Ecora Resources PLC Announces Q3 Trading Update

Rhea-AI Summary

Ecora Resources PLC announced its Q3 trading update for the period ending October 25, 2022. The company reported a record portfolio contribution of $126.6m for the nine months, up from $46.9m in 2021. Q3 contributions reached $34.1m, a rise from $23.6m year-on-year. Despite delays in cobalt shipments impacting revenue from Voisey's Bay, the company remains optimistic about commodity price stabilization. A $185m acquisition of a copper and nickel royalty portfolio from South32 positions Ecora for future growth, aiming for over 90% exposure to sustainable commodities by 2026.

Positive

• Record portfolio contribution of $126.6m for 9M 2022, a significant increase from $46.9m in 2021.
• Acquired a copper and nickel royalty portfolio from South32 for $185m, enhancing sustainable commodity exposure.
• Strong performance despite delays in cobalt shipments, with Q3 contributions rising to $34.1m.

Negative

• Delayed cobalt shipments impacted revenue from Voisey's Bay, contributing to lower Q3 revenue of $1.59m, down 78% QoQ.
• Kestrel royalty income fell by 25% in Q3 2022 compared to Q2, indicating revenue volatility.

LONDON, UK / ACCESSWIRE / October 26, 2022 / Ecora Resources PLC (LSE:ECOR)(TSX:ECOR), a leading royalty company focused on supporting the supply of commodities essential to enabling a sustainable future, issues the following trading update for the period 1 July 2022 to 25 October 2022. Unless otherwise stated, all unaudited financial information is for the quarter ended 30 September 2022.

Summary:

• Portfolio contribution of $34.1m for Q3 (Q3 2021: $23.6m), resulting in record contribution of $126.6m for the nine months ending 30 September (9M 2021: $46.9m).
• Strong Q3 portfolio performance achieved against the backdrop of an expected softening in commodity prices, although these have started to stabilise and increase again at the start of Q4.
• Revenue from Voisey's Bay was impacted by the timing of deliveries as a number of cobalt shipments scheduled for Q3 were delayed and are now expected to be received in Q4.
• The Company was renamed Ecora Resources PLC, reflecting the successful transformation from a predominantly coal royalty business to one that by 2026 is expected to generate over 90% of its portfolio contribution from commodities required to support a sustainable future.
• $185m acquisition of an advanced development stage copper and nickel royalty portfolio from South32.
• OZ Minerals announced on 23 September 2022 that it has taken a Final Investment Decision on the West Musgrave copper and nickel project in Australia, on which Ecora holds a 2% NSR royalty. Construction is expected to commence in November 2022 with first production targeted for H2 2025.
• Brazilian Nickel PLC announced on 5 July 2022 the commencement of production from the small scale PNP1000 plant at the Piauí Nickel Project in Brazil, on which Ecora holds a 1.25% royalty.
• Agreement with lending syndicate to maintain the Group's revolving credit facility at $150m whilst adding a $50m accordion feature for future acquisitions.
• Net debt at 30 September 2022 of approximately $40.0m (30 June 22: $20.5m) with approximately $180 million of liquidity available to fund growth opportunities.

	Q3 2022 $m	QoQ	Q2 2022 $m	9M 2022 $m	YoY	9M 2021 $m
Kestrel	28.05	(25%)	37.39	98.65	359%	21.47
Voisey's Bay	1.59	(78%)	7.24	15.52	56%	9.93
Mantos Blancos	1.30	(18%)	1.59	4.40	2%	4.32
Maracás Menchen	0.85	(32%)	1.25	2.81	21%	2.33
Four Mile	0.02	(94%)	0.34	0.80	281%	0.21
Narrabri (disposed of on 31 December 2021)	n/a	n/a	n/a	n/a	n/a	1.67
Royalty income	31.81	(33%)	47.81	122.18	206%	39.93
Dividends - LIORC & Flowstream	0.89	6%	0.84	2.23	(52%)	4.67
Interest - McClean Lake	0.50	(11%)	0.56	1.65	(10%)	1.84
Royalty related revenue	33.20	(33%)	49.21	126.06	171%	46.44
EVBC*	0.81	14%	0.71	2.14	(8%)	2.33
Principal repayment - McClean Lake	0.43	(55%)	0.96	1.87	267%	0.51
Less:
Metal streams cost of sales	(0.36)	(78%)	(1.63)	(3.50)	45%	(2.42)
Total portfolio contribution	34.08	(31%)	49.25	126.57	170%	46.86

* 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.

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

"The South32 royalty portfolio acquisition has positioned copper, nickel and cobalt at the centre of Ecora's commodity exposure with the Company poised to benefit from a strong fundamental demand outlook over the next decade.

"We expect a strong finish to the year with key commodity prices underlying our portfolio currently in excess of average Q3 price levels. As a permanent source of capital to the mining sector, we are well positioned to respond to opportunities which may present themselves as a result of challenging market conditions."

For further information:

Ecora Resources PLC	+44 (0) 20 3435 7400
Marc Bishop Lafleche - Chief Executive Officer Kevin Flynn - Chief Financial Officer Geoff Callow - Head of Investor Relations
Website:	www.ecora-resources.com
Camarco Gordon Poole / Owen Roberts / Elfie Kent	+44 (0) 20 3757 4997

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).

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

SOURCE: Ecora Resources PLC

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FAQ

What were the key financial results for Ecora Resources (ECRAF) in Q3 2022?

Ecora Resources reported a portfolio contribution of $34.1m for Q3 2022, leading to a record $126.6m for 9M 2022.

How did Ecora's revenue from Voisey's Bay perform in Q3 2022?

Revenue from Voisey's Bay was $1.59m in Q3 2022, impacted by delayed cobalt shipments.

What acquisition did Ecora Resources (ECRAF) make in 2022?

Ecora Resources acquired a copper and nickel royalty portfolio from South32 for $185m.

What is Ecora Resources' strategy regarding sustainable commodities?

By 2026, Ecora aims for over 90% of its contributions to come from commodities supporting a sustainable future.