Vox Royalty buys First Quantum NSR royalties portfolio

Vox Royalty Corp. (TSXV: VOX) has acquired the rights to a portfolio of four different net smelter return (NSR) royalties from First Quantum Minerals (TSX: FM) for $650,000.

The portfolio includes a 2% NSR on a portion of the Estrades project owned by Galway Metals (TSXV: GWM), a 0.49% NSR on the Opawica project owned by Imperial Mining (TSXV: IPG), a 2% NSR (including a 1% buy-back for $3 million) on the Winston Lake project owned by Metallum Resources (TSXV: MZN) and a 2% NSR on the Norbec & Millenbach concessions owned by Falco Resources (TSXV: FPC).

On closing, Vox will issue 164,319 common shares at $3.195 apiece for $525,000 in equity in exchange for the Estrades and Opawica royalties and make cash payments of $100,000 for Winston Lake and $25,000 for Norbec & Millenbach.

The portfolio spans advanced brownfield assets to earlier-stage prospects.

The past-producing, high-grade Estrades zinc-gold project in Quebec holds the potential for a restart. The project was developed by Breakwater Resources in the early 1990s and produced 175,000 tonnes grading 13% zinc and 6.35 grams gold per tonne.

Galway expects to drill around 41,000 metres over 2021 and 2022, and is also completing engineering and environmental studies.

The project currently boasts an indicated resource of 1.5 million tonnes grading 7.2% zinc, 3.6 grams gold per tonne, 1.1% copper, 122.9 grams silver and 0.6% lead. It also holds an inferred resource of 2.2 million tonnes grading 4.7% zinc, 1.9 grams gold, 1% copper, 72.9 grams silver and 0.3% lead.

Metallum’s Winston Lake project in Ontario, near its Superior project, also has production potential.

In 2021, Metallum completed a feasibility study for Superior, which outlined accessing the Pick Lake deposit (not included in royalty) through existing infrastructure from the past-producing Winston Lake groundwork.

Vox believes that the Winston Lake current indicated resource of 290,000 tonnes grading 10.4% zinc, 0.7% copper, 0.9 gram gold per tonne and 18 grams silver could be incorporated into a future mine plan.

The Opawica project is a very early-stage prospective property, while Norbec & Millenbach hold longer-term potential exploration and development exposure in Quebec.

For now, Laurentian Bank Securities Equity Research mining analyst Jacques Wortman views the deal as of neutral importance. “Although this new portfolio provides longer-term upside potential to Vox shareholders, we do not assign any value to these royalties at this point due to the early-stage nature of each project,” he said in a note to clients.

Vox says its portfolio has reached critical mass at more than 50, with 80% of them in top-tier jurisdictions such as Australia, Canada and the U.S. It has seven producing royalties, including on Brauna, Latin America’s largest diamond mine, Thor Explorations’ Segilola gold mine in Nigeria, and is the second largest listed holder of Australian mining royalties, behind Franco-Nevada (TSX: FNV; NYSE: FNV.

Vox shares trading in Toronto gained nearly 3% on the news to $3.60 apiece, giving it a market cap of $160 million.