Brothers did.
As part of the regulatory framework, banks have been working under Basel 111 rules and the time is coming for some of the rules to be enforced on the gold markets.
These new regulations are scheduled to be introduced for European banks at the end of June 2021 and in the UK from 1 January 2022, affecting all London Bullion Market Association (LBMA) member banks. The risks to the bullion banks are that they trade in an OTC derivatives market, not holding much, if any, allocated gold. Allocated gold is when an investor is allocated gold and is the outright owner of a certain amount of physical bullion.
There will be a requirement for banks holdings to meet a ratio limit between tangible assets and unallocated assets. The ratio is named Required Stable Funding and the crux of the matter is that if the bullion banks can no longer trade their paper and unallocated gold without holding physical allocated assets, the derivatives market could collapse. The 3 parts of the Basel 111 regulations that affect the paper gold markets are:
• The Available Stable Funding factor (ASF) is applied to the sources of a bank’s funding on the liability side of its balance sheet. Depending on the liability (shareholders’ equity, customer deposits, interbank loans etc.) they are multiplied by a factor, from 100% for the most stable forms of funding, such as Tier 1 bank equity, to 0% for the least stable. Being on their balance sheets, unallocated gold owed to a bank’s deposit customers is to be given a Basel III ASF of 0%, which means it will not be permitted to be a source of funding for any balance sheet assets, which must therefore be funded from other liabilities.
• The Required stable funding (RSF) is to be applied to a bank’s assets. Unallocated gold positions are to be valued at 85% of their market value. Note that allocated gold, being held in custody, is not on bank balance sheets (except where the bank actually owns physical gold in its own right) and is therefore not involved in the calculation.
• The Net stable funding requirement (NSFR) is the ASF divided by the RSF and must be at least 100% at all times.
The bullish scenario is that LBMA member banks have to find a lot of physical gold, increasing the demand and pushing up the price. The second bullish scenario for gold stackers is that with the removal of the paper gold positions that suppressed the gold price from inflating against the M2 money supply / global fiat currency expansion, the physical gold price could adjust towards higher prices in line with inflation.
Technicals
From the chart, we can deduce that the futures market is currently breaking higher and the miners are too. It is conceivable that as physical gold reaches $2k t/oz prices and beyond what is likely to happen in the derivatives markets, a lot of investors will pile in, making the current price of Vox Royalty look very cheap for such a fast-growth company.
GDX higher into June regulatory shake up for LBMAJune 2021: May see the beginning of the end of the London Bullion Market Association
The London Bullion Market Association (now known simply as LBMA), established in 1987, is the international trade association representing the global Over The Counter (OTC) bullion market, and defines itself as "the global authority on precious metals".
There will be a requirement for banks holdings to meet a ratio limit between tangible assets and unallocated assets. The ratio is named Required Stable Funding and the crux of the matter is that if the bullion banks can no longer trade their paper and unallocated gold without holding physical allocated assets, the derivatives market could collapse. The 3 parts of the Basel 111 regulations that affect the paper gold markets are:
• The Available Stable Funding factor (ASF) is applied to the sources of a bank’s funding on the liability side of its balance sheet. Depending on the liability (shareholders’ equity, customer deposits, interbank loans etc.) they are multiplied by a factor, from 100% for the most stable forms of funding, such as Tier 1 bank equity, to 0% for the least stable. Being on their balance sheets, unallocated gold owed to a bank’s deposit customers is to be given a Basel III ASF of 0%, which means it will not be permitted to be a source of funding for any balance sheet assets, which must therefore be funded from other liabilities.
• The Required stable funding (RSF) is to be applied to a bank’s assets. Unallocated gold positions are to be valued at 85% of their market value. Note that allocated gold, being held in custody, is not on bank balance sheets (except where the bank actually owns physical gold in its own right) and is therefore not involved in the calculation.
• The Net stable funding requirement (NSFR) is the ASF divided by the RSF and must be at least 100% at all times.
Vox Royalty - Up 30%Vox Royalty is now up >30% for the month. Would be great to see gold get to $2k oz and see where that leads the precious metals-focused royalty firm.
ELY - ELY GOLD ROYALTIES INCExtract from a report on Seeking Alpha:
Out of the 20 followed companies, 16 experienced a share price growth in April. The best result, a 40.85% growth, was recorded by ELY Gold Royalties (OTCQX:ELYGF). The majority of its growth was recorded after April 23; however, the catalyst is hard to identify, as there was no company-specific news and also the gold price was relatively stable around this date. A more than 26% growth was recorded by Great Bear Royalties. The company is freshly established and it started trading on TSX only on April 5. Its only asset is a 2% NSR royalty on Great Bear Resources' (OTCQX:GTBDF) Dixie Project. Double-digit gains were recorded also by Sailfish Royalty (OTCQX:SROYF) and Nomad Royalty (OTCQX:NSRXF). On the other hand, the worst performance was recorded by three of the newly-covered companies, namely Star Royalties, Empress Royalty, and Trident Royalties. Their share prices declined by 6.52%, 5.56%, and 4.08% respectively.
Vox Royalty Announces Record Revenue in Q1 2021GEORGE TOWN, CAYMAN ISLANDS – May 4, 2021 – Vox Royalty Corp. (TSXV: VOX) (“Vox” or the “Company”) is
pleased to announce that the Company has realized record preliminary revenue of C$668,600 (US$540,000)
(1) for the three-month period ended March 31, 2021. All preliminary revenues were derived from royalties, not streams, as such, the cash operating
margin(1) was 100% for the quarter. During the quarter, the Company recognized inaugural royalty revenue from the Koolyanobbing
royalty, which is an uncapped 2% Free on Board sales value royalty from iron ore mined from the recently commissioned Altair
Pit and a portion of the Deception Pit.
Quarterly revenue benefitted from increased royalty-linked production by Mineral Resources Limited (ASX: MIN) and record iron
ore prices at Koolyanobbing, increased production by Karora Resources Inc. (TSX: KRR) from the Hidden Secret deposit at
Higginsville covered by the Dry Creek royalty and rebounding quarterly diamond prices associated with the Brauna royalty.
Kyle Floyd, Chief Executive Officer stated: “Record quarterly revenue for Q1 represents the start of Vox’s anticipated revenue
growth through 2023 as numerous royalty assets are expected to commence production. The Company’s preliminary quarterly
revenue is in line with previously announced 2021 full-year revenue guidance of C$1.7M to C$2.5M. Vox’s organic revenue growth
is a product of the Company’s stated strategy of acquiring high quality, attractively priced royalties many of which are near term
production opportunities. Vox held one producing royalty in May 2020 and anticipates finishing 2021 with seven producing assets
based on its current portfolio of 50 royalties.”
Vox is a growth precious metals royalty and streaming company with a portfolio of 50 royalties and streams spanning nine
jurisdictions. The Company was established in 2014 and has since built unique intellectual property, a technically focused
transactional team and a global sourcing network which has allowed Vox to become the fastest growing company in the royalty
sector. Since the beginning of 2019, Vox has announced over 20 separate transactions to acquire over 45 royalties.
US10Y yields and Gold Miners (GDX)Gold is an inflation hedge, so expect to see XAUUSD rising as the CPI and PCE data prints show consistent prints above 2% on average for the year.
US10 year yields steepen against the 2-year yield as short-term inflation expectations are crushed by QE and low-interest rates but medium-term inflation risks are starting to show their presence in the cost of commodities, materials, and rising wages. The Fed is adamant that the current signs of inflation will be transitory and as the base effects from last year fall out of the year-on-year data readings the inflationary pressures will ease.
Gold producers on the COT report had trimmed their short positions from the beginning of 2021 until April but have started selling more again as the price of Gold bounced off $1700, which make me feel that the range between $1700 to $1900 is here to stay for a while longer.
One way to try and capitalise on the price of Gold without the need for it to break $2k necessarily is to invest in a Royalty or Streaming company. With prices for mining output already set, the Royalty companies can still make money even when the gold price is falling. They don't operate mines themselves, and so the huge infrastructure and operating costs do not fall to them.
VOX Royalty - Rising Trend LineOn the 26th of April 2021, the market received notification on earnings for VOX.
Vox Royalty:
FY Recorded revenue of $126,227, with inaugural revenues from the Brauna royalty commencing in Q3 2020 and from the Higginsville royalty commencing in Q4 2020.
The price has declined marginally and is likely to test the rising trendline this week on any further declines. If we test the trend line that will be the 3rd test and a significant indication of whether their are buyers still luriking.
