Ecora Royalties Plc · LSE:ECOR
Ecora Royalties — Anglo Pacific Group — Merger or Acquisition (July 2022)
30 slides from Ecora Royalties's merger presentation, Jul 12, 2022
Slide 1: High-Quality Copper & Nickel Royalty Portfolio Acquired from South32
Anglo Pacific Group HIGH-QUALITY COPPER & NICKEL ROYALTY PORTFOLIO ACQUIRED FROM SOUTH32 12 July 2022
Slide 2: Important Disclaimer
2 IMPORTANT DISCLAIMER THE CONTENTS OF THIS DOCUMENT ARE STRICTLY PRIVATE AND CONFIDENTIAL AND ACCORDINGLY THIS DOCUMENT MAY NOT BE PUBLISHED, REPRODUCED, COPIED OR DISCLOSED TO ANY PERSON OTHER THAN THE RECIPIENT'S PROFESSIONAL ADVISERS WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY. This present
Slide 3: Copper & Nickel Royalty Portfolio Acquired from South32 for up to US$200 Million
3 COPPER & NICKEL ROYALTY PORTFOLIO ACQUIRED FROM SOUTH32 FOR UP TO US$200 MILLION 100% Leading future-facing commodities Royalty Company(1) Strong long-term fundamentals for copper & nickel 90% Revenue exposure to future-facing commodities in Development stage royalties complements portfolio of pri
Slide 4: Acquired Royalty Portfolio Overview
4 ACQUIRED ROYALTY PORTFOLIO OVERVIEW HIGHLIGHTS West Santo Nifty Carlota Musgrave Domingo (Australia) (USA) (Australia) (Chile) • Key projects: West Musgrave and Santo Domingo Operator o High-quality, long-life, near-term production assets o Increased copper, nickel and cobalt exposure Nickel & Cop
Slide 5: Transaction Structure & Financing
5 TRANSACTION STRUCTURE & FINANCING KEY TRANSACTION TERMS REVISED REVOLVING CREDIT FACILITY (in US$ million) Cash Consideration $47.6 Lending syndicate: Anglo Pacific Shares Consideration(1) $82.4 • US$150m revolving credit facility with additional US$50m Total Consideration at Transaction Close $13
Slide 6: Positioned for Growth Post Coal Run-Off
6 POSITIONED FOR GROWTH POST COAL RUN-OFF PATH TO >US$100M OF ANNUAL REVENUES, PRIMARILY DERIVED FROM FUTURE-FACING COMMODITIES. 1H 2022 average pricing(5) 1H 2022 average ~US$30 pricing(5) - 50m 2022-2030E research Kestrel analyst annual ~US$15 Analyst through cycle average - 20m consensus annual l
Slide 7: Leading Future-Facing Commodities Royalty Company
7 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 71% Vanadium Uranium 82% Vanadium 7% future- facing Uranium 4% Coking Coal 9% Other
Slide 8: The Energy Transition Will Be Metal Intensive
8 THE ENERGY TRANSITION WILL BE METAL INTENSIVE SUBSTANTIAL COPPER AND NICKEL DEMAND GROWTH EXPECTED TO DRIVE SUPPLY DEFICITS. FORECAST COPPER DEMAND(1) FORECAST NICKEL DEMAND(1) (million tonnes) (million tonnes) Power Generation Electricity Networks Power Generation Other EV & Battery Storage Other
Slide 9: West Musgrave Is a High Quality Nickel & Copper Project in Western Australia
9 WEST MUSGRAVE IS A HIGH QUALITY NICKEL & COPPER PROJECT IN WESTERN AUSTRALIA WEST MUSGRAVE ROYALTY OVERVIEW(1) LOCATION • Large-scale nickel sulphide & copper development project Port Hedland • Established counterparty in OZ Minerals with proven track record of operating and developing mines West
Slide 10: Nickel Sulphide Deposits Are Fast Depleting
10 NICKEL SULPHIDE DEPOSITS ARE FAST DEPLETING SULPHIDE DEPOSITS ARE THE CLEANEST ROUTE TO CLASS 1 NICKEL (1) (GHG emissions intensity for Class 1 nickel, tCO2-e per tonne of nickel) 59 NICKEL PRODUCTION BY ORE TYPE(2) (Class 1 nickel, 100% basis) West Musgrave is one of the few Laterite (NPI) large
Slide 11: Santo Domingo Is a Fully Permitted Copper Project in Chile
11 SANTO DOMINGO IS A FULLY PERMITTED COPPER PROJECT IN CHILE SANTO DOMINGO ROYALTY OVERVIEW(1) • 100% owned by Capstone Copper, a leading copper producer Peru operating in the Americas Bolivia o Formed following the merger between Capstone Mining & Mantos Copper, completed in early 2022 o Merger ha
Slide 12: Capstone & Mantos Merger Creates a Pure Copper Player of Significant Size
12 CAPSTONE & MANTOS MERGER CREATES A PURE COPPER PLAYER OF SIGNIFICANT SIZE THE SANTO DOMINGO & MANTOVERDE DISTRICT IS A KEY DEVELOPMENT HUB FOR THE COMBINED ENTITY, WITH MATERIAL SYNERGIES. Market Capitalisation(1) 2023E revenue(2) CAPSTONE MINING US$1.4bn US$1.6bn MANTOS COPPER Copper Production
Slide 13: Transaction Meets Robust Sustainability and ESG Risk Assessment Criteria
13 TRANSACTION MEETS ROBUST SUSTAINABILITY AND ESG RISK ASSESSMENT CRITERIA PROJECTS HAVE STRONG ESG NICKEL INDUSTRY RANKED BY CO2-E INTENSITY(2) CREDENTIALS(1) (In tonnes of CO2 eq. per tonne of saleable nickel, 2021 basis) Scope 1 Upstream Mine Emissions: E0 • Well regarded operators with a strong
Slide 14: Attractive Global Cost Curve Positioning
14 ATTRACTIVE GLOBAL COST CURVE POSITIONING HEADROOM TO MANAGE CYCLICAL COMMODITY PRICES AND HIGH INFLATION. COPPER INDUSTRY 2022 COST CURVE(1) NICKEL INDUSTRY 2022 COST CURVE(2) (Total cash costs in US$/lb, on co-product basis) (Total cash costs in US$/lb, net of by-products) $4.0 $7 $3.5 $6 $3.0 V
Slide 15: Transaction Delivers on Stated Strategy
15 TRANSACTION DELIVERS ON STATED STRATEGY Recycling coking Strong long-term Balance sheet coal cashflows fundamentals for flexibility to into copper & copper & nickel pursue further nickel acquisitions Leading future- Medium-term facing growth as coking commodities coal income runs royalty company
Slide 16: Appendix
ANGLO PACIFIC GROUP PLC APPENDIX
Slide 17: Leading Portfolio of Producing Royalties
17 LEADING PORTFOLIO OF PRODUCING ROYALTIES VOISEY’S BAY IOC MCCLEAN EVBC LAKE MILL CARLOTA PIAUÍ KESTREL MANTOS BLANCOS MARACÁS FOUR MENCHEN MILE PRODUCING Voisey’s Mantos Maracás McClean Asset / IOC(3) Kestrel(5) EVBC(6) Four Mile Piauí(7) Carlota Bay(2) Blancos Menchen Lake Mill(4) Commodity Iron
Slide 18: Supported by a Strong Growth Pipeline
18 SUPPORTED BY A STRONG GROWTH PIPELINE SALAMANCA RING OF FIRE INCOA WEST DUGBE MUSGRAVE CAÑARIACO NIFTY PILBARA SANTO DOMINGO DEVELOPMENT EARLY STAGE West Santo Incoa(4) Asset / Nifty(3) Salamanca Pilbara Cañariaco(5) Ring of Fire Dugbe 1(6) Musgrave Domingo(2) Calcium Commodity Copper Uranium Iro
Slide 19: Expected Catalysts in the Portfolio
19 EXPECTED CATALYSTS IN THE PORTFOLIO NEW ASSETS MATERIALLY ENLARGE THE PORTFOLIO GROWTH PROFILE AND DURATION. VOISEY’S BAY – Ramp up to full underground production rate by 2025 MANTOS BLANCOS – Phase 2 mill expansion from 7.3Mtpa to 10Mtpa PFS expected Q3 2022 KESTREL – New longwall panel added to
Slide 20: Entry Point Offers Substantial Commodity Price Upside Potential
20 ENTRY POINT OFFERS SUBSTANTIAL COMMODITY PRICE UPSIDE POTENTIAL HISTORICAL COPPER PRICE PERFORMANCE(1) HISTORICAL NICKEL PRICE PERFORMANCE(1) (US$/lb) (US$/lb) $5.0 $22.0 $4.5 $17.0 $4.0 ~US$3.45/lb Cu Long-term analyst consensus forecast(2) $3.5 $12.0 ~US$8.00/lb Ni Long-term analyst consensus f
Slide 21: Nickel Industry Overview
21 NICKEL INDUSTRY OVERVIEW OVERVIEW NICKEL DEMAND & SUPPLY(1) (million tonnes) • Nickel occurs in two ore types, sulphides and laterites Current Supply Forecast Demand o Sulphide ores have been the mainstay of the nickel industry as 4.0 production technologies are relatively straightforward and pro
Slide 22: Nickel Product Overview
22 NICKEL PRODUCT OVERVIEW NICKEL SUPPLY FROM INDONESIA IS NOT BATTERY GRADE, AND HAS A HIGH CARBON FOOTPRINT. NOT ALL NICKEL IS CREATED EQUAL(1) THE CASE FOR SULPHIDE VS LATERITE ORE(2) Indonesia, Philippines, China, Australia Canada, Russia, Australia Nickel Nickel Type Overview Content Laterite O
Slide 23: Copper Industry Overview
23 COPPER INDUSTRY OVERVIEW OVERVIEW COPPER DEMAND & SUPPLY(1) (million tonnes) • Copper has a variety of end-uses due to its conductivity, ductility, recyclability, and low reactivity Current Supply Forecast Demand 26 o Copper has few cost-effective substitutes • Demand from clean energy technologi
Slide 24: Copper Supply Growth Is Constrained
24 COPPER SUPPLY GROWTH IS CONSTRAINED DECLINING GRADES AND LIMITED SOURCES OF NEW SUPPLY WILL IMPACT THE SECTOR’S ABILITY TO MEET RISING DEMAND. NO MAJOR COPPER FINDS IN PAST 10 YEARS (1,2) (million tonnes) 150 125 Limited exploration over the last decade Few significant copper discoveries in the l
Slide 25: West Musgrave
25 WEST MUSGRAVE OVERVIEW(1) All figures in US$ unless otherwise stated - metrics as of PFS Update (Dec 2020) • Located in Western Australia, approximately 1,300km northeast of Owner / operator OZ Minerals (100%) Perth Location Western Australia • Key areas of mineralisation include the Nebo-Babel n
Slide 26: West Musgrave Royalty Offers Substantial Production Upside and Life-of-Mine Extension Potential
26 WEST MUSGRAVE ROYALTY OFFERS SUBSTANTIAL PRODUCTION UPSIDE AND LIFE-OF-MINE EXTENSION POTENTIAL SUCCOTH OFFERS SIGNIFICANT UPSIDE MULTIPLE NI-CU SYSTEMS IN THE PROVINCE(1)(2) • OZ Minerals commenced a drill campaign at the Succoth copper Yappsu deposit in September 2021, and are progressing study
Slide 27: Santo Domingo
27 SANTO DOMINGO OVERVIEW All figures in US$ unless otherwise stated - metrics as of Mar 2020 technical report • Located in the Atacama Region of northern Chile, ~5km southeast Owner / operator Capstone Copper (100%) of the town of Diego De Almagro Location Atacama region, Chile • Iron-oxide-copper-
Slide 28: Nifty
28 NIFTY OVERVIEW(1) All figures in A$ unless otherwise stated - metrics as of Restart Study (Mar 2022) • Past producing primary copper mine with large sulphide resource Owner / Operator Cyprium Metals Limited (100%) Location Western Australia o Nifty is the 6th largest development project in Austra
Slide 29: Carlota
29 CARLOTA OVERVIEW(1) • Producing copper mine located in Arizona, USA o First production in 2008, focused on leaching copper ore since 2014 • 100%-owned by KGHM Polska Miedz, an international copper producer with a market cap of US$4.5bn(2) o Top 10 global copper producer operating across three con
Slide 30: End Notes
30 END NOTES 1. Future-facing commodities classified as Copper, Nickel, Cobalt, Vanadium, Uranium. Publicly disclosed start dates assumed for acquired portfolio. West Musgrave 2024; Santo Domingo 2025; Nifty 2023 (subject to delivery threshold). Research analyst revenue estimates. 2. Average contrib
Anglo Pacific Group — Merger or Acquisition (July 2022) on 6ix