Vox Royalty (VOXR) - 2024 Q4 - Annual Report

Independent Auditor's Report Ernst & Young LLP issued an unqualified opinion on the consolidated financial statements, prepared under IFRS and PCAOB standards - Ernst & Young LLP issued an unqualified opinion on the consolidated financial statements, confirming fair presentation under IFRS[7] - The audit adhered to Public Company Accounting Oversight Board (PCAOB) standards[9] - Ernst & Young LLP has served as the company's auditor since 2021[11] Consolidated Financial Statements This section presents the company's core financial statements, including financial position, loss, equity, and cash flows Consolidated Statements of Financial Position Total assets decreased to $51.4 million in 2024, while liabilities rose, resulting in total equity declining to $43.1 million Consolidated Statements of Financial Position (As at December 31) | Account | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Total current assets | 12,129,014 | 13,282,702 | | Total non-current assets | 39,252,310 | 39,423,907 | | Total assets | 51,381,324 | 52,706,609 | | Total current liabilities | 2,894,675 | 2,903,950 | | Total non-current liabilities | 5,426,450 | 4,878,989 | | Total liabilities | 8,321,125 | 7,782,939 | | Total equity | 43,060,199 | 44,923,670 | | Total liabilities and equity | 51,381,324 | 52,706,609 | Consolidated Statements of Loss and Comprehensive Loss Net loss widened to $1.65 million in 2024, primarily due to decreased royalty revenue and higher income tax expense Statement of Loss Highlights (For the years ended December 31) | Item | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Royalty revenue | 11,047,763 | 12,310,594 | | Gross profit | 7,914,825 | 9,978,660 | | Income from operations | 1,094,149 | 1,728,948 | | Income tax expense | (2,625,113) | (2,514,058) | | Net loss and comprehensive loss | (1,649,082) | (101,112) | - Basic and diluted loss per share was ($0.03) in 2024, compared to ($0.00) in 2023[14] Consolidated Statements of Changes in Equity Total equity decreased by $1.86 million in 2024 to $43.1 million, primarily due to net loss and dividends declared Changes in Equity for the year ended December 31, 2024 | Description | Amount ($) | | :--- | :--- | | Balance, December 31, 2023 | 44,923,670 | | Dividends declared | (2,419,309) | | Share-based compensation | 2,139,900 | | Net loss and comprehensive loss | (1,649,082) | | Other (share issue costs, DRIP, RSU settlement) | (34,986) | | Balance, December 31, 2024 | 43,060,199 | Consolidated Statements of Cash Flows Net cash from operations was $5.5 million in 2024, with investing and financing activities causing a $0.6 million net cash decrease Cash Flow Summary (For the years ended December 31) | Activity | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net cash flows from operating activities | 5,459,150 | 5,271,090 | | Net cash flows used in investing activities | (3,155,851) | (5,332,731) | | Net cash flows from (used in) financing activities | (2,866,837) | 5,250,936 | | Increase (decrease) in cash | (563,538) | 5,189,295 | | Cash and cash equivalents, end of year | 8,754,391 | 9,342,880 | Notes to the Consolidated Financial Statements This section provides detailed explanations of accounting policies, significant judgments, and financial statement line items Note 1: Nature of operations Vox Royalty Corp. acquires mining royalty assets, focusing on stable jurisdictions and producing or near-term producing assets - The company's business model focuses on growing its royalty asset portfolio through accretive acquisitions[19] - Strategic focus is on acquiring royalties from producing or near-term producing assets[19] Note 2: Material accounting policy information Financial statements adhere to IFRS, capitalizing royalty interests as assets depleted by units-of-production, with a single segment - Financial statements are prepared in accordance with IFRS as issued by the IASB[20] - Royalty interests are classified by stage, with producing interests depleted using the units-of-production method[27][28] - The company operates in a single reportable segment: the acquisition of royalty interests[75] Note 3: Significant judgments, estimates and assumptions Financial statement preparation involves significant judgments and estimates, especially for mineral reserves, depletion, and impairment - Management uses significant judgment in estimating mineral reserves and resources, impacting royalty interest carrying value and depletion[85][86] - Impairment assessment for royalty interests requires estimates of production, commodity prices, and discount rates[87] Note 4: Accounts receivable Accounts receivable decreased to $2.9 million in 2024, primarily comprising royalties receivable collected within 45 days Accounts Receivable Breakdown (As at December 31) | Category | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Royalties receivable | 2,897,870 | 3,414,128 | | Sales tax recoverable | 19,810 | 93,443 | | Total | 2,917,680 | 3,507,571 | Note 5: Royalty interests Royalty interests increased slightly to $38.0 million in 2024, with acquisitions and depletion impacting the carrying value - In May 2024, the company acquired the Castle Hill royalty portfolio in Australia for $3,119,814 cash consideration[93] Royalty Interests Activity (Year ended December 31, 2024) | Description | Amount ($) | | :--- | :--- | | Opening Balance (Jan 1, 2024) | 37,443,198 | | Additions (Acquisitions) | 3,673,928 | | Depletion | (3,132,938) | | Ending Balance (Dec 31, 2024) | 37,984,188 | - In 2023, the company fully impaired $1.5 million in Peruvian royalties due to operator's failure to renew mining claims[104][105] Note 6: Credit facility The company established a $15 million revolving credit facility with BMO, undrawn at year-end 2024, maturing in 2026 - The company entered a $15 million revolving credit facility with BMO, including a $10 million accordion feature[109] - As of December 31, 2024, no amounts were outstanding under the facility[111] - The facility's maturity date was extended to December 31, 2026[110] Note 7: Intangible assets The MRO database, the company's sole intangible asset, decreased to $988,631 in net book value due to amortization Intangible Asset - MRO Database | Item | Amount ($) | | :--- | :--- | | Cost | 1,837,500 | | Accumulated Amortization (Dec 31, 2024) | (848,869) | | Net Book Value (Dec 31, 2024) | 988,631 | | Net Book Value (Dec 31, 2023) | 1,172,170 | Note 8: Accounts payable and accrued liabilities Accounts payable and accrued liabilities decreased to $1.39 million in 2024, driven by lower trade and sales tax payables Accounts Payable and Accrued Liabilities (As at December 31) | Category | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Trade payable | 118,481 | 362,198 | | Sales tax payable | 487,901 | 653,792 | | Accrued liabilities | 784,125 | 824,102 | | Total | 1,390,507 | 1,840,092 | Note 9: Share capital and additional paid-in capital In 2024, the company declared $2.42 million in dividends and initiated a DRIP, with no SRP repurchases - A Share Repurchase Program for up to $1,500,000 was approved in March 2024, with no shares repurchased[124][126] Dividends Declared in 2024 | Declaration Date | Dividend per Share ($) | Total Payable ($) | | :--- | :--- | :--- | | March 7, 2024 | 0.012 | 601,462 | | May 8, 2024 | 0.012 | 602,883 | | August 7, 2024 | 0.012 | 607,059 | | November 6, 2024 | 0.012 | 607,905 | | Total | 0.048 | 2,419,309 | - A Dividend Reinvestment Plan (DRIP) was adopted in March 2024, issuing 39,913 common shares[129][130] Note 10: Equity reserves Equity reserves saw 6.4 million warrants expire, with 240,000 stock options and 990,804 RSUs granted - All 6,407,883 outstanding warrants, with a C**$4.50** exercise price, expired unexercised in March 2024[131] RSU Activity (Year ended December 31, 2024) | Category | Number of RSUs | Weighted Avg Fair Value ($) | | :--- | :--- | :--- | | Outstanding, beginning of year | 952,018 | 2.62 | | Granted | 990,804 | 2.01 | | Exercised | (633,761) | 2.48 | | Outstanding, end of year | 1,309,061 | 2.23 | - 240,000 stock options were granted to a third-party service provider with a C**$4.16** exercise price[135][136] Note 11: General and administration General and administration expenses decreased to $4.52 million in 2024, driven by lower professional fees and no TSX listing costs General and Administration Expenses (For the years ended December 31) | Category | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Salaries and benefits | 2,547,024 | 2,487,218 | | Corporate administration | 1,223,753 | 1,325,743 | | Professional fees | 415,788 | 713,475 | | Amortization | 183,539 | 183,539 | | Director fees | 147,478 | 114,663 | | TSX listing costs | - | 143,767 | | Total | 4,517,582 | 4,968,405 | Note 12: Other income Other income sharply decreased to $197,186 in 2024, primarily due to the absence of a prior year fair value gain Other Income Breakdown (For the years ended December 31) | Category | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Interest income | 482,853 | 398,955 | | Foreign exchange expense | (285,667) | (160,173) | | Fair value change of other liabilities | - | 445,216 | | Total | 197,186 | 683,998 | Note 13: Related party transactions Key management personnel compensation increased to $4.05 million in 2024, driven by higher share-based compensation Key Management Personnel Compensation (For the years ended December 31) | Category | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Short-term employee benefits | 2,115,432 | 2,080,826 | | Share-based compensation | 1,934,571 | 1,512,375 | | Total | 4,050,003 | 3,593,201 | Note 14: Commitments and contingencies The company faces ongoing litigation and significant contingent milestone payments, including over $6 million for Limpopo - The company filed a claim against Titan Minerals for replacement royalties or damages, potentially reversing up to $1,000,000 of a 2023 impairment[152][153] - A claim was filed against Aurenne MIT Pty Ltd regarding consent for Mt Ida royalty transaction documentation[154] - Future milestone payment commitments include $6.2 million for Limpopo, $1.3 million for Brits, and $0.6 million for Bullabulling[155] Note 15: Supplemental cash flow information This note details non-cash investing and financing activities, notably $2.8 million in share issuances for acquisitions in 2023 - In 2023, the company issued $2,821,454 in shares for royalty acquisitions and milestone payments, a significant non-cash activity[157] Note 16: Segment information The company operates as a single royalty acquisition segment, with Australia dominating revenue and non-current assets Revenue by Geographic Location (For the years ended December 31) | Location | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Australia | 10,915,392 | 11,250,950 | | Nigeria | - | 882,922 | | USA | 116,311 | 116,311 | | Brazil | 16,060 | 60,411 | | Total | 11,047,763 | 12,310,594 | Non-Current Assets by Geographic Location (As at December 31) | Location | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Australia | 30,452,281 | 30,396,980 | | Canada | 3,036,308 | 3,027,846 | | USA | 2,210,330 | 2,254,422 | | South Africa | 1,914,844 | 1,914,844 | | Other | 1,638,547 | 1,830,815 | | Total | 39,252,310 | 39,423,907 | Note 17: Income taxes Income tax expense was $2.6 million in 2024, with $10.9 million in unrecognized deferred tax assets from Canadian losses Income Tax Expense (For the years ended December 31) | Category | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Current tax expense | 2,077,652 | 626,500 | | Deferred tax expense | 547,461 | 1,887,558 | | Total Income tax expense | 2,625,113 | 2,514,058 | - As of December 31, 2024, the company had $10,862,000 in unrecognized deferred tax assets, primarily from Canadian non-capital losses[164][166] - Recognized deferred tax liabilities increased to $5,426,450, almost entirely related to Australian royalty interests[163] Note 18: Financial instruments The company faces credit, liquidity, currency, interest rate, and unhedged commodity price risks, managing capital for returns - The company does not hedge commodity price fluctuations, providing shareholders full market price exposure[174] - A 10% change in CAD/AUD vs USD would impact net loss by approximately $440,000[171] - The company's capital structure consists of $43.1 million in total equity as of December 31, 2024[180] Note 19: Subsequent events Subsequent to year-end, on February 20, 2025, the Board declared a quarterly dividend of $0.0125 per share - On February 20, 2025, the Board declared a quarterly dividend of $0.0125 per common share[182]