29 January 2025
Ecora Resources
PLC
("Ecora"
or the "Group")
Q4 2024 Trading
Update
Ecora Resources PLC (LSE/TSX: ECOR)
issues the following trading update for the period 1 October to 31
December 2024.
Fourth Quarter and Full Year 2024 Portfolio
Contribution
Increased production volumes at
Voisey's Bay and Mantos Blancos underpinned a portfolio
contribution of US$6.7m in Q4 2024, 29% up on Q3 2024. FY 2024
total portfolio contribution increased 9% year on year to US$63.2m
(FY 2023: US$58.2m - adjusted for US$5.4m one-off Four Mile receipt
in Q4 2023 following the favourable Court ruling with respect to
royalty payments due between 2014 and Q3 2023).
Marc Bishop Lafleche, Chief Executive Officer of Ecora,
commented:
"Fourth quarter performance was underpinned by a record
quarterly portfolio contribution from Mantos Blancos, coupled with
record production from the underground mine at Voisey's Bay, which
saw streamed cobalt entitlements for the year at the top of our
guidance range. We carry this momentum into 2025 with both
operations expected to deliver further production volume growth in
the year ahead.
"The fundamental outlook for copper remains strong, which has
led to some of the largest operators globally recently seeking to
significantly increase copper exposure. Ecora's royalty portfolio
provides investors exposure to a strong organic copper growth
profile through a de-risked royalty model. With volume growth
anticipated in 2025 we are well positioned to transact on
opportunities in the year ahead."
Highlights:
· 9%
increase in portfolio contribution for the year ended 31 December
2024 of US$63.2m (2023: US$58.2m)(1)
· Total
portfolio contribution of US$6.7m in Q4 2024 (Q4 2023:
US$9.0m(1); Q3 2024: US$5.2m)
· Completion of the Voisey's Bay Mine Expansion project,
underground mining activities continue to ramp up to steady state
production rates, with record levels of underground production
during the period driving net portfolio contribution of US$2.3m (Q3
2024: US$1.2m):
o Seven deliveries in Q4 2024 (Q3 2024: 4 deliveries) led to a
total of 15 deliveries in FY 2024; at the high end of FY guidance
of 11-16 deliveries (FY 2023: 11 deliveries)
o Realised Q4 2024 average sales price of US$12.9/lb (Q3 2024:
US$11.4/lb)
· Record
Mantos Blancos quarterly portfolio contribution of US$1.7m in Q4
2024 (Q3 2024: US$1.3m)
· The
operator of the Four Mile mine continues to report that no royalty
income is due, despite production continuing. The Group has
formally exercised its information rights under the royalty
agreement to understand the circumstances, following which it will
take such action as it considers appropriate
· Net
debt at 31 December 2024 of US$82.4m (Q3 2024: US$85.5m)
Portfolio contribution:
|
Q4 2024
|
Q3 2024
|
|
Q4 2023
|
FY 2024
|
FY 2023
|
|
|
US$m
|
US$m
|
Q/Q
|
US$m
|
US$m
|
US$m
|
Y/Y
|
Base metals
|
|
|
|
|
|
|
|
Mantos Blancos (copper)
|
1.7
|
1.3
|
|
1.4
|
5.8
|
6.1
|
|
Voisey's Bay (cobalt)
|
2.8
|
1.4
|
|
2.0
|
6.2
|
5.6
|
|
Carlota (copper)
|
0.2
|
0.1
|
|
0.2
|
0.6
|
0.6
|
|
Sub-total
|
4.7
|
2.8
|
68%
|
3.6
|
12.6
|
12.3
|
2%
|
|
|
|
|
|
|
|
|
Speciality metals &
uranium
|
|
|
|
|
|
|
|
McClean Lake(2)
(uranium)
|
0.8
|
1.2
|
|
0.9
|
4.5
|
4.1
|
|
Maracás Menchen (vanadium)
|
0.7
|
0.4
|
|
0.7
|
2.2
|
3.2
|
|
Four Mile(1)
(uranium)
|
-
|
-
|
|
0.5
|
1.4
|
1.4
|
|
Sub-total
|
1.5
|
1.6
|
(6%)
|
2.1
|
8.1
|
8.7
|
(7%)
|
|
|
|
|
|
|
|
|
Bulks &
other
|
|
|
|
|
|
|
|
Kestrel (steelmaking coal)
|
0.2
|
0.2
|
|
3.5
|
41.4
|
35.9
|
|
EVBC(3) (gold)
|
0.7
|
0.7
|
|
0.1
|
1.9
|
0.7
|
|
Other
|
0.1
|
0.1
|
|
0.2
|
0.4
|
2.0
|
|
Sub-total
|
1.0
|
1.0
|
-
|
3.8
|
43.7
|
38.6
|
13%
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
Metal stream cost of
sales(4)
|
(0.5)
|
(0.2)
|
|
(0.5)
|
(1.2)
|
(1.4)
|
|
Total portfolio contribution
|
6.7
|
5.2
|
29%
|
9.0(1)
|
63.2
|
58.2(1)
|
9%
|
12023 numbers exclude US$5.4m
of accrued income released to the income statement following the
favourable Four Mile judgement announced on 4 December
2023
2In Q4 2024, principal
repayment totalled US$0.5m and interest received totalled
US$0.3m
3Under IFRS 9, the royalties
received from EVBC are reflected in the fair value movement of the
underlying royalty rather than recorded as royalty
income
4Includes ongoing metal
purchase costs under stream agreements
Portfolio updates:
· Capstone Copper ("Capstone") is targeting the completion of a
Mantos Blancos Phase II Expansion Feasibility Study by the end of
2025
o Capstone is also evaluating Mantos Blancos tailings
reprocessing that could increase copper production by ~25 ktpa for
15 years with no additional mining or crushing costs
· Largo
Inc. published an Updated Life of Mine Plan and Pre-Feasibility
Study in respect of the Maracás Menchen mine which included a
13-year increase in the reserve-based mine life (out to 2054) and a
67% increase in Mineral Reserves
· Brazilian Nickel received a letter of interest from the U.S.
International Development Finance Corporation expressing interest
in providing the Piauí Nickel Project with a loan facility of up to
US$550m, representing approximately 40% of the overall financing
package
· Rainbow Rare Earths released an Interim Economic Study
confirming the Phalaborwa rare earths project as one of the highest
margin rare earths projects globally outside of China
· In
line with guidance, Kestrel Q4 2024 production mainly outside of
Ecora's private royalty area
· Cyprium Metals Limited ("Cyprium") published a Pre-Feasibility
Study for the Nifty Copper Mine Complex which estimated that the
Initial Cathode Project will produce an annual average of 6Kt of
copper over four years and forecast that the Copper Concentrate
Project will produce an average of 38.7 Kt of copper over an
estimated 20-year reserve-based mine life
o In
December, Cyprium launched a A$13.5m fundraising, with the majority
of the funds being used to advance the Nifty project. Cyprium
expects the fundraising to complete in the next month
· NexGen
Energy ("NexGen") completed its 2024 drilling programme in the
Patterson Corridor East (PCE), establishing a substantial 600m
strike and 600m depth uranium zone only 3.5km from the flagship
world-class Arrow deposit. A significant drill program in 2025 is
planned at PCE, where NexGen believes there is the prospectivity
for material growth
Post-period events:
· Approval of Whitehaven Coal's Narrabri Stage 3 project
triggered Ecora's right to a total of US$5m in contingent
consideration of which US$3m was received this month. The remaining
US$2m will be paid in equal instalments in January and December
2026
Portfolio outlook:
· Overall: 2025 production volumes are expected to grow relative
to 2024, driven mainly by:
o Voisey's Bay: the Group is expecting between 335 tonnes and
390 tonnes (24-28 deliveries) of attributable cobalt metal in 2025
(2024: 210 tonnes (15 deliveries)) as the ramp up
continues
o Kestrel: saleable volumes produced within the Group's private
royalty area are expected to be 5-10% higher than those achieved in
2024 (c. 2 Mt)
o Production primarily expected in the Group's private royalty
area in Q2 and Q3 2025
o Mantos Blancos: increased copper production due to higher mill
throughput with operator guidance of between 49,000 and 59,000
tonnes (2024: 44,574 tonnes)
o Volumes weighted towards H2 2025 given planned maintenance in
Q1 2025
· Capstone plans to progress partnership discussions and its
financing strategy for Santo Domingo throughout 2025, with a
potential project sanctioning decision not anticipated prior to
2026
o Capstone has allocated approximately US$50m of capital
expenditure in 2025 to the Santo Domingo project
· Business development activities remain focused on growing the
Group's near-term income producing royalty portfolio
For further information
About Ecora Resources
Ecora Resources is a leading royalty
company focused on supporting the supply of commodities essential
to creating a sustainable future.
Our vision is to be globally
recognised as the royalty company of choice synonymous with
commodities that support a sustainable future by continuing to grow
and diversify our royalty portfolio in line with our
strategy. We will achieve this through building a
diversified portfolio of scale over high quality assets that drives
low volatility earnings growth and shareholder
returns.
The mining sector has an essential
role to play in the energy transition, with commodities such as
copper, nickel and cobalt - key materials for manufacturing
batteries and electric vehicles. Copper also plays a critical role
in our electricity grids. All these commodities are mined and there
are not enough mines in operation today to supply the volume
required to achieve the energy transition.
Our strategy is to acquire royalties
and streams over low-cost operations and projects with strong
management teams, in well-established mining jurisdictions. Our
portfolio has been reweighted to provide material exposure to this
commodity basket and we have successfully transitioned from a coal
orientated royalty business in 2014 to one that by 2026 will be
materially coal free and comprised of over 90% exposure to
commodities that support a sustainable future. The fundamental
demand outlook for these commodities over the next decade is very
strong, which should significantly increase the value of our
royalty portfolio.
Ecora's shares are listed on the
London and Toronto Stock Exchanges (ECOR) and trade on the OTCQX
Best Market (OTCQX: ECRAF).
Cautionary statement on
forward-looking statements and related information
Certain statements in this
announcement, other than statements of historical fact, are
forward-looking statements based on certain assumptions and reflect
the Group's expectations and views of future events.
Forward-looking statements (which include the phrase
'forward-looking information' within the meaning of Canadian
securities legislation) are provided for the purposes of assisting
readers in understanding the Group's financial position and results
of operations as at and for the periods ended on certain dates, and
of presenting information about management's current expectations
and plans relating to the future. Readers are cautioned that such
forward-looking statements may not be appropriate other than for
purposes outlined in this announcement. These statements may
include, without limitation, statements regarding the operations,
business, financial condition, expected financial results, cash
flow, requirement for and terms of additional financing,
performance, prospects, opportunities, priorities, targets, goals,
objectives, strategies, growth and outlook of the Group including
the outlook for the markets and economies in which the Group
operates, costs and timing of acquiring new royalties and making
new investments, mineral reserve and resources estimates, estimates
of future production, production costs and revenue, future demand
for and prices of precious and base metals and other commodities,
for the current fiscal year and subsequent periods.
Forward-looking statements include
statements that are predictive in nature, depend upon or refer to
future events or conditions, or include words such as 'expects',
'anticipates', 'plans', 'believes', 'estimates', 'seeks',
'intends', 'targets', 'projects', 'forecasts', or negative versions
thereof and other similar expressions, or future or conditional
verbs such as 'may', 'will', 'should', 'would' and 'could'.
Forward-looking statements are based upon certain material factors
that were applied in drawing a conclusion or making a forecast or
projection, including assumptions and analyses made by the Group in
light of its experience and perception of historical trends,
current conditions and expected future developments, as well as
other factors that are believed to be appropriate in the
circumstances. The material factors and assumptions upon which such
forward-looking statements are based include: the stability of the
global economy; the stability of local governments and legislative
background; the relative stability of interest rates; the equity
and debt markets continuing to provide access to capital; the
continuing of ongoing operations of the properties underlying the
Group's portfolio of royalties, streams and investments by the
owners or operators of such properties in a manner consistent with
past practice; no material adverse impact on the underlying
operations of the Group's portfolio of royalties, streams and
investments from a global pandemic; the accuracy of public
statements and disclosures (including feasibility studies,
estimates of reserve, resource, production, grades, mine life and
cash cost) made by the owners or operators of such underlying
properties; the accuracy of the information provided to the Group
by the owners and operators of such underlying properties; no
material adverse change in the price of the commodities produced
from the properties underlying the Group's portfolio of royalties,
streams and investments; no material adverse change in foreign
exchange exposure; no adverse development in respect of any
significant property in which the Group holds a royalty or other
interest, including but not limited to unusual or unexpected
geological formations and natural disasters; successful completion
of new development projects; planned expansions or additional
projects being within the timelines anticipated and at anticipated
production levels; and maintenance of mining title.
Forward-looking statements are not
guarantees of future performance and involve risks, uncertainties
and assumptions, which could cause actual results to differ
materially from those anticipated, estimated or intended in the
forward-looking statements. Past performance is no guide to future
performance and persons needing advice should consult an
independent financial adviser. No statement in this communication
is intended to be, nor should it be construed as, a profit forecast
or a profit estimate.
By its nature, this information is
subject to inherent risks and uncertainties that may be general or
specific and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate; that assumptions may not be correct and that
objectives, strategic goals and priorities will not be
achieved.
A variety of material factors, many
of which are beyond the Group's control, affect the operations,
performance and results of the Group, its businesses and
investments, and could cause actual results to differ materially
from those suggested by any forward-looking information. Such risks
and uncertainties include, but are not limited to current global
financial conditions, royalty, stream and investment portfolio and
associated risk, adverse development risk, financial viability and
operational effectiveness of owners and operators of the relevant
properties underlying the Group's portfolio of royalties, streams
and investments; royalties, streams and investments subject to
other rights, and contractual terms not being honoured, together
with those risks identified in the 'Principal Risks and
Uncertainties' section of our most recent Annual Report, which is
available on our website. If any such risks actually occur, they
could materially adversely affect the Group's business, financial
condition or results of operations. Readers are cautioned that the
list of factors noted in the section herein entitled 'Risk' is not
exhaustive of the factors that may affect the Group's
forward-looking statements. Readers are also cautioned to consider
these and other factors, uncertainties and potential events
carefully and not to put undue reliance on forward-looking
statements.
The Group's management relies upon
this forward-looking information in its estimates, projections,
plans and analysis. Although the forward-looking statements
contained in this announcement are based upon what the Group
believes are reasonable assumptions, there can be no assurance that
actual results will be consistent with these forward-looking
statements. The forward-looking statements made in this
announcement relate only to events or information as of the date on
which the statements are made and, except as specifically required
by applicable laws, listing rules and other regulations, the Group
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made or to reflect the occurrence of unanticipated
events.
This announcement also contains
forward-looking information contained and derived from publicly
available information regarding properties and mining operations
owned by third parties. This announcement contains information and
statements relating to the Kestrel mine that are based on certain
estimates and forecasts that have been provided to the Group
by Kestrel Coal Pty Ltd ("KCPL"), the accuracy of which
KCPL does not warrant and on which readers may not rely.