Vox Royalty (TSX-V: VOX)(OTC: VOXCF) CEO Kyle Floyd on Meeting Upper-End Revenue Guidance, M&A Approach & Doubling Producing Assets

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Vox Royalty, Mr. Kyle Floyd. The very busy Mr. Kyle Floyd. How are you, Kyle?

Kyle Floyd: Good Gerardo, but never too busy to be on with you. It's always a pleasure. So thanks for having me.

Gerardo Del Real: I appreciate you taking the time. You just reported excellent third quarter 2021 results. You are on track to meet the upper end of 2021 annual revenue guidance, which I believe was between $4 and 5 million Canadian, if I recall the release correctly. Can you provide a bit of context on the excellent numbers?

Kyle Floyd: Yeah, absolutely correct. It's been really an exciting last six months for Vox. Obviously, we were able to double revenue guidance from $2 million to between $4 and 5 million. That happened in July, and we just released third quarter. This is the furtherance of those strong results. We saw multiple production-linked records from the projects that our royalties cover. Namely, the Dry Creek Royalty, which forms part of Karora's Higginsville operations and then also our Koolyanobbing iron ore royalty, saw record production volumes as well, and then we're seeing strength in what as we project out from there and we look at 2022, the Janet Ivy royalty is going through what's going to be one of the largest heap leach expansions ever in Australia. So that's very significant.

And then Thor Explorations announced commercial production at their Segilola gold project just about a month ago, two months ago, and so we're expecting to realize revenue from that either at the very end of this fourth quarter or early in Q1 next year, and then complimenting that we've got another three projects that we expect to come online. So really, just a tremendous amount of growth happening in the portfolio. We're seeing that manifest obviously in terms of revenue and record operating cash flow as well. So really a strong quarter for Vox, absolutely.

Gerardo Del Real: You're looking to double your producing assets by late 2023, from five to 10. We know that you have a world class database of royalties and streams. How do you manage and prioritize the M&A hunt on one side of it while simultaneously executing on the existing portfolio?

Kyle Floyd: Well, it's really nice is the existing portfolio, the hard work went into finding those assets and bringing them in at great valuations, and we've done that. So, that makes the job really easy when we've done the right work on the front end.

The M&A front for us, we're acquiring existing third-party royalty, leveraging our industry-leading IP in the form of our intellectual property, around the database, and 8,500 proprietary royalties. That is a really interesting process, and we've talked about it a little bit before, but what we're always doing is we're scanning the world for interesting developments on assets that we like technically, so that’s our mining engineers and our geologists doing the hard work.

And then from there going into the database, looking to see what projects have royalties, and then from there trying to get in touch with the royalty owners and see if we can get a deal done at a price that makes sense and so there's cyclicality, comes in waves and cycles. So I expect it's possibly Q4, but as we get it into Q1 and Q2 next year to have some really robust acquisitions that we're able to announce to the market that continue to demonstrate the value proposition to investors of how we're able to find great value on great royalties and continue building for our shareholders.

Gerardo Del Real: You have over 50 royalties and streams. Is there a focus commodity wise here in the next, let's say several quarters as you roll in new deals and streams and royalties. Are you looking for more gold streams, more copper? Is it just the right deal in the right place at the right time or a combination of those things?

Kyle Floyd: We're really; we are precious focused. But, I think what the overarching theme for us is we're looking for the right deals. Ultimately, we're trying to increase value for our shareholders as much as we possibly can with as little spend as possible. So it's when that kind of overlaps with commodities that we like, that's when we strike. And we've been very, very successful with that type of strategy and the execution around it. And so I, what we have and what we're looking at the pipeline is tends to be precious metals heavy. But there's also a lot of what I would call metals that are in the hard rock mining suite generally and, call it the battery metals matrix. So look, we will, that would include copper, nickel and so we will continue to execute where we find really good value on really good projects in commodities and operations that our technical team understands very well. So it will be a mix, but again, it tends to be precious heavy.

Gerardo Del Real: You've done a heck of a job executing thus far. You mentioned the heavy lifting that went into securing the assets, the streams, the royalties before you ever went public, right and I think you and the team should be commended for that. Next couple of quarters, what can we expect?

Kyle Floyd: Look, I think the next couple quarters are going to continue to demonstrate this transformation of the company from what was one producing asset when we went public back in May of last year. We sit at five producing assets now, and one of the interesting points and people will gloss over the gross margin that we're realizing as a company or the gross profit. But it's really high as a percentage of revenue, and that's because the value at which we're finding assets.

So, the overall and the long-term profitability of our business is projecting really, really strongly right now. And that's only going to continue to manifest as we go from five producing assets to 10 producing assets. Three of those 10 are expected to be in production next year. There's always room for surprises within our portfolio. So, we're really seeing kind of that accelerated growth happen right now and excited that we're going to continue to bring in interesting acquisitions that really add value to the portfolio over the coming months and quarters as well. So, really kind of at all capacities of the business, all facets of the business, we like where things are trending.

Gerardo Del Real: Well, in the bit that I've known you, Kyle, you tend to under-promise and over-deliver. So, would not surprise me if there were some upside surprises one or two, at least here in the next few quarters. Thank you so much for your time. I appreciate the update.

Kyle Floyd: Gerardo, likewise. Always a pleasure to be with you and on the program.

Gerardo Del Real: All right. Chat soon.

Kyle Floyd: Sounds good. Bye.

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