Ecora Royalties Plc · LSE:ECOR
Ecora Royalties — Anglo Pacific Group — Investor Presentation (December 2021)
30 slides from Ecora Royalties's investor presentation, December 2021
Slide 1: Financing Investment in Natural Resources to Enable a Sustainable Future
Anglo Pacific Group PLC FINANCING INVESTMENT IN NATURAL RESOURCES TO ENABLE A SUSTAINABLE FUTURE December 2021
Slide 2: Important Disclaimer
2 IMPORTANT DISCLAIMER This document has been prepared and issued by and is the sole responsibility of Anglo Pacific Group PLC (the “Company”) and its subsidiaries (the “Group”) for selected recipients. It comprises the written materials for a presentation to investors and/or industry professionals
Slide 3: The New Anglo Pacific Group
3 THE NEW ANGLO PACIFIC GROUP A leading non- 21st century commodities - ~75% Attractive Diversified commodity exposure in precious royalty CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY forward facing metals Royalty portfolio established mining jurisdictions company Stable long
Slide 4: Company Snapshot
4 COMPANY SNAPSHOT HIGHLIGHTS ✓ Experienced Management team and • Anglo Pacific Group (“APG”) is the largest LSE listed non-precious focused independent Board royalty and streaming company with a market cap of ~US$400m (1) ✓ Track record of royalty investing • A leading royalty and streaming company
Slide 5: Commodities Underlying APG's Portfolio Have Performed Strongly YTD
5 COMMODITIES UNDERLYING APG’S PORTFOLIO HAVE PERFORMED STRONGLY YTD ANGLO PACIFIC SHARE PRICE VS. COMMODITY BASKET YTD (1) (REBASED TO 100) 220 CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY APF Commodity basket 200 180 160 140 120 100 80 ANGLO PACIFIC GROUP PLC Jan-21 Feb-21
Slide 6: Anglo Pacific's Commodity Exposure Has Been Transformed
6 ANGLO PACIFIC’S COMMODITY EXPOSURE HAS BEEN TRANSFORMED Commodity Exposure by Portfolio Value 31 DECEMBER 2020 (1) PRO FORMA AS OF 30 JUNE 2021 (2) CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY ~30% ~75% 21ST CENTURY 21ST CENTURY COMMODITIES COMMODITIES Base Metals 16% Cobal
Slide 7: Line of Sight on Anglo Pacific's Coal Exit
7 LINE OF SIGHT ON ANGLO PACIFIC’S COAL EXIT COKING COAL EXPECTED TO BE ~8% OF TOTAL PORTFOLIO CONTRIBUTION BY 2025 AND RAPIDLY DECLINE THEREAFTER. Portfolio Contribution by Commodity ILLUSTRATIVE 2025 H1 2021 (1) INCLUDING PIAUI & INCOA (EX. NARRABRI) (2) CORPORATE PRESENTATION / GROW ING A GLOBAL
Slide 8: Proven Ability to Drive Value Accretive Growth
8 PROVEN ABILITY TO DRIVE VALUE ACCRETIVE GROWTH STRONG TRACK RECORD OF GROWING PORTFOLIO INCOME THROUGH ACQUISITIONS AND DELIVERING ATTRACTIVE RETURNS ON CAPITAL. PORTFOLIO CONTRIBUTION CAPITAL ALLOCATION (In US$ million) (In US$ million unless otherwise stated) APG Portfolio Pre-2014 (1) Acquisiti
Slide 9: Return of Capital and Trading Multiples
9 RETURN OF CAPITAL AND TRADING MULTIPLES DIVIDEND PER SHARE (1) PEER BENCHMARKING – TRADING MULTIPLES (2) (In GBP per share) EV / 2021E EBITDA P / 2021E CF P / 2021E NAV 2021E Div. Yield (Ratio) (Ratio) (Ratio) (%) CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY APG 0 8.4x 0 8.
Slide 10: Focus on Commodities That Support a More Sustainable World
10 FOCUS ON COMMODITIES THAT SUPPORT A MORE SUSTAINABLE WORLD 21ST CENTURY COMMODITIES ENCOMPASS ENVIRONMENTAL BENEFITS, MANY OF WHICH CRUCIAL TO THE ELECTRIFICATION OF ENERGY CONSUMPTION. 21st Century Commodities CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY Required to Achie
Slide 11: ESG Considerations Are Central to Anglo Pacific's Investment Process
11 ESG CONSIDERATIONS ARE CENTRAL TO ANGLO PACIFIC’S INVESTMENT PROCESS Summary ESG Due Diligence Framework Environmental Social Governance CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY • Energy supply / use • Host country labour practices • Purpose, values, culture and capabi
Slide 12: Capital Allocation Principles
12 CAPITAL ALLOCATION PRINCIPLES BALANCE SHEET CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY STRENGTH • Reasonable level of de-leveraging over time post the Voisey’s Bay transaction FUNDING FOR • Continuing the diversification of our portfolio, capitalising on the momentum pro
Slide 13: Outlook
13 OUTLOOK • Stronger results expected in H2 2021: o The outlook for commodities in general continues to be well supported by significant infrastructure CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY commitments outlined by some of the largest economies as a means to ensure no
Slide 14: Q&A
ANGLO PACIFIC GROUP PLC CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY 14 Q&A
Slide 15: Appendix I: Royalty Portfolio Update
ANGLO PACIFIC GROUP PLC CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY 15 APPENDIX I ROYALTY PORTFOLIO UPDATE
Slide 16: 21st Century Commodity Exposure Unique Amongst Royalty Companies
16 21ST CENTURY COMMODITY EXPOSURE UNIQUE AMONGST ROYALTY COMPANIES PRODUCING ROYALTY / STREAM COMMODITY OPERATOR LOCATION ROYALTY RATE / STREAM VOLUME 1 IRON ORE VOISEY’S BAY 2 COBALT VALE CANADA 22.82% CO STREAM COMPANY OF CANADA MANTOS COPPER MANTOS COPPER CHILE 1.525% NSR MCCLEAN LAKE BLANCOS MI
Slide 17: Transaction Overview
17 TRANSACTION OVERVIEW Anglo Pacific has entered into an agreement with Whitehaven Coal Limited, the operator of the Narrabri mine, to sell its only thermal coal royalty. KEY TRANSACTION TERMS ILLUSTRATIVE CONSIDERATION PROFILE (In US$ million) (In US$ million) Historical royalty income CORPORATE P
Slide 18: Royalty Portfolio Update: Voisey's Bay
18 ROYALTY PORTFOLIO UPDATE : VOISEY’S BAY VOISEY’S BAY OVERVIEW (1) RANKED BY CASH COSTS (2) (Total cash costs in US$ per pound, on co-product basis) • Anglo Pacific is entitled to to 22.82% of total cobalt produced at Vale’s Voisey’s Bay mine in Canada, stepping down to 11.41% after 7.6 Kt of fini
Slide 19: Cobalt Market Update
19 COBALT MARKET UPDATE MARKET UPDATE HISTORICAL COBALT PRICE (1) (In US$/lb) • Cobalt prices have remained strong in Q2 2021 with spot prices currently up $50 ~60% since the beginning of the year • Global electric vehicle sales have recorded a ~160% increase in H1 2021 $40 CORPORATE PRESENTATION /
Slide 20: Electric Vehicles Expected to Underpin Cobalt Demand Growth
20 ELECTRIC VEHICLES EXPECTED TO UNDERPIN COBALT DEMAND GROWTH OVERVIEW (1) FORECAST EV SALES & MARKET SHARE (2) (LHS: EV sales in millions, RHS: Total car sales) • Cobalt has a variety of end-uses including: batteries, superalloys, EV Sales EV market share catalysts and carbides • Automotive batter
Slide 21: Royalty Portfolio Update: Kestrel
21 ROYALTY PORTFOLIO UPDATE : KESTREL KESTREL OVERVIEW (1) (2) ILLUSTRATIVE ANGLO PACIFIC ROYALTY AREA (1) • The Kestrel Mine is operated by a private joint venture between EMR Capital (52%) LEGEND and PT Adaro Energy (48%) MINE Layout 300 Private Royalty Series • Total saleable coal production of 2
Slide 22: Royalty Portfolio Update: LIORC and Mantos Blancos
22 ROYALTY PORTFOLIO UPDATE : LIORC AND MANTOS BLANCOS MANTOS BLANCOS OVERVIEW (1) LIORC OVERVIEW (3) • Anglo Pacific acquired a 1.525% net smelter return royalty over all copper produced at • Anglo Pacific monetised 77% of its position in LIORC, during 4Q20 and 1Q21 the Mantos Blancos open pit mine
Slide 23: Royalty Portfolio Update: Maracás Menchen and Narrabri
23 ROYALTY PORTFOLIO UPDATE : MARACÁS MENCHEN AND NARRABRI MARACÁS MENCHEN OVERVIEW (1) NARRABRI OVERVIEW (2) • Vanadium pentoxide production of 5.1 Kt (1H20: 5.4 Kt) • ROM coal production of 1.4 Mt in calendar 1H21 (1H20: 4.1 Mt) • Kiln improvements implemented in 1Q21, commissioning and ramp-up to
Slide 24: Royalty Portfolio Update: Other Producing & Development
24 ROYALTY PORTFOLIO UPDATE : OTHER PRODUCING & DEVELOPMENT DENISON / MCCLEAN LAKE MILL: PRODUCING (1) EL VALLE AND CARLÉS MINES (EVBC): PRODUCING (2) • Due to the COVID-19 pandemic, the McClean Lake mill was placed on care and • Year to date production for fiscal year ending 30 September 2021: Au:
Slide 25: Other Portfolio Developments
25 OTHER PORTFOLIO DEVELOPMENTS SALAMANCA URANIUM PROJECT (1) • Berkeley Energia’s focus continues to be on obtaining approvals required to commence construction of the Salamanca mine • Key permitting developments include the following: • In July, the Board of the Nuclear Safety Council (NSC) issued
Slide 26: Portfolio Sustainability Highlights
26 PORTFOLIO SUSTAINABILITY HIGHLIGHTS WE BELIEVE THAT A STRONG FOCUS ON ESG IS VITAL FOR THE LONG-TERM SUCCESS OF OUR UNDERLYING ASSETS AND THE MAXIMISATION OF SHAREHOLDER VALUE. WE ARE THEREFORE COMMITTED TO INTEGRATING ESG CONSIDERATIONS INTO OUR STRATEGIC DECISION-MAKING AND CAPITAL ALLOCATION.
Slide 27: Appendix II: Royalty & Stream Overview
ANGLO PACIFIC GROUP PLC CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY 27 APPENDIX II ROYALTY & STREAM OVERVIEW
Slide 28: Advantages of Royalty and Stream Financing
28 ADVANTAGES OF ROYALTY AND STREAM FINANCING ADVANTAGES FOR ANGLO PACIFIC ADVANTAGES FOR PROJECT OPERATOR INVESTMENT • Limited exposure to cost base with cash ADVANTAGES • No maturity date when principal must be PROPOSITION flows linked to production levels or VS. DEBT repaid or refinanced revenues
Slide 29: Overview of a Royalty
29 OVERVIEW OF A ROYALTY A ROYALTY IS AN AGREEMENT WHICH PROVIDES, IN EXCHANGE FOR AN UPFRONT PAYMENT MADE TO THE MINING COMPANY, THE RIGHT TO RECEIVE A PROPORTION OF THE REVENUE FROM A MINING OPERATION ONCE IN PRODUCTION WITHOUT THE CAPEX OR OPEX RISK ILLUSTRATIVE TRANSACTION SUMMARY DESCRIPTION CO
Slide 30: Overview of a Stream
30 OVERVIEW OF A STREAM PRIMARY STREAM TRANSACTION OVERVIEW ILLUSTRATIVE TRANSACTION STRUCTURE STEP 1 CORPORATE PRESENTATION / GROW ING A GLOBAL NATURAL RESOURCES COMPANY » Miner sells right to future metal production to streamer Metal production » The sale is typically for a percentage of productio
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