Cayman special economic zone company, SilverStream SEZC, has started trading as Vox Royalty Corp on the TSX Venture Exchange in Canada after closing its public offering, which raised CDN$13.75 million (US$10 million).
The company, which focusses on mining, has a portfolio of 37 royalties and streams in seven jurisdictions – Australia, Canada, Peru, Brazil, Mexico, the US and Madagascar.
Kyle Floyd, CEO of Vox, says the company has “experienced tremendous growth” after establishing in Cayman six years ago.
Since the beginning of 2019, Vox has concluded 11 separate transactions to acquire 32 royalties.
“We have been more active than anybody over the last 18 months,” Floyd said. “We present an opportunity for investors as we are still at this exponential curve in our growth. Going public helped fuel that growth and also gave us access to lower cost of capital to make sure that, as we are growing, we are doing it as efficiently as we possibly can.”
The business was incorporated in 2014 within commodities and derivatives part of Cayman Enterprise CIty and has grown to trade at a CAD$93.3 million (US$67.7 million) market capitalisation.
Mining companies raise funds from metal royalty and streaming businesses, which in turn get exposure to precious metals profits without incurring all the risks of operating a mine.
A royalty gives the owner the right to receive a percentage of mineral production from a mining operation. A metal stream on the other hand is a purchase agreement that offers the right to buy metals produced from a mine at a fixed price.
Close to 60% of Vox’s portfolio is concentrated on precious metals royalties with a heavy bias towards gold, said Spencer Cole, executive vice president for North America. The remainder is exposed to base metals such as copper, lead, zinc and nickel; bulk metals like iron ore; as well as battery metals, including lithium, cobalt and palladium.
“We are really in the business of buying royalties that already exist,” Floyd said, adding that Vox had been successful in finding royalties in uncommon places. This includes buying from companies that are not in the mining business but are undergoing a restructuring or simply want to realise the value of the contract they are holding.
The current global economic turmoil and depressed trade has hit the demand for metals, but not all precious metals.
Floyd said the situation has increased investor interest in the company and also grown business-development opportunities by expanding the number of available deals. In particular, the demand for gold as a safe haven against other market risks and the resulting higher gold price have helped Vox, he said. At the same time, the market volatility incentivises the owners of royalties, who would otherwise be inclined to hold on to the contracts, to sell.
“We believe Vox has been an excellent case study of what the Cayman Islands, and specifically Cayman Enterprise City, have looked to develop” in terms of new business not related to tourism or traditional financial services, Floyd said.
The company has operated from Cayman from day one and expects to double its staff of three in the next six months.