In a news release, precious metals mining royalty and streaming company Vox Royalty Corp. (VOX:TSX.V) announced that "it has entered into a binding agreement with Sable Metals and Minerals Pty. Ltd. pursuant to which Vox will acquire a royalty over a portion of Bushveld Minerals Limited's (BMN:LSE) Brits Vanadium Project for total consideration of US$2,000,000." Vox Royalty noted that Bushveld Minerals operates three mines and is one of the world's preeminent high-grade vanadium producers.
The company advised that under the terms of the transaction, Vox will pay US$500,000 in cash up front and US$250,000 in Vox shares. In addition, two further milestone payments are payable either by cash or Vox shares, at the company's choosing, after a prespecified amount of production tonnage milestones are realized. These payments were outlined as "one payment of US$1,000,000 once 210,000t have been mined over a continuous six-month period and a further US$250,000 once 1,500,000t have been mined over a rolling 3-year time horizon."
Vox Royalty stated that it believes that the transaction provides it with access to a world-class, high-grade, outcropping vanadium resource. The Brits Vanadium Project is situated next to the Bushveld's Vametco Mine and is located about 3.5km from the Vametco processing facility.
The company noted that a JORC-compliant Competent Person's Report published in January 2020 "showed an aggregate Inferred and Indicated Mineral Resource distributed across three seams of 66.8 Mt @ 1.58% V2O5 in-magnetite."
Vox asserted that this opportunity affords it unique exposure to Bushveld Minerals, a globally significant vanadium producer. The firm advised that Bushveld Minerals is one of only three operating primary vanadium producers and owns two of the world's four operational vanadium processing facilities.
The company's Executive Vice President Riaan Esterhuizen, who oversees the firm's Australia operations, commented, "Vox is excited to add this world-class, near-term production asset to its growing royalty portfolio. With the Brits resource being located immediately adjacent to the Vametco Mine, we expect that any future development will require minimal capital expenditure with Brits a ready ore source for Bushveld's significant production growth plans."
The firm explained that the Brits Project is part of the Bushveld Vanadium deposits located about 75km northwest of Johannesburg. The Brits forms a part of the regional Bushveld Vanadium Project and the Brits royalty covers the Uitvalgrond Portion 3 property.
The company noted that the royalty being acquired is a 1.75% gross sales royalty in respect of all products mined from Brits. Annual royalty payments are capped at ZAR9.62/t (~CA$0.82/t) milled, but are adjusted upward annually using the South African Consumer Price Index. The company "estimates that the current royalty cap escalated to 2020 terms is equivalent to approximately CA$1.03/t milled."
Vox Royalty stated it expects that the transaction will be completed in December 2020 and that the transaction is subject to ordinary conditions including the approval of both the TSX Venture Exchange and the Financial Surveillance Department of the South African Reserve Bank.
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