Elemental Royalty (ELE) posts strong Q1 2026 growth, launches dividend and expands credit
Filing Impact
Filing Sentiment
Form Type
6-K
Rhea-AI Filing Summary
Elemental Royalty Corporation reported a sharp step-up in scale for Q1 2026 after its merger with EMX. Revenue rose to $24.3M from $11.6M, while royalty GEOs increased modestly to 4,983 from 4,606, driven mainly by Bonikro, Karlawinda, Caserones and Timok. Higher depletion, G&A, royalty generation spending and a $2.5M loss on warrant and investment revaluation held net income to $1.1M, down from $3.4M.
Adjusted EBITDA reached $17.7M and operating cash flow jumped to $14.5M, helping lift cash to $69.1M and working capital to $92.5M with no debt. The company upsized its revolving credit facility to $150M plus a $50M accordion and declared an inaugural annual dividend of $0.12 per share (including a $0.03 Q1 dividend payable in cash or Tether Gold XAU₮).
Subsequent to quarter-end, Elemental enhanced its Western Queen exposure by converting its royalty into an uncapped 2.5% NSR in exchange for an initial A$5.0M payment and a contingent A$5.0M tied to project milestones, adding further leverage to Australian gold development.
Positive
- None.
Negative
- None.
Insights
Q1 shows post‑merger scale, strong cash generation and added capital flexibility.
Elemental delivered Q1 2026 revenue of $24.3M, more than double Q1 2025, with key contributions from Bonikro, Karlawinda, Timok and Caserones. Adjusted EBITDA of $17.7M and operating cash flow of $14.5M underscore the cash-generating nature of the enlarged royalty portfolio.
Net income declined to $1.1M as higher depletion, G&A, royalty generation costs and a $2.5M loss on revaluation of financial instruments offset revenue growth. These costs reflect integration of EMX, portfolio expansion and non-cash warrant liability movements rather than weaker underlying assets.
The upsized $150M revolving facility with a $50M accordion, combined with $69.1M cash, $92.5M working capital and no debt, provides meaningful funding capacity for additional royalties. The inaugural $0.12-per-share annual dividend signals management’s view of durable cash flows, while the new 2.5% NSR at Western Queen and first production at Chapi expand future gold and copper optionality. Overall, the quarter supports a stronger, more diversified royalty platform.
Key Figures
Q1 2026 revenue: $24.3M
Q1 2026 net income: $1.1M
Adjusted EBITDA: $17.7M
+5 more
8 metrics
Q1 2026 revenue
$24.3M
Quarter ended March 31, 2026 vs $11.6M in Q1 2025
Q1 2026 net income
$1.1M
Quarter ended March 31, 2026 vs $3.4M in Q1 2025
Adjusted EBITDA
$17.7M
Three months ended March 31, 2026
Operating cash flow
$14.5M
Cash provided by operating activities in Q1 2026
Cash balance
$69.1M
Cash and cash equivalents as of March 31, 2026
Working capital
$92.5M
Working capital as of March 31, 2026
Revolving credit facility
$150M + $50M accordion
Amended facility signed February 26, 2026
Annual dividend
$0.12 per share
Inaugural annual dividend for fiscal 2026, $0.03 declared in Q1
Key Terms
gold equivalent ounces, net smelter return, Adjusted EBITDA, revolving credit facility, +2 more
6 terms
gold equivalent ounces financial
"The following table summarizes the Company’s GEOs1 during the three months ended March 31, 2026 and 2025"
Gold equivalent ounces express the combined output or reserves of a mine by converting other metals (like silver, copper or zinc) into the amount of gold they would be worth at current market prices, so everything is shown as a single “gold” number. For investors this provides a common yardstick to compare production, value and growth across projects that produce multiple metals—like converting several currencies into one familiar money unit.
net smelter return financial
"replaced with an uncapped 2.5% net smelter return royalty on gold produced from the applicable Western Queen royalty area"
Net smelter return is the percentage of revenue from selling a mineral or metal that a mining company or project owner receives after deducting costs like refining and transportation. It functions like a share of the profits from the mineral's sale, giving investors an idea of how much money the project generates. This measure helps investors assess the potential profitability of a mining asset.
Adjusted EBITDA financial
"Adjusted EBITDA | $ | 17,741 | | | $ | 11,471"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
revolving credit facility financial
"upsize the existing credit facility to $150.0 million with a $50.0 million accordion feature"
A revolving credit facility is a type of loan that a business can borrow from whenever it needs money, up to a set limit. It’s like having a credit card for companies—allowing them to borrow, pay back, and borrow again as needed, providing flexibility for managing cash flow or funding short-term expenses.
warrant liability financial
"These warrants are considered a derivative liability due to the exercise price being denominated in Canadian dollars"
Warrant liability is the financial obligation a company records when it grants warrants—special options giving the holder the right to buy company shares at a set price in the future. It matters to investors because changes in this liability can affect a company's reported earnings and overall financial health, similar to how a pending contract can influence a company's future value.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2026
Commission File Number: 001-42900
ELEMENTAL ROYALTY CORPORATION
(Translation of registrant’s name into English)
10001 W. Titan Road
Littleton, Colorado
United States of America 80125
Phone: +1 (303) 973-8585
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
[ ] Form 20-F [X] Form 40-F
SUBMITTED HEREWITH
Exhibits:
| Exhibit | Description | |||||||
99.1 | Condensed Consolidated Interim Financial Statements for the period ended March 31, 2026 | |||||||
99.2 | Management’s Discussion and Analysis for the period ended March 31, 2026 | |||||||
99.3 | Form 52-109F2 - Certification of Interim Filings - Full Certificate - CEO | |||||||
99.4 | Form 52-109F2 - Certification of Interim Filings - Full Certificate - CFO | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ELEMENTAL ROYALTY CORPORATION | ||||||||
| (Registrant) | ||||||||
| Date: May 13, 2026 | By: | /s/ Rocio Echegaray | ||||||
| Name: | Rocio Echegaray | |||||||
| Title: | Corporate Secretary | |||||||
Elemental Royalty Corporation
(formerly Elemental Altus Royalties Corp.)
(formerly Elemental Altus Royalties Corp.)
Condensed Consolidated Interim Financial Statements
(Unaudited)
March 31, 2026
Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s)
Condensed Consolidated Interim Statements of Financial Position
| As at March 31, | As at December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Assets | |||||||||||
Cash and cash equivalents (Note 4) | $ | 69,121 | $ | 53,143 | |||||||
Trade receivables and other assets (Note 5) | 24,959 | 25,154 | |||||||||
Investments (Note 6) | 16,780 | 16,115 | |||||||||
| Total current assets | 110,860 | 94,412 | |||||||||
Trade receivables and other assets (Note 5) | 2,996 | 2,043 | |||||||||
| Investment in associate | 996 | 1,000 | |||||||||
Royalty interests (Note 7) | 800,103 | 808,720 | |||||||||
| Property and equipment | 1,143 | 1,141 | |||||||||
| Total non-current assets | 805,238 | 812,904 | |||||||||
| Total Assets | $ | 916,098 | $ | 907,316 | |||||||
| Liabilities | |||||||||||
Accounts payable and accrued liabilities (Note 8) | $ | 8,924 | $ | 6,664 | |||||||
Warrant liability (Note 9) | 9,437 | 7,684 | |||||||||
| Total current liabilities | 18,361 | 14,348 | |||||||||
| Deferred income tax liability | 112,930 | 112,553 | |||||||||
| Total non-current liabilities | 112,930 | 112,553 | |||||||||
| Total Liabilities | 131,291 | 126,901 | |||||||||
| Shareholders' Equity | |||||||||||
Share capital (Note 11) | 793,789 | 787,682 | |||||||||
| Contributed surplus | 16,499 | 17,481 | |||||||||
| Accumulated other comprehensive income ("AOCI") | 1,615 | 1,503 | |||||||||
| Deficit | (27,096) | (26,251) | |||||||||
| Total Shareholders' Equity | 784,807 | 780,415 | |||||||||
| Total Liabilities and Shareholders' Equity | $ | 916,098 | $ | 907,316 | |||||||
Event subsequent to the reporting date (Note 20)
Approved on behalf of the Board of Directors on May 11, 2026
| Signed: | "David M Cole" | Director | Signed: | "Sunny Lowe" | Director | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except per share amounts
Condensed Consolidated Interim Statements of Income and Comprehensive Income
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Revenue (Note 12) | $ | 24,322 | $ | 11,639 | |||||||
Depletion of royalty interests (Note 7) | (8,617) | (5,374) | |||||||||
| Gross profit | 15,705 | 6,265 | |||||||||
General and administrative expenses (Note 13)1 | (5,586) | (1,600) | |||||||||
Royalty generation expenses, net (Note 14) | (1,436) | - | |||||||||
Share-based compensation expense (Note 8 and 11) | (2,008) | (757) | |||||||||
| Share of profit (loss) from associate | (4) | 445 | |||||||||
| Gains (losses) on disposals | (30) | 26 | |||||||||
| Profit from operations | 6,641 | 4,379 | |||||||||
| Other income and expenses | |||||||||||
| Interest income | 213 | 29 | |||||||||
Interest and finance expenses (Note 10) | (179) | (131) | |||||||||
Gain (loss) on revaluation of financial instruments (Note 6 and 9) | (2,478) | 179 | |||||||||
| Foreign exchange gain (loss) | (44) | 28 | |||||||||
| Other income | - | 129 | |||||||||
| Income before income taxes | 4,153 | 4,613 | |||||||||
| Tax expense | (3,070) | (1,165) | |||||||||
| Total net income | 1,083 | 3,448 | |||||||||
| Other comprehensive income | |||||||||||
Gain on revaluation of digital currency (Note 6) | 105 | - | |||||||||
| Foreign currency translation adjustment | 7 | (28) | |||||||||
| Other comprehensive income (loss) | 112 | (28) | |||||||||
| Total comprehensive income | $ | 1,195 | $ | 3,420 | |||||||
| Earnings per share | |||||||||||
Basic earnings per share (Note 16) | $ | 0.02 | $ | 0.14 | |||||||
Diluted earnings per share (Note 16) | $ | 0.02 | $ | 0.14 | |||||||
Weighted average number of common shares outstanding - basic (Note 16) | 64,066,984 | 24,576,259 | |||||||||
Weighted average number of common shares outstanding - diluted (Note 16) | 66,355,518 | 24,576,259 | |||||||||
1 Certain comparative figures have been reclassified to general and administrative expenses to conform to current year presentation as illustrated in Note 13.
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s)
Condensed Consolidated Interim Statements of Cash Flows
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Income for the period | $ | 1,083 | $ | 3,448 | |||||||
| Adjustments for: | |||||||||||
| Depletion and depreciation | 8,675 | 5,374 | |||||||||
Share-based compensation expense (Note 8 and 11) | 2,008 | 757 | |||||||||
| Loss (gain) on revaluation of financial instruments | 2,478 | (179) | |||||||||
Interest and finance expenses (Note 10) | 179 | 131 | |||||||||
| Tax expense | 3,070 | 1,165 | |||||||||
Other non-cash movements (Note 19) | (270) | (698) | |||||||||
| Changes in non-cash working capital items: | |||||||||||
| Accounts receivable | 346 | (5,868) | |||||||||
| Accounts payable and accrued liabilities | (39) | (1,582) | |||||||||
| Total cash provided by operating activities before taxes | 17,530 | 2,548 | |||||||||
| Taxes paid | (3,036) | (176) | |||||||||
| Total cash provided by operating activities | 14,494 | 2,372 | |||||||||
| Cash flows from investing activities | |||||||||||
| Distributions from SLM California | - | 922 | |||||||||
Proceeds from the sale of investments (Note 6) | 576 | 95 | |||||||||
Purchase of marketable securities (Note 6) | (461) | - | |||||||||
Purchase of Tether Gold cryptocurrency tokens (Note 6) | (1,000) | - | |||||||||
Other movements (Note 19) | (66) | - | |||||||||
| Total cash provided by (used in) investing activities | (951) | 1,017 | |||||||||
| Cash flows from financing activities | |||||||||||
| Interest received | 185 | 29 | |||||||||
| Interest paid | (80) | (99) | |||||||||
Loan repayments (Note 10) | - | (3,000) | |||||||||
Deferred financing costs (Note 10) | (1,134) | - | |||||||||
Proceeds from exercise of options (Note 11) | 3,405 | - | |||||||||
| Finance lease payments | (31) | - | |||||||||
| Total cash provided by (used in) financing activities | 2,345 | (3,070) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 90 | 28 | |||||||||
| Change in cash and cash equivalents | 15,978 | 347 | |||||||||
| Cash and cash equivalents, beginning | 53,143 | 4,454 | |||||||||
| Cash and cash equivalents, ending | $ | 69,121 | $ | 4,801 | |||||||
Supplemental disclosure with respect to cash flows (Note 19)
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except per share amounts
Condensed Consolidated Interim Statements of Shareholders' Equity
| Number of common shares | Share Capital | Contributed Surplus | AOCI | Deficit | Total | ||||||||||||||||||||||||||||||
| Balance as at December 31, 2025 | 63,829,995 | $ | 787,682 | $ | 17,481 | $ | 1,503 | $ | (26,251) | $ | 780,415 | ||||||||||||||||||||||||
| Issued during the period: | |||||||||||||||||||||||||||||||||||
| Shares issued for exercise of stock options | 395,165 | 6,107 | (2,702) | - | - | 3,405 | |||||||||||||||||||||||||||||
| Share-based payments | - | - | 1,720 | - | - | 1,720 | |||||||||||||||||||||||||||||
| Dividends declared | - | - | - | - | (1,928) | (1,928) | |||||||||||||||||||||||||||||
| Net income and comprehensive income for the period | - | - | - | 112 | 1,083 | 1,195 | |||||||||||||||||||||||||||||
| Balance as at March 31, 2026 | 64,225,160 | $ | 793,789 | $ | 16,499 | $ | 1,615 | $ | (27,096) | $ | 784,807 | ||||||||||||||||||||||||
| Number of common shares | Share Capital | Contributed Surplus | AOCI | Deficit | Total | ||||||||||||||||||||||||||||||
| Balance as at December 31, 2024 | 24,576,259 | $ | 217,449 | $ | 6,535 | $ | 1,416 | $ | (29,016) | $ | 196,384 | ||||||||||||||||||||||||
| Share-based payments | - | - | 757 | - | - | 757 | |||||||||||||||||||||||||||||
| Net income and comprehensive income (loss) for the period | - | - | - | (28) | 3,448 | 3,420 | |||||||||||||||||||||||||||||
| Balance as at March 31, 2025 | 24,576,259 | $ | 217,449 | $ | 7,292 | $ | 1,388 | $ | (25,568) | $ | 200,561 | ||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 1 - Nature of Operations
Elemental Royalty Corporation (formerly Elemental Altus Royalties Corp.) (the “Company” or “Elemental”), was incorporated under the laws of the Province of British Columbia. The Company is primarily involved in the acquisition and generation of precious and base metal royalties. The Company's head office is 10001 W. Titan Road, Littleton, Colorado, USA and the registered office address is Suite 905, 815 West Hastings Street, Vancouver, British Columbia, Canada. The Company’s common shares trade on the Nasdaq Exchange under the trading symbol “ELE” and on the Toronto Stock Exchange ("TSX") under the ticker symbol “ELE”.
These condensed consolidated financial statements of the Company are presented in United States Dollars ("US Dollars" or "US$"), unless otherwise noted, which is the functional currency of the parent company. The notation “$” represents US dollars, “C$” represents Canadian dollars, and “A$” represents Australian dollars.
Note 2 - Basis of Presentation
Statement of Compliance
The unaudited condensed consolidated interim financial statements have been prepared in accordance with IFRS Accounting Standards applicable to the preparation of interim financial statements, under International Accounting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB") (the “IFRS Accounting Standards”).
The condensed consolidated interim financial statements were approved by the board and authorized for issue on May 11, 2026.
Summary of Material Accounting Policies
The Company uses the same accounting policies and methods of computation as in the annual consolidated financial statements for the year ended December 31, 2025, except as described below. There was no material impact on the financial statements from new accounting standards or amendments to accounting standards, effective January 1, 2026.
New Accounting Policies
Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments
In May 2024, the International Accounting Standards Board issued amendments to IFRS 7 Financial Instruments: Disclosures and IFRS 9 Financial Instruments relating to settling financial liabilities using electronic payment systems and assessing contractual cash flow characteristics of financial assets. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, including financial assets that have environmental, social and corporate governance (ESG)-linked features and other similar contingent features. The IASB added disclosure requirements for financial instruments with contingent features that do not relate directly to basic lending risks and costs, and amended disclosures relating to equity instruments designated at fair value through other comprehensive income.
The amendments are effective for periods beginning on or after January 1, 2026, and adoption of these amendments did not have a material effect on our condensed consolidated interim financial statements. For financial liabilities settled in cash using an electronic payment system, we applied the election to deem these financial liabilities to be discharged before the settlement date. The amendments have been applied retrospectively with no restatement of comparative information, in accordance with transition requirements on initial application of IFRS 9.
Deferred Share Units ("DSUs")
Share-based payment arrangements related to deferred share units are measured at fair value. Deferred share units are liability awards settled in cash and measured at the quoted market price at the grant date and the corresponding liability is adjusted for changes in fair value at each subsequent reporting date until the awards are settled.
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 6 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 2 - Basis of Presentation (continued)
New Accounting Policies Issued But Not Yet Effective
Certain pronouncements have been issued by the IASB or the International Financial Reporting Interpretations Committee ("IFRIC") that are not mandatory for the current period and have not been early adopted. The Company has reviewed these updates and the amendment that is applicable to the Company is discussed below:
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. The Company is currently assessing the impact of the new standard.
Critical Accounting Estimates and Judgments
These condensed consolidated interim financial statements follow the same critical accounting estimates and judgements as the Company's most recent annual financial statements and should be read in conjunction with the annual audited consolidated financial statements of the Company for the year ended December 31, 2025.
Basis of consolidation
These condensed interim consolidated financial statements include the accounts of the Company and its subsidiaries. Material subsidiaries are listed in the following table:
| Ownership Percentage | |||||||||||||||||||||||
| Name | Place of Incorporation | Functional Currency | 2026 | 2025 | |||||||||||||||||||
| Altus Royalties Limited | England & Wales | US Dollar | 100% | 100% | |||||||||||||||||||
| Altus Strategies Limited | England & Wales | US Dollar | 100% | 100% | |||||||||||||||||||
| Bullion Monarch Mining, Inc. | United States of America | US Dollar | 100% | 100% | |||||||||||||||||||
| Elemental One Limited | BVI | US Dollar | 100% | 100% | |||||||||||||||||||
| Elemental Resources Limited | England & Wales | Pound Sterling | 100% | 100% | |||||||||||||||||||
| Elemental Royalties (Australia) Pty Ltd. | Australia | US Dollar | 100% | 100% | |||||||||||||||||||
| Elemental Royalties Delaware | United States of America | US Dollar | 100% | 100% | |||||||||||||||||||
| EMX (USA) Services Corp. | United States of America | US Dollar | 100% | 100% | |||||||||||||||||||
| EMX Chile SpA | Chile | US Dollar | 100% | 100% | |||||||||||||||||||
| EMX Royalty Corporation | Canada | US Dollar | 100% | 100% | |||||||||||||||||||
| Eurasia Madencilik Ltd. Sirketi | Türkiye | US Dollar | 100% | 100% | |||||||||||||||||||
| Minera Tercero SpA | Chile | US Dollar | 100% | 100% | |||||||||||||||||||
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 7 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 3 - Acquisition of EMX Royalty Corporation
On November 13, 2025, the Company closed an arrangement agreement whereby the Company acquired all of the issued and outstanding shares of EMX Royalty Corporation ("EMX") (the "Transaction"). Pursuant to the terms and conditions of the arrangement agreement between the Company and EMX dated September 4, 2025 (the "Arrangement Agreement"), EMX shareholders received 0.2822 of a common share for each EMX common share held prior to the Transaction, for a total of 31,500,450 common shares issued. In accordance with the Arrangement Agreement, each EMX share option was replaced with a fully vested replacement Elemental share option and each EMX warrant was replaced with a replacement Elemental warrant. The fair value of the replacement options and warrants was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:
| Options | Warrants | ||||||||||
| Risk free interest rate (%) | 2.47 | 2.45 | |||||||||
| Expected life (years) | 2.4 | 1.4 | |||||||||
| Expected volatility (%) | 44.4 | 45.3 | |||||||||
| Dividend yield (%) | - | - | |||||||||
For accounting purposes, the Company determined that the Transaction met the definition of a business combination under IFRS 3 - Business Combinations and applied the acquisition method of accounting. The closing date of the Transaction was determined to be November 13, 2025 and Elemental was determined to be the acquiring company. Upon completion of the acquisition of EMX, Elemental and EMX shareholders owned 51% and 49% of the Company, respectively. Below is a reconciliation of the purchase consideration for EMX along with the estimated preliminary fair value of the total assets acquired, net of liabilities assumed, as at the date of the Transaction.
| Consideration | |||||
| Number of Elemental shares issued to EMX shareholders | 31,500,450 | ||||
| Closing price of an Elemental share on November 12, 2025 (C$) | $ | 20.74 | |||
| C$/US$ exchange rate on November 12, 2025 | 1.4005 | ||||
| Fair value of Elemental share consideration | $ | 466,490 | |||
| Fair value of EMX share options replaced with Elemental share options | 10,799 | ||||
| Purchase consideration | $ | 477,289 | |||
| Assets and Liabilities Acquired | |||||
| Cash and cash equivalents | $ | 15,941 | |||
| Trade receivables and other assets | 11,338 | ||||
| Investments | 9,084 | ||||
| Equity investment in associate (SLM California) | 104,405 | ||||
| Royalty interests | 490,138 | ||||
| Property and equipment | 1,162 | ||||
| Accounts payable and accrued liabilities | (13,335) | ||||
| Warrant liability | (5,507) | ||||
| Loan payable | (24,714) | ||||
| Deferred tax liability | (111,223) | ||||
| Total assets acquired, net of liabilities assumed | $ | 477,289 | |||
The allocation is preliminary and the fair values of the royalty interests acquired and deferred tax liability assumed remain subject to change based on relevant information existing as at the date of the Transaction. The Company expects to close the allocation in Q2 2026 once the final assessments of operator information are obtained for all operating assets.
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 8 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 4 - Cash and Cash Equivalents
At March 31, 2026, and December 31, 2025, the Company had the following cash and cash equivalents:
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Cash | $ | 68,805 | $ | 52,684 | |||||||
| Demand deposits | 316 | 459 | |||||||||
| Total cash and cash equivalents | $ | 69,121 | $ | 53,143 | |||||||
The Company had demand deposits held by wholly-owned subsidiaries of the Company, which the full amount is for use and credit to the Company's exploration venture partners in the United States of America pursuant to expenditure requirements for ongoing property agreements.
Note 5 - Trade Receivables and Other Assets
The Company's trade receivables and other assets are primarily related to royalty revenue receivable, deferred compensation and milestone payments, refundable taxes from government taxation authorities, recoveries of royalty generation costs from project partners, prepaid expenses and reclamation bonds.
As at March 31, 2026, and December 31, 2025, trade receivables and other assets were as follows:
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Trade and accrued royalties receivable | $ | 20,079 | $ | 20,992 | |||||||
| Deferred milestone payments | 3,043 | 2,779 | |||||||||
| Refundable taxes | 1,117 | 806 | |||||||||
| Prepayments | 1,255 | 1,501 | |||||||||
Deferred financing costs (Note 10) | 1,682 | 178 | |||||||||
| Recoverable royalty generation expenditures and advances | 301 | 506 | |||||||||
| Reclamation bonds, deposits and other | 478 | 435 | |||||||||
| Total receivables and other assets | 27,955 | 27,197 | |||||||||
| Less: current portion | (24,959) | (25,154) | |||||||||
| Non-current portion | $ | 2,996 | $ | 2,043 | |||||||
Non-current trade receivables and other assets include certain deferred production-based milestones from the Korali-Sud royalty and the long-term portion of the unamortized deferred financing costs.
As at March 31, 2026, the Company has no material reclamation obligations. Once reclamation of the properties is complete, the bonds will be returned to the Company. The carrying amounts of the Company's trade receivables and other assets are predominantly denominated in US Dollars. There are no other currencies with which the carrying amounts are material.
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 9 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 6 - Investments
As at March 31, 2026, and December 31, 2025, the Company had the following changes to investments:
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Opening balance | $ | 16,115 | $ | 2,243 | |||||||
| Additions | 1,514 | 16,221 | |||||||||
| Disposals | (576) | (5,231) | |||||||||
| Revaluation gains (losses) | (273) | 2,882 | |||||||||
| Ending balance | $ | 16,780 | $ | 16,115 | |||||||
During the period, the Company purchased $1.0 million in Tether Gold XAU₮ cryptocurrency tokens (Note 15). The current value of the Tether Gold XAU₮ cryptocurrency tokens as at March 31, 2026 was $2.2 million (December 31, 2025 - $1.1 million).
Note 7 - Royalty Interests
As at and for the three months ended March 31, 2026:
| Cost | Accumulated Depletion | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Opening | Additions | Disposals/Impairment | Ending | Opening | Depletion | Disposals/Impairment | Ending | Carrying Amount | |||||||||||||||||||||||||||||||||||||||||||||
| Royalty Interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ballarat, Australia | $ | 9,896 | $ | - | $ | - | $ | 9,896 | $ | 3,067 | $ | 378 | $ | - | $ | 3,445 | $ | 6,451 | |||||||||||||||||||||||||||||||||||
| Balya, Türkiye | 24,808 | - | - | 24,808 | 258 | 391 | - | 649 | 24,159 | ||||||||||||||||||||||||||||||||||||||||||||
Bonikro, Cote d'Ivoire | 31,800 | - | - | 31,800 | 7,194 | 2,177 | - | 9,371 | 22,429 | ||||||||||||||||||||||||||||||||||||||||||||
Cactus, U.S.A | 7,922 | - | - | 7,922 | - | - | - | - | 7,922 | ||||||||||||||||||||||||||||||||||||||||||||
Caserones, Chile | 132,496 | - | - | 132,496 | 1,079 | 2,050 | - | 3,129 | 129,367 | ||||||||||||||||||||||||||||||||||||||||||||
Chapi, Peru | 19,036 | - | - | 19,036 | - | - | - | - | 19,036 | ||||||||||||||||||||||||||||||||||||||||||||
Diablillos, Argentina | 30,580 | - | - | 30,580 | - | - | - | - | 30,580 | ||||||||||||||||||||||||||||||||||||||||||||
Dugbe, Liberia | 16,505 | - | - | 16,505 | - | - | - | - | 16,505 | ||||||||||||||||||||||||||||||||||||||||||||
| Gediktepe, Türkiye | 24,909 | - | - | 24,909 | 216 | 580 | - | 796 | 24,113 | ||||||||||||||||||||||||||||||||||||||||||||
Karlawinda, Australia | 37,166 | - | - | 37,166 | 11,278 | 542 | - | 11,820 | 25,346 | ||||||||||||||||||||||||||||||||||||||||||||
Korali-Sud, Mali | 11,196 | - | - | 11,196 | 5,126 | - | - | 5,126 | 6,070 | ||||||||||||||||||||||||||||||||||||||||||||
Laverton, Australia | 64,263 | - | - | 64,263 | - | - | - | - | 64,263 | ||||||||||||||||||||||||||||||||||||||||||||
Leeville, U.S.A. | 48,806 | - | - | 48,806 | 904 | 1,341 | - | 2,245 | 46,561 | ||||||||||||||||||||||||||||||||||||||||||||
Timok, Serbia | 187,833 | - | - | 187,833 | 524 | 1,104 | - | 1,628 | 186,205 | ||||||||||||||||||||||||||||||||||||||||||||
Vittangi, Sweden | 34,124 | - | - | 34,124 | - | - | - | - | 34,124 | ||||||||||||||||||||||||||||||||||||||||||||
Wahgnion, Burkina Faso | 12,379 | - | - | 12,379 | 6,227 | - | - | 6,227 | 6,152 | ||||||||||||||||||||||||||||||||||||||||||||
| Yenipazar, Türkiye | 38,073 | - | - | 38,073 | - | - | - | - | 38,073 | ||||||||||||||||||||||||||||||||||||||||||||
| Other Producing Royalties | 11,638 | - | - | 11,638 | 1,633 | 54 | - | 1,687 | 9,951 | ||||||||||||||||||||||||||||||||||||||||||||
| Other Royalty Assets | 102,796 | - | - | 102,796 | - | - | - | - | 102,796 | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 846,226 | $ | - | $ | - | $ | 846,226 | $ | 37,506 | $ | 8,617 | $ | - | $ | 46,123 | $ | 800,103 | |||||||||||||||||||||||||||||||||||
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 10 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 8 - Accounts Payable & Accrued Liabilities
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Trade payables | $ | 1,082 | $ | 2,209 | |||||||
| Accrued liabilities | 2,509 | 1,683 | |||||||||
| Lease liability | 459 | 489 | |||||||||
| Taxes payable | 2,211 | 1,901 | |||||||||
| Dividends payable | 1,927 | - | |||||||||
| Other payables and advances | 736 | 383 | |||||||||
| Total | $ | 8,924 | $ | 6,664 | |||||||
During the three months ended March 31, 2026, the Company granted 14,919 DSUs to independent directors of the Company. These DSUs are cash-settled and only redeemable upon the retirement, resignation or replacement of the director. During the three months ended March 31, 2026, the Company recorded $0.3 million (2025 - $0.0 million) of share-based compensation related to DSUs which was included in other payables and advances.
The following table summarizes information about the DSUs which were outstanding at March 31, 2026:
| Number of DSUs | |||||
| Balance as at December 31, 2025 | - | ||||
| Granted | 14,919 | ||||
| Balance as at March 31, 2026 | 14,919 | ||||
Note 9 - Warrant Liability
During the year ended December 31, 2025, the Company issued replacement warrants as part of the acquisition of EMX. The terms of the warrants match the outstanding warrants EMX had at the closing of the transaction. These warrants are considered a derivative liability due to the exercise price being denominated in Canadian dollars compared to a US Dollar functional and presentation currency. As at March 31, 2026, the fair value of the warrant liability was $9.4 million (December 31, 2025 - $7.7 million). During the three months ended March 31, 2026, the Company recognized a loss of $2.2 million (2025 - $Nil) on revaluation of the warrant liability, which was included in the revaluation of financial instruments.
The fair value of the warrant liability was estimated using the Black-Scholes pricing model with weighted average assumptions as follows:
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Risk free interest rate (%) | 2.82 | 2.58 | |||||||||
| Expected life (years) | 1.04 | 1.28 | |||||||||
| Expected volatility (%) | 62.05 | 48.16 | |||||||||
| Dividend yield | - | - | |||||||||
During the three months ended March 31, 2026, there were no changes in the number of warrants outstanding.
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 11 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 9 - Warrant Liability (continued)
The following table summarizes information about the warrants which were outstanding as at March 31, 2026:
| Date Issued | Number of Warrants | Exercisable | Exercise Price (C$) | Expiry Date | |||||||||||||||||||
| November 12, 2025 | 1,075,780 | 1,075,780 | 15.77 | April 14, 2027 | |||||||||||||||||||
| Total | 1,075,780 | 1,075,780 | |||||||||||||||||||||
Note 10 - Borrowings
Credit Facility
As at December 31, 2025 the Company had a $50.0 million revolving credit facility with National Bank of Canada ("NBC"), Canadian Imperial Bank of Commerce ("CIBC") and Royal Bank of Canada ("RBC"). On February 26, 2026, the Company signed an amendment to the existing credit facility agreement to upsize the existing credit facility to $150.0 million with a $50.0 million accordion feature (the "Amended Facility") with the Bank of Nova Scotia ("BNS") replacing RBC as a lender. Depending on the Company's leverage ratio, amounts drawn on the Amended Facility are subject to interest at SOFR plus 2.25% - 3.50% per annum, and the undrawn portion is subject to a standby fee of 0.50% - 0.78% per annum. The Amended Facility has a term of three years, extendable through mutual agreement between the Company and the lenders. In connection with the execution of the Amended Facility, the Company capitalized transaction costs of $1.6 million to be amortized over the term of the Amended Facility. As at March 31, 2026, $1.7 million of unamortized transaction costs remained outstanding (Note 5).
The Amended Facility includes a number of financial covenants including maintenance of an interest coverage ratio above 3.00:1.00, maintenance of a net leverage ratio below 3.50:1.00 and maintenance of a net worth relative to that at the date of the Amended Facility plus cumulative net income thereafter. The financial covenants are measured on a quarterly basis. As at March 31, 2026 and December 31, 2025, the Company certified that it was in compliance with the terms of the covenants.
The following table summarizes the changes to the Company's loan payable during the three months ended March 31, 2026:
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Opening balance | $ | - | $ | 2,687 | |||||||
| Assumed debt on acquisition of EMX | - | 25,000 | |||||||||
| Repayments | - | (28,000) | |||||||||
| Amortization of transaction costs | - | 129 | |||||||||
Transaction costs reclassified to other assets (Note 5) | - | 184 | |||||||||
| Ending balance | $ | - | $ | - | |||||||
For the three months ended March 31, 2026, the Company recognized interest expense of $0.1 million (2025 - $0.1 million) on the credit facility which was included in finance expenses.
Note 11 - Shareholders' Equity
Authorized
As at March 31, 2026, the authorized share capital of the Company was an unlimited number of common shares without par value.
On March 20, 2026 the Company declared a dividend of $0.03 per common share in the capital of the Company. As at March 31, 2026 the dividend had not been paid and was included in accounts payable and accrued liabilities (Note 8).
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 12 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 11 - Shareholders' Equity (continued)
On March 25, 2025 the Company commenced a Normal Course Issuer Bid ("NCIB"). Under the NCIB Elemental may purchase for cancellation up to 1,228,812 common shares in the capital of the Company over a twelve month period. During the period ended March 31, 2026, no common shares were repurchased for cancellation and the NCIB expired.
Common Shares
During the three months ended March 31, 2026, the Company:
•Issued 395,165 common shares for net proceeds of $3.4 million pursuant to the exercise of stock options.
Stock Options
The Company maintains an incentive compensation plan for stock options, restricted share units ("RSUs") and deferred share units. The maximum number of shares reserved for issue under the plan shall not exceed 10% of the outstanding common shares of the Company, as at the date of the grant. The maximum number of common shares reserved for issue to any one person under the plan cannot exceed 5% of the issued and outstanding number of common shares at the date of the grant and the maximum number of common shares reserved for issue to a consultant or a person engaged in investor relations activities cannot exceed 2% of the issued and outstanding number of common shares at the date of the grant. The exercise price of each option granted under the plan may not be less than the Discounted Market Price (as that term is defined in the policies of the TSX).
The vesting terms of the awards are in the sole discretion of the Board of Directors. Options may be granted for a maximum term of ten years from the date of the grant, are non-transferable and expire within 90 days of termination of employment or holding office as a director or officer of the Company.
During the three months ended March 31, 2026, the change in stock options outstanding was as follows:
| Number | Weighted Average Exercise Price (C$) | Weighted Average Life | |||||||||||||||
| Balance as at December 31, 2025 | 2,817,625 | $ | 12.18 | 2.66 | |||||||||||||
| Granted | 663,339 | 23.48 | |||||||||||||||
| Exercised | (395,165) | 11.75 | |||||||||||||||
| Forfeited | (8,058) | 12.38 | |||||||||||||||
| Balance as at March 31, 2026 | 3,077,741 | $ | 14.67 | 3.39 | |||||||||||||
| Exercisable as at March 31, 2026 | 2,262,273 | $ | 12.15 | 2.36 | |||||||||||||
The following table summarizes information about the stock options which were outstanding at March 31, 2026:
| Year of expiry | Number of stock options | Weighted average exercise price (C$) | |||||||||
| 2026 | 155,771 | 14.54 | |||||||||
| 2027 | 901,748 | 13.13 | |||||||||
| 2028 | 218,418 | 9.58 | |||||||||
| 2029 | 525,629 | 10.76 | |||||||||
| 2030 | 612,836 | 12.59 | |||||||||
| 2033 | 663,339 | 23.48 | |||||||||
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 13 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 11 - Shareholders' Equity (continued)
The fair value of stock options granted was estimated using the Black-Scholes option pricing model with weighted average assumptions as follows:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Risk free interest rate (%) | 3.07 | 2.70 | |||||||||
| Expected life (years) | 4.0 | 5.0 | |||||||||
| Expected volatility (%) | 43.5 | 39.0 | |||||||||
| Dividend yield (%) | - | - | |||||||||
During the three months ended March 31, 2026, the Company recorded $1.3 million (2025 - $0.6 million) of share-based compensation expense related to stock options.
Restricted Share Units
The Company has established a RSU plan whereby RSUs will be issued to eligible employees or directors. RSUs give the holder the right to receive a specified number of common shares at the specified vesting date. RSUs vest over a period of three years from the grant date. RSU expense is recognized over the vesting period based upon the fair value of the Company’s common shares on the grant date and the awards that are expected to vest. The fair value is calculated with reference to the closing price of the Company’s common shares on the date of grant.
The following table summarizes information about the RSUs which were outstanding at March 31, 2026:
| Number of RSUs | Weighted Average Life (years) | ||||||||||
| Balance as at December 31, 2025 | 247,100 | 3.65 | |||||||||
| Granted | 155,133 | ||||||||||
| Forfeited | (18,425) | ||||||||||
| Balance as at March 31, 2026 | 383,808 | 3.14 | |||||||||
| Exercisable as at March 31, 2026 | 95,276 | ||||||||||
During the three months ended March 31, 2026, the Company recorded $0.4 million (2025 - $0.2 million) of share-based compensation related to RSUs.
Note 12 - Revenue
During the three months ended March 31, 2026 and 2025 the Company had the following sources of revenue and other income:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Royalty revenue | $ | 23,857 | $ | 11,639 | |||||||
| Option, property and other revenue | 465 | - | |||||||||
| Total | $ | 24,322 | $ | 11,639 | |||||||
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 14 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 12 - Revenue (continued)
The Company has a number of exploration stage royalties and royalty generation properties being advanced by the Company and within partnered agreements. Many of these projects include staged or conditional payments owed to the Company payable in cash or partner equity pursuant to individual agreements. The Company may also earn conditional payments on producing royalties.
During the three months ended March 31, 2026 and 2025 the Company had the following sources of royalty revenue:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Ballarat | $ | 966 | $ | 474 | |||||||
| Bonikro | 6,150 | 2,193 | |||||||||
| Caserones | 6,837 | - | |||||||||
| Gediktepe | 1,084 | - | |||||||||
| Karlawinda | 2,821 | 1,843 | |||||||||
| Korali-Sud | - | 6,648 | |||||||||
| Leeville | 2,065 | - | |||||||||
| Timok | 2,242 | - | |||||||||
| Other producing royalties | 1,613 | 481 | |||||||||
| Advanced royalty payments | 79 | - | |||||||||
| Total | $ | 23,857 | $ | 11,639 | |||||||
Note 13 - General and Administrative Expenses
During the three months ended March 31, 2026 and 2025 the Company had the following sources of general and administrative expenses:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Salaries, fees and employee benefits | $ | 3,081 | $ | 1,050 | |||||||
| Professional fees and consulting fees | 1,133 | 294 | |||||||||
| Marketing and promotion | 88 | 79 | |||||||||
| Listing and filing fees | 127 | 26 | |||||||||
| Corporate administration | 715 | 135 | |||||||||
| Project evaluation and transaction related expenses | 442 | 16 | |||||||||
| Total | $ | 5,586 | $ | 1,600 | |||||||
Certain comparative figures have been reclassified to general and administrative expenses to conform to current year presentation as shown in the table below:
| As previously reported March 31, 2025 | Reclassification | Reclassified March 31, 2025 | |||||||||||||||
| General and administrative expenses | $ | 1,584 | $ | 16 | $ | 1,600 | |||||||||||
| Project evaluation | $ | 16 | $ | (16) | $ | - | |||||||||||
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 15 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 14 - Royalty Generation Expenses
The Company incurs expenditures to originate and evaluate mineral projects, partner with major and junior mining companies, and selectively retain royalty interests. During the three months ended March 31, 2026 and 2025 the Company had the following project and royalty generation costs:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Administrative costs | $ | 242 | $ | - | |||||||
| Drilling, technical, and support costs | 142 | - | |||||||||
| Personnel | 869 | - | |||||||||
| Property costs | 482 | - | |||||||||
| Professional fees | 45 | - | |||||||||
| Total Expenditures | 1,780 | - | |||||||||
| Recoveries from partners | (344) | - | |||||||||
| Net Expenditures | $ | 1,436 | $ | - | |||||||
Note 15 - Related Party Transactions
The aggregate value of transactions and outstanding balances relating to key management personnel for the three months ended March 31, 2026 and 2025 were as follows:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Salaries, fees, benefits and professional fees | $ | 1,528 | $ | 611 | |||||||
| Share-based compensation | 1,588 | 505 | |||||||||
| Total | $ | 3,116 | $ | 1,116 | |||||||
As at March 31, 2026 the Company held $2.2 million (December 31, 2025 - $1.1 million) in Tether Gold XAU₮ cryptocurrency tokens. As at March 31, 2026 a net $0.7 million (December 31, 2025 - $0.1 million) was due to related parties.
Note 16 - Earnings per Share
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net income | $ | 1,083 | $ | 3,448 | |||||||
| Weighted average number of common shares outstanding - basic | 64,066,984 | 24,576,259 | |||||||||
| Dilutive effect of stock options and warrants | 2,288,534 | - | |||||||||
| Weighted average number of common shares outstanding - diluted | 66,355,518 | 24,576,259 | |||||||||
| Basic earnings per share | $ | 0.02 | $ | 0.14 | |||||||
| Diluted earnings per share | $ | 0.02 | $ | 0.14 | |||||||
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 16 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 17 - Segmented Information
The Company’s business is organized into one single operating segment, consisting of acquiring, managing and generating royalties. The Company’s chief operating decision-maker, the CEO, makes capital allocation decisions, reviews operating results and assesses performance.
Geographic revenues from royalties are determined by the location of the operations giving rise to the revenue.
For the three months ended March 31, 2026 and 2025, the Company had royalty revenue located geographically as follows:
| North America | South America | Europe | Australia | Africa | Total | ||||||||||||||||||||||||||||||
| Royalty revenue | |||||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | 2,515 | $ | 6,837 | $ | 4,093 | $ | 4,262 | $ | 6,150 | $ | 23,857 | |||||||||||||||||||||||
| March 31, 2025 | $ | 231 | $ | - | $ | - | $ | 2,567 | $ | 8,841 | $ | 11,639 | |||||||||||||||||||||||
As at March 31, 2026 and December 31, 2025, the Company had royalty interests located geographically as follows:
| North America | South America | Europe | Australia | Africa | Total | ||||||||||||||||||||||||||||||
| Royalty interests | |||||||||||||||||||||||||||||||||||
| As at March 31, 2026 | $ | 89,896 | $ | 197,619 | $ | 341,560 | $ | 113,271 | $ | 57,757 | $ | 800,103 | |||||||||||||||||||||||
| As at December 31, 2025 | $ | 91,251 | $ | 199,669 | $ | 343,635 | $ | 114,230 | $ | 59,935 | $ | 808,720 | |||||||||||||||||||||||
Note 18 - Financial Instruments
Management of Capital
Management monitors the Company’s financial risk management policies and exposures and approves financial transactions.
The Company’s objectives when managing capital are to provide shareholder returns through maximization of the profitable growth of the business and to maintain a degree of financial flexibility relevant to the underlying operating and metal price risks while safeguarding the Company’s ability to continue as a going concern. The Company manages the capital structure and makes adjustments in the light of changes in economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure the Company may issue new shares, acquire debt, or sell assets. Management regularly reviews cash flow forecasts to determine whether the Company has sufficient cash reserves to meet future working capital requirements and to take advantage of business opportunities.
The Company was not subject to any externally imposed capital requirements with the exception of complying with certain covenants under the Company's credit facility. The Company was in compliance with the debt covenants in force as at March 31, 2026. Details of these covenants are included in Note 10. There were no changes in the Company's approach to capital management for the period presented.
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 17 | |||||||||||||||
Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 18 - Financial Instruments (continued)
Fair Value of Financial Instruments
Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy based on the degree to which the inputs used to determine the fair value are observable. The three levels of the fair value hierarchy are:
Level 1 – Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Unobservable inputs which are supported by little or no market activity.
The levels in the fair value hierarchy into which our financial assets and liabilities that are measured and recognized in the consolidated statement of financial position at fair value on a recurring basis were categorized as follows:
| Fair value as at March 31, 2026 | |||||||||||||||||||||||
| Recurring Measurements | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Investments | $ | 7,685 | $ | 9,095 | $ | - | $ | 16,780 | |||||||||||||||
| Warrant liability | - | (9,437) | - | (9,437) | |||||||||||||||||||
| Total | $ | 7,685 | $ | (342) | $ | - | $ | 7,343 | |||||||||||||||
| Fair value as at December 31, 2025 | |||||||||||||||||||||||
| Recurring Measurements | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Investments | $ | 6,839 | $ | 9,276 | $ | - | $ | 16,115 | |||||||||||||||
| Warrant liability | - | (7,684) | - | (7,684) | |||||||||||||||||||
| Total | $ | 6,839 | $ | 1,592 | $ | - | $ | 8,431 | |||||||||||||||
The carrying value of cash and cash equivalents, current trade receivables and other assets and accounts payable and accrued liabilities, approximate their fair value because of the short-term nature of these instruments.
The Company holds warrants exercisable into common shares of public companies and has issued warrants exercisable into common shares of the Company. These warrants do not trade on an exchange and are restricted in their transfer. The fair value of the warrants was determined using the Black-Scholes pricing model using observable market information and thereby classified within Level 2 of the fair value hierarchy.
The Company's financial instruments are exposed to certain financial risks, including credit risk, interest rate risk, market risk, liquidity risk and currency risk.
Credit Risk
Credit risk is the risk of loss associated with a counterparty’s inability to fulfil its payment obligations. The Company’s maximum exposure to credit risk is attributable to cash and cash equivalents and accounts receivable relating to royalty revenues and milestone payments. The credit risk on cash is limited because the Company invests its cash in deposits with well capitalized financial institutions. The Company’s accounts receivable is subject to the credit risk of the counterparties who own and operate the mines underlying the royalty portfolio. In order to mitigate its exposure to credit risk, the Company closely monitors its financial assets.
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Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 18 - Financial Instruments (continued)
Interest Rate Risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing financial assets and liabilities that the Company uses. Treasury activities take place under procedures and policies approved and monitored by the Board to minimize the financial risk faced by the Company. Interest-bearing assets comprise cash and cash equivalents which are considered to be short-term liquid assets, and interest-bearing liabilities which comprise the loan from NBC, CIBC and BNS. Depending on the Company's leverage ratio, amounts drawn on the facility are subject to interest at SOFR plus 2.25% - 3.50% per annum, and the undrawn portion is subject to a standby fee of 0.50% - 0.78% per annum. An increase in the overall interest by 100 basis points would have increased the interest expense and decreased net income by $Nil during the period.
Market Risk
Market risks are the risks that change in market factors, such as commodity prices, foreign exchange rates or interest rates, will affect the value of the Company’s financial instruments. The Company manages market risks by either accepting it or mitigating it through the use of economic strategies.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk by continuing to monitor forecasted and actual cash flows. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its development plans. The Company strives to maintain sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from royalty interests, its holdings in cash and its committed liabilities.
Commodity Price Risk
The Company’s royalties are subject to fluctuations from changes in market prices of the underlying commodities. The market prices of gold and copper are the drivers of the Company’s profitability. All of the Company’s future revenue is not hedged in order to provide shareholders with full exposure to changes in the market prices of these commodities.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s transactions are carried out in a variety of currencies, including Pound Sterling, Australian Dollar, Canadian Dollar and US Dollar and it is exposed to movements in the US Dollar against these other currencies. The Company has not hedged its exposure to currency fluctuations.
Sensitivity analysis has been performed to indicate how the profit or loss would have been affected by changes in the exchange rate between the US Dollar and each of these currencies. The analysis is based on a weakening and strengthening of these currencies by 10% against the US Dollar in which the Company has assets and liabilities at the end of each respective period. A movement of 10% reflects a reasonably possible sensitivity when compared to historical movements over a three-to-five-year timeframe. Based on the Company’s US Dollars denominated monetary assets and liabilities at March 31, 2026, a 10% strengthening in CAD, GBP and AUD relative to the US Dollar would not result in material impact in the Company’s net income. A 10% increase (decrease) of the value of other currencies relative to the US Dollar does not have a material impact on net income.
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Notes to the Condensed Consolidated Interim Financial Statements
Unaudited - Expressed in U.S. Dollars ($000s), except where indicated
Note 19 - Supplemental Disclosure with Respect to Cash Flows
Other non-cash operating activities:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Interest income | $ | (213) | $ | (29) | |||||||
| Losses (gains) on disposals | 30 | (26) | |||||||||
| Foreign exchange gain | (39) | (56) | |||||||||
| Share of loss from associate | 4 | (445) | |||||||||
| Other non-cash items | (52) | (142) | |||||||||
| Total | $ | (270) | $ | (698) | |||||||
Other investing activities:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Purchase and sale of property and equipment, net | $ | (60) | $ | - | |||||||
| Reclamation bonds | (6) | - | |||||||||
| Total | $ | (66) | $ | - | |||||||
Note 20 - Event Subsequent to the Reporting Date
Subsequent to the reporting period, the Company completed an amendment and restatement of its existing royalty agreement over the Western Queen gold project in Western Australia, owned by Rumble Resources Limited. Under the amended royalty agreement, the Company’s existing nominal $/oz gold royalty has been replaced with an uncapped 2.5% net smelter return royalty on gold produced from the applicable Western Queen royalty area.
As consideration for the amendment, the Company paid Rumble Resources Limited A$5.0 million on closing. A further A$5.0 million is payable upon satisfaction of certain milestone conditions relating to the execution of qualifying toll treatment arrangements for gold produced from the Western Queen project.
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Elemental Royalty Corporation
(formerly Elemental Altus Royalties Corp.)
Management's Discussion and Analysis
(formerly Elemental Altus Royalties Corp.)
Management's Discussion and Analysis
Three Months Ended March 31, 2026
Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
General
This Management's Discussion and Analysis ("MD&A") for Elemental Royalty Corporation (formerly Elemental Altus Royalties Corp.) (the "Company", or "Elemental") has been prepared based on information known to management as of May 11, 2026. This MD&A is intended to help the reader understand the consolidated financial statements and should be read in conjunction with the condensed consolidated interim financial statements of the Company for the three months ended March 31, 2026 prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). All dollar amounts included therein and in the following MD&A are in United States dollars except where noted.
Readers are cautioned that the MD&A contains forward-looking statements and that actual events may vary from management's expectations. Readers are encouraged to read the "Forward-Looking Information" at the end of this MD&A. Additional information related to the Company, including our Annual Information Form ("AIF") and Form 40-F, are available on SEDAR+ at www.sedarplus.ca, and on EDGAR at www.sec.gov, respectively. These documents contain descriptions of certain of Elemental's producing royalties as well as summaries of the Company's advanced royalties, exploration royalties and royalty generation assets. For additional information, please see our website at www.elementalroyalty.com.
Table of Contents | |||||
General | 2 | ||||
Description of the Business | 3 | ||||
Strategy | 3 | ||||
Highlights | 3 | ||||
Revenue and GEO Performance | 5 | ||||
Corporate Updates for Q1 2026 | 6 | ||||
Key Producing Royalty Updates | 7 | ||||
Development Royalty Updates | 9 | ||||
Royalty Generation Updates | 10 | ||||
Results of Operations | 11 | ||||
Liquidity and Capital Resources | 14 | ||||
Quarterly Information | 16 | ||||
Risk and Capital Management: Financial Instruments | 17 | ||||
Non-IFRS Financial Measures | 23 | ||||
| Abbreviated Definitions | |||||
| Periods under review | |||||
| "Q4" | The three-month period ended December 31 | ||||
| "Q3" | The three-month period ended September 30 | ||||
| "Q2" | The three-month period ended June 30 | ||||
| "Q1" | The three-month period ended March 31 | ||||
| Measurement | |||||
| "GEO" | Gold equivalent ounces | ||||
| "oz" | Ounce | ||||
| "t" | Tonne | ||||
| "lb" | Pound | ||||
| "Kt" | Thousand tonnes | ||||
| "Mlbs" | Million pounds | ||||
| "Tsol" | Total soluble | ||||
| Interest types | |||||
| "NSR" | Net smelter return | ||||
| "GSR" | Gross smelter return | ||||
| "GRR" | Gross revenue royalty | ||||
| "NPI" | Net profits interest | ||||
| "AMR" | Advance minimum royalty | ||||
| "AAR" | Annual advance royalty | ||||
| Places and currencies | |||||
| "U.S." | United States | ||||
| "$" or "USD" | United States dollars | ||||
| "C$" or "CAD" | Canadian dollars | ||||
| "A$" or "AUD" | Australian dollars | ||||
| Other | |||||
| "FS" | Feasibility study | ||||
| "IRR" | Internal rate of return | ||||
| "LOM" | Life of mine | ||||
| "NPV" | Net present value | ||||
| "PEA" | Preliminary Economic Assessment | ||||
| "PFS" | Pre-feasibility study | ||||
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Description of the Business
Elemental is in the business of acquisition and management of royalties and organically generating royalties derived from a portfolio of mineral property interests. Elemental's royalty and mineral property portfolio consists of 256 assets across North America, South America, Europe, Africa, and Australia.
The Company's common shares are listed on the Nasdaq Exchange ("NASDAQ") and as of April 7, 2026, on the Toronto Stock Exchange ("TSX") under the ticker symbol "ELE".
Strategy
Elemental’s strategy is to advance a disciplined growth strategy focused on building a diversified portfolio of high-quality royalty and streaming interests across both precious and base metals. The Company focuses on acquiring and creating high-quality royalty and streaming interests, making strategic investments, and selectively generating royalties, with a balanced exposure to precious and base metals and an emphasis on gold and copper. The key components of Elemental’s business strategy are summarized as follows:
Royalty and Streaming Acquisitions and Financing
Elemental seeks to acquire and finance royalty and streaming interests across a spectrum of asset stages, ranging from producing operations to advanced development projects. The Company targets opportunities in the precious metals, base metals, and battery metals sectors, and will also consider other cash-flowing royalty and streaming opportunities, including within the energy sector. Through disciplined capital allocation and transaction structuring, Elemental aims to build a portfolio that delivers near-term cash flow, long-term optionality and exposure to commodity price upside.
Royalty Generation
Royalty generation is a complementary component of Elemental’s broader acquisition, financing, and investment strategy. The Company leverages in-country geological expertise to originate and evaluate mineral projects, partner with major and junior companies, and selectively retain royalty interests. These activities can result in royalties, advance royalty payments, milestone payments, and occasional equity consideration, providing modest early-stage cash flows and long-term upside optionality with limited capital deployment.
Elemental’s diversified portfolio of producing, development-stage, and exploration royalties provides exposure to near-term cash flow and long-term discovery upside. By integrating acquisitions and financing, strategic investments, and selective royalty generation, the Company has established a resilient platform for long-term shareholder value.
Highlights
Q1 2026 was a strong start to the year for Elemental, with a significant increase in revenue supported by strong metal prices and contributions from a broader base of cash-flowing assets, including Bonikro, Karlawinda, Timok, and Caserones. Following the transformational merger with EMX Royalty Corporation ("EMX"), the Company continued to benefit from enhanced scale, greater portfolio diversification, and increased exposure to both near-term cash flow and long-term organic growth opportunities.
During the quarter, Elemental strengthened its financial capacity through an upsized revolving credit facility of $150.0 million, with a $50.0 million accordion feature, providing up to $200.0 million of additional liquidity. The facility enhances financial flexibility and supports the Company’s ability to pursue meaningful growth opportunities, including more material acquisitions and royalty generation initiatives.
Elemental also advanced its capital allocation framework through the declaration of an inaugural annual dividend of $0.12 per share, payable quarterly to qualifying shareholders in either cash or Tether Gold XAU₮ tokens, reflecting management's confidence in the sustainability of the Company’s cash flow profile while maintaining capacity for portfolio growth. Supported by strong commodity markets, an expanded asset base, and disciplined capital allocation, Elemental remains well positioned to build on the momentum from Q1 and continue delivering long-term value for shareholders.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Summary of Financial Highlights for the Three Months Ended March 31, 2026 and 2025:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Statement of Income | |||||||||||
| Revenue | $ | 24,322 | $ | 11,639 | |||||||
| General and administrative costs | 5,586 | 1,600 | |||||||||
| Royalty generation expenses, net | 1,436 | - | |||||||||
| Income from operations | 6,641 | 4,379 | |||||||||
| Net income | $ | 1,083 | $ | 3,448 | |||||||
| Statement of Cash Flows | |||||||||||
| Cash flows from operating activities | $ | 14,494 | $ | 2,372 | |||||||
| Cash flows from investing activities | (951) | 1,017 | |||||||||
| Cash flows from financing activities | $ | 2,345 | $ | (3,070) | |||||||
| Non-IFRS Financial Measures1 | |||||||||||
| Revenue plus attributable share of Caserones | $ | 24,322 | $ | 13,261 | |||||||
| Adjusted cash flows from operating activities | $ | 14,494 | $ | 3,294 | |||||||
| Adjusted EBITDA | $ | 17,741 | $ | 11,471 | |||||||
| GEOs sold | 4,983 | 4,606 | |||||||||
| March 31, | December 31, | ||||||||||
| Statement of Financial Position | 2026 | 2025 | |||||||||
| Cash and cash equivalents | $ | 69,121 | $ | 53,143 | |||||||
Working capital1 | $ | 92,499 | $ | 80,064 | |||||||
Non-IFRS Financial Measures1:
The Company had revenue plus attributable share of Caserones, and adjusted EBITDA of the following:
1 Refer to the "Non-IFRS Financial Measures" section on page 23 of this MD&A for more information on each non-IFRS financial measure.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Revenue and GEO1 Performance
The following table summarizes the Company’s revenue from royalty interests during the three months ended March 31, 2026 and 2025:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Ballarat | $ | 966 | $ | 474 | |||||||
| Bonikro | 6,150 | 2,193 | |||||||||
| Caserones2 | 6,837 | - | |||||||||
| Gediktepe | 1,084 | - | |||||||||
| Karlawinda | 2,821 | 1,843 | |||||||||
| Korali-Sud | - | 6,648 | |||||||||
| Leeville | 2,065 | - | |||||||||
| Timok | 2,242 | - | |||||||||
| Other producing royalties | 1,613 | 481 | |||||||||
| Advanced royalty payments | 79 | - | |||||||||
| Total royalty revenue | $ | 23,857 | $ | 11,639 | |||||||
| Option, property and other revenue | 465 | - | |||||||||
Caserones (before reclassification)2 | - | 1,622 | |||||||||
Revenue plus attributable share of Caserones1 | $ | 24,322 | $ | 13,261 | |||||||
The following table summarizes the Company’s GEOs1 during the three months ended March 31, 2026 and 2025:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Ballarat | 198 | 165 | |||||||||
| Bonikro | 1,260 | 762 | |||||||||
Caserones2 | 1,401 | - | |||||||||
| Gediktepe | 222 | - | |||||||||
| Karlawinda | 578 | 640 | |||||||||
| Korali-Sud | - | 2,309 | |||||||||
| Leeville | 423 | - | |||||||||
| Timok | 459 | - | |||||||||
| Other producing royalties | 331 | 167 | |||||||||
| Advanced royalty payments | 16 | - | |||||||||
| Total GEOs from royalty interests | 4,888 | 4,043 | |||||||||
| Option, property and other revenue | 95 | - | |||||||||
Caserones (before reclassification)2 | - | 563 | |||||||||
| Total GEOs | 4,983 | 4,606 | |||||||||
1 Refer to the "Non-IFRS Financial Measures" section on page 23 of this MD&A for more information on each non-IFRS financial measure.
2 The Caserones royalty is held by Sociedad Legal Minera California Una de la Sierra Peña Negra (“SLM California”) in which the Company held an effective 67.1% equity interest as at December 31, 2025. Effective November 13, 2025, the Company discontinued accounting for SLM California as an investment in associate and began recognizing its proportionate share of assets, liabilities, revenues and expenses of the entity.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Portfolio Growth
Elemental continues to advance a disciplined growth strategy focused on building a globally diversified portfolio of high-quality royalty and streaming interests, with a core emphasis on gold and precious metals. The Company’s portfolio provides exposure to a range of assets throughout the development and production pipeline, including cornerstone interests such as Karlawinda, Laverton, and Leeville. This gold-focused approach is complemented by selective exposure to large-scale base metals assets such as Caserones and Timok, with diversification across commodities, jurisdictions, and operators supporting stable cash flow generation while preserving meaningful upside to exploration success and mine life extensions.
Near- to medium-term portfolio growth is expected to be supported by continued development, optimization, and exploration activities at several key assets. At Timok, ongoing advancement of both the Upper and Lower Zone projects provides exposure to a world-class copper-gold system with significant scale potential. In addition, recent exploration success in the broader Timok district, including the Malka Golaja discovery, highlights the prospectivity of the regional land package and reinforces the long-term optionality of Elemental’s royalty interest. While the ultimate impact of such discoveries remains subject to further delineation and development by the operator, management views these results as encouraging indicators of the district’s geological potential.
Elemental’s exposure to precious metals growth is anchored by assets such as Karlawinda, a long-life gold operation in Western Australia. Ongoing mining activities and regional exploration at Karlawinda offer the potential to support stable production and incremental upside over time. The recently acquired Laverton royalty further enhances the Company’s exposure to a highly prospective gold district in Western Australia, while the acquisition of the Dugbe royalty in Liberia adds additional development-stage gold optionality. Together, these assets support the near- to medium-term pipeline of exploration-driven growth potential and reinforce Elemental’s strategy of acquiring royalties over large land packages in established mining camps with high-quality operators.
In addition to its core precious metals weighting, Elemental benefits from exposure to established and operating base metal assets such as Caserones, a large-scale copper mine where continued operational optimization and exploration efforts may contribute to sustained production and potential mine life extension. These base metal assets complement the gold-focused portfolio by providing diversification and leverage to copper demand, which is increasingly supported by structural trends related to electrification, infrastructure investment, and the global energy transition.
Elemental remains well positioned to pursue additional accretive royalty and streaming opportunities across its targeted commodities. Management continues to evaluate a robust pipeline of potential transactions, reflecting sustained interest from mining companies seeking non-dilutive sources of capital. The Company’s strong balance sheet, recently amended $150.0 million revolving credit facility with a $50.0 million accordion feature and scalable business model provide enhanced financial flexibility to support disciplined capital deployment.
Management believes Elemental’s gold-focused, diversified asset base, strengthened liquidity position, disciplined growth strategy and aligned shareholder support provide a solid foundation for long-term value creation.
Corporate Updates for Q1 2026
Inaugural Dividend Declared
The Company’s Board of Directors declared its first dividend of $0.03 per common share and intends to declare dividends quarterly, totaling $0.12 per share for fiscal 2026. The Company also introduced a dividend election option allowing eligible shareholders to receive their dividends in Tether Gold tokens "XAU₮", providing exposure to physical gold.
Amended Revolving Credit Facility
The Company entered into an amendment agreement for its existing revolving credit facility (the “Facility”), resulting in an increase of borrowing capacity to $150.0 million, with a $50.0 million accordion feature. Under the amended terms, the Company retains its ability to draw on the Facility subject to agreed covenants and conditions, with the enlarged capacity intended to provide additional capital and financial flexibility for general corporate purposes, including potential acquisitions, working capital and other growth initiatives.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Commencement of Production at Chapi
Quilla Resources Inc. ("Quilla") achieved first copper cathode production from the Chapi Copper Project in southern Peru during Q1 2026, following Quilla’s acquisition of the brownfield asset in December 2024. Elemental holds a 2.0% NSR royalty on Chapi, with ramp-up underway toward plant nameplate capacity of approximately 10,000 tonnes per annum of copper cathode and first royalty payments are expected to be received in Q2 2026. The milestone represents an important step in bringing Chapi back into production and adds incremental near-term revenue potential to Elemental’s portfolio.
Serbian Exploration Licenses Option to BHP
During Q1 2026, Elemental entered into a definitive option and earn-in agreement with a wholly owned subsidiary of BHP Group Limited over three exploration licenses in Serbia’s Bor Mining District. The agreement provides potential long-term royalty optionality in a highly prospective copper-gold district and complements Elemental’s existing Serbian royalty portfolio, including royalties over Zijin’s producing Čukaru Peki mine and the Malka Golaja discovery. Under the agreement, Elemental retains 2.0% NSR royalties on the optioned projects, subject to a maximum buyback of 0.5%, as well as annual advance royalty payments until commercial production.
Western Queen Royalty Investment
Subsequent to the reporting period, the Company completed an amendment and restatement of its existing royalty agreement over the Western Queen gold project in Western Australia, owned by Rumble Resources Limited. Under the amended royalty agreement, the Company’s existing nominal $/oz gold royalty has been replaced with an uncapped 2.5% net smelter return royalty on gold produced from the applicable Western Queen royalty area.
As consideration for the amendment, the Company paid Rumble Resources Limited A$5.0 million on closing. A further A$5.0 million is payable upon satisfaction of certain milestone conditions relating to the execution of qualifying toll treatment arrangements for gold produced from the Western Queen project. The proceeds from the initial payment are expected to fund dewatering and related project development activities ahead of Rumble Resources' targeted near-term underground production pathway.
Key Producing Royalty Updates
Caserones, Chile - Copper and Molybdenum - Effective 1.304% NSR Lundin Mining Corporation
The Company’s effective share of the royalty revenue in Caserones totaled $6.8 million for Q1 2026 (Q1 2025 - $1.6 million). The Company's realized revenue in 2025 on the interest acquired from the EMX acquisition only relates to revenue after November 13, 2025, the closing date of the EMX acquisition. Had the merger taken place on January 1, 2025, the Company would have generated a total of $4.6 million for Q1 2025.
Caserones produced 38,552 tonnes of copper in Q1 2026 compared to 28,709 tonnes in Q1 2025. During the quarter, copper concentrate production benefitted from higher than expected grades, but was impacted by unplanned maintenance on the ball mill leading to a 24 hour mill shutdown. Additional irrigated area in the dump leach continues to benefit copper cathode production.
In Q1 2026, operator Lundin Mining (TSX: LUN) ("Lundin") reported Caserones open pit mineral resources and mineral reserves updated to year-end 2025, with an effective date of December 31, 2025. The mineral reserves and mineral resources slightly decreased year over year from depletion and model updates, partially offset by improved recovery models. Exploration activities last year included 18,908 meters of diamond drilling focused principally at the Caserones and Angélica deposits, as well as airborne and ground-based geophysics.
In Q1 2026, Lundin provided copper production guidance of 130,000–140,000 tonnes for 2026, 115,000–120,000 tonnes for 2027, and 115,000–125,000 tonnes for 2028. Lundin also outlined $53 million in planned exploration spending for 2026, primarily focused on near-mine resource expansion. The largest portion will be directed to Caserones, with approximately 39,800m of drilling and geophysical work planned, targeting the Angelica deposit as well as lateral expansion and district exploration targets including Centauro and Cordillera.
| TSX: ELE / NASDAQ: ELE | Elemental Royalty Corporation | 7 | |||||||||||||||
Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Karlawinda, Australia - Gold - 2% NSR Capricorn Metals Ltd.
Elemental earned $2.8 million in royalty revenue from Karlawinda in Q1 2026 (Q1 2025 - $1.8 million).
At Karlawinda, operator Capricorn Metals (ASX: CMM) (“Capricorn”) has reported that the Expansion Project remains on track, with the operation producing 30,358 ounces of gold in Q1 2026 while continuing to advance key development works across the expanded processing circuit and associated infrastructure. During the quarter, Capricorn reported that more than 90% of plant site concrete works had been completed, major structural steel and pipework packages had been delivered, CIL tank construction and welding had been completed, and structural, mechanical and piping works across the crushing, milling and CIL areas had advanced materially. Capricorn also reported that earthworks for ROM Pad 2 were largely completed and first ore had been placed for commissioning, TSF 2 embankments had been advanced to the level required for start-up, and the ball mill had been delivered ahead of schedule ahead of commissioning expected to commence in the Q3 2026.
Capricorn has previously stated that the expansion is expected to increase total processing capacity at Karlawinda to 6.5Mtpa from the existing 4.0Mtpa plant and lift annual gold production to around 150,000 ounces. On that basis, the expansion is expected to deliver a material step-up in scale at Karlawinda, with annual gold production increasing by approximately 25% to 30% once the expanded circuit is operational.
Timok (Čukaru Peki), Serbia - Copper and Gold - 0.3625% NSR Zijin Mining Corporation
Elemental earned $2.2 million in royalty revenue from the Timok royalty in Q1 2026 (Q1 2025 - $Nil). The Company's realized revenue in 2025 only relates to revenue after November 13, 2025, the closing date of the EMX acquisition. Had the merger taken place on January 1, 2025, the Company would have generated a total of $1.6 million for Q1 2025.
Bonikro, Cote d'Ivoire - Gold - Up to 4.5% NSR, capped at 560,000 ounces Allied Gold Corp.
Elemental earned $6.2 million in royalty revenue from Bonikro in Q1 2026 (Q1 2025 - $2.2 million). The significant increase in revenue in Q1 2026 was due to strong metal prices, consistent production and approximately 8koz of gold inventory carried over from Q4 2025.
During the quarter, Allied Gold Corp. (“Allied”) announced that it has agreed to be acquired by Zijin Gold International (“Zijin”) in a friendly all-cash transaction valued at approximately C$5.5 billion. Allied also noted Zijin’s intention to further advance its operations, including Sadiola, which increases confidence in continued development, expansion and long-term production from royalty-covered assets.
Korali-Sud (Diba), Mali - Gold - 1% NSR Allied Gold Corp.
Elemental earned $Nil in royalty revenue from Korali-Sud in Q1 2026 (Q1 2025 - $6.6 million).
In 2025, Allied noted that Korali-Sud is expected to be developed in a staged manner alongside Sadiola, with certain work programs being streamlined and wound down following completion of key approval milestones. The recognition of no revenue in Q1 2026 compared to 2025 is expected and in line with Allied's public statements.
Leeville, USA - Gold - 1.0% GSR Nevada Gold Mines
Elemental earned $2.1 million in royalty revenue from Leeville in Q1 2026 (Q1 2025 - $Nil). The Company's realized revenue only relates to revenue after November 13, 2025, the closing date of the EMX acquisition. Had the merger taken place on January 1, 2025, the Company would have generated a total of $0.9 million for Q1 2025.
Gediktepe, Türkiye - Gold and Polymetallic - 2.25% NSR ACG Metals Corporation
Elemental earned $1.1 million in royalty revenue from the Gediktepe mine in Q1 2026 (Q1 2025 - $Nil). The Company's realized revenue only relates to revenue after November 13, 2025, the closing date of the EMX acquisition. Additionally, effective January 1, 2026, the Company's royalty rate on Gediktepe Oxide sales was reduced from 10% to 2.25%. Had the merger taken place on January 1, 2025, the Company would have generated a total of $4.3 million for Q1 2025.
Gediktepe remains an operating open-pit mine, while development activities continue centered on transitioning the operation from oxide gold-silver production toward sulphide processing and the future production of copper and zinc concentrates. The sulphide project reported to be advancing on schedule toward targeted first commercial sulphide production in Q3 2026.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Other Producing Royalties
For information related to the other royalty properties see the "Results from Operations" section below.
Development Royalty Updates
Laverton, Australia - Gold - 2.0% - 4.0% GSR - Resource Development Genesis Minerals Limited
Genesis Minerals (ASX: GMD) (“Genesis”) continues to highlight the strategic importance of the Focus assets within its growing eastern hub. Genesis identified Beasley Creek as a key project for Laverton and stated that its updated long-term plan will include the introduction of initial Focus assets into the existing Laverton mill, alongside ongoing studies to expand milling capacity. Current work is focused on drilling, resource re-estimation and pit optimization, led by Beasley Creek as the first development priority.
Genesis also highlighted potential upside across the broader Focus tenure, including additional open pit opportunities at Burtville and Karridale, as well as underground potential with all deposits described as open at depth.
Viscaria, Sweden - Copper and Iron - 0.5% - 1.0% NSR - Development Permitting Gruvaktiebolaget Viscaria
Gruvaktiebolaget Viscaria (ST: VISC) (“Viscaria”) stated that groundworks for the processing plant had already commenced in early 2026 and that key priorities for the year include mine dewatering, completion of dams, securing electrical power and connection to the Malmbanan rail network. Viscaria also disclosed that, subsequent to year-end, it had signed long-lead item and construction-related agreements with Metso and Nordec respectively, and is targeting completion of its structured project financing package by the end of Q2 2026.
Viscaria continues to guide toward first production in 2028. The company’s published timetable indicates first ore in 2028, with full production from 2029. At full capacity, Viscaria expects to produce approximately 26,000 tonnes of copper per year over an initial 17 year mine life.
Diablillos, Argentina - Silver and Gold - 1.0% NSR - Feasibility Study AbraSilver Resource Corp.
At Diablillos, AbraSilver (TSX: ABRA) (“AbraSilver”) announced that the project has been approved for inclusion under Argentina’s Large Investment Incentive Regime (“RIGI”). RIGI provides long-term fiscal stability together with tax, customs, and foreign-exchange benefits.
AbraSilver further stated that Diablillos remains on track for several near-term milestones, including Environmental Impact Assessment (“EIA”) approval and completion of the Definitive Feasibility Study, as it works toward a construction decision later this year. The company said detailed engineering, procurement planning, and infrastructure upgrades are advancing in parallel, with early works intended to begin following receipt of the EIA.
Dugbe, Liberia - Gold - 2.0% - 2.5% NSR - Feasibility Study Mansa Resources Limited
Pasofino Gold (“Pasofino”) has been acquired by Mansa Resources (“Mansa”) in an all-cash transaction, with Mansa also agreeing to provide Pasofino with up to $10 million of interim funding through a promissory note. The ownership structure will simplify decision-making going forward and facilitate enhanced financial support from an experienced and well-funded operator. An updated feasibility study is due to be released this year along with a final investment decision for the permitted project.
Cactus & Parks/Salyer, USA - Copper - 0.50% - 0.54% NSR - Pre-Feasibility Study Arizona Sonoran Copper Company
Hudbay Minerals (TSX, NYSE: HBM) (“Hudbay”) has announced that the company has entered into an agreement to acquire Arizona Sonoran and the Cactus Project, establishing a major copper hub in southern Arizona, and Hudbay as a leading supplier of domestic US refined copper, with Hudbay’s Copper World and Cactus both expected to be significant producers of copper cathode. The acquisition substantially reduces execution risk at Cactus given Hudbay’s enhanced balance sheet and proven track record developing and operating large-scale copper projects.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Mactung, Canada - Tungsten - 4.0% NSR - Resource Development Fireweed Metals Corp.
At Mactung, Fireweed Metals (TSX-V: FWZ) (“Fireweed”) announced the commencement of an updated Feasibility Study for its 100%-owned Mactung Tungsten Project, supported by the US Department of War as part of the Defense Production Act. Fireweed stated that the study is expected to be completed in early 2027 and is intended to support further engineering and mine licensing efforts. The mine license application is expected to be submitted in 2027.
Subsequent to the feasibility study announcement, Fireweed closed a C$61.5 million non-brokered private placement, including a strategic investment by JX Advanced Metals Corporation and participation by the Lundin Family Trusts. The proceeds will be used to support advancement of its Macpass, Mactung, and Gayna projects, regional infrastructure planning and general working capital purposes, which should further support the ongoing advancement of Mactung, the world’s largest high-grade tungsten deposit.
Pickle Crow, Canada - Gold - 2.25% NSR - Resource Development Bellavista Resources
FireFly Metals has agreed to sell the 70% interest in the Pickle Crow Project to Bellavista Resources (ASX: BVR) (“Bellavista”) for an aggregate value of A$86.1 million. Subject to and in conjunction with the completion of the acquisition, Bellavista is seeking to raise up to approximately A$25 million, which will be used to conduct Mineral Resource extensional and near-mine drilling, as well as regional mapping and sampling of multiple underexplored structures to identify new targets.
Other Development Royalties
See www.elementalroyalty.com for information on the other development royalty properties.
Royalty Generation Updates
In Q1 2026, the Company's royalty generation business was active in North America, Europe, and Türkiye. The Company incurred $1.4 million in net royalty generation costs in Q1 2026 compared to $Nil in Q1 2025. These expenses include exploration related activities, technical services, project marketing, and legal costs, as well as third party due diligence for royalty acquisitions.
Subsequent to the acquisition of EMX in 2025, the Company’s royalty generation business focused on the early-stage acquisition and advancement of mineral properties with the objective of creating future royalty interests through partner-funded option and exploration agreements. The strategy centers on identifying prospective targets, enhancing project value through geological work, and structuring agreements that transfer development responsibility to qualified operators while retaining long-term royalty exposure.
In Q1 2026 the Company executed a definitive option and earn-in agreement with a subsidiary of BHP Group Limited covering select Serbian exploration licenses located in the Bor District of eastern Serbia, near the Company’s existing producing royalty at Timok. The agreement provides for staged consideration and partner-funded exploration while preserving future royalty interests.
For additional details on Elemental's royalty and royalty generation portfolio, including specifics on the royalty terms, refer to the Company's website, www.elementalroyalty.com.
Qualified Persons
Michael P. Sheehan, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified, and approved the above technical disclosure.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Results of Operations
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Financial results | |||||||||||
| Revenue | $ | 24,322 | $ | 11,639 | |||||||
| Depletion of royalty interests | (8,617) | (5,374) | |||||||||
| General and administrative expenses | (5,586) | (1,600) | |||||||||
| Royalty generation expenses, net | (1,436) | - | |||||||||
| Share-based payments | (2,008) | (757) | |||||||||
| Share of profit (loss) from associates | (4) | 445 | |||||||||
| Gains (losses) on disposals | (30) | 26 | |||||||||
| Income from operations | $ | 6,641 | $ | 4,379 | |||||||
| Gains (losses) from other items | (2,488) | 234 | |||||||||
| Tax expense | (3,070) | (1,165) | |||||||||
| Net income from continuing operations | $ | 1,083 | $ | 3,448 | |||||||
| Non-IFRS Financial Measures1 | |||||||||||
| Revenue plus attributable share of Caserones | $ | 24,322 | $ | 13,261 | |||||||
| Adjusted cash flows from operating activities | $ | 14,494 | $ | 3,294 | |||||||
| Adjusted EBITDA | $ | 17,741 | $ | 11,471 | |||||||
| GEOs sold | 4,983 | 4,606 | |||||||||
Revenue
The Company earns various sources of revenue including royalty revenue and option revenue earned from mineral property agreements such as execution payments, staged option payments, and operator and management fees.
During the three months ended March 31, 2026 and 2025, the Company had the following sources of revenue:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Royalty revenue | $ | 23,857 | $ | 11,639 | |||||||
| Option, property and other revenue | 465 | - | |||||||||
| Total | $ | 24,322 | $ | 11,639 | |||||||
Non-IFRS Financial Measures1 | |||||||||||
| Revenue plus attributable share of Caserones | $ | 24,322 | $ | 13,261 | |||||||
1 Refer to the "Non-IFRS Financial Measures" section on page 23 of this MD&A for more information on each non-IFRS financial measure.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
During the three months ended March 31, 2026 and 2025, the Company had revenue plus attributable share of Caserones1 from the following sources:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Ballarat | $ | 966 | $ | 474 | |||||||
| Bonikro | 6,150 | 2,193 | |||||||||
| Caserones2 | 6,837 | - | |||||||||
| Gediktepe | 1,084 | - | |||||||||
| Karlawinda | 2,821 | 1,843 | |||||||||
| Korali-Sud | - | 6,648 | |||||||||
| Leeville | 2,065 | - | |||||||||
| Timok | 2,242 | - | |||||||||
| Other producing royalties | 1,613 | 481 | |||||||||
| Advanced royalty payments | 79 | - | |||||||||
| Total royalty revenue | $ | 23,857 | $ | 11,639 | |||||||
| Option, property and other revenue | 465 | - | |||||||||
Caserones (before reclassification)2 | - | 1,622 | |||||||||
Revenue plus attributable share of Caserones1 | $ | 24,322 | $ | 13,261 | |||||||
For the three months ended March 31, 2026 and 2025:
Royalty revenue for the three months ended March 31, 2026 increased by $12.2 million or 105% when compared to Q1 2025. Revenue increased primarily due to the first full quarter of recognition of producing royalty assets acquired through the EMX acquisition, as well as strong production from both Karlawinda and Bonikro. Bonikro also benefited from approximately 8koz of additional sales of inventory carried over from Q4 2025. This was partially offset by a significant decrease at Korali-Sud where the operator has begun to shift focus away from the project, as noted in the discussion above.
The breakdown of the Company's revenue plus attributable share of Caserones2 over the past eight quarters and the revenue allocation by metal group for Q1 2026 are as follows:
1 Refer to the "Non-IFRS Financial Measures" section on page 23 of this MD&A for more information on each non-IFRS financial measure.
2 The Caserones royalty is held by Sociedad Legal Minera California Una de la Sierra Peña Negra (“SLM California”) in which the Company held an effective 67.1% equity interest as at December 31, 2025. Effective November 13, 2025, the Company discontinued accounting for SLM California as an investment in associate and began recognizing its proportionate share of assets, liabilities, revenues and expenses of the entity.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Option, property and other revenue will fluctuate based on deal flow and the structure of property agreements, including execution payments, staged option payments, and operator or management fees. Execution payments may consist of cash and the fair value of equity interests received in partners.
General and Administrative Expenses
General and administrative ("G&A") expenses for the three months ended March 31, 2026 and 2025, comprised of the following:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Salaries, fees and employee benefits | $ | 3,081 | $ | 1,050 | |||||||
| Professional fees and consulting fees | 1,133 | 294 | |||||||||
| Marketing and promotion | 88 | 79 | |||||||||
| Listing and filing fees | 127 | 26 | |||||||||
| Corporate administration | 715 | 135 | |||||||||
| Project evaluation and transaction related expenses | 442 | 16 | |||||||||
| Total | $ | 5,586 | $ | 1,600 | |||||||
For the three months ended March 31, 2026 and 2025:
G&A costs of $5.6 million were incurred for the three months ended March 31, 2026 compared to $1.6 million in Q1 2025. G&A expenditures will fluctuate from period to period depending on the level of activity and deal flow. Some of the changes in 2026 compared to 2025 are related to:
•The $2.0 million increase in salaries, fees and employee benefits reflects the increase in corporate headcount resulting from the merger with EMX in Q4 2025.
•The $0.8 million increase in professional fees reflects costs associated with the Company's first annual dividend declaration payable to qualifying shareholders in cash or Tether Gold (XAU₮) tokens, along with increased compliance costs and tax planning efforts.
•The $0.6 million increase in administrative costs reflects incremental IT and office-related costs, along with higher corporate travel expenditures to support company-wide integration.
•The increase in project evaluation and transaction related expenses coincides with increased due diligence activities performed by the Company during the period compared to that of Q1 2025.
Royalty Generation Expenses, Net of Recoveries
For the three months ended March 31, 2026 and 2025:
Net royalty generation costs increased to $1.4 million in Q1 2026 from $Nil in Q1 2025 which was the result of the acquisition of EMX in Q4 2025 as Elemental did not previously operate a royalty generation business. Royalty generation costs include exploration related activities, project marketing, and land and legal costs.
Depletion
For the three months ended March 31, 2026 and 2025:
The Company recognized depletion of $8.6 million for Q1 2026 (Q1 2025 - $5.4 million). The increase was primarily attributable to the inclusion of producing royalties acquired through the merger with EMX. Additionally, depletion was higher due to the reclassification of Caserones from an investment in associate to a royalty interest in Q4 2025. These inclusions were partially offset by a substantial decrease in production at Korali-Sud compared to Q1 2025.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Share-based Payments
During the three months ended March 31, 2026 the Company recorded a total of $2.0 million in aggregate share-based payments compared to $0.8 million for the comparative period in 2025. The aggregate share-based payments related to the annual equity grant and vesting of stock options, restricted share units and deferred share units. The increase in share-based payments was mainly due to the increase in head count as a result of the merger with EMX.
Other
•During the three months ended March 31, 2026, the Company had an unrealized loss of $2.5 million (Q1 2025 - gain of $0.2 million) related to the revaluation of financial instruments. The unrealized loss in the current period was primarily attributed to the revaluation of the warrant liability. Due to the increase in the Company's share price in Q1 2026, the Company recognized a loss of $2.2 million on the revaluation of the warrant liability. The remaining unrealized loss on revaluation of financial instruments relates to revaluation of marketable securities.
•During the three months ended March 31, 2026, the Company recognized finance expenses of $0.2 million (2025 - $0.1 million) which primarily consisted of the amortization of deferred financing costs on the credit facility and other standby charges. As at the end of the reporting period, the Company had no principal outstanding.
Taxes
During the three months ended March 31, 2026, the Company recorded an income tax expense of $3.1 million (2025 - $1.2 million). The increase is a result of additional withholding taxes paid on increased royalty revenue, as well as the reclassification of the Caserones royalty from an investment in associate to royalty interest. Due to this reclassification, the income tax related to Caserones is now classified as income tax rather than being included in equity income from investment in associated entities.
Liquidity and Capital Resources
The Company considers items included in shareholders' equity as capital. The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.
The condensed consolidated interim financial statements have been prepared using IFRS Accounting Standards applicable to a going concern, which assumes that the Company will be able to realize its assets, discharge its liabilities and continue in operation for the following twelve months. As at March 31, 2026, the Company had working capital surplus of $92.5 million (December 31, 2025 - $80.1 million).
The Company has continuing royalty revenue that will vary depending on royalty ounces received and the price of minerals, and other pre-production income. The Company also receives additional cash inflows from the recovery of expenditures from project partners and sales of investments. The Company manages the capital structure and makes adjustments in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through public and/or private placements, sell assets, renegotiate terms of debt, or return capital to shareholders.
The Company is not subject to externally imposed capital requirements other than as disclosed for the revolving credit facility. As at March 31, 2026, the Company had no outstanding debt and an available credit facility of $150.0 million with a $50.0 million accordion feature.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Operating Activities
Cash provided by operating activities for the three months ended March 31, 2026 was $14.5 million (2025 - $2.4 million), and adjusted cash provided by operating activities1 for the period was $14.5 million (2025 - $3.3 million) and represents royalty income received in the period, offset by expenditures primarily on general and administrative expenses and royalty generation. There is no adjustment to cash flows from operating activities in Q1 2026 due to the reclassification of the Caserones royalty from an investment in associated entity to a royalty interest on November 13, 2025. Adjusted cash flows from operating activities1 is adjusted by $0.9 million in Q1 2025 due to royalty distributions received from the Company's effective royalty interest in Caserones.
Investing Activities
The total cash used in investing activities during the three months ended March 31, 2026 was $1.0 million compared to $1.0 million provided by investing activities for the comparative period. The net outflow in the current period related primarily to $1.0 million spent on the purchase of Tether Gold cryptocurrency tokens. In the comparative period, the Company received $0.9 million in after-tax dividend distributions related to the Caserones royalty. After November 13, 2025, the revenue and taxes related to Caserones were considered operating activities as a result of the reclassification of Caserones to a royalty interest.
Financing Activities
The total cash provided by financing activities for the three months ended March 31, 2026 was $2.3 million compared to $3.1 million used in financing activities for the comparative period. The net proceeds received in the current period primarily related to $3.4 million (2025 - $Nil) in net proceeds from exercise of stock options. This was partially offset by $1.1 million spent on deferred financing costs related to the upsized credit facility agreement signed in Q1 2026. Additionally, in the prior period the Company made $3.0 million in debt repayments towards the outstanding principal balance on the credit facility. As at March 31, 2026, the Company had no outstanding debt.
Contractual Obligations and Commitments
The following table outlines the Company’s contractual obligations and commitments as at March 31, 2026, reflecting fixed and determinable payment obligations under existing agreements. The table does not include contingent or variable payments, including milestone or production-based payments, where the timing or likelihood of occurrence cannot be reasonably estimated.
(in thousands of dollars) | Payments Due by Period | ||||||||||||||||
| Total | Less than 1 year | 1 - 3 years | 4 - 5 years | After 5 years | |||||||||||||
| Debt | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||
| Lease Obligations | 787 | 371 | 248 | 168 | - | ||||||||||||
| Total Contractual Obligations | $ | 787 | $ | 371 | $ | 248 | $ | 168 | $ | - | |||||||
Related Party Transactions
The aggregate value of transactions and outstanding balances relating to key management personnel and directors for the three months ended March 31, 2026 and 2025 was as follows:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Salaries, fees, benefits and professional fees | $ | 1,528 | $ | 611 | |||||||
| Share-based compensation | 1,588 | 505 | |||||||||
| Total | $ | 3,116 | $ | 1,116 | |||||||
As at March 31, 2026 the Company held $2.2 million (December 31, 2025 - $1.1 million) in Tether Gold XAU₮ cryptocurrency tokens. As at March 31, 2026 a net $0.7 million (December 31, 2025 - $0.1 million) was due to related parties.
1 Refer to the "Non-IFRS Financial Measures" section on page 23 of this MD&A for more information on each non-IFRS financial measure.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Quarterly Information
| (In thousands of dollars, except per share amounts) | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | |||||||||||||||||||
| Financial results | |||||||||||||||||||||||
| Revenue | $ | 24,322 | $ | 16,047 | $ | 6,863 | $ | 9,094 | |||||||||||||||
| Revenue plus attributable share of Caserones1 | 24,322 | 17,226 | 8,216 | 10,497 | |||||||||||||||||||
| Net income (loss) | 1,083 | (3,209) | 1,373 | 160 | |||||||||||||||||||
| Basic earnings (loss) per share | 0.02 | (0.07) | 0.06 | 0.01 | |||||||||||||||||||
| Diluted earnings (loss) per share | 0.02 | (0.07) | 0.06 | 0.01 | |||||||||||||||||||
| Total assets | $ | 916,098 | $ | 907,316 | $ | 209,573 | $ | 206,467 | |||||||||||||||
| (In thousands of dollars, except per share amounts) | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | |||||||||||||||||||
| Financial results | |||||||||||||||||||||||
| Revenue | $ | 11,639 | $ | 5,519 | $ | 3,725 | $ | 3,752 | |||||||||||||||
Revenue plus attributable share of Caserones1 | 13,261 | 6,827 | 4,825 | 5,201 | |||||||||||||||||||
| Net income (loss) | 3,448 | 134 | 630 | (114) | |||||||||||||||||||
| Basic earnings (loss) per share | 0.14 | 0.01 | 0.03 | (0.01) | |||||||||||||||||||
| Diluted earnings (loss) per share | 0.14 | 0.01 | 0.03 | (0.01) | |||||||||||||||||||
| Total assets | $ | 205,064 | $ | 204,167 | $ | 179,159 | $ | 178,258 | |||||||||||||||
Off-Balance Sheet Arrangements
As of the date of this MD&A, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources.
New Accounting Pronouncements
New Accounting Policies
Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments
In May 2024, the International Accounting Standards Board issued amendments to IFRS 7 Financial Instruments: Disclosures and IFRS 9 Financial Instruments relating to settling financial liabilities using electronic payment systems and assessing contractual cash flow characteristics of financial assets. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, including financial assets that have environmental, social and corporate governance (ESG)-linked features and other similar contingent features. The IASB added disclosure requirements for financial instruments with contingent features that do not relate directly to basic lending risks and costs, and amended disclosures relating to equity instruments designated at fair value through other comprehensive income.
The amendments are effective for periods beginning on or after January 1, 2026, and adoption of these amendments did not have a material effect on our condensed interim consolidated financial statements. For financial liabilities settled in cash using an electronic payment system, we applied the election to deem these financial liabilities to be discharged before the settlement date. The amendments have been applied retrospectively with no restatement of comparative information, in accordance with transition requirements on initial application of IFRS 9.
1 Refer to the "Non-IFRS Financial Measures" section on page 23 of this MD&A for more information on each non-IFRS financial measure.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Deferred Share Units ("DSUs")
Share-based payment arrangements related to deferred share units are measured at fair value. Deferred share units are liability awards settled in cash and measured at the quoted market price at the grant date and the corresponding liability is adjusted for changes in fair value at each subsequent reporting date until the awards are settled.
New Accounting Policies Issued But Not Yet Effective
New Accounting Policies Issued But Not Yet Effective
Certain pronouncements have been issued by the IASB or the International Financial Reporting Interpretations Committee ("IFRIC") that are not mandatory for the current period and have not been early adopted. The Company has reviewed these updates and the amendment that is applicable to the Company is discussed below:
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. The Company is currently assessing the impact of the new standard.
Risks and Uncertainties
Investment in the common shares of the Company involves a significant degree of risk and should be considered speculative due to the nature of Elemental's business and the present stage of its development. Prospective investors should carefully review the risk and uncertainties contained in Elemental's AIF for the year ended December 31, 2025 together with other information contained in this MD&A before making an investment decision.
Risk and Capital Management: Financial Instruments
Fair Value of Financial Instruments
Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy based on the degree to which the inputs used to determine the fair value are observable. The three levels of the fair value hierarchy are:
Level 1 – Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Unobservable inputs which are supported by little or no market activity.
The Company has investments and a warrant liability which are classified as Level 1 and Level 2 of the fair value hierarchy. The Company also holds warrants exercisable into common shares of public companies and has issued warrants exercisable into common shares of the Company. These warrants do not trade on an exchange and are restricted in their transfer. The fair value of the warrants was determined using the Black-Scholes pricing model using observable market information and thereby classified within Level 2 of the fair value hierarchy.
The carrying value of cash and cash equivalents, current trade receivables and other assets and accounts payable and accrued liabilities, approximate their fair value because of the short-term nature of these instruments.
The Company's financial instruments are exposed to certain financial risks, including credit risk, interest rate risk, market risk, liquidity risk and currency risk.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Credit Risk
Credit risk is the risk of loss associated with a counterparty’s inability to fulfil its payment obligations. The Company’s maximum exposure to credit risk is attributable to cash and cash equivalents and accounts receivable relating to royalty revenues and milestone payments. The credit risk on cash is limited because the Company invests its cash in deposits with well capitalized financial institutions. The Company’s accounts receivable is subject to the credit risk of the counterparties who own and operate the mines underlying the royalty portfolio. In order to mitigate its exposure to credit risk, the Company closely monitors its financial assets.
Interest Rate Risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing financial assets and liabilities that the Company uses. Treasury activities take place under procedures and policies approved and monitored by the Board to minimize the financial risk faced by the Company. Interest-bearing assets comprise cash and cash equivalents which are considered to be short-term liquid assets, and interest-bearing liabilities which comprise the loan from NBC, CIBC and BNS. Depending on the Company's leverage ratio, amounts drawn on the facility are subject to interest at SOFR plus 2.25% - 3.50% per annum, and the undrawn portion is subject to a standby fee of 0.50% - 0.78% per annum. An increase in the overall interest by 100 basis points would have increased the interest expense and decreased net income by $Nil during the period.
Market Risk
Market risks are the risks that change in market factors, such as commodity prices, foreign exchange rates or interest rates, will affect the value of the Company’s financial instruments. The Company manages market risks by either accepting it or mitigating it through the use of economic strategies.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk by continuing to monitor forecasted and actual cash flows. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its development plans. The Company strives to maintain sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from royalty interests, its holdings in cash and its committed liabilities.
Commodity Price Risk
The Company’s royalties are subject to fluctuations from changes in market prices of the underlying commodities. The market prices of gold and copper are the drivers of the Company’s profitability. All of the Company’s future revenue is not hedged in order to provide shareholders with full exposure to changes in the market prices of these commodities.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s transactions are carried out in a variety of currencies, including Pound Sterling, Australian Dollar, Canadian Dollar and US Dollar and it is exposed to movements in the US Dollar against these other currencies. The Company has not hedged its exposure to currency fluctuations.
Sensitivity analysis has been performed to indicate how the profit or loss would have been affected by changes in the exchange rate between the US Dollar and each of these currencies. The analysis is based on a weakening and strengthening of these currencies by 10% against the US Dollar in which the Company has assets and liabilities at the end of each respective period. A movement of 10% reflects a reasonably possible sensitivity when compared to historical movements over a three-to-five-year timeframe. Based on the Company’s US Dollars denominated monetary assets and liabilities at March 31, 2026, a 10% strengthening in CAD, GBP and AUD relative to the US Dollar would not result in material impact in the Company’s net income. A 10% increase (decrease) of the value of other currencies relative to the US Dollar does not have a material impact on net income.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Management of Capital
Management monitors the Company’s financial risk management policies and exposures and approves financial transactions.
The Company’s objectives when managing capital are to provide shareholder returns through maximization of the profitable growth of the business and to maintain a degree of financial flexibility relevant to the underlying operating and metal price risks while safeguarding the Company’s ability to continue as a going concern. The Company manages the capital structure and makes adjustments in the light of changes in economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure the Company may issue new shares, acquire debt, or sell assets. Management regularly reviews cash flow forecasts to determine whether the Company has sufficient cash reserves to meet future working capital requirements and to take advantage of business opportunities.
Critical Accounting Judgments and Significant Estimates and Uncertainties
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Areas of judgment and estimation that have the most significant effect on the amounts recognized in the consolidated financial statements are outlined below:
(a) Impairment review of royalty interests
At the end of each reporting period, it is assessed whether there are any indicators that the carrying value may not be recoverable or that an impairment loss previously recognized may no longer exist that gives rise to the requirement to conduct an impairment or impairment reversal analysis. Impairment or impairment reversal is assessed at the cash-generating unit (CGU) level, which is usually at the individual royalty from which independent cash inflows are generated.
Management uses judgment when assessing whether there are indicators of impairment, considering variables such as the production profiles, production commissioning dates where applicable, future commodity prices and guidance from the mine operators such as reserve and resource estimates or other relevant information from the operators which may indicate production from the interests will not likely occur or may be significantly reduced in the future. If such an indication exists, the recoverable amount of the interest is estimated in order to determine the extent of the impairment (if any). The test to determine the recoverable amount is performed using an income-based approach based on a discounted cash flow model which includes the following significant assumptions: future commodity prices, discount rate, and forecasted production based on mineral reserve and resource estimates from the operators. Management’s estimates of forecasted production of mineral reserves and mineral resources from the operators are based on information compiled by qualified persons (management’s expert).
(b) Taxation
The Company's accounting policy for taxation requires management's judgment as to the types of arrangements considered to be a tax on income in contrast to an operating cost. Judgment is also required in assessing whether deferred tax assets and certain deferred tax liabilities are recognized on the statement of financial position and their related measurement.
Deferred tax assets, including those arising from unused tax losses, capital losses and temporary differences, are recognized only where it is considered probable that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from temporary differences caused principally by the expected royalty revenues generated by the royalty property are recognized unless expected offsetting tax losses are sufficient to offset the taxable income and therefore, taxable income is not expected to occur in the foreseeable future. Assumptions about the generation of future taxable profits depend on management's estimates of future cash flows. These depend on estimates of future production and sales volumes, commodity prices, and mineral reserves. Judgments are also required about the application of income tax legislation in foreign jurisdictions.
These judgments and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized on the statement of financial position and the amount of other tax losses and temporary differences not yet recognized. In such circumstances, some or the entire carrying amount of recognized deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to profit or loss.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
(c) Business combinations
The assessment of whether an acquisition meets the definition of a business or is considered an asset acquisition is an area of key judgment. For an acquisition to constitute a business acquisition, the Company should be acquiring inputs and substantive processes which could deliver an output. Management would need to apply judgment to determine whether any processes were acquired as part of the acquisition of assets.
For both business combinations and asset acquisitions, the assumptions and estimates with respect to determining the fair values often require management to make assumptions and estimates about future events. The assumptions and estimates with respect to determining the fair value of assets acquired and liabilities assumed, those of mineral interests and other properties in particular, generally require a high degree of judgment and include estimates of future production of operator mineral reserves and mineral resources acquired, discount rates and long-term forecast commodity prices. Changes in the judgments made or in any of the assumptions or estimates used in determining the fair value of acquired assets and liabilities could impact the amounts assigned to assets and liabilities.
Sources of Estimation Uncertainty
Mineral reserves and mineral resources
Royalty interests of the Company that generate economic benefit are depleted using a units-of-production method (based on units sold) over the anticipated life of the mine to which the interest relates. This is determined using available information regarding proven and probable mineral reserves and the portion of mineral resources expected to be classified as mineral reserves at the mine corresponding to the specific agreement. These calculations require the use of estimates and assumptions, including the mineral reserves and mineral resources relating to each royalty interest. Mineral reserves and mineral resources are estimates of the amount of minerals that can be extracted from the mining properties at which the Company has royalty interests. Changes to the mineral reserves mineral and resources assumptions could directly impact the depletion rates used. Changes to depletion rates are accounted for prospectively.
Disclosure Controls and Internal Control Over Financial Reporting
Disclosure Controls and Procedures
The Company’s Disclosure Controls and Procedures (“DCP”) are designed to ensure that information required to be disclosed in reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and include, without limitation, controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted by the Company under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.
The Company’s management, with the participation of the CEO and CFO, have evaluated the effectiveness of the design and operation of the Company's DCP as defined under the Exchange Act, as at March 31, 2026. Based upon the results of that evaluation, the CEO and CFO have concluded that, as at March 31, 2026, the Company’s disclosure controls and procedures were effective.
Internal Control over Financial Reporting
Management of the Company, with participation of the CEO and CFO, is responsible for establishing and maintaining adequate Internal Control over Financial Reporting (“ICFR”). Management has used the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") to evaluate the effectiveness of the Company's ICFR.
The Company’s ICFR includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
It should be noted that a control system, no matter how well conceived or operated, can only provide reasonable assurance, not absolute assurance, that the objectives of the control system are met. There are inherent limitations in all control systems, which include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls and projections of any evaluation of effectiveness to future periods may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Changes in Internal Control over Financial Reporting
During the year ended December 31, 2025, the Company completed the acquisition of EMX Royalty Corporation, which significantly expanded the Company's operations. As a result of the acquisition, the Company's internal control over financial reporting changed to incorporate the controls and processes of EMX. Management is in the process of integrating EMX's internal controls with those of the Company. Other than the foregoing, during the three months ended March 31, 2026, there were no changes in the Company's ICFR that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Outstanding Share Data
As at May 11, 2026, the Company had 64,383,030 common shares issued and outstanding. There were also 3,054,206 stock options outstanding with expiry dates ranging from February 29, 2027 to January 7, 2033, 280,957 restricted share units outstanding with expiry dates ranging from January 7, 2029 to July 31, 2030 and 1,075,780 warrants outstanding with an expiry date of April 14, 2027.
Forward-Looking Statements
This MD&A contains forward-looking statements and forward-looking information (within the meaning of applicable Canadian securities laws) (collectively, “forward-looking statements”). All statements and information, other than statements and information of historical fact, constitute “forward-looking statements” and include any information that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future including the Company’s strategy, plans or future financial or operating performance and other statements that express management’s expectations or estimates of future performance.
Forward-looking statements are generally identifiable by the use of the words “may”, “would”, “could”, “will”, “anticipate”, “believe”, “plan”, “expect”, “intend”, “estimate” and similar expressions (including negative and grammatical variations) have been used to identify these forward-looking statements. These statements reflect management’s current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant risks, uncertainties and assumptions and in this MD&A include, but are not limited to: statements with respect to the Company’s financial guidance and outlook; the completion of mine expansion under construction phases, and the results of exploration and timing thereof at the mines or properties that the Company holds an interest in; and future royalty payments relating to royalties and streams the Company holds an interest in. Many factors could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, without limitation, those listed in the “Risk Factors” section of the Company’s annual information form for the year ended December 31, 2025, available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this MD&A. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Although the forward-looking statements contained in this MD&A are based upon what management currently believes to be reasonable assumptions, the Company cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. The forward-looking statements contained in this MD&A have been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company’s control, including without limitation: the impact of general business and economic conditions; the absence of control over mining operations from which it will receive royalty payments and risks related to those mining operations, including risks related to international operations, government and environmental regulation, delays in mine construction and operations, actual results of mining and current exploration activities, conclusions of economic evaluations and changes in project parameters as plans are refined; problems related to the ability to market precious metals or other minerals; industry conditions, including inflation, commodity price fluctuations; interest and exchange rate fluctuations; regulatory, political or economic developments in any of the countries where properties underlying the royalty, stream interests or exploration assets are located or through which they are held; risks related to the operators of the properties underlying royalty or other interest, including changes in the ownership and control of such operators; risks related to geopolitics and conflict; title, permit or license disputes related to interests on any of the properties in which a royalty or other interest is held; loss of key employees; regulatory restrictions; litigation; and other factors, many of which are beyond the control of the Company. The Company assumes no responsibility to update forward-looking statements, other than as may be required by applicable securities laws. The factors identified above are not intended to represent a complete list of the factors that could affect the Company.
Future-Oriented Financial Information
This MD&A may contain future-oriented financial information (“FOFI”) within the meaning of Canadian securities legislation, about prospective results of operations, financial position, GEOs and anticipated royalty payments based on assumptions about future economic conditions and courses of action, which FOFI is not presented in the format of a historical balance sheet, income statement or cash flow statement. The FOFI has been prepared by management to provide an outlook of the Company’s activities and results and has been prepared based on a number of assumptions including the assumptions discussed under the headings above entitled “Portfolio Growth” and “Forward-Looking Information” and assumptions with respect to the future metal prices, the estimation of mineral reserves and mineral resources, realization of mineral reserve estimates and the timing and amount of estimated future production. Management does not have, or may not have had at the relevant date, or other financial assumptions which may have been used to prepare the FOFI or assurance that such operating results will be achieved and, accordingly, the complete financial effects are not, or may not have been at the relevant date of the FOFI, objectively determinable.
Importantly, the FOFI contained in this MD&A are, or may be, based upon certain additional assumptions that management believes to be reasonable based on the information currently available to management, including, but not limited to, assumptions about: (i) the future pricing of metals, (ii) the future market demand and trends within the jurisdictions in which the Company or the mining operators operate, and (iii) the operating cost and effect on the production of the Company’s royalty partners. The FOFI or financial outlook contained in this MD&A do not purport to present the Company’s financial condition in accordance with IFRS, and there can be no assurance that the assumptions made in preparing the FOFI will prove accurate. The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented in any such document, and such variation may be material (including due to the occurrence of unforeseen events occurring subsequent to the preparation of the FOFI). The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments as at the applicable date. However, because this information is highly subjective and subject to numerous risks, FOFI or financial outlook within this MD&A should not be relied on as necessarily indicative of future results.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Cautionary Note to Investors Concerning Estimates of Inferred, Indicated and Measured Resources
The Company is subject to the reporting requirements of the applicable Canadian securities laws, and as a result, reports its mineral resources and reserves according to Canadian standards. Unless otherwise indicated, all mineral resource and mineral reserve estimates included in this MD&A have been prepared by the owners or operators of the relevant properties (as and to the extent indicated by them) in accordance with NI43-101 and the Canadian Institute of Mining and Metallurgy Classification System based on information prepared by the current or previous owners or operators of the relevant properties (as and to the extent indicated by them). Investors are cautioned that Inferred resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. Geological evidence is sufficient to imply, but not verify, geological and grade continuity of inferred mineral resources. It is reasonably expected that the majority of Inferred resources could be upgraded to Indicated resources with continued exploration. Under Canadian rules, estimates of inferred mineral resources may not be converted to a mineral reserve, or form the basis of economic analysis, production schedule, or estimated mine life in publicly disclosed pre-feasibility or feasibility studies, or in the life of mine plans and cash flow models of developed mines. Inferred mineral resources can only be used in economic studies as provided under NI 43-101. U.S. investors are cautioned not to assume that part or all of an Inferred resource exists, or is economically or legally mineable. U.S. investors are further cautioned not to assume that any part or all of a mineral resource in the ‘measured’ and ‘indicated’ categories will ever be converted into reserves.
Non-IFRS Financial Measures
The Company has included performance measures which are non-IFRS and are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS Accounting Standards. The non-IFRS measures do not have any standard meaning under IFRS Accounting Standards and other companies may calculate measures differently.
Caserones Reclassification
Effective November 13, 2025, the shareholders of SLM California executed an amendment to the entity's shareholder agreement, resulting in the Company reassessing the classification of its interest in SLM California, which holds the Company’s Caserones royalty. As a result of the amendment to the shareholder agreement, the Company determined that the revised arrangement constituted a joint operation in accordance with IFRS 11 Joint Arrangements. Consequently, on November 13, 2025, the Company discontinued equity accounting under IAS 28 Investments in Associates and Joint Ventures and began recognizing its proportionate share of the assets, liabilities, revenues, and expenses of SLM California as a joint operation. As a result, there are no adjustments in the current period for revenue plus attributable share of Caserones, depletion plus attributable share of Caserones or tax expense plus attributable share of Caserones.
Reconciliation of Adjusted EBITDA:
Adjusted EBITDA excludes the effects of certain other income/expenses and unusual non-recurring items. Adjusted EBITDA is comprised of earnings before interest, taxes, depletion, including depletion and taxes relating to share of profit from associate, and share-based compensation. Management believes that this is a useful measure of the Company’s performance because it adjusts for items which may not relate to underlying operating performance of the Company and/or are not necessarily indicative of future operating results.
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
The following is the reconciliation of adjusted EBITDA:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Net income for the period | $ | 1,083 | $ | 3,448 | |||||||
| Project evaluation and transaction related expenses | 442 | 16 | |||||||||
| Interest Income | (213) | (29) | |||||||||
| Interest and finance expenses | 179 | 131 | |||||||||
| Tax expense plus attributable share of Caserones | 3,070 | 1,603 | |||||||||
| Depletion plus attributable share of Caserones | 8,617 | 5,750 | |||||||||
| Depreciation | 47 | - | |||||||||
| Losses (gains) on revaluation of financial instruments | 2,478 | (179) | |||||||||
| Share-based compensation | 2,008 | 757 | |||||||||
| Losses (gains) on disposals | 30 | (26) | |||||||||
| Adjusted EBITDA | $ | 17,741 | $ | 11,471 | |||||||
The presentation of this non-IFRS measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS Accounting Standards. Other companies may calculate these non-IFRS measures differently.
Reconciliation of Revenue, Depletion and Tax expense plus Attributable Share of Caserones:
Revenue plus attributable share of Caserones is a non-IFRS financial measure, which is defined as including gross royalty revenue from associated entities holding royalty interests related to Elemental’s effective royalty on the Caserones copper mine. Management uses revenue plus attributable share of Caserones to evaluate the underlying operating performance of the Company for the reporting periods presented, to assist with the planning and forecasting of future operating results, and to supplement information in its financial statements. Management believes that in addition to measures prepared in accordance with IFRS Accounting Standards such as revenue, investors may use revenue plus attributable share of Caserones to evaluate the results of the underlying business, particularly as the revenue plus attributable share of Caserones may not typically be included in operating results. Management believes that revenue plus attributable share of Caserones is a useful measure of the Company performance because it adjusts for items which management believes reflect the Company’s core operating results from period to period. Revenue plus attributable share of Caserones is intended to provide additional information to investors and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS Accounting Standards. It does not have any standardized meaning under IFRS Accounting Standards and may not be comparable to similar measures presented by other issuers.
Depletion plus attributable share of Caserones and tax expense plus attributable share of Caserones are non-IFRS measures which include depletion and tax expense from the Caserones royalty asset respectively, consistent with the recognition of revenue plus attributable share of Caserones as described above.
The following is the reconciliation of revenue plus attributable share of Caserones:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Revenue | $ | 24,322 | $ | 11,639 | |||||||
| The Company's share of royalty revenue from Caserones | - | 1,622 | |||||||||
| Revenue plus attributable share of Caserones | $ | 24,322 | $ | 13,261 | |||||||
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Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
The following is the reconciliation of depletion plus attributable share of Caserones:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Depletion of royalties | $ | (8,617) | $ | (5,374) | |||||||
| Depletion of Caserones | - | (376) | |||||||||
| Depletion plus attributable share of Caserones | $ | (8,617) | $ | (5,750) | |||||||
The following is the reconciliation of tax expense plus attributable share of Caserones:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Tax expense | $ | (3,070) | $ | (1,165) | |||||||
| Tax expense related to Caserones | - | (438) | |||||||||
| Tax expense plus attributable share of Caserones | $ | (3,070) | $ | (1,603) | |||||||
Reconciliation of Adjusted Cash Flows from Operating Activities:
Adjusted cash flows from operating activities is a non-IFRS measure which includes dividends from the Caserones royalty asset.
The following is the reconciliation of adjusted cash flows from operating activities:
| Three months ended March 31, | |||||||||||
| (In thousands of dollars) | 2026 | 2025 | |||||||||
| Cash provided by operating activities | $ | 14,494 | $ | 2,372 | |||||||
| Caserones royalty distributions | - | 922 | |||||||||
| Adjusted cash flows from operating activities | $ | 14,494 | $ | 3,294 | |||||||
Reconciliation of Gold Equivalent Ounces Sold
Elemental's revenue plus attributable share of Caserones is converted to an attributable gold equivalent ounce, or GEO, basis by dividing the royalty and other revenue from associates in a period by the average gold price for the same respective period. The presentation of this non-IFRS measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS Accounting Standards. Other companies may calculate these non-IFRS measures differently.
The following is the reconciliation of gold equivalent ounces sold:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Revenue plus attributable share of Caserones (in $000s) | $ | 24,322 | $ | 13,261 | |||||||
| Average gold price | $ | 4,881 | $ | 2,879 | |||||||
| Total GEOs | 4,983 | 4,606 | |||||||||
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Form 52-109F2
Certification of Interim Filings
Full Certificate
I, David M. Cole, Chief Executive Officer of Elemental Royalty Corporation, certify the following:
1.Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Elemental Royalty Corporation (the "issuer") for the interim period ended March 31, 2026.
2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4.Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings
a.designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
i.material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
ii.information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
b.designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.
5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission.
5.2 ICFR - material weakness relating to design: N/A
5.3 Limitation on scope of design: N/A
6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on January 1, 2026 and ended on March 31, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
Date: May 13, 2026
| /s/ David M. Cole | |||||
| David M. Cole | |||||
| President and Chief Executive Officer | |||||
1
Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Stefan L. Wenger, Chief Financial Officer of Elemental Royalty Corporation, certify the following:
1.Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Elemental Royalty Corporation (the "issuer") for the interim period ended March 31, 2026.
2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4.Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings
a.designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
i.material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
ii.information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
b.designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.
5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission.
5.2 ICFR - material weakness relating to design: N/A
5.3 Limitation on scope of design: N/A
6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on January 1, 2026 and ended on March 31, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
Date: May 13, 2026
| /s/ Stefan L. Wenger | |||||
| Stefan L. Wenger | |||||
| Chief Financial Officer | |||||
1
FAQ
How did Elemental Royalty (ELE) perform financially in Q1 2026?
Elemental Royalty generated $24.3 million in revenue in Q1 2026, up from $11.6 million a year earlier. Adjusted EBITDA reached $17.7 million and operating cash flow was $14.5 million, reflecting strong contributions from Bonikro, Karlawinda, Timok and Caserones.
Why did Elemental Royalty’s Q1 2026 net income fall despite higher revenue?
Net income declined to $1.1 million from $3.4 million mainly because of higher depletion, general and administrative expenses, royalty generation costs, and a $2.5 million loss on revaluation of financial instruments, even though revenue and cash flow increased significantly year over year.
What is Elemental Royalty’s liquidity and debt position after Q1 2026?
Elemental Royalty ended Q1 2026 with $69.1 million in cash, $92.5 million in working capital, and no outstanding debt. The company also has an upsized $150 million revolving credit facility with a $50 million accordion feature available for future growth.
What dividend did Elemental Royalty declare for 2026?
The board declared an inaugural annual dividend of $0.12 per share, payable quarterly. For Q1 2026, a $0.03 per share dividend was declared, with eligible shareholders able to receive payment in cash or Tether Gold XAU₮ tokens.
Which assets drove Elemental Royalty’s Q1 2026 revenue growth?
Q1 2026 royalty revenue of $23.9 million was led by Bonikro ($6.2 million), Caserones ($6.8 million), Karlawinda ($2.8 million), Timok ($2.2 million) and Leeville ($2.1 million). These assets offset the expected absence of revenue from Korali-Sud during the quarter.
What is the significance of Elemental Royalty’s Western Queen royalty amendment?
After quarter-end, Elemental replaced its prior Western Queen royalty with an uncapped 2.5% NSR on gold production. It paid A$5.0 million upfront and may pay another A$5.0 million upon toll-treatment milestones, increasing leverage to potential future underground production in Western Australia.
How many gold equivalent ounces (GEOs) did Elemental Royalty record in Q1 2026?
Elemental Royalty reported 4,983 gold equivalent ounces sold in Q1 2026, compared with 4,606 GEOs in Q1 2025. The increase reflects contributions from new and expanded royalties, particularly at Caserones, Timok, Bonikro and Leeville following the EMX acquisition.