Vox Royalty Corp. (TSXV: VOX) (“Vox” or the “Company”) is pleased to announce that it has entered into two binding Royalty Sale and Purchase Agreements with arm’s length parties dated June 15, 2020.

Vox will acquire a 1.5% gross revenue royalty on the high grade development-stage Uley graphite project held by Quantum Graphite Limited (“QGL”) in South Australia (the “Uley Royalty”) for consideration of A$500,000 comprised of A$80,000 in cash and A$420,000 in Vox shares (the “Uley Transaction”). The seller will be issued 58,031 Vox shares for the A$200,000 upfront share portion of the consideration and a further A$220,000 in Vox shares once commercial production has been achieved at the Uley Graphite Project.

Vox will also acquire a 1.5% net smelter return royalty covering Strategic Energy Resources Limited’s (“SER”) Saxby Gold Project in Queensland Australia (the “Saxby Royalty”) for consideration of US$80,000 comprised of US$50,000 in cash and US$30,000 in Vox shares (the “Saxby Transaction”). The seller will be issued 12,675 Vox shares for the US$30,000 share portion of the consideration. The acquisition of the Saxby Royalty from STEMify Limited (formerly Robo 3D Limited) further demonstrates Vox’s consistent strategy of identifying and acquiring royalties held by non-mining focussed companies – similar to Vox’s historical royalty transactions with telecommunications company Vonex Limited and hearing technology company Nuheara Limited.

Transaction Highlights

  • The Uley Royalty adds a fully permitted development stage graphite royalty covering a high-grade coarse-flake JORC-compliant resource of 5.0Mt @ 11.5% Total Graphitic Carbon (Measured & Indicated as at June 30, 2019)
  • The Uley feasibility study update released in December 2019 covered an 8 year potential operation with annual crusher feed of 500Ktpa targeting production of a graphite concentrate grading 94% TGC at 84% graphitic carbon recovery with ~73% of overall production in the Medium to Extra-Large Flake size fractions
  • The Uley Graphite Project is the only permitted graphite development project in Australia (QGL presentation, December 18, 2019), subject only to securing offtake arrangements and project financing
  • The Saxby Royalty adds an gold exploration royalty with high grade potential in Saxby with an innovative exploration operating partner in SER
  • Provides exposure to high-grade gold exploration results at the Saxby Gold Project as disclosed by SER

Spencer Cole, Executive Vice President of Vox stated: “Vox is excited to add these two overlooked royalties to our growing portfolio of 40 royalties and streams. The Uley graphite project is a high grade ‘shovel-ready’ graphite development project and the Saxby Gold Project is an exciting high-grade gold exploration project that is actively being progressed by an innovative partner in Strategic Energy Resources. These acquisitions are consistent with our strategy of acquiring high quality royalties in Tier 1 jurisdictions such as Australia from unconventional sellers who are motivated to realize value for their shareholders by monetizing non-core assets.”

Uley Graphite Development Royalty

The Uley Royalty covers 2 Mining Licenses, 2 Retention Licenses and 1 Exploration License encompassing the Uley Graphite Project area. The Uley Graphite Project is located on the Eyre Peninsula in South Australia, approximately 20km southwest of the deep water port of Port Lincoln.

An update to the definitive feasibility study (“DFS”) revising the mining study and the ore reserve estimate was released by QGL for the Uley Graphite Project on December 11, 2019 which summarized total undiscounted operating cashflow of A$207 million from an 8 year operation with annual crusher feed of 500Ktpa targeting production of a graphite concentrate grading 94% TGC at 84% graphitic carbon recovery.

According to the DFS, comprehensive metallurgical testwork has confirmed a high quality production mix of ~73% of overall production in the Medium (27.1% weighting, 96.6% gC purity), Large (35.4% weighting, 97.2% gC purity) and Extra-Large Flake (10.5% weighting, 97.8% gC purity) size fractions.

The project is the only permitted graphite mine in Australia, following the issuance of the Program for Environment Protection and Rehabilitation (“PEPR”) from the South Australian Department of Energy and Mining (“DEM”) on December 24, 2014. QGL is currently focused on offtake arrangements, project financing and optimizing the DFS.

Saxby Gold Exploration Royalty

The Saxby Royalty covers EPM 15398 and is located 150km northeast of Cloncurry in northwest Queensland Australia. Mesozoic sediments of the Carpentaria Basin unconformably overlie deformed and metamorphosed basement rocks of the Mt Isa Eastern Succession with the cover sequence greater than 400m thick. Exploration at the Saxby Gold Project has previously identified high-grade gold mineralisation at the Lucky Squid Prospect.

According to SER’s target generation model, gold mineralisation at the Saxby Gold Project is characterised by intense pyrite alteration overprinting calcite-magnetite veins and breccia, associated with a network of chlorite vein arrays and hydrofractures suggesting a variant of an Iron Oxide Copper-Gold mineral system (SER December 7, 2016). Historical drilling of large magnetic and gravity anomalies by MIM Exploration from 1992 – 1998 identified a nickel-copper sulphide exploration target named the Tea Tree Prospect.

Drill testing of the Lucky Squid gold prospect was most recently undertaken by SER on the interpreted structure between previously identified high grade gold intercepts in November-2019. SER plans to complete further diamond drilling to test the extent and continuity of the high-grade gold mineralised structures at the Saxby Gold Project.