Ecora Royalties Plc · LSE:ECOR
Ecora Royalties — Anglo Pacific Group — H1 2021 Earnings Presentation
29 slides from Ecora Royalties's earnings presentation, August 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 Results for the half year ended 30 June 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: H1 2021 Highlights
3 H1 2021 HIGHLIGHTS H1 2021 % MVT H1 2020 H1 2021 % MVT H1 2020 $’000 $’000 £’000 £’000 Kestrel 9,556 (37%) 15,095 6,885 (43%) 11,975 Voisey’s Bay 3,118 - - 2,247 - - Mantos Blancos 2,750 82% 1,513 1,981 65% 1,200 Royalty related dividends (LIORC and Flowstream) 2,856 (1%) 2,895 2,058 (10%) 2,296 M
Slide 4: Positioned for Strong H2 2021
4 POSITIONED FOR STRONG H2 2021 KEY COMMODITIES UNDERLYING APG PORTFOLIO (Re-based to 100) (1) YEAR TO DATE LAST THREE MONTHS 119% 102% 88% 75% 79% 57% ANGLO P ACI FI C GROUP P LC R ESU LTS FOR T H E H AL F YEAR EN D ED 3 0 JU N E 2 0 2 1 25% 21% 19% 16% 7% 3% -11% -28% Met Coal Thermal Vanadium Cob
Slide 5: Financial Review
5 ANGLO P ACI FI C GROUP P LC R ESU LTS FOR T H E H AL F YEAR EN D ED 3 0 JU N E 2 0 2 1 FINANCIAL REVIEW
Slide 6: Financial Highlights
6 FINANCIAL HIGHLIGHTS KPIS INCLUDED IN GBP TO ENABLE COMPARISON WITH PRIOR PERIODS. ADJ. EARNINGS PER SHARE (1) DIVIDEND COVER (2) FREE CASH FLOW PER SHARE (3) (Pence per share) (Cover per share) (Pence per share) H1 H2 H1 FY H1 H2 8.3 2.4x 11.2 2.3x 2.3x 9.5 12.7 9.4 12.4 12.1 6.5 1.4x 15.2 1.1x 8
Slide 7: Income Summary
7 INCOME SUMMARY FIGURES IN $’000 H1 2021 H1 2020 FY 2020 FY 2019 Kestrel 9,556 15,095 23,285 47,266 Mantos Blancos 2,750 1,513 3,659 1,305 Maracás Menchen 1,460 (384) 675 3,507 Narrabri 1,150 2,000 3,918 5,118 Four Mile 105 168 583 349 Royalty revenue 15,021 18,392 32,120 57,545 Voisey’s Bay – stre
Slide 8: Summary Income Statement
8 SUMMARY INCOME STATEMENT FIGURES IN $’000 H1 2021 H1 2020 Royalty and stream related revenue 22,222 22,407 Metal streams cost of sales (767) - Amortisation and depletion of royalties and streams (5,698) (3,444) Operating expenses (5,029) (4,252) Operating profit (1) 10,728 14,711 Impairment of roy
Slide 9: Summary Balance Sheet
9 SUMMARY BALANCE SHEET FIGURES IN $’000 as at 30 Jun 2021 31 Dec 2020 30 Jun 2020 Coal royalties (Kestrel) 65,385 76,268 93,045 Metal streams 162,150 - - Royalty financial instruments 62,904 99,923 88,842 Royalty and exploration intangibles 124,843 130,512 129,440 Other long-term receivables 24,195
Slide 10: Financial Resources
10 FINANCIAL RESOURCES H1 2021 CHANGE IN CASH BALANCE (In US$ millions) $63.0 $62.5 ($208.1) ANGLO P ACI FI C GROUP P LC R ESU LTS FOR T H E H AL F YEAR EN D ED 3 0 JU N E 2 0 2 1 $62.1 $1.7 $0.1 ($4.3) ($8.0) $27.8 ($5.6) $27.5 ($4.3) $14.6 1 January Portfolio M&EI FX & other Overheads Finance Taxe
Slide 11: Business Update
ANGLO P ACI FI C GROUP P LC R ESU LTS FOR T H E H AL F YEAR EN D ED 3 0 JU N E 2 0 2 1 11 BUSINESS UPDATE Chaired by Julian Treger
Slide 12: The New Anglo Pacific Group
12 THE NEW ANGLO PACIFIC GROUP A leading non- 21st century commodities - ~60% Attractive Diversified commodity exposure in precious royalty battery related metals Royalty portfolio established mining jurisdictions company Stable long-life Sustainable, through-the-cycle cash ANGLO P ACI FI C GROUP P
Slide 13: Anglo Pacific's Commodity Exposure Has Been Transformed
13 ANGLO PACIFIC’S COMMODITY EXPOSURE HAS BEEN TRANSFORMED… YEAR END 2013 (1) HALF YEAR 2021 (2) COMMODITY EXPOSURE COMMODITY EXPOSURE Coking coal (3) 76% Cobalt 45% Iron Ore 9% Base metals 11% 0% ~60% Vanadium 4% Battery Uranium 4% Battery Metals Other 11% Metals Thermal coal (3) 10% Coking coal (3
Slide 14: Royalty Portfolio Update
14 ROYALTY PORTFOLIO UPDATE PRODUCING ROYALTY / COMMODITY OPERATOR LOCATION ROYALTY RATE / IRON ORE STREAM STREAM VOLUME 1 COMPANY OF CANADA VOISEY’S BAY 2 COBALT VALE CANADA 22.82% CO STREAM MCCLEAN LAKE MILL EVBC KESTREL 3 COKING & EMR CAPITAL / AUSTRALIA 7 – 15% GRR THERMAL COAL PT ADARO ENERGY I
Slide 15: Cobalt Market Update
15 COBALT MARKET UPDATE MARKET UPDATE HISTORICAL COBALT PRICE (1) (In US$/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 $40 compared to the same peri
Slide 16: Outlook
16 OUTLOOK • Stronger results expected in H2 2021: o The outlook for commodities in general continues to be well supported by significant infrastructure commitments outlined by some of the largest economies as a means to ensure no lasting damage caused by the COVID pandemic o We expect coal prices t
Slide 17: Q&A Session
ANGLO P ACI FI C GROUP P LC R ESU LTS FOR T H E H AL F YEAR EN D ED 3 0 JU N E 2 0 2 1 17 Q&A SESSION Chaired by Julian Treger
Slide 18: Appendix I: Royalty Portfolio Update
ANGLO P ACI FI C GROUP P LC R ESU LTS FOR T H E H AL F YEAR EN D ED 3 0 JU N E 2 0 2 1 18 APPENDIX I: ROYALTY PORTFOLIO UPDATE
Slide 19: Royalty Portfolio Update: Voisey's Bay
19 ROYALTY PORTFOLIO UPDATE : VOISEY’S BAY VOISEY’S BAY OVERVIEW (1) RANKED BY CASH COSTS (2) (Total cash costs in US$ 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 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: Focus on Commodities That Support a More Sustainable World
27 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 Required to Achieve the Electrification of Encompassing Relative Environmental Energy
Slide 28: Return of Capital and Trading Multiples
28 RETURN OF CAPITAL AND TRADING MULTIPLES DIVIDEND PER SHARE ROLLING EV/FY1 EBITDA & P/NAV (2) (In GBp per share) (Broker consensus EBITDA and NAV estimates) Anglo Pacific EV / FY1 EBITDA (LHS) Anglo Pacific P / NAV (RHS) 10.0x 2.0x 8.0x 1.6x 9p 9p 6.0x 1.2x 8p 7p ANGLO P ACI FI C GROUP P LC R ESU
Slide 29: Endnotes
29 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