Ecora Royalties PLC

Good afternoon, everybody, and welcome to the Cora Royalties 2025 Full Year Results Conference Call. My name is Geoff Callow, the Head of Investor Relations. I'm joined today by Mark Bishop-LeFleche, our Chief Executive Officer, and Kevin Flynn, our CFO. We'll run through a short presentation, after which there'll be opportunity to ask questions. Before I hand over to Mark, can I draw your attention to page two of the presentation? We have some forward-looking statements, and there's a disclaimer on there relating to these. And with that, I'll hand over to Mark.

Thank you, Jeff, and thank you all for joining us today. 2025 marked a year of delivery on a number of fronts. First, this represents an inflection point for ECORA's critical minerals portfolio, which achieved a record level of portfolio contribution. This was driven primarily by ECORA's base metals exposures, which grew 150% year on year. and we are truly delighted to see our critical minerals royalties demonstrate only a small portion of their true underlying cash flow generation potential. During the year, we acquired the producing Mimbula Copper Stream. That was for an upfront consideration of US$50 million, and that acquisition contributed to the year-on-year base metals growth, which saw ECOR partner with Moxico's exceptional management team while also cementing copper at the core of the core's commodity exposures. The portfolio also delivered rapid deleveraging following the MIMBULA acquisition. This was driven by the portfolio's cash generation, as well as active management, which we took to unlock value from non-core holdings. Net debt declined very quickly from just under $125 million after transaction closed to ending the year around $85 million, which is roughly similar to the levels at the beginning of the year. So from our perspective, it's been a landmark year. And as you can see very clearly on this chart, for the first time in this group's history, our critical minerals exposures represented the majority of ACORA's full-year portfolio contribution. And as I mentioned, this does, from our perspective, represent a true inflection point on a number of fronts. First, in terms of commodity complexion underlying the cash flows generated by this portfolio. Second, in terms of a reduction in the historical volatility connecting to mining operations moving in and out of the core is royalty area. And third, Decor's revenue profile is now underpinned by operations and projects with mine lies that are measured in decades, compared to Kestrel, which is measured only in years, and this is truly a seismic shift. Carrying this point forward, as you can see on the chart on the right, in the past five years since 2020, starting from a very low base, Decor's critical minerals exposures, consisting of base metals, specialty metals, and uranium royalties, have delivered approximately 650% growth in portfolio contribution. And what we're even more excited about is when we look ahead by five years, we still only appear to be at the foothills of ACORA's strong, organic, critical minerals growth profile, centered in copper, which offers torque to the strong long-term fundamentals outlook for copper, but also the other critical minerals to which ACORA has exposure. The next 12 months are expected to de-risk that next wave of growth that I just mentioned, spanning that 25 to 30 period. A number of key potential milestones are layered across the portfolio, spanning, firstly, producing assets, brownfield assets, as well as near-term and longer-term development stage royalties. To pick out a few, this includes, for example, the continued ramp-up in production at Voises Bay in Mamboula, the potential Matos Blanco's Phase II brownfield expansion, Further steps towards the restart of mining operations at the past producing Nifty Mine. And a key one for us, the possibility of an FID decision by Capstone Copper at the Santo Domingo project. Also the continued technical de-risking of the Palo Oboro project. And last but certainly not least, the possibility of a change of control at West Musgrave, which could certainly add clarity and visibility on the timeline to a first production date. So with that, I'll hand it over to Kevin.

Thanks, Mark, and thanks again to everyone who's joining us today. Turning to our financial performance slide, it's very pleasing to report another strong set of results, which highlights two very important things. Number one is the resilience of our business model, which is particularly important in times of volatility such as these. But secondly, the steady progress we have been making on our stated strategy, which is now in a very meaningful way starting to convert into earnings. Looking at portfolio contribution, whilst our headline portfolio contribution is slightly down in the year, this really doesn't tell the whole story of the changing complexion of our portfolio, which I'll touch on on the next slide, and as Mark alluded to earlier. Our adjusted earnings excludes non-cash valuation and impairment reversals, and this was lower in the period, reflective of the higher financing costs that we assumed as part of the Mambula transaction. and also some currency movements based on our reported overheads. Again, I'll touch on these a little later. Our free cash flow improved in the period, which we flagged in the past, as we would expect this to be based on the declining overall portion of Kestrel as a percentage of our portfolio contribution. Kestrel attaches a higher effective tax rate than the rest of the portfolio, so we should continue to see good free cash flow conversion going forward. And finally, the dividends with the 1.4 cents that we're proposing today, along with the 0.6 cent we paid in relation to the first half of the year, that would take our total dividend for the year to 2 cent per share. Turning to the next slide, which is our portfolio contribution, a couple of key points to note here. First of all, the change of complexion I mentioned earlier. sees our base metals portfolio contribute 50% of our overall contribution. The first time that that has ever done so in our history. The second is the quality of these earnings as well. The base metals portfolio itself, we can now speak of that profile in terms of multiples decades, rather than where we were in the past, which was talking about the short-term nature of the Kestrel Royalty. The free cash flow potential and conversion of this portfolio is also expected to increase as we have a much more efficient portfolio in terms of free cash flow conversion as Kestrel reduces in the year and years ahead. The highlights within the portfolio, just to pick a few out. The base metals, we saw 113% and 43% volume growth from Voices Bay and Mantos Blancos, respectively. Voices Bay also benefited from the noticeable recovery in cobalt prices during the year, following action taken by the DRC to address considerable oversupply in recent years. Around this time last year, in fact, the alloy grade cobalt price was only around $13 per pound. Today, this number is $30 per pound, which bodes well for the year ahead. At Mantos, another standout performer in the period, we generated $9.5 million, a record contribution from this royalty, which actually approximates to about a 20% running cash flow yield. So we're very pleased with the performance here in the period. To pick out a couple of other highlights, the Mambula acquisition. This added to cash flow from day one. But just to draw your attention to the fact that the 4 million we report here are 2.9 million net of cost of sales. That represents effectively only two full quarters of income. given that the income is only recognized at the point of sale. That's different to an accruals basis for the rest of our royalty portfolio. So we'd expect to see this contribution increase on a reported basis significantly in 2026. Elsewhere, 4 Mile resumed its normal sales profile during 2025, but like Mimbula, this reported income lags a quarter. And so the 2.2 million we report this year is effectively only three quarters of normalised sales levels. And with this much stronger uranium pricing environment currently, we'd expect to see more to come from Form Island 2026. And, of course, in the current gold price environment, it's not to be forgotten that we have some exposure to cash flow through our EVBC royalty, an asset which has been generating revenue for the group for over 15 years now, and the operator signaling reserve capacity to the end of the decade. Finally, Kestrel itself. Kestrel met its guidance during the year. although it was impacted by a lower coking coal price environment where prices were down around 36%. 2026 should, depending on advance rates, see the last meaningful volumes for the group. To that extent, we're guiding midpoint range of about 1.1 million tonnes from Kestrel in the year ahead. So in conclusion, very pleased with the performance from the portfolio, which saw a change in the complexion of our earnings, the quality of those earnings increasing and the free cash flow potential of the portfolio really coming through. Turning to the next slide, which is our adjusted earnings and shows how our portfolio contribution translates to earnings per share. Just to elaborate on the two points I mentioned earlier, Our operating costs, despite actually the underlying cost base of the group falling a little bit during the year, we report our sterling overheads in U.S. dollars in line with our functional currency. The strengthening of the pound against the U.S. dollar in the period accounted for about a million dollars of extra reported overheads. We do hedge a portion of our fixed cost base and we'll continue to do so to try to manage this volatility going forward. I mentioned earlier our financing costs increased in the period. This was associated with the Mambula acquisition, which increased our average borrowings in the period, which on average were $150 million dollars. Our tax in the period, despite showing a three percentage point drop in our effective tax rate, still showed a small reduction in the period. But we'd expect to see this continue to become much more efficient as Kestrel contributes a lower overall portion of earnings going forward. Turning to the balance sheet, a couple of points to pick up on here. First of all, the depletion in Kestrel. means that this asset now on the balance sheet, once net of deferred tax, represents less than $20 million. The flip side to that is that now 88% of our royalty assets on our balance sheet are held at amortized cost. And as a result of this, the balance sheet doesn't reflect the significant value of the portfolio based on reserve expansion, mine life extension, or an increase in the long-term commodity price inputs. A good example of that is our copper assets, which most were acquired at long-term copper prices of less than $4 a pound. The current long-term copper price is now closer to $5 a pound. We've also announced today the non-cash impairment reversal at Boise's Bay. And although the price has recovered significantly here, this reversal is actually driven by resources. with a new mine life plan suggesting expansion, but also that those expanded mine life will see volumes brought forward in the next few years. We've always believed that there was the potential here for further mine life expansion, so it's very pleasing to see this now start to come through. Turning to our next slide, our next net debt reconciliation. Net debt itself has largely remained unchanged in the period. which is very pleasing considering the 50 million Mambula acquisition undertaken in March, very much aligned to our capital allocation priorities, prioritizing growth. Following the Mambula acquisition, we undertook a number of initiatives in an attempt to accelerate deleveraging. Firstly, we reached an agreement with Whitehaven Coal to accelerate the remaining deferred consideration associated with the Narrabri disposal. Secondly, we took the opportunity to dispose of the Dugby Gold Royalty in Liberia. And whilst asset disposals are not a core part of our stated strategy, this asset was somewhat of an outlier in the group, given its precious metals nature and also its estimated time to first cash flow. So we were very pleased that these initiatives combined realised $28 million, which effectively refinanced around half of the Mambula investment. We continued our dividend policy in the period and on a cash basis we paid 2.81 cent per share in 2025. Today we're proposing a final dividend of 1.4 cent per share, which when combined with the interim dividend of 0.6 cent per share brings our total proposed dividend to 2 cent per share for 2025. And finally, the table on the bottom right of the slide is certainly worth highlighting. This table shows that based on latest broker commodity price decks, what our base case net debt would look like and then flex to a plus or minus 10% case. The strong free cash flow, which we expect the portfolio to continue generating, does enable meaningful deleveraging with net debts of under $55 million by the end of 2026 and then less than $30 million by the end of 2027. These levels are comfortably within our covenant levels, leaving significant headroom under our $180 million facility, which provides ample firepower to continue our growth journey. And with that, I'll hand back to Mark.

Thank you, Kevin. On the whole, Ecorra's commodity exposures are significant. very strong price performance during 2025 from copper, cobalt, uranium and rare earths in particular. That strong performance carried forward into early 2026. The recent conflict in Iran has certainly resulted in a degree of market and commodity price volatility. Nevertheless, the long term commodity price outlook in particular for copper continues to be underpinned by exceptionally strong supply demand fundamentals. Turning now to look at our operator partners' expected 2026 production volumes. So much of this is actually covered later in the presentation. So I'll just pick out one point on this slide very quickly related to four mile. And that is during 2025, we saw four mile sales return to normalized levels following a period in 2024 when produced material was stockpiled. In 2026, as you can see on the chart, we expect production and sales to revert to full run rates of 4 to 5 million pounds per annum. Turning to Voises, the Voises Bay mine achieved a very strong production ramp-up during 2025, which saw stream cobalt deliveries to Requam more than double. And as Kevin mentioned, with the benefit of cobalt price tailwinds, the Boise's Bay portfolio contribution last year tripled year on year. So delighted to see this asset deliver on the potential we've always known existed. And we've also seen in that vein an extension to the Boise's Bay line life. There certainly remains potential for much more meaningful and continued expansion to that life of mine in the future. In 2026, we continue to expect further year-on-year volume growth up between 12% to 25% as Boise Bay operations ramp up to full production levels. And on a separate point, as many of you will already be aware, we receive physical cobalt products to settle the Boises Bay Stream. And therefore, the timing of those deliveries is often and usually subject to shipping timelines, and this can result in a degree of quarter-on-quarter variability. In the first quarter of this year, we have now received approximately 42 tons of cobalt, An additional 56 tons of cobalt is currently being shipped and with delivery expected in the initial weeks of April. So these 56 tons will accordingly be recognized in the second quarter and that would be incremental to what we expect to be delivered in the second quarter of this year. This will have no impact or change or full year attributable cobalt guidance. The last point to highlight on this page, and it's actually something that Kevin's already mentioned, but it's worth repeating in the context of wider commodity price volatility that we've seen of late, and that is the resilience of the cobalt price. Cobalt prices remain robust. The alloy grade cobalt price is now just under $30 per pound and has stayed there despite the volatility we've seen in copper or other commodities in the past week or two. Turning to Mantos Blancos. Kevin touched on this, but what a year for Mantos Blancos. This royalty has delivered record annual portfolio contribution and primarily driven off of very strong production growth following the completion of a de-bottlenecking project. In 2026, Capstone expects production to be down approximately 10%, and this is a function of mining operations passing through a zone of lower copperhead grades. We see this as a transient factor, and Capstone expects copperhead grades to rebound next year in 2027 and beyond. So on the back of this absolutely stellar record performance in 2025, what's next at Mantos Blancos? And from our perspective, we're very excited about that next phase of growth, which includes the potential to, number one, increase concentrator plants throughput to at least 27,000 tons per day, and number two, the potential to increase cathode production, and that's from existing underutilized SXEW capacity. A Mantos Blancos Phase 2 study focusing on the sulfide concentrator plant expansion is expected in mid-2026. And we'll hopefully then see this expansion included in the CORAS NAV and also our revenue forecasts. So finally, within our wider key base metals port exposures. First, at Membula, the project expansion continues towards throughput nameplate capacity levels of 56,000 tons per annum. Q4 2025 production implied an annual production sales rate and run rate of 20,000 tons per annum. And full-year guidance at Membula is 30,000 to 35,000 tons per year. But keep in mind, please, that this is an average run rate, and so we certainly expect to see production ramp up over the course of the year. And it's also worth keeping in mind that Q1 is typically the rainy season in Zambia. And in any heap leaching, SXEW operation, heavy precipitation can certainly impact PLS grades coming off the heaps. Turning to Santo Domingo, it goes without saying, for those who are familiar with the Ikora story, that Santo Domingo is core to our medium and longer-term growth profile. This is an asset that, over the first seven to eight years, has the potential to generate over $35 million per annum. That's an annual average again, and that's at spot copper and gold prices, so certainly core to our growth profile. And very exciting is the progress that Capstone has made, first of all securing a strategic partner to develop the project, But second, the capstone seems very focused on pushing this project forward, completing necessary work to position the project for a potential final investment decision imminently. At West Musgrave, BHB stated last year that it would consider divesting this project more widely within the nickel exposure and subsequently launched a sales process to explore this possibility. There's a substantial amount of speculation in the press in relation to the likelihood and potential interested parties. Nevertheless, we'll of course have to see how things evolve and ultimately develop. But needless to say, should a sale eventuate, that could certainly provide much greater clarity to the timeline to first production at the West Mosgrave project in the future. And then last, Canary Echo. This is an asset that often doesn't get much attention or portfolio. However, it retains enormous potential value in the future. And accordingly, we wanted to highlight the completion of Fortescue's acquisition of Alta Copper to become the owner of this project. The project is highly prospective, sizable land package that has not been explored historically. Development studies to date have really only focused on Canariaco Norte, and that envisaged production ignoring byproducts CU approximately 135,000 tons per year. So our current spot price is something in the order inclusive of byproducts of 10 million per annum. Certainly a longer dated assets in our portfolio, but one that we're very excited about given how strong of a partner Fortescue is and how well positioned Fortescue is to advance this project forward. This next slide brings our entire copper exposures together. We started 2025 with less than 2 million pounds of attributable copper from producing royalties. And following the Mimbula acquisition, that roughly doubled. And when you look further out, the Corps' organic profile has the potential to deliver just under 20 million pounds of attributable copper equivalent. And that's all underpinned by very high quality operator partners. Turning now to look at, of course, specialty metal and uranium exposures. Let's start with the Palabora Rare Earth Project. I mean, we've been absolutely delighted by the project, the momentum that this project continues to build. having delivered a number of de-risking events. And this is all in the wider context of a demonstrated geopolitical imperative to diversify global rare earth supply chains and bring new sources of supply into production. At Patterson Corridor East, I think we can only really say that the exploration program continues to deliver what are truly exceptional results, and we're genuinely excited to see what the 2026 exploration program delivers as this royalty continues to evolve in what seems to be truly world-class uranium exposure. Finally, our box another. So starting with Kestrel, the Kestrel mining operation within the Ikora Royalty area is now firmly in its final innings. In 2026, we expect 1 to 1.2 million tons of sellable product mined within our Royalty area. And that's slightly half of the volumes we saw last year. The EVBC royalty, as Kevin mentioned, continues to perform very strongly and has been benefiting from a very robust gold price environment. This operation continues to benefit from life of mine extension potential. Many years past its initial reserve case when the investment was made approximately 15 years ago. And should gold prices remain elevated at or around current levels, there's certainly potential for further long extension in the future. So in summary, 2025 delivered very strong portfolio contribution growth from our critical minerals exposures, completely transforming our commodity complexion in terms of our underlying commodities generating revenue for the group. and further growth on that front is expected in 2026. Our operating partners are targeting key development milestones and de-risking events in the next 12 months, which then underpins our next phase of organic growth spanning the short, medium and long term. We are delighted to have delivered the very strong deleveraging following the Mimboola acquisition. And from here, we're exceptionally well-positioned to continue to grow and diversify this royalty portfolio. And last, in the context of persistent inflationary pressures, which have evolved this year in terms of their underlying source but remain, we expect that the royalty model's nominal price exposure and also its defense of nature should really continue to shine. So to sum it all up brightly, we feel it's been truly a landmark year for eCora. We're very pleased with the foundations that have been laid. And we remain very motivated and we're very excited to continue to drive this business forward to the next level. Thanks very much.

Thank you. If you wish to ask a question at this time, please signal by pressing star 1 on your telephone keypad. If you wish to cancel your request, please press star 2. And please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. Again, please press star one to ask a question. And our first question is from Laura Chan from RVC. Please go ahead.

Hey, guys. Thanks. I'm curious if you could provide some color. This is the development pipeline and perhaps comment on how on the capital competitive intensity for new deals. Thanks.

Sorry, Laura, if you wouldn't mind just repeating your question again. The audio wasn't great in your line. If you wouldn't mind just repeating your question.

Sorry. Can you hear me better now?

That's much better. Thank you.

Yeah, could you just provide some color on your business development pipeline and perhaps comment on the competitive intensity for a new deal?

Hi, Laura. Thanks. Thank you for the question. At the moment, we continue to be very focused on diversifying this portfolio. Our focus remains assets either up the development curve in production or assets that are not yet producing and in less large-ticket qualities in or around the definitive feasibility study stage from a commodity complexion Our focus is to consider the suite of critical minerals with a tilt towards maintaining copper at the core of our commodity exposure. More generally, in terms of the competitive landscape, I think what we've observed is with the increase in equity market valuations and more generally with more supportive equity market backdrops, We do think that that unlocks opportunities that may otherwise not have been available, given ECOR is typically only a small portion of the capital structure, and other forms of capital are necessary. So all in all, it's difficult to determine exactly when the scholars will align, although we're quite excited about the opportunities that we see coming across the desk, and we're confident that in time we'll be able to continue to grow this portfolio and maintain the exposure to high-quality underlying operations or projects.

Great. Thanks so much. Congrats on the results.

Thank you. As a reminder, to ask a question, please signal by pressing star one. Now, our next question is from Riley Winton from Atrium. Please go ahead.

Hi, guys. Congrats on the strong year. I just had a question on Kestrel. The production is expected to kind of conclude in 2030, and we have guidance for 2026, but what sort of volumes are you anticipating in the royalty area for the three, four years between now and then as things wind down.

Thank you for the question. On slide 21, I refer to the – there's an image on the right hand of that page which overlays our royalty area with the Longwall mining operations. And you can see why 2026 would be the final year we anticipate material exposure in our royalty area. As we mentioned, for 2025 – 2026, excuse me, we'd expect 1 to 1.2 million tons in our royalty area. And then toward – and in the final years of 27 to 2030, somewhere between 300,000 to 500,000 tons, depending on exactly which panel is being mined in the Longwall panel sequence.

Great. Thanks for taking my question.

Pleasure. Thank you.

Thank you. As a final reminder, to ask a question, please signal by pressing star one. So there are currently no further questions at this time over the phone. With this, I'll hand the call back over to Scott for any further questions.

Thanks very much for that. Yes, if you'd like to ask a question over the webcast, please do so by typing in the toolbar at the bottom of your screen. Tal Manchos from Berenberg has asked a question. Under the current trajectory and expectations, what level of net debt do you think you will reach by the end of full year 2026? Thank you.

Maybe I'll take that one. If we look at slide 12, we've included a table in the bottom right-hand side of that slide. What this table does is takes broker consensus prices that were published at the beginning of March, applied to the public production guidance by the operators that we're exposed to, and it gives you a flavor for where the consensus net debt would be on a on a deleveraging basis as we go through the course of 2026 and 2027. We've sensitized that on a plus and minus 10% basis. So for those who don't have the slide in front of them, that would be ending net debt on a consensus basis of $53 million at the end of 2026 and $27 million at the end of 2027.

Thank you, Kevin. Next question is from Riley Benton from Atrium Research. In terms of potential acquisitions, what are you considering in terms of project stage? And are you looking exclusively at copper?

So I think we've touched on that one slightly in an earlier question. But to capture a couple of key points here. Number one, the stage in terms of meaningful ticket exposure would be for assets that are far along the development curve, if not already in production with a great line of sites to production, for example, FID or in construction already. And then for smaller investment tickets, assets that are far along the development curve but not quite yet at that FID stage. The bulk of our time being focused on the former. That being said, we feel it's wise not to ignore high-quality opportunities that come across if they're not yet in production. In terms of the commodity focus, look, we target the suite of critical minerals. I think the core is creating a portfolio with copper at the core has been deliberate, and it's something we're very happy to achieve. So there is a natural tilt towards growing our copper exposure. That being said, if we see really high-quality opportunities with high-quality operators in well-established mining jurisdictions and other commodities, we'd consider these one-off, but the core focus remains base metals and copper.

That's great. At the present time, we've got no further questions on the webcast or the conference call, so I'd like to hand back to Mark for any final closing remarks.

Well, thanks a lot for joining us. We feel it's been a phenomenal year for Ecorra, a true underlying inflection point for this business. We're very excited for 2026 and for this next phase of organic growth that we look forward to building upon via further acquisitions in time.