Vox Royalty (TSX-V:VOX) Corp has told investors it expects to report royalty revenues of between C$10 million and C$12 million in 2022—more than double what it realized in 2021—as it also revealed it has acquired a producing royalty on a Western Australian iron ore mine.
The royalty, purchased from a private vendor, is a 1.25%-1.50% sliding scale gross revenue royalty (GRR) on the Wonmunna mine operated by major Mineral Resources Ltd (ASX:MIN).
Vox is paying US$4.75 million in cash, US$12.15 million in Vox shares, and issuing 3.6 million share purchase warrants with an exercise price of C$4.50.
"The Wonmunna royalty acquisition further expands the revenue and growth profile of Vox and is accretive on all key metrics," said Kyle Floyd, CEO of Vox in a statement.
"The opportunity to add significant, immediate, incremental revenue through a non-brokered accretive transaction with a private seller generates significant value for Vox shareholders for years to come.
©Proactive Investors
The line that I find most interesting is 'warrants with an exercise price of C$4.50', as the current price action is hovering above C$3.00. For the vendor of the Royalty to find this deal acceptable they must have looked at Vox Royalty Corp and seen what others clearly can not see. And that is a 50% increase in value at the minimum.
Warrants and Call Options Similarities
The basic attributes of a warrant and call are the same:
• Strike price or exercise price – The guaranteed price at which the warrant or option buyer has the right to buy the underlying asset from the seller (technically, the writer of the call). “Exercise price” is the preferred term with reference to warrants.
• Maturity or expiration date – The finite time period during which the warrant or option can be exercised.
• Option price or premium – The price at which the warrant or option trades in the market.
©Investopedia
For a strike price of C$4.50 to work, the share price needs to be above C$4.50 or otherwise the warrants have little to no value.
The royalty, purchased from a private vendor, is a 1.25%-1.50% sliding scale gross revenue royalty (GRR) on the Wonmunna mine operated by major Mineral Resources Ltd (ASX:MIN).
Vox is paying US$4.75 million in cash, US$12.15 million in Vox shares, and issuing 3.6 million share purchase warrants with an exercise price of C$4.50.
"The Wonmunna royalty acquisition further expands the revenue and growth profile of Vox and is accretive on all key metrics," said Kyle Floyd, CEO of Vox in a statement.
"The opportunity to add significant, immediate, incremental revenue through a non-brokered accretive transaction with a private seller generates significant value for Vox shareholders for years to come.
©Proactive Investors
The line that I find most interesting is 'warrants with an exercise price of C$4.50', as the current price action is hovering above C$3.00. For the vendor of the Royalty to find this deal acceptable they must have looked at Vox Royalty Corp and seen what others clearly can not see. And that is a 50% increase in value at the minimum.
Warrants and Call Options Similarities
The basic attributes of a warrant and call are the same:
• Strike price or exercise price – The guaranteed price at which the warrant or option buyer has the right to buy the underlying asset from the seller (technically, the writer of the call). “Exercise price” is the preferred term with reference to warrants.
• Maturity or expiration date – The finite time period during which the warrant or option can be exercised.
• Option price or premium – The price at which the warrant or option trades in the market.
©Investopedia
For a strike price of C$4.50 to work, the share price needs to be above C$4.50 or otherwise the warrants have little to no value.
