Ecora Royalties Plc · LSE:ECOR
Ecora Royalties — H1 2022 Earnings Presentation
32 slides from Ecora Royalties's earnings presentation, Aug 25, 2022
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 Results for the half year ended 30 June 2022
Slide 2: Disclaimer
2 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 concerning
Slide 3: H1 2022 Highlights
3 H1 2022 HIGHLIGHTS 100% Record portfolio contribution of $93m Net debt reduced to $50m at end of July (following South32 transaction) 90% Revenue exposure to future-facing commodities in 2026 Queensland government revises royalty rates; beneficial to Kestrel First nickel production from the small-
Slide 4: Financial Review
4 ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 FINANCIAL REVIEW
Slide 5: Financial Highlights
5 FINANCIAL HIGHLIGHTS RECORD PORTFOLIO CONTRIBUTION – H1 22 EXCEEDS FY 2021 PORTFOLIO CONTRIBUTION ADJ. EARNINGS PER SHARE (1) DIVIDEND COVER (2) (US$m) (US$c per share) (Times) H1 H2 28.08 10.61 19.68 12.62 6.1x 92.8 85.6 15.45 8.26 75.9 65.9 47.5 2.6x 11.43 2.3x 2.3x 7.43 ANGLO PACIFIC GROUP PLC
Slide 6: Income Summary
6 INCOME SUMMARY FIGURES IN US$M H1 2022 % Change H1 2021 FY 2021 Kestrel 70.9 638% 9.6 48.1 Voisey’s Bay 13.9 348% 3.1 16.5 Mantos Blancos 3.1 11% 2.8 5.7 Maracás Menchen 2.0 43% 1.4 3.3 Narrabri n/a n/a 1.1 3.4 Four Mile 0.8 700% 0.1 0.3 Royalty and stream income 90.7 401% 18.1 77.3 Dividends – LI
Slide 7: Summary Income Statement
7 SUMMARY INCOME STATEMENT FIGURES IN US$’000 30 Jun 2022 30 Jun 2021 Royalty and stream related revenue 93,171 22,222 Metal streams cost of sales (3,160) (767) Amortisation and depletion of royalties and streams (5,760) (5,698) Operating expenses (4,986) (5,029) Operating profit (1) 79,265 10,728 I
Slide 8: Summary Balance Sheet
8 SUMMARY BALANCE SHEET FIGURES IN US$’000 30 Jun 2022 31 Dec 2021 30 Jun 2021 Coal royalties (Kestrel) 120,730 84,465 65,385 Metal streams 164,914 170,567 166,287 Royalty financial instruments 50,753 53,791 62,904 Royalty and exploration intangibles 66,613 69,518 124,843 Other long-term receivables
Slide 9: Net Debt Reconciliation
9 NET DEBT RECONCILIATION RAPID REDUCTION IN NET DEBT 90.0 69.3 9.8 20.5 ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 0.9 1.0 12.1 1.7 Net Debt 4.6 Net Cash (98.3) (1.3) Net Debt as Portfolio Non core Admin Finance Taxes FX & Other Acquisition Dividends Net Debt as Change in
Slide 10: Capital Allocation Principles
10 CAPITAL ALLOCATION PRINCIPLES STRONG FINANCIAL POSITION WITH A FOCUS ON REDUCING DEBT, GROWTH & SHAREHOLDER RETURNS US$200 MILLION RCF(1) BALANCE SHEET • Deployed ~$400m in past sixteen months STRENGTH • Net debt ~$50m at end July post South32 transaction Lending syndicate: FUNDING FOR • Maintain
Slide 11: ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022
ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 11 COMPANY UPDATE
Slide 12: Leading Future-Facing Commodities Royalty Company
12 LEADING FUTURE-FACING COMMODITIES ROYALTY COMPANY Batteries & Power Generation & Pro-forma commodity Electric Vehicles Grid Infrastructure exposure by assets(1) Copper, Nickel, Cobalt, Copper, Vanadium, Base Metals 73% Vanadium Uranium ~80% Vanadium 2% future- facing Uranium 4% Coking Coal 13% Ot
Slide 13: Historical Commodity Pricing
13 HISTORICAL COMMODITY PRICING COBALT (1) COPPER (2) NICKEL (2) (US$/lb) (US$/lb) (US$/lb) $50 $6.0 $25 $40 Spot $20 $5.0 $30 $25.50 $15 $3.71 $9.82 $4.0 $20 $10 $3.0 $10 $5 $0 $2.0 $0 ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 COKING COAL (2) 62% IRON ORE (2) VANADIUM PEN
Slide 14: Updated Queensland Royalty Rate
14 UPDATED QUEENSLAND ROYALTY RATE QUEENSLAND ROYALTY RATE (1) ILLUSTRATIVE ROYALTY UPLIFT ON A PER TONNE BASIS (2) (US$/t entitlement to APG, net of applicable deductions) Previous royalty regime Coal Price Revised royalty rate Previous royalty rate Royalty regime effective from 1 July 2022 (A$ per
Slide 15: Expected Catalysts in the Portfolio
15 EXPECTED CATALYSTS IN THE PORTFOLIO NEW ASSETS MATERIALLY ENLARGE THE PORTFOLIO GROWTH PROFILE AND DURATION VOISEY’S BAY – Ramp up to steady state underground production rate by 2025 MANTOS BLANCOS – Phase 2 mill expansion from 7.3Mtpa to 10Mtpa PFS expected Q3 2022 KESTREL – Updated Queensland r
Slide 16: Acquisition of Royalty Portfolio from South32
16 ACQUISITION OF ROYALTY PORTFOLIO FROM SOUTH32 HIGHLIGHTS West Santo Nifty Carlota Musgrave Domingo (Australia) (USA) (Australia) (Chile) • Key projects: West Musgrave and Santo Domingo Operator o High-quality, long-life, near-term production assets o Increased copper, nickel and cobalt exposure N
Slide 17: Positioned for Growth Post Coal Run-Off
17 POSITIONED FOR GROWTH POST COAL RUN-OFF PATH TO >US$100M OF ANNUAL REVENUES, PRIMARILY DERIVED FROM FUTURE-FACING COMMODITIES H1 2022 average pricing (5) H1 2022 average ~US$30 pricing (5) - 50m 2022-2030E research ~US$15 ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 analys
Slide 18: Outlook
18 OUTLOOK Recycling coking Strong long-term Balance sheet coal cashflows fundamentals for flexibility to into future-facing commodity pursue further commodities basket acquisitions ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 Leading future- Medium-term facing growth as coki
Slide 19: Q&A Session
ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 19 Q&A SESSION Chaired by Marc Bishop Lafleche
Slide 20: Appendix
ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 20 APPENDIX
Slide 21: Leading Portfolio of Producing Royalties
21 LEADING PORTFOLIO OF PRODUCING ROYALTIES VOISEY’S BAY IOC MCCLEAN EVBC LAKE MILL CARLOTA PIAUÍ KESTREL ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 MANTOS BLANCOS MARACÁS FOUR MENCHEN MILE PRODUCING Voisey’s Mantos Maracás McClean Piauí(7) Asset / IOC(3) Kestrel(5) EVBC(6)
Slide 22: Supported by a Strong Growth Pipeline
22 SUPPORTED BY A STRONG GROWTH PIPELINE SALAMANCA RING OF FIRE INCOA WEST DUGBE MUSGRAVE ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022 CAÑARIACO NIFTY PILBARA SANTO DOMINGO DEVELOPMENT EARLY STAGE West Santo Incoa(4) Asset / Nifty(3) Salamanca Pilbara Cañariaco(5) Ring of Fir
Slide 23: APG Has Proven Its Ability to Drive Value Accretive Growth
23 APG HAS PROVEN ITS ABILITY TO DRIVE VALUE ACCRETIVE GROWTH STRONG TRACK RECORD OF GROWING PORTFOLIO INCOME THROUGH ACQUISITIONS AND DELIVERING ATTRACTIVE RETURNS ON CAPITAL PORTFOLIO CONTRIBUTION CAPITAL ALLOCATION (US$m) (US$m, unless otherwise stated) APG Portfolio Pre-2014 (1) Acquisitions 201
Slide 24: ESG Considerations Are Central to Investment Process
24 ESG CONSIDERATIONS ARE CENTRAL TO ANGLO PACIFIC’S INVESTMENT PROCESS SUMMARY ESG DUE DILIGENCE FRAMEWORK Environmental Social Governance • Energy supply / use • Host country labour practices • Purpose, values, culture and capabilities • Energy management / emissions • Rights of indigenous peoples
Slide 25: Portfolio Sustainability Highlights
25 PORTFOLIO SUSTAINABILITY HIGHLIGHTS ESG RISK FRAMEWORK & SUSTAINABILITY A CORE PILLAR OF INVESTMENT STRATEGY PRODUCING ASSETS HIGHLIGHTS KEY ASSETS WELL POSITIONED ON EMISSIONS CURVE (1) (In tonnes of CO2 eq. per tonne of saleable nickel, 2021 basis) ASSET ESG HIGHLIGHTS Scope 1 Freight & Port Up
Slide 26: Royalty Portfolio Update: Voisey's Bay
26 ROYALTY PORTFOLIO UPDATE VOISEY’S BAY VOISEY’S BAY OVERVIEW (1) BATTERY CHEMISTRY CATHODE MARKET SHARE (2) 22.82% attributable production cobalt stream (100% basis) • Anglo Pacific acquired a 70% net interest in an existing metal stream on cobalt LCO NCA NCM LMNO LFP LMO production from the Voise
Slide 27: Updated Royalty Rate at Kestrel
27 UPDATED ROYALTY RATE AT KESTREL KESTREL OVERVIEW (1) (2) ILLUSTRATIVE ANGLO PACIFIC ROYALTY AREA (1) • The Kestrel mine is operated by a private joint venture between EMR Capital (42%), PT LEGEND Adaro Energy (38%) and Mitsui (20%) MINE Layout 300 • 2022 guided saleable coal production of ~7.0 Mt
Slide 28: Royalty Portfolio Update: Producing
28 ROYALTY PORTFOLIO UPDATE PRODUCING LIORC (1) MANTOS BLANCOS (3) Indirect interest in 7.0% GR royalty 1.525% NSR royalty • Anglo Pacific holds ~ 1.0 million shares in LIORC • Anglo Pacific acquired a 1.525% net smelter return royalty over all copper produced • LIORC was impacted by lower iron ore
Slide 29: Royalty Portfolio Update: Acquired Portfolio
29 ROYALTY PORTFOLIO UPDATE ACQUIRED PORTFOLIO WEST MUSGRAVE (1) SANTO DOMINGO (2) 2.0% NSR 2.0% NSR • OZ Minerals were granted the Mining lease for the West Musgrave project in August • Capstone Copper is progressing the Mantoverde – Santo Domingo (MV-SD) district 2022, and now have all regulatory
Slide 30: Royalty Portfolio Update: Other Producing & Development
30 ROYALTY PORTFOLIO UPDATE OTHER PRODUCING & DEVELOPMENT DENISON / MCCLEAN LAKE MILL: PRODUCING (1) EL VALLE AND CARLÉS MINES (EVBC): PRODUCING (2) Tolling revenue 2.5-3.0% NSR royalty • Cameco have successfully caught up on development work that had been deferred from • Production in Q1 2022 was i
Slide 31: Royalty Portfolio Update: Other Development
31 ROYALTY PORTFOLIO UPDATE OTHER DEVELOPMENT SALAMANCA URANIUM PROJECT (1) CAÑARIACO COPPER PROJECT (2) 1.0% NSR royalty 0.5% NSR royalty • Berkeley Energia’s focus continues to be on progressing the approvals required to • One of the largest development stage copper projects in the world commence
Slide 32: Endnotes
32 ENDNOTES Third party information As a royalty and streaming Company, the Group often has limited, if any, access to non-public scientific and technical information in respect of the properties underlying its portfolio of royalties, or such information is subject to confidentiality provisions. As