Kyle Floyd, CEO and Chairman of Vox Royalty (TSX: VOXR) (NASDAQ: VOXR), joins us to review their growth strategy for 2024, after a record 2023 in operational results, revenues, and cash flows on a per share basis from their portfolio of royalties.  We also outline a few partner project updates that represent deep longer-term value in their royalty portfolio.

We lead off with some of the points that Kyle made in their investor letter, released on April 25 titled “On the Path of Totality.”   In this annual letter to shareholders Kyle summed things up well with this passage:

“…much of North America has been caught up in the Total Solar Eclipse,with many people flocking to the narrow band of geography that lies on the Path of Totality. What caught my mind was a news article that expounded on the high costs of hotels at certain hot spots to watch the eclipse and the late-comers paying very high prices. The thing with solar events is that the right scientists and mathematicians can forecast these events with amazing accuracy decades and sometimes millennia in advance. In the last few months, more and more people have gotten caught up in the mania and paid a higher price for late planning and forecasting. In my personal life, career, and especially at Vox, I have always attempted to forecast and plan ahead. It’s something that our executive team also innately embraces and focuses on. Much more time is spent talking about tomorrow versus today because the returns generated today were paved by yesterday’s hard work. As a result, sometimes we have been early on our corporate strategy without immediate reward for what, similar to a total eclipse, can be readily calculated and expected well in advance. This is the phenomenon that I believe we are experiencing with our portfolio of royalties in Australia. The value that is readily apparent to us and can be forecasted with high confidence is not being valued appropriately at present, resulting in an opportunity for those willing to do the math in advance and make appropriate preparations.”

Expanding upon this premise, we have Kyle outline one of the assets in the Vox Royalty portfolio that was acquired last year that they see on this pathway to clear value – the royalty on Norther Star’s Red Hill mine.  Recent news released by Northern Start highlights a significant exploration and development update for the Red Hill gold project in Western Australia, with a 58% resource upgrade, a maiden reserve declaration, and further disclosure around development assumptions. Vox management estimates that this Red Hill gold royalty has the potential to generate approximately US$10 million in initial annual revenues, over a potential mine life that is still to be determined by Northern Star.   Kyle makes the point that this is a prime example of the kind of royalties the companies has focused on acquiring that provide solid returns on invested capital.

We wrap up discussing the health of the Company balance sheet, the optionality they have to make accretive acquisitions in the year ahead, and some ways of thinking about how to value their current portfolio of royalty assets.

If you have any follow up questions for Kyle and the team at Vox, then please email us at Fleck@kereport.com or  Shad@kereport.com.

• In full disclosure, Shad is a shareholder of Vox Royalty at the time of this recording.

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Click here to visit the Vox Royalty website and read over the recent news releases.