Vox Royalty’s Winning Formula: High-Return Royalties, Growing Dividends & Global Optionality

• VOX Royalty focuses on acquiring legacy mining royalties 2-5 years from production, prioritizing returns over specific commodities while maintaining geographic flexibility across multiple metals.
• The company acquired the producing Kanmantoo copper royalty in South Australia for $12 million and holds the Red Hill gold royalty expected to generate $15+ million annually when Northern Star's expansion completes.
• VOX increased 2025 revenue guidance from $12-14 million to $13-15 million, achieved record positive free cash flow in 2024, and maintains industry-leading return on invested capital over five years.
• The company now operates eight producing assets across nine ore bodies, transitioning from iron ore dominance to increased gold and copper exposure, with four new gold deposits coming online recently.
• VOX maintains a strong balance sheet with $9 million cash against $11.7 million debt, uses 6.8% cost debt financing for acquisitions, and pays a growing dividend while targeting inclusion in major indices like GDXJ.

VOX Royalty Corp has emerged as a distinctive player in the mining royalty sector, differentiating itself through a returns-focused approach that prioritizes fundamental value over commodity-specific strategies. In a recent interview, CEO and founder Kyle Floyd outlined the company's strategic evolution from a single producing asset five years ago to a diversified portfolio of eight producing assets across nine ore bodies, while maintaining what he describes as industry-leading return on invested capital.

Strategic Philosophy: Returns Over Commodities

Unlike many royalty companies that focus on specific metals or geographic regions, VOX Royalty positions itself as "agnostic" regarding commodity exposure, instead emphasizing value creation and per-share compounding growth. Floyd explains this approach stems from two fundamental principles that have historically driven the royalty industry: "One was cash flow arbitrage and the other is optionality."

However, VOX's strategy diverges from traditional approaches by refusing to buy assets at premium valuations solely for their optionality. 

"We're not buying assets at one-times NAV that there's plenty of other groups that are in the market that go and buy assets at those types of valuations and then ultimately hope to benefit from the optionality attached to those assets. We want to benefit from all that as well, but we need to see value on the front end in terms of what we're buying and the ultimate net asset value attached to that asset as it stands today."

Acquisition Strategy and Due Diligence Process

VOX's acquisition strategy focuses on assets ranging from a quarter-year to five years from production, allowing the company to take calculated development risks while securing favorable pricing with sellers. The company has developed what Floyd characterizes as a "three-legged stool" for identifying value opportunities.

The first component involves a technical team continuously scouring global mining developments for projects with clear pathways to production success. The second element is VOX's proprietary royalty database, which continues expanding its capabilities daily. The third crucial aspect involves building relationships with royalty owners to facilitate transactions.

"It takes each one of those steps and each leg of that stool, proverbially speaking, for us to be successful. We work on enhancing and refining those capabilities to do that successfully every single day, and that continues to improve, and the evidence of that is that we're going to continue to find really creative opportunities that drive shareholder value."

Case Studies: Red Hill and Kanmantoo 

Floyd highlighted two recent acquisitions that exemplify VOX's strategy across different development timelines. The Red Hill royalty, acquired in September 2023, represents a longer-term opportunity within Northern Star's expanding Kalgoorlie Consolidated Gold Mines operation in Western Australia.

"Red Hill in of itself is a very significant asset for us. It's a meaningful asset for Northern Star, but it is a piece of the mill feed to what is going to be ultimately a 27 million ton per annum super pit operation or KCGM operation." 

The company expects this royalty to generate "$15 million plus per annum" once Northern Star completes its $1.5 billion mill expansion, likely within 18-24 months.

At the other end of the timeline spectrum, VOX recently acquired the Kanmantoo copper royalty for $12 million, representing approximately 20% of the company's deployed capital. This producing asset in South Australia appealed to VOX due to the quality of the operating team and significant expansion potential.

"We think there's immense potential both for mine life extension through resource conversion but also near-term satellite deposits that can really fill the mill which is operating between 40 and 60% of capacity." 

The operator has planned a 60,000-meter drill program and is advancing underground ore source development to increase mill utilization.

Interview with CEO Kyle Floyd

Financial Performance and Capital Structure

VOX has demonstrated strong financial performance, with 2024 marking a record year for positive free cash flow generation. The company increased its 2025 revenue guidance from $12-14 million to $13-15 million, driven by four new gold deposits coming online and the addition of the Kanmantoo copper royalty.

The company maintains a healthy capital structure with nearly $9 million in cash against $11.7 million in outstanding debt, approaching net-zero debt levels. VOX has secured debt financing at 6.8% cost of capital through a facility with Bank of Montreal, significantly lower than the estimated 20% cost of equity capital the company faced as a micro-cap entity several years ago.

"That 6.8% really increases our operating margin and allows us to expand the operating leverage of the firm significantly for our shareholders."

This lower cost of capital enables more accretive acquisitions while maintaining financial flexibility.

Portfolio Diversification and Geographic Focus

VOX's portfolio has evolved significantly from its early dependence on iron ore revenues to a more diversified mix emphasizing gold and copper exposure. The company now operates across multiple commodities, with eight producing assets generating revenue from various metals.

Despite this diversification, VOX maintains a strong preference for Australian, particularly Western Australian, operations. Floyd believes 

"Australia and specifically Western Australia is the best mining jurisdiction you can possibly have exposure to as a royalty company." 

This geographic concentration reflects the company's risk assessment philosophy, as Floyd emphasizes achieving returns with lower per-unit risk compared to industry peers.

The company has been somewhat insulated from iron ore price volatility, which declined over 20% in recent periods, through the addition of four new gold deposits and the Kanmantoo copper acquisition, maintaining revenue stability while positioning for growth.

Dividend Policy and Capital Allocation

VOX maintains a disciplined approach to dividend policy, targeting sustainable growth rather than fixed payout ratios. The company has increased its dividend for three consecutive years at approximately 7% annual growth rates, while cash flow per share has compounded at over 60% annually.

"The way that we think about our business is we will grow our cash flow per share much more at a higher growth rate than we will grow our dividend growth rate."

This strategy prioritizes reinvestment in accretive acquisitions while maintaining meaningful dividend payments for shareholders.

Floyd indicated that dividend suspension would be unlikely, though the company remains flexible based on value maximization opportunities. 

"How we make decisions is purely based on what do we think increases and maximizes value for our shareholders."

The Investment Thesis for VOX Royalty

• Proven Value Creation Strategy: VOX has delivered industry-leading return on invested capital over five years while maintaining lower per-unit risk through disciplined asset selection focused on fundamental value rather than speculative optionality.
• Scalable Growth Platform: The company has evolved from one producing asset to eight producing assets across nine ore bodies, with a robust pipeline and enhanced capital structure enabling larger acquisitions through 6.8% cost debt financing.
• Geographic and Operational Advantages: Concentrated exposure to Western Australia provides access to the world's premier mining jurisdiction with favorable regulatory environment, skilled workforce, and established infrastructure supporting long-term asset performance.
• Diversified Revenue Base: Portfolio spans multiple commodities (gold, copper, iron ore) across various development stages, reducing single-asset dependence while capturing upside from different commodity cycles and operational improvements.
• Strong Financial Foundation: Company maintains near-zero net debt, generates positive free cash flow, pays growing dividends, and recently achieved Russell 2000 index inclusion, indicating institutional recognition and improved liquidity.
• Experienced Management Team: Leadership demonstrates disciplined capital allocation, technical expertise in asset evaluation, and established relationships enabling access to proprietary deal flow in competitive royalty acquisition market.

Macro-Thematic Analysis

The current mining royalty landscape presents compelling opportunities driven by elevated commodity prices, particularly gold reaching record levels in major mining currencies. Western Australia has emerged as a beneficiary of this environment, with gold exceeding $5,000 per ounce in Australian dollars, creating exceptional operating margins for local producers and facilitating capital access for development projects.

This macro backdrop coincides with a structural shift in the royalty sector, where traditional cash flow arbitrage strategies face valuation pressures as asset prices have expanded. Companies capable of identifying mispriced assets through proprietary research and technical expertise gain competitive advantages, particularly in established jurisdictions with predictable regulatory frameworks.

The convergence of higher commodity prices, improved operator margins, and selective capital deployment creates conditions favoring disciplined acquirers with established deal sourcing capabilities. As Floyd noted,

"If it rains gold, don't put out the thimble, put out the bucket. I think we're in a position now where the bucket's ready."

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