Interview with Spencer Cole, CIO of Vox Royalty Corp.
Our previous interview: https://www.cruxinvestor.com/posts/vox-royalty-tsxvoxr-quality-portfolio-and-disciplined-strategy-drive-cash-flow-growth-5077
Recording date: 19th June 2024
Vox Royalty Corp (NASDAQ/TSX: VOXR) presents a compelling investment opportunity in the mining royalty sector, offering exposure to precious metals growth with a focus on risk-adjusted returns. As a relatively young player in the $70 billion mining royalty industry, Vox has positioned itself uniquely by emphasizing assets in stable jurisdictions and near-term production potential.
Founded a decade ago, Vox has demonstrated impressive growth, tripling its revenue over the past three years. The company's portfolio consists of 70 royalties, with approximately 80% weighted towards Australia, the United States, and Canada. This geographic focus underscores Vox's commitment to operating in politically stable regions with established mining industries.
Vox's strategy centers on acquiring royalties on projects expected to commence production within six months to three years. This approach aims to minimize the gap between investment and cash flow generation, a key consideration for investors seeking near-term returns. The company's recent acquisition of Australian gold royalties, including the Castle Hill project being developed by Evolution Mining, exemplifies this strategy. Set to begin production in early 2026, Castle Hill is expected to significantly boost Vox's revenue stream.
Despite its strong growth trajectory and strategic positioning, Vox faces challenges in market perception, particularly among North American investors less familiar with Australian mining operators. This perception gap has led to a potential undervaluation of Vox's Australian assets, presenting an opportunity for investors as these assets come online and generate cash flow.
The company's management team, owning a significant portion of Vox (up to 20% including the board), aligns closely with shareholder interests. This alignment is reflected in their approach to capital allocation, including the recent securing of a $25 million credit facility to fund growth without diluting existing shareholders.
Vox offers several attractive features: Focus on risk-adjusted returns in stable jurisdictions, a proven growth track record with clear path for future expansion, potential for value realization as underappreciated Australian assets come online, management alignment through significant ownership and exposure to favorable gold market dynamics.
Investors should still consider potential risks, including commodity price volatility and operational challenges at underlying mining projects. The competitive nature of the royalty sector and the company's relatively small size compared to industry giants are additional factors to weigh.
In conclusion, Vox Royalty represents an intriguing option for investors seeking exposure to the mining sector with a focus on managed risk and growth potential. As the company continues to execute its strategy and bring more assets into production, it has the potential to deliver significant value to shareholders.
View Vox Royalty's company profile: https://www.cruxinvestor.com/companies/vox-royalty
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What is Company Interviews?
An insight into junior mining and opportunities to invest.
Company Interviews, a Crux Investor show, exists to cut through the jargon, bias and bluster.
Matthew Gordon, and guest host Merlin Marr-Johnson hone in on the important factors that indicate a company's strong footing for growth and success.