Ecora Royalties PLC

good morning and welcome to corey's full year 2023 results call financials were key financials were released pre-released as part of our q4 trading update so portfolio contribution of 64 million down from the frankly exceptional year we had in 22 very much as expected When we strip out that spectacular record year, though, and treat it as an outlier, 2023 very much in line with our historical four- to five-year performance. We'll come back to a detailed overview of the 2023 financials, which Kevin will cover in more detail. The first half of our presentation, however, will focus on, number one, the solid platform that we have here at Acora to deliver short, medium, and long-term organic growth. Number two, the scarcity of funding to the mining sector that currently exists, and as a permanent source of capital, creating a very favorable market environment for Cora to acquire new high-quality royalties. Number three, as you have seen earlier today, we announced a new capital allocation framework, and in that context, the U.S. $10 million share buyback program, And last, Kevin will also touch on our refinance credit facility and our balance sheet positioning to fund future growth. This is a snapshot of our asset base and our business as of the end of last year. And we believe there's a lot to like about where we are now, as well as the general direction of travel. We have a high-quality counterparty profile. We have a geographic footprint weighted towards our OECD jurisdictions, almost 100%. Our weighting to future-facing commodities are underpinned by structural demand megatrends expected to persist into the next decades. And we have exposure to low-cost, resilient operations, as well as development projects that have the potential or are generating strong cash flows through the commodity price cycle. And that cost curve positioning profile is certainly not an accident. It's a reflection of our methodical and disciplined approach to acquiring royalties. Furthermore, we've been deploying capital and managing a core in a responsible fashion, as evidenced by the continued upgrade momentum of our ESG scores from groups such as MSCI and Sustainalytics. So how can we improve this business? From here, we think it's a matter of doing a lot more of the same. Helpfully, wider market conditions are very favourable to growing our business at the moment. We're seeing cyclical lows in the commodity markets, we're seeing depressed equity valuations, and that's created really exciting opportunities for companies like Ikora. Mining companies are very much recognising the value of the royalty model and the partnership approach that we bring. Our product is very much seen as a mainstream funding source. And the market dynamics as they stand today, should they persist for the expected at least 12 months to three years, we anticipate a really strong backdrop to deploy capital, acquire high-quality royalties, grow and diversify our business. So in that context, today the board has announced an updated capital allocation framework. This framework optimally positions the business to be able to take advantage of the current market opportunities to grow, but also while navigating a period of greater quarter-on-quarter volatility as Kestrel winds down. The capital allocation framework has four key pillars. The first is growth. The second is deleveraging following transactions. The third is cash dividends in the future. Dividend distributions will be in line with business performance and based on a range of 25% to 35% of free cash flow. And the fourth pillar is to consider share buybacks in the context of market price and estimated net asset value. Capital market conditions have been very challenging for UK equities. And unfortunately, eQuora has been no exception. Today, eQuora is trading at levels substantially below net asset value estimates. such that only our producing asset base appears to be priced in. In that context, our board has approved a U.S. dollar $10 million share buyback program. This will principally be funded by the proceeds of a recent partial monetization of our LIORC stake, which really drives a compelling value arbitrage, a great way to recycle capital from LIORC trading at much more favorable relative valuation metrics, and ultimately expected to be very accretive to both Accor NAV per share and earnings per share. Accor's portfolio has been repositioned towards growth. Looking back to 2015, portfolio income and estimated net asset value were absolutely dominated by orchestral steelmaking coal royalty. Since then, however, estimated net asset value has grown nearly three times, and rather than being dominated by steel making coal, currently dominated by future facing commodities. Our income profile today is still heavily weighted towards steel making coal. But looking at the right hand side of the page, what you can see is that our business has a much healthier weighting towards producing assets, construction stage assets, development and earlier stage assets compared to 2015. And as we've moved forward in time, While the non-producing assets, of course, do not contribute towards income today, as those assets come online and they shift towards a producing asset base, we're expecting to see a lot more organic growth through the business and a lot of the NAV that we've added to the business shift to being non-income producing to income producing. So we've included this slide here today to remind folks that, as it stands today, our producing portfolio and only our near-term development royalties provide ACORA with a line of sight on potential portfolio contribution annually in excess of $100 million. This is very much driven by two things. Number one, growth across our producing asset base, including Boise's Bay, ramping up at full production to approximately 40 deliveries per year from 11 last year. and our near-term development royalties portfolio. So what is a value opportunity at eCora? There are very much two dimensions. And if we put aside for a moment the question as to whether enterprise value at EBITDA is the correct measure to value a royalty company, assume that it is, and simply to illustrate the point, we consider the following. So the first dimension is our organic growth profile. And this is shown on the left-hand side of the page. And assuming absolutely no change in trading multiple, with our current potential portfolio contribution growth, this provides Accor with the potential to double our enterprise value. The second dimension is a function of our expected change in the complexion of our cash flows. So in the coming years, of course, cash flows are expected to transition from a heavy weighting towards steelmaking coal to primarily being base metals, amongst other future-facing commodities. And in the market today, we see mining companies that derive earnings from steelmaking coal trading at substantially lower valuation multiples than base metals miners. So following that logic, we reasonably expect that core trading multiples could and should expand as the complexion of our underlying cash flows changes from Metco to base metals and other future-facing commodities. Time will tell if and how much that multiple may change. But nevertheless, we've included on the right-hand side, purely for illustration, the value upside that exists if we were to, for example, trade from our current multiple of 6.2 up to that of our closest non-precious peer. Both these dimensions have been presented separately, but in the real world, they also are likely and have the potential to occur in parallel. And so, for what it's worth, this is why I personally, amongst other eCore insiders, have been buying so many eCore shares recently. And that in a nutshell is the eCore value opportunity. So over to you, Kevin.

Thanks, Mark. Turning to the financial performance slide. Portfolio contribution of $64 million was previously reported in our trading update in January. And this reflects the expected lower volumes from Kestrel as mining is now transitioning away from our private royalty area. In addition, 2022, as Mark pointed out, was a bit of an outlier year, benefiting from record short-term pricing levels of Kestrel. And these didn't repeat in 2023, although pricing levels in 2023 were still well above long-term average. The 64 million, if we exclude 2022, is broadly in line with the average of the three preceding years. And with volume growth expected in the portfolio in the year ahead, we'd expect the level of income to repeat in the coming years whilst the development royalties come online. Our adjusted earnings decreased in line with contribution, although impacted as well by the full year effect of the shares we issued to set 32 in 2022. And this resulted in dividend cover of 1.4 times. In line with previous quarters and if approved at the AGM, the final dividend of 2.125 cent will bring the total for the year to eight and a half cents. And I'll talk through the updated dividend policy for 2024 onwards in a later slide. Turning to our portfolio contribution slide. So our core portfolio generated nearly $28 million of income in 2023, down from $36 million in the previous year. And this was mainly due to the continuation of the underground ramp up at Voisey's Bay, which resulted in fewer deliveries in the year, partially offset by the successful four mile legal case in Australia. So looking at some of the key points here, the continued ramp up from Voices Bay meant fewer deliveries in the year, 11 in 2023 compared to 19 in 2022. And this also coincided with a weaker COBOL price environment, where we averaged around $16.50 per pound in 2023 compared to around $32 a pound in 2022. So for Voices Bay, this combined to a 70% reduction in income in the year. However, as Mark points out, we are expecting an increase in deliveries in the year ahead. as the ramp-up gathers pace, and I think we've guided the market to between 12 to 16 deliveries for 2024. Mantos was in line with the previous year, and here we're once again expecting an increase in volumes in the year ahead as the impact of the de-bottlenecking project takes hold. The decrease in maracas reflected lower sales volumes and slightly lower pricing environment during the year, But overall, the operation continues to perform well and is the lowest cost pure plate vanadium mined globally. Income from LIORC reflected lower dividend levels in the period and similar to Kestrel, the iron ore prices pulled back from record levels achieved in 2022. Income here was also impacted by the partial disposal of our stake in the fourth quarter of 2023 and I'll return to this point a little later on also. Decreasing income from the McLean Lake toll milling stream reflected a temporary reduction in volumes at the beginning of 2025, but these are now running back at 100% levels. Four Mile, though, was a particular highlight in the portfolio following the successful outcome of our court process, which had been ongoing in relation to deduction levels. This saw about $5.4 million of backdated income being released to the income statement in 2023. And the timing of this is also important, given the current uranium price levels, which have rallied over the past 12 months, and also the outlook for uranium demand looks very favourable too. Our other income includes assets such as EVBC, Carlota and Flowstream. The reduction here was primarily in relation to EVBC, where we worked with the operator to agree a lower royalty ratchet rate, helping them with their cash flow management as they went through 2023. And finally, to Kestrel. As we mentioned earlier, volumes will become more volatile as mining begins to move away from the group's private royalty land. So in 2023, the volumes were 1.6 million tonnes compared to 4.1 million tonnes in 2022. whilst the average price reduced from the record highs of $465 AUD realised in 2022 to $342 AUD in 2023. Looking forward to the year ahead, we are guiding an increase in volumes for 2024 from Kestrel. The vast majority of this is expected to come in the first half of the year, which is important given that cooking coal prices averaged around about US$300 a tonne in Q1 and they currently remain above US$275 now. So all of this produced a total portfolio contribution of US$64 million in the year. and we've got an expectation of volume growth to come from most of the royalties in the portfolio for 2024, which should pave the way for revenue growth to come in the year ahead, subject of course to commodity prices. The next slide shows how this translates into adjusted earnings. A couple of points just to note on this page. Our overheads remained broadly flat in the year at about $11 million, despite the inflationary backdrop continuing to impact many businesses. Our finance costs reflected higher average interest rates in the period, along with an increase in average borrowings as we continued to make the deferred payments to South32 and invested $27 million into growth assets. So our adjusted earnings of 11.8 cents in the period. Not exactly a direct comparison with 2022. As I mentioned earlier, the weighted average shares in issue was lower in 2022 as the shares we issued to SED32 only occurred in July that year. And looking ahead, we'd expect average interest rates to fall over the course of 2024 following the refinancing of our borrowing facility at slightly lower pricing levels. The market is generally expecting several interest rate cuts by the Fed in the second half of the year. And absent any further acquisitions, there's no capital commitments in 2024 to increase average borrowings. And looking at slightly further, our effective tax rate should begin to get lower as Kestrel begins to form a lower percentage of our total portfolio contribution. So both these factors should benefit adjusted earnings moving forward. Turning to our balance sheet. The overall reduction in our net assets largely reflects the depletion associated with the income we earned from Kestrel in the period. And when taking the deferred tax associated with this asset, the total balance sheet carrying value of our Kestrel asset is now less than $50 million, which is comfortably less than 10% of the group's NAV. Kestrel is now very much a short-life royalty, and we'd expect most of this value to materialise in the next two years. It's worth remembering that our intangible assets primarily consist of Mantos, West Musgrave and Santo Domingo. And these are carried at amortised cost and not fair value. And there were no impairment charges recorded against the intangible assets in the period. The royalty financial instruments are the royalties carried at fair value. These primarily include the Denison loan and our POE investment. I'll come back and look at the cash and borrowings on the next slide. But overall, the net asset value on the balance sheet of $482 million implies a balance sheet value per share of just under £1.50. This slide looks at the movement in our net debt during the year. The increase in our net debt reflects the $27 million invested during the year, along with the continuation of the deferred consideration associated with the SED32 acquisition in 2022. Our seven and a half million POE advance was funded through the 14 million part disposal of the group's residual stake in LIORC. The remaining six and a half million dollars of this will be used to finance the majority of the $10 million buyback announced today. And again, this represents a good capital recycling opportunity given the relative trading multiples of both stocks. The final payment to CET32 was made in January of this year. And as such, there's no further expected capex commitments in the portfolio outside of our option to invest a further 62.5 million into the PoE project. The next slide provides some details on the refinancing that we announced in January. We were once again delighted to work with the leading blue-chip Canadian lenders to refinance our previous facility on slightly enhanced and more flexible terms as well. So the facility itself, along with the expected growth from the portfolio in terms of volumes, ensures we're in very good financial health with no amortization payments or refinancings required until January 2027 at the earliest. We also, along with the refinance, took the opportunity to increase our accordion by $25 million to $75 million, which while subject to lender approval for permitted acquisitions, is available for further investments. Our new loan facility, importantly, is also more flexible in terms of its use. We've got a maximum permitted leverage of three and a half times, which can be increased to over four times for a period of six months following an acquisition. Our current leverage ratio on the balance sheet at the year end is quite low at 1.4x, so plenty of headroom there. The loan is now priced at a slightly better margin from that before, ranging from 2.25% to 4%, which was previously 2.75% to 4%. The ratchet depends on the level of operational gearing within the business. But overall, with $58 million undrawn on our existing facility, the $75 million accordion option, our remaining stake in LIORC and the treasury shares we have currently, this provides a potential $150 million war chest available to continue to pursue further high-quality royalty acquisitions going forward. My final slide illustrates how the dividend is intended to operate going forward. The dividend will be calculated by looking at an average of the free cash flow generated in the two immediately preceding six-month periods, as outlined in the diagrams. This is designed to result in a more even distribution between interim and final dividends, especially over the next two years for periods when Kestrel is operating outside of our private royalty land. And based on published operator guidance and current commodity prices, we think this should produce a dividend per share of approximately 4 cent based on the mid-range payout ratio. At our current share price levels, we still feel this represents a sector-leading yield in the diversified royalty sector. We're also adjusting the frequency of the dividend payments to twice a year which is outlined in the table below and should result in payments being made in early January and July of each year. So our updated dividend policy results in greater alignment of our dividend to the revenue generated by the portfolio and along with the recently refinanced borrowing facility ensures we remain in a very strong financial position while capitalised to continue our growth. I'll now hand back to Mark.

Thank you, Kevin. Turning now to look at our portfolio. As we've mentioned a couple of times already, we expect year-on-year volume growth in 2024 and into 2025 based on current operating partner guidance. Beyond 2025, our portfolio well-positioned to deliver further growth with VB at full steady, with Voices Bay rather, at steady state production levels, implying somewhere in the range of 40 deliveries per year. And you can see on the bottom half of the page, sizable volume growth potential from our near-term development royalties. Copper market dynamics have increasingly become more attractive as we've gone through 2024. with short-term supply forecasts widely revised downwards as a function of operational disruption across the sector. That's forecasted to have moved market balance into deficit, and copper prices have been trading just under $10,000 per ton. Beyond that, the medium-term and long-term supply demand fundamentals for copper remain highly compelling. And our copper portfolio that we've built up over the years positions us for continuous growth into the next decade. So very much what you'd like to see as a royalty company. And in this context, we think our copper exposure is very well positioned to increasingly shine. The nickel industry has had a series of well-publicized challenges as of late. And in the context of Vokora and our business model as a royalty company, a very strong reminder of the importance of having exposure to low-cost operations, which can or would be expected to generate strong cash flows, even in times of commodity price weakness. Voisey's Bay, once fully ramped up, expected to be within the lower half of the cost curve. And as projects, West Musgrave and PoE, both expected to be very well positioned on the industry cost curve. and still substantially operate at a cost profile that's substantially lower than weak nickel prices we've seen in the recent months. Looking at West Musgraves specifically, it's important not to overlook the fact that there is a large copper component to this project, which certainly would enhance the project economics even more so in the context of today's copper price environment. BHP recently stated that at current nickel prices, the project is economic on a standalone basis. Nickel prices, rather, have increased since then. Construction of that project is now 21% complete, and for the time being, we await further updates from BHP. We are absolutely delighted today to daylight our next-gen royalty, which is a fantastic example of why portfolio diversification and depth is so crucial towards achieving a premium royalty company equity valuation. It's early days. NextGen has announced one drill hole within our royalty area. But those initial results are very encouraging, and they compare very favorably to the world-class Aerodeposit and Discovery very close by. So as I mentioned, early days. but certainly one to keep an eye on and a very nice addition to our uranium exposure. So ECORA's organic growth potential has been a large focus of today's presentation. And here we summarize key upcoming updates and de-risking events expected in the near term. Santo Domingo is certainly one to watch and should not be overlooked, as there are some pretty mission-critical updates expected in the next 12 months, starting with an updated feasibility study in the first half of this year. And beyond that, Capstone's targeting a final investment decision to proceed with that project in the second half of next year. We've included this slide here to give a bit more shape about number one, what we're seeing in the market, and number two, how we're thinking about opportunities. So starting first with ticket size. This is very much a function of the stage of development. For earlier study stage assets, we're really thinking ticket size is less than 10 million. And for assets which are much closer to first production, still in study stage, mind you, but perhaps a feasibility study or in a stage where they're very close to a final investment decision, tickets in the range of 10 to 25. And then for producing assets or construction stage assets, we are generally thinking of ticket sizes in excess of 25 million. In terms of our commodity exposure, retaining copper at the core of our business is one of our key strategic imperatives. But that being said, we think there are a lot of merits in filling in the gaps and broadening our commodity exposure to the wider future-facing commodity basket. All the while, for Cora, maintaining our disciplined approach to investments is crucial. I think looking back on last year and prior years, it's very clear that what we choose to do is as equally important as what we choose not to do. So in summary, our strategic focus, in short, is to further diversify our portfolio with high-quality royalties with the objective of achieving a premium royalty company valuation. Market conditions are very favorable to royalty partnerships. We've updated a capital allocation framework which has positioned us on a very firm footing to grow the business, as Kevin mentioned, with a current potential war chest of US $100.50 million. And we've also announced the US $10 million buyback program. We anticipate volume growth in the next two years, which, absent further acquisitions, should permit an accelerated pace of deleveraging. We have a high-quality development royalty portfolio underpinning medium term growth. And at our core, of course, future facing commodity baskets aligns us with very strong structural commodity demand trends. And with that, we'll turn to Q&A.

Thank you. Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad. If you wish to cancel your request, please press star two. You may also submit your questions on the webcast. Now, the first question comes from Marina Calera from RBC Capital Markets. Please go ahead.

Good morning and thanks for the call. You mentioned that the current market conditions are creating opportunities to grow your business. Can you give us a bit more color on your current pipeline? Which commodities are using most opportunities And I'm curious to know as well whether you've seen an increase in opportunities available to finance producing assets. Thank you.

Good morning, Marina. Thanks for your question. Generally, we don't comment on the status of opportunities within our pipeline, but we will say we're highly active. In terms of the commodity mix, I'd encourage you to reference the commodities we've detailed in the presentation. As we mentioned, retaining copper at the core of our portfolio is a strategic objective. That being said, there are gaps in the commodity basket which we could infill. And ultimately, with that in mind, keep in mind that At Accor, our vision is to create a vehicle that provides investors with exposure to the energy transition thematic holistically. So as we infill that commodity profile, that's one step closer towards offering a one-stop solution.

Absolutely. Thank you.

Peter Marling-Jones from Peel Hunt. Please go ahead. Your line is open.

Morning, Mark and team. Just two sort of questions. One slightly following on from Mariana's. Obviously, you sort of laid out the sort of approximate ticket sizes that you're looking at across the sort of timelines of potential acquisitions. And given your comments about the opportunity set, I was wondering if you could comment on how the pipeline is looking or the opportunity set is looking relative to the last few years, and then perhaps going back a little bit further to the sort of period around 2015, 2016, when previously there seemed to be a sort of a window opened up for royalty financing.

Morning, Pete. Absolutely. I think, you know, when we think about our competitive landscape on the non-precious space, there are far fewer royalty companies. pursuing the commodities and the counterparties and the opportunities that we target. And therefore, in that context, the availability of equity financing and more generally equity valuations are really relative important consideration as to the merits of our funding solution. Today, the Royalty Partnership is for many mining companies on a relative basis, far more creative than an equity solution. So in that context, we have seen an uptick in demand for our product.

Okay, thank you. And then just thinking about the revised dividend policy, can you give us some indications as how you're thinking of using the flexibility within the free cash flow sort of percentage? Is it something as simple as at the top of the pricing cycle, you'd be paying at the bottom of the range and towards the top of the range at the bottom? Or is it more a function that we should be thinking of how your balance sheet is looking and the potential availability or the requirement to de-lever is driving more of where your eventual dividend payouts are going to come?

Pete, when you look at the formula approach, specifically with reference to the average of two half yearly periods, that incorporates an element of smoothing. And the range within that context is more of a function of a smoothing effect to capture some of the volatility that can occur in commodity price cycles.

Okay, thank you.

Our next question comes from . Please go ahead.

Thanks, guys. Very, very welcome to hear the new capital allocation policy. Big positive in my view. Just two questions. One is regarding the buybacks. How should we be thinking about the triggers for this? Is it a simple earnings differential where you look at your peers and if there is a big gap emerging or current, then you'd consider doing a buyback? And then the second question is around the financing process for Piali. How's it going for Brazilian nickel? And what, in your view, could trigger the exercise of the final option for you guys?

Morning, Alex. So in terms of the buybacks themselves, at this time, we're not contemplating or we have no intention on going further than the $10 million announced today. But as part of our capital allocation framework more broadly, Really, it's a question of market price versus net asset value. And in time, both of those pieces will fluctuate and move. Today, we're sitting at an estimated PNAP multiple in the range of 0.4 or 0.5. And therefore, in that context, a buyback is highly accretive. That being said, in the future, buybacks will be considered, again, with respect to whatever the market dynamics are and the relative valuation at the time. In terms of your second question, the POE financing process continues. Market conditions, of course, are challenging for nickel more generally. But as we mentioned in the call, nickel outside of certain supply chain markets, from a sovereign perspective, remains a strategic imperative. This project with nickel supply out of Brazil, that as of today, anyways, continues to be IRA compliant, is attractive. Second is the carbon intensity of the Brazil nickel project is relatively very, very low compared to the industry. Again, an important consideration when looking at nickel. So in terms of the triggers, I think the first point is that our funding obligation is triggered at such time that the project is fully financed. And at that point, subject to final board approval, of course, being a requirement for us to proceed, those are the two key main points.

Brilliant. Thanks, guys.

Appreciate it.

As a reminder, to ask a question, please signal by pressing star one. Our next question comes from Richard Hutch from Berenberg. Please go ahead.

Yeah, morning, Mark and team. Thanks and congrats on a decent set of numbers and a nice new dividend policy. Just wonder if you've got any clarity you can give us on the first quarter today. I appreciate, you know, quarter hasn't ended yet, but is everything sort of performing in line with your expectations? I suppose, particularly just from a Kestrel standpoint, just given the fact that we're expecting it to be pretty strong. That's the first one. Thanks.

Hi, Richard. Yeah, I'd be nice to appreciate as a royalty company, you know, we don't have sort of the operational oversight that a mining company would on a day by day and week by week, month by month basis. I think at Kestrel specifically, our expectation continues to be that those volumes would be primarily weighted towards H1. Probably today, potentially more to H1 smoother versus Q1 that was expected at the beginning of the year. But we'll just have to see how it shapes up and what information we receive from the operator at the end of the quarter. Okay, cool.

Thanks. And then just a pure accounting one on the buyback. Shares will be held in treasury, right? So your share count will not reduce. So it won't be EPS accretive, but obviously the cash... outflow will be less based on the amount of shares that you buy back, correct?

Yeah, I think that's right, Richard. I think the shares that are held in Treasury will not be available, sorry, will not attract a dividend. So I think on that basis, exactly, it will be very accretive to the cash flow measures. The shares will not be cancelled, they'll be held in Treasury.

Okay, cool. And then just on the free cash flow calculation, I'm just sort of working through it in the model, but the proceeds that you receive for things like Marabry that continue to drip in, that's included, right? So that drops down into that free cash flow, correct?

Yeah, that's right, Richard. We specifically include and make available for distribution proceeds from non-core asset disposals.

Okay, good stuff.

All right, well done. Thanks, guys.

Thank you. And is there enough other questions in the phone queue? I'd like to hand it over for any web questions. Thank you.

Thank you, Sergey. We have a few questions that have come in online. Firstly, does Acora still own the 2% NSR on the Doobie Gold project as it is not mentioned anywhere in the corp material anymore?

This is a short answer. Yes, Accor owns that royalty. It is not included in the context of our key principal royalties, as it's not a core asset to the business. It is included, I believe, on our website, unless I'm mistaken, within our annual report. But not sure about that. In any event, the royalty is non-core to the business. It's a de minimis percentage of our net asset value.

Thank you. Given the rapid growth in Indonesian nickel production, do you still think it's wise to invest heavily in Poway? What steps have the company planned if BHP mothballed the West Musgrave project?

So in response to the first question, Ultimately, like any investment, a royalty and the attractiveness of the royalty is a function of the long-term price assumed at the time of the investment. And if that is, say, at $16,000 per ton or, for example, at $25,000 per ton, that is very different relative attractions. Today, the royalty attracts, is expected to attract anyways, based on what information we have available. really attractive IRRs, even at today's current nickel price. So in that context, you'd think, yes. The next question we'd have to evaluate is whether the operation has substantial margins. And as it sits today, the operation is well positioned on the cost curve. If the business can operate profitably through cycle, And if our royalty can generate attractive returns, even at today's nickel price, you'd think that that is a highly attractive investment. And frankly, with a substantial upside over the life of the royalty. The second question was in relation to West Musgrave. And again, we can't speculate as to what BHP will and will not decide to do. I think when we look at the profile of the West Musgrave project, however, So we're really encouraged by the fact that this is an asset that sits at the lowest end of the industry cost curve, or is expected to be anyways. Number two, it's amongst the best development projects, nickel-copper, in an OECD jurisdiction today in the world. It's 21% complete. And absent any decisions within the context of the wider Nickel West framework, BHP have commented publicly that that as a standalone operation, West Musgrave is attractive. So we'll have to wait and see as to what, if anything, BHP does around the timeline for West Musgrave.

Thank you. Is there perhaps an update on the status of the INCOA project? When is the funding by ACORA projected?

The... The core royalty triggers and the funding are set with reference to a number of operational CPs. At this time, those have not been met. Those could be met in 2024. At this time, that's not the expectation. We'll have to, as we get through the year, we'll have a better visibility on when they could be hit, if ever.

What other royalties does ACORA hold in the Athabasca basin? Is it a larger royalty package?

That's right. ACORA has a fairly large package of royalties in Athabasca. Generally speaking, most of those properties that are an earlier stage of development, as and when there are material updates or greater sources of value that can be attributed to those assets, we'll look to disclose more information.

I think, Mark, just to add to that and to tie it back to the Dugby royalty, the group has a number of royalties that are worth or carry a very little value in the group's balance sheet. And as we can see with the Athabasca royalties, over the passage of time, some of these can come into production and create value for the group. A similar asset, of course, is the Amapa iron ore royalty, which we have in the group. You know, we do have other assets which have got optionality value for us, which may not be reflected on the balance sheet. But again, it goes to our points really about the virtues of having a diversified royalty portfolio spread across various stages of development, jurisdictions and commodity.

I think we have a final question. Has any progress been made on the Amapa Iron Orb royalty in Brazil, given its planned reopening by cadence?

Well, Okora, as our business model, is not to, as ourselves, progress these operations as a royalty holder. The progress at Amapa is really in the hands of the owners and operators. From what we've seen publicly, the project has recently concluded and updated some further technical work And the next step is to finalize project technicals prior to the potential and targeting funding for a restart. As to when that might happen, this is really out of our control.

Thank you, Mark. There are no further questions on the webcast. I'll hand back for any additional closing remarks.

Well, thanks so much for joining us today. A lot to talk about. One of our busier full year results. Look forward to our next core update.