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Jeff Clark – “The Beaver Creek Update 2023”

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Jeff Clark – “The Beaver Creek Update 2023”

 

 

 

 

 

I attended the Precious Metals Summit in Beaver Creek, Colorado from September 12-15. It was very productive.

 

 

If you’ve never been, it’s a beautiful upscale mountain village that sits at 8,000-feet elevation, above the town of Avon, Colorado, a few miles down the road from Vail.

 

 

Some presentations are given, but the conference is mostly one-on-one meetings between companies and investors—fund managers, money managers, institutions including banks, and a few people like me, newsletter writers.

 

 

It’s a packed event, with meetings spread across three buildings. My schedule was full, one evening I even jumped between two dinners. (I was able to manage okay with my cane… if you don’t know I had back fusion surgery in May and am still in recovery mode, slow but sure.)

 

 

I like Beaver Creek because “everybody” is there, meaning junior mining companies. In TheGoldAdvisor portfolio, 17 of 22 companies attended. I met with all of them.

 

 

I wanted to share my notes with you, as some important things came out of these meetings. This update also includes companies that released news that week, what many like to do in front of the event.

 

 

While opinions varied on when sentiment will turn in the junior sector, what was very pleasing to see is that companies are moving their projects forward. Despite the current market environment, most every team in our portfolio is advancing their projects in meaningful ways.

 

They’re not standing still wringing their hands about metals prices; they’re focused on making their companies more valuable now.

 

 

This is one reason why I continue to invest: company developments can lead to higher stock prices even when gold and silver prices are flat, Snowline Gold being the obvious example. Higher metals prices will come in time, but most everyone in our portfolio is pushing forward. This is what we want to see.

 

 

The other reason I continue to invest is most stocks remain deeply undervalued, suggesting even a simple reversion to the mean will see doubles turn into triples, triples turn into 5-baggers, etc. And if gold really starts to rock and roll like many of us believe it will, well then you might want attend the New Orleans Investment Conference the first week of November and come to my workshop, “Are Juniors Dead? Or will 10-Baggers Become 20-Baggers?” As you can see in the link, it will be quite the blockbuster event. I hope to see you there.

 

 

My advice? Hang in there. Actually, do better than that. Focus on building and refining a portfolio that will be positioned for maximum leverage when sentiment inevitably turns in this sector.

 

 

Beaver Creek Update

 

 

Here’s my notes from the Beaver Creek Summit. Companies are presented in alphabetical order (only those that attended and/or had news that week).

 

 

American Pacific Mining (USGDF; C.USGD)

 

 

Management issued news on September 13 that a five-hole diamond drill campaign will get underway in early Q4 at the Madison Copper-Gold project in Montana.

 

 

Last year’s program hit 14.44 g/t gold over 6.53 meters, for a total of 94.2 gram-meters. This 1,130-meter expansionary drill program could get interesting.

 

 

The program is funded by Kennecott Exploration, a division of Rio Tinto Group, who has spent approximately US$6.8 million here. They can earn up to 70% of the project by spending US$30M by 2030. American Pacific leads the exploration program, which is in the process of being permitted.

 

 

As Warwick told me at Beaver Creek, “The ultimate prize at Madison is the potential for a deep-rooted porphyry deposit—but we believe the shallow high-grade skarn mineralization will be an important contributor during the early years of any future mining scenario, and that it can be expand significantly.”

 

 

Also coming soon are drill results at both Gooseberry and Palmer. Significant news flow ahead.

 

 

The stock was up 9.4% last week, showing investors like the American Pacific story.

 

 

Aztec Minerals (AZZTF; T.AZT)

 

 

CEO Simon Dyakowski said the private placement previously announced will grow again, now raising around C$1.5-1.6 million. It’s still open as I write, and is open to US investors, so if interested you’ll need to move fast by contacting Simon at 604-619-7469 or email at simon@aztecminerals.com. Since the placement is non-brokered, he would like to know how you heard about it, so let him know you read about it here.

 

 

Management expects to be drilling at Cervantes by mid-October, a 14-hole, 2,000-meter Phase I program, and then if successful a similar Phase II campaign. We’ll see a press release on this.

 

 

The thing to be aware of is that they’ve explored only part of the system here and are just now stepping out. The goal is to meaningfully expand it. Whether they continue drilling after this upcoming campaign or do a Resource estimate will depend on drill results.

 

 

At Tombstone, the company believes there is a porphyry system somewhere on the property. There has been very little deep drilling here, and with geophysics now completed they can begin to hone in on where it might be.

 

Here geologist and VP-Exploration Dave Heyl (also at our meeting) emphasized that they are “nowhere near finding the edges of Contention.” They’re working behind the scenes to expand the drill targets, slated for Q1. Lots of big boy potential still at Tombstone.

 

 

Want to know how undervalued this stock is? Aztec has had better results than many juniors with a higher market cap.

 

 

Blackrock Silver (BKRRF; T.BRC)

 

 

CEO Andrew Pollard said he thinks we’ll see premium takeouts next year, meaning companies bought out for more than just an average premium. M&A has been down for a while, and seniors are going to start getting itchy for ounces.

 

 

He also noted that First Majestic Silver’s new mint (more below) is just two hours away from Blackrock.

 

A new Resource is coming on Tonopah West in early October, which will include three new drilled areas that weren’t included in the prior one.

 

 

Meanwhile, assay results are pending at Silver Cloud, the exciting new discovery in Nevada.

 

 

Add it up and there is some significant potentially market-moving news coming within the next 30 days.

 

 

Cabral Gold (CBGZF; T.CBR)

 

 

CEO Alan Carter was excited when we met, because the path to production and then growing that production through exploration at no dilution to shareholders is now in place.

 

 

The “little starter” as he called it, appears to me it will produce roughly 23,000 ounces at 2+ g/t gold to start. Small, but it’ll only cost roughly $15M in capex to build it, and projected costs will likely be below $1,000 all-in, something that could catch the eye of investors.

 

Importantly, it will generate cash flow to drill out Cuiú Cuiú. First pour is not far away, projected to be Q1-2025.

 

 

Alan emphasized, however, that “this is not the end game.” It appears output will grow almost immediately, getting to 40,000 ounces after the first full year of production and growing bigger from there. He sees this as a +2-million-ounce property and a likely 200,000 ounce/year producer.

 

 

How does it get that big? There are 45 targets yet to explore—gaps between the two pits, open in all directions beyond the two pits, plus two other deposits to explore.

In the meantime, we’ll see more drill results, metallurgical test results, a pre-feasibility update, and an updated

 

Resource estimate, all by year end. Lots of news and potential catalysts ahead.

 

 

Cassiar Gold (CGLCF; T.GLDC)

 

 

Management issued two press releases last week, as results start to pour in from their BC projects. The September 11 press release was a drilling update, with over 14,500 meters completed, roughly 80% at Cassiar North (Taurus) and 20% at Cassiar South.

 

 

The very next day came news of assay results from 8 drill holes at Taurus, including 4.19 g/t gold over 23.6 meters, for a total of 98.8 gram-meters. As the press release says, “the results confirm the potential to continue to expand mineralization internal to the current resource footprint.” Meaning, the 1.4-million-ounce Inferred Resource at 1.14 g/t gold is almost certain to grow in my opinion.

Various stock options were also granted, amounting to roughly 7% dilution if all vest.

 

 

I met with CEO Marco Roque, and in a nice surprise VP-Exploration Jill Maxwell was also there. She pointed out that not only are the drill results thus far likely to add to the Inferred Resource, but they will also likely reduce the strip ratio, which lowers mining costs. She also pointed out the grades coming back are above the pit grades of the Resource.

 

 

What was most exciting to hear is that in her opinion, they are “just now starting to expand Taurus.” You’ll recall this is one advantage at Cassiar; it is the geologist’s playground.

 

 

This is all very positive.

 

 

The company has roughly 38 more drill holes to report, so lots of news ahead. The stock was a victim of a “sentiment selloff” this summer, but the company has been aggressively advancing its projects. Management will decide if the Resource estimate gets updated after all drill results are in, but it’s already showing strong signs of getting bigger.

 

 

Dolly Varden (DOLLF: T.DV)

 

 

CEO Shawn Khunkhun emphasized that despite the strong drill results so far, the current 130-million-ounce silver-equivalent Resource excludes 100,000 meters of drilling. The Wolf deposit is already adding millions of ounces, and the veins are still open. Approximately 65% of the current drill program is focused on silver targets, with 35% on gold.

 

 

The goal, as Shawn puts it, is to “see how big this thing is.” Some analysts think this is a potential 500-million-ounce deposit. Shawn thinks it could potentially be twice that, but based on 500M ounces it would carry a valuation of around $1.5 billion. The market cap is currently C$190 million, so the upside target here is potentially 7-8x in a normal gold and silver market. Don’t count on that of course, but in a strong bull market these things can overshoot, too.

 

 

They still have 40,000 meters of drilling to report, while five rigs continue to turn. An updated resource is coming in Q2 next year.

 

Beaver Creek investors must like what they see; the stock was up 27% by the end of the conference, suggesting it’s not too late to buy.

 

 

EMX Royalty (NYSE & TSX: EMX)

 

 

Our senior analyst Jeff Valks covered the news release last week, plus see the comments from my meeting with them at the conference below.

 

 

September 13, 2023: EMX Royalty Corporation Strikes Deal for Flagship Australian Asset with Lumira Energy

 

Jeff Valks, Senior Analyst

September 13, 2023

 

 

Hard on the heels of the initial royalty payment from Zijin, we have another exciting announcement out of Vancouver’s EMX Royalty Corporation. The company announced it has entered into an option agreement with Lumira Energy Ltd., a private Australian company, for EMX’s Copperhole Creek polymetallic project in Queensland, Australia. This agreement brings several benefits to EMX, including a 2.5% Net Smelter Return (NSR) royalty interest, cash and equity payments, work commitments, and more.

 

Located 20 kilometers east of the renowned Georgetown-Forsayth Metallogenic District in Queensland, the Copperhole Creek Project is a polymetallic treasure trove. Its mineralization shares geological characteristics with the Georgetown-Forsayth District, boasting two primary styles of mineralization: Tin-copper-molybdenum mineralization in zones of greisen-style alteration and shear zone hosted copper-silver mineralized veins and breccias.

 

 

It’s worth noting: Despite being located within a prospective geological belt, the Copperhole Creek project has seen minimal exploration activity in the past 30 years. Historical mining operations occurred in the early 20th century, with limited exploration in the 1970s and 1980s. A notable highlight was BP Minerals’ drilling at the Questend prospect in 1978, revealing a promising intercept of 12 meters with significant copper, zinc, tin, and silver mineralization.

 

 

As Jeff points out in his must-read book, “PAYDIRT”, exploring brownfields areas with new technology is always an exciting and promising endeavor. EMX’s land position encompasses numerous occurrences, historical mines, and prospects, presenting significant exploration potential. Interestingly, while the Georgetown-Forsayth District is famous for its historical gold production, only a few occurrences at Copperhole Creek have been assayed for gold, offering an enticing upside for the project.

 

Empowering Lumira Energy

 

 

This transaction marks a pivotal moment for Lumira Energy, positioning the company with a flagship asset in Australia ahead of its planned listing on the Australian Securities Exchange (ASX) in mid-2024. EMX and Lumira Energy will leverage modern exploration methods and deposit models to identify and prioritize additional targets within the area.

 

 

Key commercial terms on the agreement are as follows:

  • Lumira initiates with a $20,000 cash payment to EMX, initiating an exclusive two-month option period. During this period, Lumira can secure a 100% interest in the Project by paying an additional $30,000. Upon a successful ASX listing, Lumira will issue shares equivalent to $100,000 to EMX and an additional 500,000 shares 12 months post-listing. Lumira will also grant EMX 1,000,000 options upon listing. These options are divided into 500,000 exercisable at $0.30 per share for 24 months and 500,000 exercisable at $0.40 per share for 36 months.

 

 

All the Details and EMX’s Retained Interests

 

 

Upon fulfilling the option period requirements, Lumira Energy secures a 100% interest in the project, while EMX retains:

  • A 2.5% NSR royalty interest.
  • Annual advance royalty payments, starting at $30,000 per year from the third anniversary of the initial public offering (IPO) and escalating by 15% annually, reaching a maximum of $75,000 per year.
  • Milestone payments linked to project advancements, including maiden JORC-compliant resource publication, scoping studies, Preliminary Economic Assessments, and the commencement of commercial production.

 

 

 

Recommendation

 

 

Jeff rates this stock as a strong buy and hold for the foreseeable future. I mentioned in my introductory write-up that the leadership at EMX is strong and highly experienced, increasing our confidence in owning the stock. More moves like what management has accomplished and you might wish you’d bought in at sub US$2/share levels when you had the chance.

 

 

Beaver Creek Meeting

 

 

I met with CEO David Cole and IR Director Scott Close. They said the company will receive about $30 million in revenue this year, and a similar amount next year. They’re sitting on $15 million in cash, and will continue with their business model of selling more projects and keeping a royalty.

 

 

They also pointed out the discovery potential of many of their assets. Approximately 100 kilometers of drilling is performed by partners every year—which they don’t pay for and can increase their royalty payout as more ounces are added to production.

 

 

We, and many other analysts, consider EMX a “prolific royalty generator.” It’s worth pointing out that Franco-Nevada, the biggest of the royalty companies, has bought shares in EMX, the only company they’ve done so. That speaks volumes about the EMX business model.

 

 

First Majestic (AG; T.FR)

 

 

The company announced on September 14 that they opened a minting facility. It’s called First Mint and is located in Nevada.

 

 

This is more significant than it may appear, because it “vertically integrates” the production of their bullion, allowing them to sell a substantially greater portion of its silver production directly to its shareholders and bullion customers.

 

 

As CEO Keith Neumeyer puts it, “Last year, we sold over 440,000 ounces of silver bullion, generating over $11 million in revenue. However, sales could have been substantially higher had we not been constrained by limited supply from our minting partners due to the incredible demand the silver industry is currently experiencing. By minting our own silver, we are able to reduce unit production costs and expedite delivery time to our customers. In time, our goal is to sell 100% of the silver we produce directly to the physical market.”

 

 

If you own at least 100 shares, you qualify for a discount of $0.50 per ounce from the company’s posted price through the Shareholder Benefits program.

 

 

A management change was also announced, one that was a little sad for me. VP Todd Anthony has stepped down, who is a contributor to PAYDIRT. He’s replaced by Mani Alkhafaji, who’s been with the company since 2015 and most recently was VP of Business Planning & Procurement. We’ll be watching to see where Todd goes; he was with First Majestic for 13 years, and while it was certainly a team effort, he started when the market cap of the stock was just $200 million.

 

 

By the way, more than one analyst pointed out that the location of the bullion mint in Nevada could weigh in the company’s next acquisition.

 

 

Heliostar Metals (HSTXF; T.HSTR)

 

 

Here’s the crux of the Heliostar story: a new Resource is coming in November, and it appears the company is on track to reach one million ounces of gold, at 5 g/t. This could make it a 100,000-ounce annual producer, a criteria majors look for. This would put Heliostar “on the map” and could force a rerate of the stock.

 

 

In addition, they have two targets that appear could easily add another half million ounces at around the same grade. There is excellent exploration potential at Ana Paula.

Is the new proposed law in Mexico a concern? Not really; the company already owns the surface rights and has an open pit permit. This will be an underground mine, so they’ll submit an “addendum”, which has never really been an issue in Mexico. Bottom line, Heliostar is likely to be the next gold producer in Mexico.

 

 

An updated pre-feasibility study will be done next year, and the project should be construction-ready by the first half of 2025. The company is sitting on $5M in cash, but there will be more dilution to get construction underway.

Metallurgical results come out next month, which, if positive, could bring in those investors that have been waiting to be certain recovery rates are positive. Funds and institutional investors could move the stock.

The company is clearly on track with the valuation model we initially outlined.

 

 

P2 Gold (PGLDF; T.PGLD)

 

 

CEO Joe Ovsenek and Exploration Manager Ken McNaughton said in our meeting that the PEA on Gabbs in Nevada was “very well received” by the investors they met.

 

 

There is a lot of room to optimize it between now and production, too. In fact, with a higher copper price the mine could spit out two million gold-equivalent ounces per year and push the AISC below $1,000 per ounce of gold.

Joe and Ken were clear: “This will be a mine. It will get built.” Their prior successful experience in mine building gives this statement a lot of weight.

 

 

To push the project forward financially, they plan to sell a royalty in the range of $15 million. This will clean up the Waterton deal and fund half of the pre-feasibility study.

Meanwhile, four zones are open for further drilling, plus other blind targets. The likelihood that Gabbs will grow between now and the start of production is high.

 

 

At BAM, management has decided to reassess the data they’ve accrued to date and use it to better pinpoint where the copper porphyry may lie.

 

 

The stock hit 52-week lows prior to the conference but stabilized that week. In my opinion this management team will make this work, starting with an asset that will produce at least 1.86 million gold-equivalent ounces over 13.4 years.

 

 

Pacific Ridge Exploration (PEXZF; T.PEX)

 

 

The company is drilling the last hole of a 10,000-meter drill program. Assays are pending on 19 holes, and all will be released by year-end. All exploration this year is fully funded.

 

 

What CEO Blaine Monaghan made clear in our meeting is that the dimension of flagship Kliyul will be materially bigger. Many holes have been 300-meter step-outs. We’ll know more once all drill results are tallied, but it’s clear the asset is growing.

 

 

There will be metallurgical news coming too, always important. A small 3.5-million-unit raise was announced, the dilution immaterial.

 

 

The Churchi project will be drilled next year as soon as the season is open.

 

 

In my opinion this is one of the strongest copper-gold projects in BC. Everything I heard at Beaver Creek reinforced that belief.

 

 

Revival Gold (RVLGF; T.RVG)

 

 

CEO Hugh Agro pointed out that passive funds will bring higher stock prices in the near future, once the market cap of the company is higher, something they require. Mining engineer John Meyer noted they’ve received more interest this year than last, which is compelling since overall sentiment is actually worse.

 

 

In the meantime, they continue to de-risk Beartrack-Arnett, pushing development forward and making it more attractive to a potential major. There is “clear potential” for production to reach 150,000 ounces a year, and then 200,000 plus. This is going to be a big asset that carries a lot of appeal to a senior producer that needs ounces.

Drill results are pending, and they’re active in the M&A front, too.

 

 

The long-term appeal of Revival Gold is hard to deny.

 

 

Reyna Silver (RSNVF; T.RSLV)

 

 

My first question for CEO Jorge Ramiro Monroy and geologist Lauren Megaw was about work at Guigui, since this was the initial flagship project the company was based on. Part of that answer is that the discovery at Batopilas took center stage, and also that they wanted to step back and design drill holes to better identify the source of the CRD system. This involves a lot of data crunching, which isn’t very splashy, but they’re taking the time to refigure it. As they pointed out, this is one advantage of having multiple projects.

 

 

At Batopilas, they’ve found an entirely new vein, and it came with the widest intercepts to date. You can see a close-up shot of native silver in the vein on page 12 of the presentation. I kidded Laura about how excited she was talking about Batopilas; she clearly sees a lot of potential here.

 

 

At Medicine Springs, assay results are about 6-8 weeks away. They’ll put all the data together to identify drill targets for 2024.

 

 

The stock was up over 14% the week of Beaver Creek, probably helped some by Dr. Peter Megaw’s attendance. At times it seemed everyone wanted to talk to him. Stay tuned for lots of news.

 

 

Scottie Resources (SCTSF; T. SCOT)

 

 

CEO Brad Rourke said they finished the 20,000-meter drill program last week. They’ll be releasing assay results till next February, so lots of news flow ahead.

 

 

Check out page 14 of the presentation; the blue shaded areas near the bottom of the pits is where the deposits are open—and is where drills have been targeting. The strike is already 1.5 kilometers long but is continuing to grow.

As Brad outlined, we’re looking at a 5-10 g/t gold asset at surface, making it very economic. It also has strong infrastructure in place; it’s permitted, has power and roads, plus local mills that could reduce capex for a potential buyer.

 

 

Brad is excited about what future drilling will show here. So am I.

 

 

Silver Hammer (HAMRF; C.HAMR)

 

 

I met with CEO Peter Ball and the main question we addressed is why there was no news for two months. He said they’ve been working behind the scenes on a big M&A announcement. This explains why they’ve been quiet the past couple months.

 

 

He wasn’t permitted to give details yet, but he did say the market will likely view this as a “transformational” acquisition.

 

 

Peter has a lot at stake, as he is the company’s largest shareholder.

 

 

Will the coming announcement “transform” Silver Hammer? Let’s watch the news and see what comes, but it sounds exciting.

 

 

Snowline Gold (SNWGF; T.SGD)

 

 

I met with CEO Scott Berdahl, VP-Exploration Thomas Branson, and IR & Director of Marketing Stephanie Hansen. I admit it was a bit of a celebratory meeting for me, as the stock is up over 10x since I first recommended it in October 2021.

 

 

But there were things to discuss, starting with the fact that approximately 10,000 meters of drill results are still to come. Camp will shut down early next month due to winter setting in, but there will be news of assay results for months.

 

 

Scott and Thomas pointed out that Tosh and Cliff targets are getting drilled for the first time. These are outside the Rogue area where the Valley deposit is located, so any success here could demonstrate true district scale.

 

 

All told, there are 30 primary targets yet to explore, plus other anomalies. Scott reassured me that discovery is still their primary focus. To show just how much more drilling is coming, he said there are 3-5 years of drilling just at Valley.

 

 

Is a rising gold price trend around the corner? In an unusual development, T. Rowe Price just invested in Snowline. Investing directly in a miner is normally outside of their focus. See page 6 of the presentation for institutional and corporate ownership, along with analyst coverage.

 

 

Last, Scott also pointed out that the trend of large discoveries continues to fall off, while exploration budgets remain constrained. In other words, we’re still grinding to a supply issue.

 

 

Summa Silver (STHFF; T.STH)

 

 

I met with CEO Galen McNamara and IR Giordy Belfiore. They pointed out the company still has C$7.5M in cash, plenty to keep pushing forward.

 

 

Galen said they’re “surgically” drilling 6 holes right now at Mogollon in New Mexico. We can expect assays in late October. They own 75% of Mogollon now and will own 100% by year-end.

 

 

I thought I misunderstood him when he first told me, but at Hughes in Nevada Summa Silver is drilling 4-kilometer step-outs, over 2.4 miles. See slide 18 of the presentation for just how far Saphire is from the last drill intercept—hitting here, as Galen put it, would mean it’s “game on” for the Hughes project.

 

 

They’re also targeting zones at depth, from 300 meters to 800 meters, something that’s never been done at Tonopah.

 

 

What struck me was that Galen believes there is a path to 100 million ounces of silver-equivalent at both projects. This would put a bright light on the company.

 

 

Beaver Creek investors must see the potential too, as the stock was up 30% after the conference started.

Watch for news on assay results soon.

 

 

Thesis Gold (THSGF; T.TAU)

 

 

Now that the merger between Benchmark and Thesis is finalized, my question was how they grow the company. CEO Ewan Webster basically outlined what you can see on page 8 of their presentation.

 

 

You’ll see this is a combination of drilling at both Lawyers and Ranch projects, a combined PEA next year, and exploration drilling of over 20 targets.

 

 

An updated Resource of the combined assets is also expected in Q2 next year. Lawyers and Ranch are not far apart, only 24 kilometers between them, with complete road accessibility.

 

 

The Resource could show there are 5 million ounces of gold here, which would put it in rarified air and potentially lead to a stock re-rate.

 

 

VOX Royalty (VOSR)

 

 

Senior analyst Jeff Valks filed a full update on the company’s recent news while I was at Beaver Creek. Here’s his analysis, with my comments on the meeting with them below…

 

 

September 13, 2023: VOX Royalty (VOXR) completes Australian royalty portfolio acquisition. 

 

Jeff Valks, Senior Analyst

September 13, 2023

 

Toronto-based Vox Royalty Corp made waves with its strategic acquisition of nine advanced development and exploration-stage royalties in Australia. The announcement, made on September 12, marks a significant move for Vox as it expands its presence in resource-rich Australia. You may recall from our original write-up that management was in the middle of a possible royalty sale and purchase agreement with an Australian company to acquire a portfolio of development and exploration-stage royalties.

 

 

Strategic Acquisitions

 

 

The acquisition, initially announced on July 31, 2023, demonstrates Vox’s commitment to becoming a dominant player in the royalty sector. The company’s Chief Investment Officer, Spencer Cole, described the move as “one of the most exceptional transactions in Vox’s corporate history.” This acquisition provides Vox with exposure to approximately 50,000 gold equivalent ounces (GEOs) under royalty coverage at a cost of approximately $100 per ounce.

 

 

The newly acquired portfolio includes royalties from advanced development and exploration-stage projects in Western Australia and the Northern Territory, primarily focused on gold and copper. Two key assets, the Red Hill brownfields gold discovery and the Horseshoe Lights copper-gold project, are expected to offer significant revenue potential in the near term.

 

 

Lucrative Prospects

 

 

The Red Hill gold royalty, one of the jewels in this newly acquired crown, has a noteworthy history. It generated over A$7,000,000 in historical royalty revenue between 2003 and 2008, during a period when gold prices ranged from approximately $400 to $700 per ounce. This asset, with its inferred resource of 32.4 million tonnes at 1.1 grams per tonne for 1.2 million ounces of gold, is poised to become a substantial revenue generator for Vox. Red Hill is a free-milling ore source with high historical metallurgical recoveries of 95%.

The Red Hill gold royalty’s proximity to the Kanowna Belle mill and the Fimiston mill, both operated by Northern Star Resources (ASX:NST), further enhances its production potential. These facilities are well-established in the region, providing infrastructure support for efficient processing and transportation.

 

 

Additionally, Vox is evaluating the possibility of unlocking early cashflow opportunities at the Horseshoe Lights copper-gold project. This past-producing asset holds substantial potential, and Vox intends to explore the potential of historic Direct Ship Ore copper stockpiles.

Strengthening Geographic Diversification

 

 

As mentioned in my introductory article about Vox, a large portion of their assets are Australian mines, and most of their geological team is Australian. Clearly, they’re playing to their strengths and capitalizing on local knowledge. They know the terrain, they know the key players, and Australian mining regulations remain fast and efficient. They now have a total of 46 royalties located in Australia alone.

 

 

This strategic acquisition also reinforces Vox’s portfolio by increasing its exposure to lower-risk political jurisdictions. Approximately 80% of Vox’s royalty assets are now located in Australia, Canada, and the USA, providing a stable and secure foundation for the company’s operations.

 

 

CEO Kyle Floyd expressed his excitement regarding the successful acquisition. He highlighted the company’s differentiated capabilities in identifying, researching, and procuring high-quality royalty assets. This move aligns with Vox’s long-term vision and shows the acute vision of the team.

 

 

Industry-Leading Growth

 

 

Vox’s latest acquisition is a testament to its rapid growth trajectory while reinforcing its standing as a significant player in the sector. Long-term broker consensus commodity prices support Vox’s management estimates and the potential for significant returns.

 

 

Vox Royalty’s strategic acquisition of a portfolio of Australian royalties underscores the company’s commitment to growth and sector leadership. With exposure to promising gold and copper assets and a strengthened geographic diversification, Vox is well-positioned to capitalize on the opportunities in the mining royalty market while rewarding its shareholders.

The stock is down just over a dollar from its recent high of $3.10 in early April, currently sitting at $2.09 before the bell, and $2.31 the pre-market. These recent bold and bullish moves can’t be ignored too much longer before the major players before the price starts to rebound to what it’s rightfully worth. The company has also begun paying a small dividend. While I don’t think dividend payments are going to make us retail investors rich, they are a sign of good company health. I missed the chance to buy below $2/share. Now looks to be a good time to jump in or add to your position.

 

 

Beaver Creek Meeting

 

 

The crux of our discussion centered around the Australian royalty acquisition package. CEO Kyle Floyd said they’ve been working to acquire the Australian assets for 7 years. It was obvious to me that he was elated (and relieved) about the acquisition.

 

 

This is a big deal, as M&A goes. It’s not an exaggeration to say it will be “transformational” for the company. Jeff Valks has the details above, but the amount of royalty income this could generate would be a company-maker on its own.

 

 

This is a royalty play we believe you can buy and tuck away. The stock rose 10% during the conference, so other investors are starting to understand the significance of this acquisition.

 

 

REMINDER: The companies listed here have been invited to be sponsors of TheGoldAdvisor.com, and all have accepted. They’re only invited, however, if I am, or will be, personally overweight the stock, a starting criterion for consideration. You can read our disclaimer here, one you likely have not read elsewhere.

 

 

Courtesy of TheGoldAdvisor.com

 

Posted September 19, 2023

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