Ecora Royalties (LSE:ECOR) — Financing investment in natural resources to enable a sustainable future

0:01 Good afternoon, ladies and gentlemen, and welcome to the Anglo Pacific Group BLC financing investment in natural resources to enable a sustainable future investor presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the q and a tab situated in the right hand corner of your screen. Just click q and a, scroll to the bottom, type your question, and press it. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your investment company dashboard, and you'll be notified

0:33 once they're ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Kevin Flynn, CFO, Bishop, Leflesh, CIO. Good afternoon. Good afternoon. Thank you, and hello to everybody on the line. I think just at the outset, to give you a overview of what Anglo Pacific is, We're a London and Toronto listed business who offers investors exposure to a diversified basket of commodities, which which are principally aligned to energy decarbonization. I think it's generally accepted the world is going to need a lot of copper, nickel, and cobalt in order to meet climate change targets. And at Anglo Pacific, around 75% of our balance sheet value is derived from these such materials.

1:20 But unlike companies who actually produce these materials, we offer exposure to the commodities through the royalty and streaming model, which means that investors benefit from commodity price increases without any associated CapEx or operating cost inflation. I think what sets us apart from other royalty and streaming companies is, number one, we're focused primarily on battery metals in OECD jurisdictions. Number two, over 80% of our assets by value are already contributing revenue, meaning that there's limited development risk. And number three, because of this, we offer a sector leading dividend yield such that investors not only can benefit from commodity price appreciation, but also earn an attractive yield while the whilst they do so.

2:08 Mark and I are very proud of the quality of the investments that we've made over the past five years, and we've got a very experienced team who have proven track record, of investing in this sector. And we feel like we're very well placed to continue on our growth journey. And with that, turning to the presentation, the disclaimer, read do read at your own leisure. So turning to slide number three. Just to set the scene a little bit here, I suppose, in terms of who the new Anglo Pacific is, the last twelve months have been incredibly transformational for our business. We basically solved with the Voisey's Bay acquisition in March 2021 two of the most significant strategic challenges facing the business. Number one was that our hitherto cornerstone asset, Kestrel, is approaching the end of its, material life mining life within our private royalty sector.

3:08 And number two, that commodity exposure was metallurgical coal. With that transaction, we've really stabilized the revenue profile of the business, meaning that, in the medium to long term, we've a very stable platform of earnings profile to come. The second challenge that we faced, as we went through 2021 and feedback from our investors at that time was could we, a economical way, divest of our thermal coal exposure and become thermal coal free. Now it's always been a huge part of our strategy to divest from coal into future facing materials such as cobalt, nickel, vanadium, and copper.

3:55 And we were very pleased a couple of months ago to announce the disposal of our narrowbri royalty, which effectively means at the end of this year, we will we will be thermal coal free as a business. Not only that, we will be then on a very short runway towards zero coal once Kestrel has primarily left our private royalty area in about two years' time. So with those two transactions, we've really changed the complexion of Anglo Pacific Group as an investment proposition for the London and Toronto market. As we say, we're a leading non precious metals, royalty and streaming company. 75% of that portfolio is closely aligned to energy decarbonization. The diversification that the royalty model affords investors is also very powerful because we're not a single asset mining vehicle, and we have various management teams and commodities in different jurisdictions, which we'll look at on the next slide.

4:54 The stability which the Voisey's Bay acquisition has provided to us means that we have now got a stable long life cash flow profile, which is obviously very important for, investors who who who invest in us because of the yield in our dividend. But, primarily, we're a growth business. We have deployed circa $435,000,000 over the last five years into predominantly income producing assets. This culminated in the largest ever transaction in our history, which was the Voisey's Bay acquisition in March this year, which was just over $200,000,000.

5:34 And I think we see a lot of opportunities at the moment to continue on that growth trajectory and build on the momentum that that transaction has given us in the market. However, underpinning all of this, and our pivot, a couple of years ago towards these future facing materials was a very strong emphasis on ESG. I think we're very, very conscious, that this is the future, commodities driving decarbonization, which we are fully aligned to in terms of the components that go into battery chemistry and also technology required to deliver the production, and scale of electric vehicles as well. We look very, very carefully at ESG when we're making investment decisions. It's a core part of our diligence.

6:24 Mark can discuss this further, in this presentation. But this now is the new Anglo Pacific. We feel like we have transformed the business in the last twelve months, and we're fully focused on continuing to add accretive transactions to our business, for the longer term benefit of our investors.

6:46 Just turning to the next slide. I think I've covered most of these points already, but perhaps if we could focus really on the geographic footprint of where our assets are. We've got 16 core royalty and stream investments, eight of which are producing royalties. That's approximately 80% of the value of the business. Three are development stage, but these, we feel have shown some very encouraging signs, of moving towards production this calendar year. Again, Mark may touch on those later. And we for earlier stage opportunities. So whilst a lot of our focus is on income producing assets, we also have, some development potential, already in our portfolio.

7:36 And looking at the footprint of our assets, you'll see our focus has traditionally been on OECD jurisdictions. Those jurisdictions which have a long track record of supporting, mining activity and indeed classifying it as a core economic, driver. A lot of our assets, 60% plus, are actually in Canada, which is a jurisdiction we're very comfortable with. We've got a large footprint as well in Australia. We've got some copper exposure in Chile, and we've got, some exciting projects, also in Brazil.

8:18 Turning to the next slide, and the good news for potential investors on the phone. The the the investment thesis to invest in Anglo Pacific is very compelling. If you look at this chart, this shows you the basket of commodities which really drives the value of Anglo Pacific vis a vis our share price throughout the

8:41 year. And when the coking coal and cobalt prices really started to move midyear, you'll see that actually our stock became derated at the point at which our earnings began to accelerate. And that vast gulf between the performance of commodity and our share price is a little bit puzzling for us, but we think that that offers a very compelling, investment case for people looking to get into the stock. I'm gonna pass now to, Mark Bishop LaFlesche, our chief investment officer, who will run through the next couple of slides, which really demonstrates the transformation of the business over the years. And, obviously, Mark has been instrumental to the business in terms of enacting that tran transition.

9:28 Mark, over to you. Well, thank you, Kevin, and thank you for joining us here today. It's an absolute pleasure to take you through our portfolio and to speak to you about what we find to be a very exciting business, particularly for those who have been tracking in Pacific for eight years and who have been either following with us or invested in Anglo Pacific through our journey. We are delighted to to show you this slide where even just a year ago, if we were sitting here speaking to get to together at this time right before Christmas, we'd probably be saying to you we had a lot more work to do in terms of repositioning our portfolio. And from where we were last year, that's leaps and bounds of where we were, say, in 2014 where our commodity exposure was almost 80% coal and one asset.

10:23 So we're really pleased with how things have have taken shape, and we're really pleased with the direction of the business to see as a part of our NAV, you know, coking coal just at the 10% mark to expect it to go down further next year. It really speaks to to how much we've changed this business, but also position this business for success over the next decades. And similarly, in terms of our revenue contribution, this chart, as of the first half of this year, still quite weighted to met coal. And as a consequence of, you know, the fairly short life at at Kestrel, that's likely to be the case in the next couple of years.

11:11 But fast forward to 2025. Now that we've exited thermal coal, beyond 2025, coking coal should be a fairly negligible contributor to our royalty income basket. And consequently, we think this company does become extremely exciting to those folks who are not only wishing to back and have exposure to commodities that that support decarbonization, but also if it invest ethically and invest in companies that are looking to really, you know, provide the raw materials required to achieve a better future for ourselves, our children, our grandchildren. Kevin touched on this earlier. Despite our best efforts, the company continues to trade at a pretty attractive entry point relative to North American peers and North American royalty companies.

12:08 In part, we think that is because being the only sort of nonprecious focused royalty company in London for quite some time, that's changed recently with Wheaton and and others

12:23 coming to the loan, LSE. But we think that a lot of people look at Anglo Pacific and look at our business model very much akin to a mining company as opposed to a royalty company, and there are some big differences between the two. So first of all, royalty company doesn't have any underlying operating cost exposure in the same way a mining company does. A royalty company doesn't have the same capital cost risk, And a royalty company is an excellent inflation pass through hedge given our exposure is purely to our inflationary trends on the commodity prices. But from an operating cost perspective, we just don't have the same cost inflation that is generally seen in a mining company, and that is being currently seen in the mining industry where some folks are reporting annual labor cost inflation in the range of five, ten, 15%.

13:17 And so we do think that we're extremely well positioned in that regard and a really interesting way for investors to get a diversified exposure to a basket of commodities that are required to support the future decarbonization in an inflation protected way and also supported by our track record of capital deployment. On slide 10, you can see here, we're really trying to position this business sort of two in we when we think about our commodity and project selection, of course, we look at cost curve positioning. Of course, we look for good and strong management teams. We look for counterparties with good balance sheets and good jurisdictions. But focusing just on the actual set of commodities, we see this in two buckets. So we're trying to we have position in Engle Pacific, and we will hope we hope to continue to do so by looking at, number one, commodities that specifically are required for batteries, particular specifically required in in the sense of energy transmission,

14:26 commodities that are required for the generation of renewable energy in the form of, for example, rare earth magnets. But we also look for mining projects that relative to the global production of the same commodity, so on a global basis, is this one specific mining project greener in terms of its lower carbon footprint, in terms of if it's an iron ore project, for example, we have invested in Labrador iron ore royalty company. And one of the big things we we really liked about that product is that, ultimately, when you use a pellet product in the production of steel, one can achieve much lower scope three carbon emissions relative to other types of iron ore products.

15:17 Similarly, another example is Voisey's Bay, where we recently acquired a Cobalt Street. Now Voisey's Bay produces nickel primarily. The cobalt is a byproduct. But that production of nickel is the second lowest emitter of carbon per unit to all nickel in in the world for all global nickel mines. Now cobalt, of course, fits very squarely on the left hand side of the stage as cobalt is a direct input for our battery. But thematically, this is how we we think about commodity selection. And to the degree there are additional questions on how we how we consider this, just please do share in the q and a, and we can spend a bit more time talking about it later on.

16:01 ESG due diligence is a fundamental and interwoven concept both in our investment decision making process in terms of monitoring our ongoing operations, but also is a is a an important factor in terms of management remuneration. So across the board, we have, in part, I think, because of our legacy of thermal coal and met coal exposure, been quite ahead of the curve in terms of developing these frameworks. And over the last six or seven years, have really been looking to position the portfolio, you know, where it is today, it looks quite good. But that certainly was not an accident. It's been a concerted effort to get there. And so across the board, you know, we're really looking for responsible operators and, ultimately, in addition to the, you know, underlying commodities themselves.

16:59 So on on that, back to you, Kevin. Sure. Thanks, Mark. This slide here looks at our capital allocation principles that we published around the time of the Voisey's Bay acquisition. I think number one is clearly balance sheet strength. We did take on some leverage associated with the Voisey's Bay acquisition in order to minimize the dilution, metrics to to NAV and to earnings at the time. We are expecting a very strong second half, for 2021, so we should see some meaningful deleveraging coming through, notwithstanding that we've had three dividend payments effectively in the second half of twenty twenty one.

17:45 We are prioritizing growth. We see opportunities to continue to deploy capital in a way that can be accretive to our key performance indicators. So whilst growth opportunities are still out there and we are targeting those very selectively around commodity price and entry points, that is where we are currently focusing most of our attention at the moment. Our quarterly dividend, we pay 1.75 p per quarter. That basically equates to an annualized dividend of about 7 p, and that really is the level of dividend which we have guided the market to this year. And absent any growth or other opportunities that we see, we will then, look to other shareholder returns. But I think in the short term, we've got about $90,000,000 of, optionality on our balance sheet to deploy capital in a way that is very accretive. So I think our our focus for the moment, remains on growth opportunities.

18:57 So looking towards the outlook, I think we are expecting a much stronger second half to the year. When we look at that slide previously, the commodity basket versus our share price, we have seen a very significant move in the cobalt and coking coal price in the second half of the year. Most commodities really began to increase around about the time of COVID, so around about March, April 2020. Coking and thermal coal really lagged behind, and it was really only in around June 2021 when the coking coal price began to move in a material way, peaking at just under $400 a ton. But in the last twelve months, it's been as low as a $105. So what's very pleasing for us is that these movements are now coming through. We had a very strong, third quarter to the year. We expect decent volume at Kestrel in the fourth quarter.

19:53 Ultimately, until we get that information, we don't know precisely what that number is gonna be, but, we are hoping for a record quarter of royalty portfolio contribution in the fourth quarter. Cobalt prices, I think currently are over $32 a pound. When we acquired the Voisey's Bay acquisition, we were forecasting cobalt prices in the second half of this year at $20.50. So a very significant outperform in terms of our expectations for the Voisey's Bay stream. So we're very, very pleased with how this acquisition is playing out in the short term. But more importantly, I think in the longer term, the supply demand dynamic around electric vehicles, we remain very confident that this is a very sensible entry point into the cobalt market.

20:44 The thermal coal exit following our strategic review process has now taken place. We think that should open Anglo Pacific up to a much broader range of potential investors, ESG funds, and others who are prepared to accept the difference between met coal and thermal coal. And indeed, with regards to met coal, can see a very clear and obvious path towards zero coal within a two to three year time frame. In terms of our firepower, we retain flexibility of around $70,000,000 currently. That comes through via undrawn cash, undrawn borrowing facilities, our residual stake in LIORC, and some treasury shares that we own following the buyback last year.

21:32 Of course, this number we expect to grow in the first quarter of next year as we receive the what will hopefully be very strong cash flow from the fourth quarter

21:44 of this year. Okay. That's it from the presentation. Sure. I'll hand back to our host to introduce the q and a. Fantastic. Kevin and Mark, thank you very much indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions using the q and a tab situated in the right hand corner of your screen. Just want the team take a few moments to review those questions submitted already. I'd like to remind you that they're recording the presentation. Along with a copy of the slides and the published q and a can be accessed via investor dashboard on the Investor Meet company platform. I'd also like to remind that your feedback is important to the company. Immediately after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order the team could better understand your views and expectations. Kevin, we've had a number of questions that have come in from, attendees today.

22:33 I wonder if I could just hand back to you just to click on that q and a tab. And when appropriate to do so, if you could read out the question and give your response, that'd be fantastic. Thank you. Sure. Absolutely. I think I'll start on some of the kind of corporate questions around dividend, etcetera. For the portfolio ones, it makes

22:50 much more sense for for Mark to go through those. So so maybe I'll start with questions that have come in from the dividend. And and, firstly, thank you all for your questions and interest. It's it really is a privilege to be here to to be able to have a forum where we can present to to to retail shareholders and individuals. So looking through some of these questions, will the quarterly dividend payments return to historical normal timings? Yes. We expect the dividend timetable in 2022 to be much more normal with one payment per quarter. That was slightly different this year just due to the way in which we finance Boise's base, so that will return. We've had a question in relation to how the dividend, is thought about in light of growth and in terms of payout ratios, etcetera.

23:44 I think when we look at last year, I think the payout ratio on an earnings basis was around 75%. Now I wouldn't expect to see that, level of payout ratio going forward. I think it's much more norm normal in this sector to be at in the range of 30 to 60%. Whilst that's not a policy of ours necessarily, I think the dividend the quarterly dividend of 1.75 is probably where our dividend is gonna be for the year. But, of course, we need to determine that when we see the full effect of the fourth quarter, royalty revenue.

24:21 In terms of the ability to finance growth, where that's coming from, I I've mentioned we've got about $70,000,000, which we could probably deploy pretty quickly if we wanted to. Historically, that probably has been sufficient to finance one or two bolt on acquisitions. Clearly, for something more transformational, we'd have to finance that in a more creative fashion. But I I think we've got a pretty good track record in terms of how we've been able to think and finance growth. Voisey's Bay was a particularly good case in point. Does that mean a risk to cutting the dividend? No. Not necessarily. I mean, we're very conscious of the fact that a significant, portion of our shareholder base is focused on yield, And, obviously, we generate a lot of cash flow as well, and the dividend is a part of our, very much part of our business and our strategy.

25:19 Why do we think the share price has been so weak? Is there stock overhang? Well, I think we're we're quite puzzled ourselves as to why the share price hasn't moved, especially given the fact that coking coal and cobalt prices have moved very significantly. We are very busy, as always, appraising new acquisitions. This is a sector which is not deal heavy. You know, we are very disciplined in how we go about deploying capital, but there are a couple of exciting things that we're looking at right now and and trying to figure out how we can add further growth. You know, hopefully, with the benefit of a very strong fourth quarter, that can give a bit more visibility around how the cobalt stream is working and how we see that upside coming through. And perhaps that could be a a short term catalyst, hopefully, to to closing that gap a little bit.

26:17 Question on the CEO succession. Can I give an update on that? The update on that is that, our nomination committee, in line with good corporate governance, is conducting a full and thorough search, and an update will be provided, when the appropriate candidate is chosen. But they are going through due process. Julian will be with us until the end of March and is still fully involved in the business. Mark, I think from looking through the rest of the questions, these are probably due down to commodities or portfolio issues. So perhaps, Mark, if I could Sure. Pass over to you. Sure. Well, thank you so much. Echoing Kevin's comment, thank you for for the questions.

27:03 It's always much more interesting to have an an interactive session and, you know, get get a steer as to what folks are particularly keen on, discussing. So the first question is from Shivar G. Please, can you explain what the situation is with the POE nickel project? Is there a clear pathway to production, and how long will it take? So there's a few parts to answering that question. The first is an update generally with respect to the Brazilian nickel and the PUE nickel project. So over the last twelve months, the business has that business has raised slightly over $50,000,000 in equity financing, and that has come from private equity investors, some of whom are actually, funded by by the US government, who are now investing in equity stakes in order to ensure, supply chain certainty for the battery precursor material and and vehicle supply in The United States.

28:05 And with with those proceeds, the capital is being deployed to two main uses. Number one, the preparation of a bank of a feasibility study. That's almost complete, so we expect to update the market on on that work next h one next year. And number two, the construction of no. It's not a demonstration plant. It's it's a small scale operating plant that from a from a footprint and ramp up perspective can can be ramped up to to the full plant of envisage being 24,000 tons of nickel per annum capacity and 1,000 tons of cobalt. And that's expected to complete in h '1 next year as well. And so there are some really exciting developments and and work streams ongoing at that project.

28:52 Anglo Pacific, to remind you, initially invested $2,000,000 to buy a 1.25% royalty. But what's more interesting is that we have the right to contribute $70,000,000 to acquire new royalties with that amount going to part funding the construction of the project. So all in, at sort of envisaged steady state production levels and nickel prices not too far away from the current long term price, we'd expect for slightly over $70,000,000 investment to generate somewhere between 10 to 15,000,000 of income per year. That is, of course, subject to change based on nickel prices and the ultimate bankable feasibility study. And we're, of course, not required to acquire those royalties, but we are viewing this project quite closely.

29:45 We're really excited about how that income profile would really continue to materially well, continue our trajectory of aligning the business and the commodity exposure with commodities that are expected to be in in deficit over the next decade, but also those required for decarbonization. So more to come on that asset. I I the last point to make and just to be crystal clear, we are we are not required to fund that $70,000,000 investment. It is our option and right to do so. Provided the economics are interesting, we would proceed most likely. But at this time, it's it's an option. So we won't be obligated to proceed, for example, if, you know, the the bankable feasibility comes back, and we are, you know, disappointed with the some of the outcomes there. In any event, we're keeping a close eye on this one and look forward to updating you in the future.

30:42 The next question here is from Andrew h. As coal and cobalt are now significantly higher than when you last guided analysts, will you be guiding higher preresults? So we have already guided a much stronger h two, as Kevin mentioned. At the time of our q three h two and q three, we've we've been pretty clear actually that on the back of strong commodity prices, we expect a very strong h two this year. So that's that's already been done. And, again, back to the point that Kevin made, we we remain perplexed on the back of guiding what's expected to be a very strong half, the share price kind of going sideways or even down. The next is Johnny. Have you been looking at or will you be looking at opportunities within The UK?

31:32 For example, mining companies in Cornwall, looking at lithium copper tin mining. Absolutely. We have looked at a number of opportunities in The UK. That's part of our mandate to to look at opportunities in Europe, North America, South America, and Australia. We were we've historically been quite conservative and disciplined in terms of our investment strategy. So today, we haven't seen any opportunities that we we are keen to execute and complete on. That's not to say necessarily that we wouldn't do it, but it's something that we keep a very close eye on. The next question here is from John h. At current cobalt prices and current production, what would APG earnings be in 2022?

32:17 So that's in terms of specifically the cobalt piece, earlier this year, we guided income expectation of the range of, I believe, 12 to $15,000,000 of EBITDA from that stream. And, therefore, at stronger prices, one would expect us to be at the higher end or potentially higher end of that range, but we we shall see how things shape up, over the course of the year. The next question is from Jeffrey w. Do you believe that a core holding in cobalt is a sensible investment where you see battery makers trying to use alternative elements to avoid the supply of non ESG cobalt from China and as as well as sky high cobalt pricing. So that that's an interesting question, Jeffrey.

33:08 And the question probably has three parts to answer it because when one is thinking about a battery, it's an energy storage. It's quite nuanced. Right? So the first is, what is the cost of the battery that you're looking to put in together? Number two, what what are the safety aspects of the battery that you're trying to put together? And number three, what performance are you trying to achieve? So specifically on the battery, the these three components can actually be, you know, in some respects, mutually exclusive. So in other words, as you lower cobalt from a battery, you achieve lower cost, you achieve weaker safety standards, and you also achieve wake weaker performance as you, for example, move entirely into an ultra chemistry.

33:59 And so what we expect to happen is that, you know, there's no one battery technology and chemistry that will be dominant and be the chemistry across the board. What we expect is there'll be battery chemistries used in applications where those battery chemistries are well suited. So certain battery chemistries are very well suited to, you know, very low range, very cheap costs, and many of those batteries have have gained a lot of traction in China. We we don't see those battery chemistries getting much traction in, for example, lithium iron phosphate battery chemistry in North America or Europe simply because, first of all, those techno the lithium iron phosphate technology does not work very well in cold weather, which is a major problem.

34:46 Number two, the performance is relatively much poor compared to a battery technology that has cobalt. And number three, the batteries just don't last as long. And so the useful life of the battery is much shorter, which is a big issue, it seems, for North American and Western consumers. So that's the first part. We we we think the outlook for cobalt is quite attractive. We think cobalt is is very well positioned. When we looked at this investment initially, you know, cobalt was $16.17, $18 per pound. So effectively, historical multiyear lows. Cobalt peaked out just around $50 per pound in 2018.

35:31 So, you know, even at $33 per pound, it was still theoretically a long way for cobalt to run. And is it sky high? I'd argue that it's not actually sky high at these levels. It's still almost, you know, $20 per pound below its peak. So I I think it's probably cobalt's return to a level that's probably more mid level in terms of being in this cobalt price cycle from where it was a year or two ago where we're really at low low cyclical levels. Next question from Steven l. With with the clear change towards ESG and the risk diversification of a royalty based company, how do you aim to achieve getting the message out of how Anglo Pacific's assets are different to the normal investment cases as both the growth dividend and royalty player?

36:23 I think that's a good question, Steven. And, you know, Kevin and I have been really frustrated by by COVID because it's made it very difficult for us to travel. It's made it very difficult for us to go on roadshows. It's been much more difficult even, you know, to to take meetings with, you know, events like these, which are now increasingly online, but that was a transition period. As the world well, hopefully, we're currently in a blip in The UK anyways, but beyond the next few weeks, hopefully, things will continue to normalize. And quite frankly, think we will just continue and get back on on on the road and, you know, take a number of meetings and really extol the virtues of of this company. And I think the other point to make is that, you know, for folks who for folks who don't really understand mining in the detail that is probably required to, you know, go pick which mining companies and which exploration project or which which management team to back. Investing into natural resource sectors can can be pretty daunting.

37:29 And the advantages of Anglo Pacific to some degree is that by investing in Anglo Pacific, you're you're effectively investing in your view on on the management's team's ability to do good deals and create value. And if and if someone is looking for exposure to, you know, twenty first century commodities but doesn't really have the ability or the the time or the desire to do the diligence to figure out which actual mining company and which project they wanna invest on. Anglo Pacific is a great way to just get exposure indirectly. We're very transparent about our investment track record and the returns generated. That's available in the public domain. If if you if you can't find it, let us know, and we can share that with you.

38:16 And investors can take their own view as to whether or not they wanna support Anglo Pacific and and agree that the investment track record is good. But that's something that we really plan on that I'm communicating in the next year because we think that message will resonate particularly well with generalist investors who, you know, feel like they don't want to miss out and want some exposure and allocation to, you know, these commodities, but are finding it difficult to get the same direct exposure just more generally in the mining sector. So John A's next question is, I'm considering becoming a shareholder. Please, can you give me a one minute pitch as to why I should invest in you? I think that was the pitch, wasn't it, Mark? That's right, John. I wish wish we had read that first, but I think we've just given it to you.

39:01 So if you have any follow ups, please just tack them on. Next is how much do you how much cash do you have to invest in new opportunities? Kevin, do you wanna take this one? Yeah. Sure. I mean, I think I I I kind of put out there that we've about $70,000,000 currently, that our balance sheet could support. And, you know, with a strong q four to come, we expect those, those cash balances to start increasing too. So I think one of the things which, you know, please do bear in mind, Anglo Pacific has never, failed to acquire royalty through lack of, an ability to finance a transaction. Voisey's Bay was a a very good example of that. So, you know, if the deal is good enough, we're we're confident that a deal can be financed.

39:53 Mark, just touching on a couple of those next ones, I guess. There was a question about retail participation and would we offer that if there was an equity raise. I think the answer to that is yes. We actually did that with our Voisey's Bay acquisition when we raised some equity. We offered retail participation to existing, holders through the primary bid platform. So we were very pleased with the participation from from our retail holders in that, and it's obviously something which we will look to continue to do, in a similar vein to to to these presentations that we're doing now. You know, our retail shareholder base is incredibly important to us, and we're very pleased that, you know, some of these technologies and platforms are kind of allowing more of a regular, involvement and dialogue between management and retail holders.

40:44 I think that's a very positive trend that with with technology is only gonna keep improving. There's a question about share buybacks, and is that something that we would do at a current share price levels? Look. I think we did a share buyback a little over twelve months ago. But following the Voisey's Bay transaction, you know, I think our short term priority is to delever, to build up a bit, war chest for the opportunities that we currently see. And I think a share buyback probably goes against against that investment strategy a bit. So, never say never, but, I think deleveraging at the moment takes priority over, share buybacks. There is also a question, whether we would look to merge with other royalty and streaming players for the ultimate price of obtaining scale. Look. I I think the word scale there is a very important part of that question.

41:45 That's probably something which Anglo Pacific is suffering from at the moment is liquidity in our stock and and scale. Think, you know, our ambition is to try and become, you know, a billion dollar market cap company as quickly as we can. That said, we're not we're not going to compromise our investment principles, just to chase scale at all costs. I think Voisey's Bay, again, was a very good example of a transaction that we looked at a number of years ago. We felt at the time we would be investing into a bubble, and, ultimately, that, asset came back to market at much more sensible prices. So I think discipline is is a key strength of our management team and, will continue to be so, albeit, you know, we we do want to grow this business to capture some of the benefits of scale.

42:40 There was a comment, Mark, I think, which, is around the Narrabri royalty sale, about the loss of that, and how much of that was driven by ESG versus economic forces? And is that something we would expect to replicate, Mark? I think that's that's a good one for you to pick up on. Yeah. Well, there's a few points to make here. First of all, that deal structure subject to, you know, future commodity prices, permitting, and production levels, all in, could generate pro sales proceeds roughly if one also adds up the income generated today, roughly equivalent to the purchase price.

43:31 So it's probably not correct to say that the royalty has been sold at a big loss because there's actually a path to achieving effectively, you know, a breakeven price. Furthermore, I think it's actually pretty incredible that in today's market, we've achieved that deal outcome. Generally speaking, when you look at other deals that are being done in the thermal coal space, a lot of miners are actually paying folks to take their thermal coal assets, and we sold our our at a multiple on the last twelve month basis on on cash flow or EBITDA of roughly seven to nine times. Plus, if you include all the contingent amounts, that can jump to, say, you know, fourteen, eighteen times, which is which we think is, you know, fantastic price in one of our really challenging thermal coal markets.

44:20 And then the final point to make here is that the the the second part of the question, which is, you know, do a weak share price performance. The other the key thing to think about here is there are a lot of people who told us specifically that as potential shareholders, they would love to come in and to buy in specific shares, but they couldn't because of the thermal coal. So it's not so one also needs to take that over time as increasingly more and more funds are unable and more investors cannot buy stock who have thermal coal exposure, that creates potentially both a lot of selling pressure, but also very few buyers. And so exiting thermal coal today, you know, in the scheme of things in our view, puts the company in a position where, hopefully, it is going to have more buyers and therefore deliver shareholders' capital gains over the next medium and long term.

45:15 Yeah. And I think just to add to that, Mark, if I may, you know, this was not a sale at all cost. This was a strategic review we undertook to see what the likely level of interest was going to be. We were very pleased with the level of interest we received, and we think based on the final two or three that we brought through to final round, I think we we did a pretty good, balance there in terms of, the multiples on exit versus the likely impact or damage that retaining thermal coal in the industry in in the business could have for future equity raises, for instance. So I I think there there was pressure that we were feeling from potential investors even as part of the Voisey's Bay acquisition, and it just had to be mindful of that.

46:05 And I think part of the challenge here really is that some investors will reward a short term path towards zero coal. The challenge with Narrabri was it was a very good thermal coal asset. It was a very long life asset. So we could never promise that path to zero coal in the way that we can for Kestrel. And I think, ultimately, on balance, we made a decision that we thought in the longer term interest of shareholders was better. Of course, you know, some people will take a view on value and others, you know, will will think differently. But on balance, I think for our large institutional holders, we we achieved what, what they wanted us to do. I see a question. Would we be higher rated if we were listed in The USA or North America than the LSE?

46:58 I mean, the the comps that Mark has provided in in one of his slides would suggest so. You know, I think you know, we're not here to tell the London market that they're valuing the business incorrectly. We're providing some data points, but, you know, what we do offer investors is a portfolio, you know, of assets of which the quality of those is is what we think kind of unparalleled in the, in the battery metal sector, and underpinned by, you know, revenue consensus for this year, $7,070,000,000 dollars or so. I think it's a very a very interesting investment proposition. And, hopefully, over time, as we continue to grow some of those rating disparities can can be narrowed.

47:52 Guys, I'm just conscious of time. So we're coming up towards that hour mark. We have had an awful lot of questions, and thank you so much for answering so many of them. We may not get around to answering that many more. Just in case there's any further questions that did jump out that you wanted to cover off, if not, we will look to shortly wrap up, redirect the attendees to give you some feedback. Okay. So so we'll be taking a couple more. Yeah. I think there's a good one here, Mark, if we can from David. Question. Yep. You can you can take them. So from from David h, the question is, I hear that copper prices may have peaked. Would you agree? And do you have many copper royalties? What would be action on these royalties? Should you hold them, sell them? So on on the copper market, I think, generally speaking, copper prices are certainly at historically high levels. Although, generally, the outlook for copper remains quite positive.

48:50 I think if we if we take a step back and look at the investments into new copper projects in the last decade, really, or the latter half of the second decade and the early years of this decade, It's on historical standards, it's been extremely low. And as we look forward in the context of the world seeking to decarbonize energy consumption, that that's fundamentally very strong for copper. Ultimately, the largest producing assets are getting older. Copper is getting deeper. Grades are going down. Inflation seems to be quite strong, particularly in in the mining sector. And, therefore, at this time, we feel the outlook for for copper remains quite constructive and positive. And in fact, they're they're probably in the copper market, especially for for royalties, quite a few more buyers than there are there are sellers just given that outlook.

49:46 The next question is from David h. David h, you've asked, when purchasing and mining royalty, how important is political stability as opposed to future future potential financial returns? And it it's it's it's an excellent question. It's something that we think about very carefully because, fundamentally, that the returns that will be generated by the royalty are entirely predicated upon there being political stability and the royalty being enforceable. And so, therefore, one in making any sort of analysis on financial metrics is assuming a strong political environment or a strong regulatory framework where the the mind can operate and Anglo Pacific can collect its royalties.

50:35 So in that context, the large majority of our portfolio today is tilted towards OECD jurisdictions, which have very strong, you know, rule of law and well established mining jurisdictions. In the context of a of a a wider angle of Pacific portfolio, we do think the business could be run somewhere in the range of 75 to 85% OECD and, you know, the balance being non OECD, although being certainly not the the riskiest of the non OECD jurisdictions. But in any event, where we are today, the Anglo Pacific jurisdiction footprint is is very strong. And the next one from James, aren't lithium battery makers engineering cobalt out of the products so reducing long term demand?

51:22 And this is a tricky question because, first of all, one of the reasons that folks are looking to engineer cobalt out is because, historically, cobalt has been one of the more expensive raw materials for a battery. And, therefore, if the trend continues of utilizing less cobalt per kilogram of battery, then by definition, cobalt becomes cheaper. And so then the engineers have to ask themselves a very difficult question, which is, will we continue to work on ways to reduce cobalt, which, by the way, reduces safety performance and is technically quite challenging? And is it worth it if cobalt prices are weaker?

52:09 Right? So it's it's there is a circular aspect to that question, which is not sort of unidimensional. And the second point to make is it's absolutely correct that in the next five to ten years, batteries will require less cobalt based on the current battery's chemistries being contemplated. And when we've contemplated, you know, total demand though from total EV sales, even on that basis, we still see what is a quite constructive and positive outlook for cobalt demand. And in in the longer term, beyond, you know, ten fifth beyond ten to fifteen years, who who knows what the battery chemistries will be? As a species, humans have proven us we've proven ourselves to be incredibly in in ingenious when it comes to technological development.

53:02 But because the Voisey's Bay Mine has a reserve life that only really runs until 2033, 2034 in the next decade, Basically, what that means is we feel we have a good line of sight on cobalt being an important part of the battery chemistry for the life of Voisey's Bay in this mine. And then beyond that, when, you know, other technologies may come into play on a commercial scale, our our risk is significantly reduced thereafter. Guys, I think we're just coming up towards time, and thank you for answering so many questions. And thank you very much to the attendees for submitting so many. Of course, the company will be able to review all questions submitted today. And we'll publish those responses where appropriate to do so on the investor meeting company platform. Mark, Kevin, thank you again for updating investors today. Could I please ask investors not to close the session? It should be automatically redirected for the opportunity to provide your feedback in order the team can better understand your views and expectations.

53:59 This will only take a few moments to complete and be greatly valued by the company. On behalf of the management team of Anglo Pacific PLC, thank you very much indeed for attending today. Thank you for