RCS - Ecora Resources PLC - Portfolio Update

Ecora ResourcesAnnouncement

06/03/2024 07:15

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RNS Number : 7067F  Ecora Resources PLC  06 March 2024

 

 

 

6 March 2024

 

Ecora Resources PLC

("Ecora" or the "Company")

 

Portfolio Update

 

Ecora Resources PLC (LSE/TSX: ECOR), the leading royalty company focused on
supporting the supply of commodities essential to creating a sustainable
future, issues a portfolio update following the recent public market updates
provided by the operators of key projects in Ecora's royalty and stream
portfolio.

 

The Company continues to expect volume growth in 2024 at operations underlying
its producing royalty portfolio which, at current commodity price levels,
would imply year-on-year portfolio contribution growth. In addition, Ecora's
near-term development royalties are poised for significant de-risking events
in the year ahead.

 

 

Producing royalties

 

Voisey's Bay (Operator: Vale)

 

Vale announced that the Voisey's Bay underground project was more than 90%
complete as of December 2023. Vale continues to anticipate ore mined at the
underground Reid Brook and Eastern Deeps ore bodies to ramp-up during the
course of 2024, with the Eastern Deeps main production start-up expected to
occur in the second half of this year. Ecora continues to expect to receive
between 12 and 16 deliveries of cobalt during 2024 (each delivery is 20 tonnes
of which 70% is attributable to Ecora).

 

Mantos Blancos (Operator: Capstone Copper)

 

Production for the full year is forecast to be in line with Ecora's
expectations at 49-57kt.  Capstone stated that during the first half of 2024
it intends to install the necessary equipment to remove bottlenecks between
major components of the Mantos Blancos processing circuit. Following which
Capstone expects the mine to operate at nameplate throughput rates of 7.3mtpa
and subsequently intends to recommence studies related to Mantos Blancos Phase
2 expansion.

 

Iron Ore Company of Canada (Operator: Rio Tinto)

 

The Iron Ore Company of Canada (IOC) has been awarded C$18.1million from the
Government of Canada's Low Carbon Economy Fund to support the decarbonisation
of the production of iron ore concentrate and iron ore pellets. IOC's
cumulative greenhouse gas emissions are expected to be reduced by 9% over the
life of the project.

 

Operator Production Guidance

 

 Mine                                                            Operator             Commodity          Production
                                                                 2024 (Forecast)                         2023                       2022
 Kestrel (production within Ecora's private royalty area) ((1))  Adaro / EMR Capital  Steel making coal  1.8-2.0 mt      1.6 mt     4.1 mt
 Mantos                                                          Capstone Copper      Copper             49 - 57 kt(4)   49.5 kt    41.2 kt

 Blancos ((2))
 Voisey's Bay ((3))                                              Vale                 Cobalt             240 - 320 t     220 t      380 t
 Maracás Menchen ((4))                                           Largo Resources      Vanadium           8.7 - 10.7 kt   9.4 kt     10.0 kt

 Cigar Lake ((5))                                                Cameco               Uranium            18 Mlbs         15.1 Mlbs  18 Mlbs
 Four Mile ((6))                                                 Quasar Resources     Uranium            4.5 - 5.0 Mlbs  5.0 Mlbs   4.9 Mlbs

 

1.   Implied Kestrel 2024 production within Ecora's private royalty area
based on 2023 production volumes as per Ecora trading update issued on 31
January.

2.   Mantos Blancos 2024 production guidance as per Capstone Copper Q4 2023
results announcement issued on 22 February 2024.

3.   Voisey's Bay 2024 cobalt deliveries as per Ecora trading update issued
on 31 January.  Ecora attributable interest of 70% of cobalt deliveries under
the Voisey's Bay stream.

4.   Maracás Menchen 2024 production guidance as per Largo Resources FY
2023 Operational and Sales results announcement issued on 23 January 2024.

5.   Cigar Lake 2024 production guidance as per Cameco 2023 Q4 results
announcement issued on 8 February 2024.

6.   Four Mile 2024 production guidance calculated with reference to 2022
and 2023 historical uranium production and sales volumes.

 

 

Development portfolio

 

Santo Domingo (Operator: Capstone Copper)

 

Capstone is expecting to release an updated Santo Domingo Feasibility Study
during the first half of 2024. The original 2018 Feasibility Study
contemplated a stand-alone operation and will be updated to reflect synergies
expected to arise from Capstone's nearby Mantoverde mine where a brownfield
expansion was completed at the end of 2023. Capstone is targeting a final
investment decision to construct the Santo Domingo project in H2 2025.

 

West Musgrave (Operator: BHP)

 

The West Musgrave project's economics remain robust, with BHP stating that the
operation could generate reasonable returns despite a weak nickel price
environment and assuming lower forward prices for nickel. However, as BHP
studies a potential move into care and maintenance for Nickel West, it will
consider the merits of phasing the remaining West Musgrave construction
capital expenditure. The West Musgrave project is currently 21% complete, and
first copper and nickel production had previously been targeted between Q4
2025 and calendar year 2026.

 

Piauí (Operator: Brazilian Nickel)

 

Brazilian Nickel Limited continues to progress construction financing
workstreams, including debt and equity funding. Detailed engineering
activities are underway, and the Brazilian Nickel project team has been
expanded to include a Chief Sustainability Officer with over 25 years'
experience, most recently at Vale Base Metals, and Chief People Officer with
17 years of experience, much of it in the mining sector.

 

The Piauí project, located in the Brazilian state of Piauí, is a low-cost
heap leaching nickel and cobalt project, expected to produce 27 ktpa of nickel
and 1 ktpa of cobalt credit during the initial 10 years of operation.

 

 

For further information:

 

 Ecora Resources PLC                        +44 (0) 20 3435 7400
 Geoff Callow - Head of Investor Relations

 Camarco                                    +44 (0) 20 3757 4997

 Gordon Poole / Owen Roberts / Elfie Kent

 Website:                                   www.e (http://www.ecora-resources.com) cora-resources.
                                            (http://www.ecora-resources.com) com (http://www.ecora-resources.com)

 

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) 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'. 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 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, steams 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.

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, steams 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.

Forward-looking statements 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.
Forward-looking statements are not guarantees of future performance and
involve risks, uncertainties and assumptions, that may be general or specific
which could cause actual results to differ materially from those forecast,
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. 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. No statement in this communication is
intended to be, nor should it be construed as, a profit forecast or a profit
estimate.

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.

 

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