Ecora Royalties (LON: ECOR), the critical minerals royalty and streaming company, reported third-quarter portfolio contribution of $24.8m, about 1% below the $25.0m of a year earlier. The trading update came at 7am today, before the London market opened. The group is also listed in Toronto.
Portfolio contribution is royalty and stream income less the cost of stream purchases. The quarter followed $19.0m in the second quarter, and the first nine months of the year stand 32% higher at $56.2m, against $42.6m a year ago.
Kestrel, a steelmaking coal mine where Ecora holds a royalty, explains the flat quarter. Its contribution fell to $10.2m from $12.5m, on 0.9 million tonnes of saleable production from the part of the mine covered by a private royalty. Management’s full-year guidance for Kestrel is 1.0 to 1.2 million tonnes.
Strip Kestrel out and the picture changes. The rest of the portfolio contributed $14.6m, up 17% from $12.5m, and $44.7m over nine months, up 66% from $26.9m.
Cobalt from Voisey’s Bay led the growth. Its net contribution rose to $7.2m from $6.0m, after $1.7m of stream costs, as the realised cobalt price climbed to $26.20 a pound from $18.13, more than covering lower volumes of 154 tonnes against 182.
Mimbula copper added $1.7m, up from $1.1m, and Ecora’s third-quarter entitlement is 250 tonnes, which it puts at $2.5m of net contribution in the fourth quarter. Gold from EVBC doubled to $1.4m from $0.7m. Base metals overall brought in $11.6m, up 17%, while bulks and other fell 12% to $11.6m and specialty metals and uranium fell 16% to $1.6m.
Net debt stood at $71.6m on the 30th of September, down from $74.9m at the end of June, before October receivables. Chief executive Marc Bishop Lafleche expects about $57m at the end of October once Q3 royalty receivables due in October are counted, roughly 35% lower year to date. The figures are not like-for-like, and these are management expectations, not analyst consensus.
The update carried no dividend or buyback guidance. Bishop Lafleche pointed instead to the development pipeline.
The next twelve months should feature a number of key milestones across our development portfolio of copper and wider critical minerals royalties, that are expected to derisk the next wave of Ecora’s organic growth.
Marc Bishop Lafleche, Ecora Royalties