Slide 1: Ecora Resources PLC FY 2023 Results Presentation
Providing capital to the Providing capital to the mining sector required mining sector to supply to supply the commodities the commodities central central to a sustainable future to a sustainable future Ecora Resources PLC FY 2023 Results Presentation March 2024
Slide 2: Important disclaimer
Important disclaimer • This document has been prepared and issued by and is the sole responsibility of Ecora Resources 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 conc
Slide 3: Positioned for growth
Positioned for growth FY 23 financial highlights Portfolio well positioned • Portfolio contribution of $63.6m for growth from future facing (2022: $143.3m) commodities • AEPS of 11.82c (2022: 37.55c) • Year on year organic volume growth in 2024 and 2025 • Net debt of $75m (2022: $36m) • Development
Slide 4: Diversified portfolio backed by strong operators & developers
Diversified portfolio backed by strong operators & developers Operator partners include Geographic exposure by assets(1) South America 41% 96% North America 33% OECD(2) Australia 25% Other 1% Commodity exposure by assets(1) Copper 33% Steel coal 8% Cobalt 23% Other 5% 87% Nickel 19% Vanadium 5% Comm
Slide 5: Cyclical lows in commodity markets create opportunities
Cyclical lows in commodity markets create opportunities Mining companies recognising the value of royalty partnership as a mainstream funding source. Bloomberg world mining index(1) (Rebased to 100) Global mining equities trading below through-the cycle averages 110 – Value gap has widened during pa
Slide 6: Updated capital allocation framework
Updated capital allocation framework Pillars Philosophy Growth Acquire high quality royalties to further diversify and grow the portfolio Deleveraging Focus on post-transaction balance sheet deleveraging Cash dividends Semi-annual cash dividends based on range of 25-35% of free cash flow Share buyba
Slide 7: What is priced into the shares today?
What is priced into the shares today? Analyst consensus NAV/share(1) (p/share) £0.09 (£0.23) £0.21 £0.30 Value not currently £0.33 £1.10 reflected in market £0.95 value Current share price: 72p Piauí Current Santo Domingo West Musgrave Estimated first Construction Estimated first Ecora share product
Slide 8: $10m strategic share buyback
$10m strategic share buyback Primarily funded recent partial LIORC stake sale which drives compelling value arbitrage. Illustrative relative trading metrics P/NAV multiple 2025E cash flow yield 11.4% 0.9x 7.3% 0.5x LIF Ecora LIF Ecora Accretive to Ecora NAV/sh and AEPS Source: S&P Capital IQ market
Slide 9: Portfolio significantly repositioned towards growth
Portfolio significantly repositioned towards growth Revenue mix evolution(1) Portfolio NAV by stage of development(2) (In US$ millions) (As % of NAV) Kestrel Producing 86 Portfolio ex. Kestrel Construction 74 15% Development 2% 64 53 Early Stage 2015 11 YE-2015 YE-2017 YE-2019 YE-2021 YE-2023 83% Ne
Slide 10: Portfolio has the potential to generate +$100m annually
Portfolio has the potential to generate +$100m annually Revenue growth from future facing commodities(1) ($’s million) 120 Future facing commodities (producing) Development(2) Other commodities • Santo Domingo: targeted 100 Future facing commodities (construction) first production 2027-28 Future fac
Slide 11: Value opportunity has two drivers
Value opportunity has two drivers Organic growth potential(1) Rerating potential(2) (In US$ millions) (In US$ millions) EBITDA growth Multiple expansion Multiple expansion potential when Ecora cashflows are Illustrative EV at US$100m EBITDA & flat trading multiple derived primarily from base metals
Slide 12: Financials
Financials
Slide 13: Financial performance
Financial performance Portfolio contribution Adjusted earnings per share(1) Dividend cover(2) (US$m) (USc) (x) 4.4x 37.6 143.3 26.1 25.2 2.6x 85.6 2.3x 75.9 63.6 15.7 11.8 1.4x 1.4x 47.5 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 • Decrease reflects known transition •
Slide 14: Portfolio contribution
Portfolio contribution ($m) 31 Dec 2023 31 Dec 2022 % Core portfolio Voisey’s Bay (cobalt) 4.3 14.6 (70%) Mantos Blancos (copper) 6.1 6.0 2% Maracás Menchen (vanadium) 3.1 3.6 (14%) LIORC (high purity iron ore pellets) 2.0 2.9 (31%) McClean Lake (uranium) 4.1 5.0 (18%) Four Mile (uranium) 6.8 1.0 58
Slide 15: Adjusted earnings
Adjusted earnings Change in earnings (US$m) (2.3) (10.9) (8.3) 2.6 63.6 (14.2) 30.5 11.8c Portfolio McClean Lake Operating expenses Finance costs Other Taxes Adjusted earnings Adjusted earnings contribution principal repayment per share • Overheads remained broadly flat in the period despite inflati
Slide 16: Summary balance sheet
Summary balance sheet ($m) 31 Dec 2023 31 Dec 2022 Metal streams (inc deferred tax) 195.0 197.6 Kestrel (carried at fair value) 77.4 106.7 Royalty financial instruments 32.8 43.9 Royalty and exploration intangibles 269.8 252.6 Other long-term receivables 33.7 37.4 Total royalty assets 608.7 638.2 Ca
Slide 17: Net debt reconciliation
Net debt reconciliation Change in net debt (US$m) 23 5 10 (67) 65 (14) 22 75 39 115 101 106 (5) 72 58 53 53 36 36 36 1 Jan 2023 Acquisitions & Finance cost, FX Overheads Taxes Portfolio LIORC disposal Narrabri Dividends 31 Dec 2023 Change to net deferred & other contribution consideration debt posit
Slide 18: Successful refinancing
Successful refinancing Refinanced revolving credit facility Key terms Maximum permitted leverage of 3.5x $150m Committed facility (no step downs) – Increased to 4x for 6 months for certain acquisitions Pricing: – SOFR + 2.25 – 4.00% (old terms 2.75-4.00%) $75m Accordion acquisition option – Ratchet
Slide 19: Dividend payout formula incorporates smoothing effect
Dividend payout formula incorporates smoothing effect and aligns distributions with business performance Prior calendar year Current calendar year H1 H2 H1 H2 Interim dividend Payout range Interim dividend Average (25 – 35%) distribution Prior calendar year Current calendar year H1 H2 H1 H2 Final di
Slide 20: Portfolio Update and Outlook
Portfolio Update and Outlook
Slide 21: Year on year volume growth
Year on year volume growth Steady state annual Commodity 2022A 2023A 2024 forecast production Producing Kestrel Steel-making 4.1mt 1.6 mt 1.8-2.0 mt - (Ecora royalty area) coal Voisey’s Bay Cobalt 19 11 12-16 c. 40(1) (Deliveries on 100% basis, 70% attr to Ecora) Mantos Blancos(2) Copper 41.2 kt 49.
Slide 22: The leading copper growth pipeline in the royalty sector
The leading copper growth pipeline in the royalty sector Illustrative annual copper production(1) (In tonnes 000s) 600 500 400 300 200 100 - Producing In Construction Brownfield Shovel ready Brownfield restart Medium-term Longer-term 1.525% NSR 2.0% NSR 1.525% NSR 2.0% NSR 1.5% GRR 0.25 - 0.55% NSR
Slide 23: Nickel development projects remain attractive in current price environment
Nickel development projects remain attractive even in the current price environment Nickel industry global cost curve(1) West Musgrave has significant copper credits (Net of by-products) Nickel spot price – $7.75/lb(3) Analyst consensus long-term nickel price (real) - $8.45/lb(3) “West Musgrave stan
Slide 24: NexGen's highly prospective uranium discovery within Ecora's royalty area
NexGen’s highly prospective uranium discovery within Ecora’s royalty area NexGen has announced a new intense uranium zone on its SW2 Discovery Athabasca uranium basin property in Saskatchewan, Canada Exploration Canada corridor • Located 3.5km east of Arrow NexGen SW2 deposit mineral tenure • Arrow
Slide 25: Upcoming portfolio growth & de-risking events
Upcoming portfolio growth & de-risking events 2024 2025 2026 Voisey’s Bay Underground ramp up West Musgrave Construction MV-SD Detailed Engineering Santo Domingo Updated FS Construction Cobalt Study / Sanctioning Sanctioning / potential Mantos Blancos Phase II FS expansion Piauí Construction financi
Slide 26: Acquisition pipeline overview
Acquisition pipeline overview Illustrative ticket size by stage of development(1) Our strategic priorities We seek to deploy capital across all stages of Greater than development, with increased financing capacity for Producing & assets nearer production construction stage $25 million Our strategic
Slide 27: Outlook
Outlook Focus on diversifying and scaling royalty portfolio to achieve premium royalty company valuation. Market conditions favourable to Updated capital allocation framework & royalty partnerships $10m buy back Year on year production volume growth in Accelerated deleveraging absent further 2024 &
Slide 28: Appendix
Appendix
Slide 29: Diversified portfolio of producing royalties
Diversified portfolio of producing royalties Market cap of listed producing royalty counterparties ~ $200bn Voisey’s Bay IOC McClean Lake Mill EVBC Carlota Maracás Menchen Kestrel Mantos Blancos Four Mile Producing Voisey’s Mantos Maracás McClean Asset / IOC Kestrel EVBC Four Mile Carlota Commodity
Slide 30: Supported by a strong growth pipeline
Supported by a strong growth pipeline Ring of Fire SW2 Salamanca Incoa Piauí West Cañariaco Musgrave Nifty Santo Domingo Pilbara Vizcachitas Development Early Stage West Santo Incoa Asset / Piauí Nifty Vizcachitas Salamanca SW2 Pilbara Cañariaco Ring of Fire Commodity (1) Musgrave Domingo Nickel & C
Slide 31: Ecora offers exceptional value relative to peers and in absolute terms
Ecora offers exceptional value both relative to peers and in absolute terms Market Cap(1) P/NAV(1) EV/2024E EBITDA(1) 2024E EBITDA(1) 2025E FCF Yield(1) (US$M) (x) (x) (US$M) (%) LTM LTM Avg. Max ECORA Ecora $234 0.5x 0.6x 0.7x 6.2x $50 11.4% Deterra $1,640 1.0x 1.0x 1.2x 10.0x $163 6.8% LIORC $1,37
Slide 32: Investor information
Investor information Top Shareholders (as at 31 December 2023) (1) Analyst coverage Berenberg South32 16.9% Richard Hatch (London) Canaccord Genuity Aberforth Partners 7.8% Alex Bedwany (London) Peel Hunt Schroder Investment Management 6.2% Pete Mallin-Jones (London) RBC Hargreaves Lansdown 4.1% Mar
Slide 33: Endnotes (1/2)
Endnotes (1/2) 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.
Slide 34: Endnotes (2/2)
Endnotes (2/2) Asset endnotes i. Voisey’s Bay stream entitlement of 22.82% of cobalt production until 7.6kt of finished cobalt is delivered, 11.41% thereafter; represents 70% share of the original stream agreement between Vale and Cobalt27. Fixed Cobalt payability of 93.3%. Ongoing payment of 18% of