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.