REG - Ecora Resources PLC - Q1 2024 Trading Update

Ecora ResourcesAnnouncement

24/04/2024 07:00

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RNS Number : 7599L  Ecora Resources PLC  24 April 2024

 

24 April 2024

 

Ecora Resources PLC

("Ecora" or the "Group")

 

Q1 2024 Trading Update

 

Ecora Resources PLC (LSE/TSX: ECOR) issues the following trading update for
the period 1 January to 31 March 2024.

 

Ecora is the leading royalty company focused on supporting the supply of
industrial commodities essential to creating a sustainable future. The Group
has a portfolio which combines near term volume growth in 2024 and 2025 from
its producing royalty portfolio with a pipeline of development projects that
are expected to drive material medium term revenue growth.

 

Marc Bishop Lafleche, Chief Executive Officer of Ecora, commented:

"The portfolio performed in line with expectation, production at Kestrel
returned to our private royalty area driving a 117% increase in portfolio
contribution compared to Q4 23 ($19.5m vs $9m)((1)). Mining at Kestrel is
expected to remain within the bounds of our royalty area throughout the
quarter which should underpin a strong H1.

 

"We are keeping a close eye on the progress of the ramp up at Voisey's Bay,
the publication of the Santo Domingo Feasibility Study and the development
plan for the West Musgrave nickel-copper project."

 

Highlights:

 

·     Portfolio contribution of $19.5 million, up 117% on Q4 23((1))
primarily due to operations at Kestrel moving back within the Group's private
royalty area, with the rest of the portfolio producing volumes in line with
expectations.

·     Saleable production volumes within the Group's private royalty lands
at Kestrel totalled 660kt. FY 2024 guidance remains unchanged at a 15-25%
increase on FY 2023 (1.6Mt), with the majority of royalty receipts expected to
be in H1.

·     Two cobalt deliveries from Voisey's Bay during the period at an
average realised sales price of $16.0/lb. FY guidance remains unchanged at
12-16 deliveries of cobalt subject to scheduled ramp of underground activity
in H2.

·     On 18 April, BHP stated that the results of a review into the
potential phasing and capital spend for the West Musgrave development project
will be announced in August 2024.

·     Capstone Copper is scheduled to release the updated Santo Domingo
Feasibility Study during the first half of 2024.

·     Continue to expect year on year production volume growth at
operations underlying producing royalty portfolio in 2024 and 2025.

·     Net debt at 31 March was $87 million, providing the balance sheet
flexibility to pursue further growth.

 

(1)       Excludes $5.4m of accrued income released to the income
statement following the favourable Four Mile judgment announced on 4 December
2023.

( )

 Portfolio contribution((1))                    Q1 2024         Q4 2023  Q1 2023
                                                $m       QoQ    $m       $m
 Core portfolio
 Voisey's Bay (cobalt)                          1.0      (50%)  2.0      1.6
 Mantos Blancos (copper)                        1.3      (7%)   1.4      1.8
 Maracás Menchen (vanadium)                     0.7      -      0.7      0.9
 Four Mile (uranium) ((1))                      0.7      40%    0.5      0.4
 Other (copper)                                 0.1      (50%)  0.2      0.1

 Royalty and stream income                      3.8      (21%)  4.8      4.8

 Dividends - LIORC & Flowstream                 0.1      (50%)  0.2      0.4
 Interest - McClean Lake                        0.4      -      0.4      0.5

 Royalty and stream related revenue             4.3      (20%)  5.4      5.7

 EVBC ((2))                                     0.2      100%   0.1      0.7
 Principal repayment - McClean Lake             0.7      40%    0.5      0.7

 Less:
 Metal streams cost of sales                    (0.2)    (60%)  (0.5)    (0.4)
 Total portfolio contribution from core assets  5.0      (9%)   5.5      6.7

 Near term run-off portfolio
 Kestrel (steel making coal)                    14.5     314%   3.5      22.9
 Total near term run-off portfolio              14.5     314%   3.5      22.9

 Total portfolio contribution                   19.5     117%   9.0      29.6

 

((1)) Excludes $5.4m of accrued income released to the income statement
following the favourable Four Mile judgment announced on 4 December 2023

((2)) Under IFRS 9, the royalties received from EVBC are reflected in the fair
value movement of the underlying royalty rather than recorded as royalty
income.

 

For further information

 

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

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

 FTI Consulting                              +44(0) 20 3727 1000

 Sara Powell / Ben Brewerton / Nick Hennis   ecoraresources@fticonsulting.com (mailto:ecoraresources@fticonsulting.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) 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.

 

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