Ecora Resources Acquires Near Term Cashflow with Royalty on Mimbula Copper Mine

Ecora (LSE:ECOR)(TSX:ECOR)(OTCQX:ECRAF), a critical minerals focused royalty company, announces that it has entered into a copper stream (the “Stream“) with reference to production at the Mimbula copper mine (“Mimbula“), owned by Moxico Resources plc (“Moxico“), for a total cash consideration of US$50m (the “Transaction“). The Stream will cover Mimbula’s existing reserve-based Life Of Mine (“LOM“) of 11 years with potential for additional extension.

Mimbula, located in the Zambian Copperbelt Province, achieved first copper production from Phase 1 of the project in late 2022 and in 2024 produced 14,000 tonnes of copper at operating costs in the lowest half of global copper mines. A brownfield Phase II expansion is currently in construction, which will increase total copper cathode production capacity to achieve 56,000 tonnes per annum in mid-2026.

Deal Highlights

• Immediately accretive to earnings per share and free cash flow per share

• Increased exposure to strong fundamental copper outlook (approximately 45% of NAV)

• High margin producing copper mine with low operating costs

• Brownfield expansion underway to increase copper production from ~14 kt in 2024 to steady state capacity of ~56 ktpa

• Stream structure reduces ramp-up risk and has an expected payback period of approximately 6-7 years

• Reserve based LOM of 11 years (2035) with extension potential

• Proceeds to bolster liquidity for Mimbula’s brownfield expansion as well as for other general corporate purposes

• Mimbula produces Grade A LME cathodes

• High-quality management team with a proven operational track record and prior experience at large diversified miners

• Transaction completion expected within the coming days

Analyst and Investor Presentation

• There will be an analyst and investor webcast at 2pm (GMT) on 27 February 2025. The presentation will be hosted by Marc Bishop Lafleche (CEO), Kevin Flynn (CFO) and Geoff Callow (Head of IR)

• Please join the event 5-10 minutes prior to the scheduled start time.

• Slides will be available shortly on the Company’s website (www.ecora-resources.com)

The stream entitlement is structured as follows:

1. Quarterly stream entitlements calculated with reference to pro-rated quarterly production levels (i.e. 4.7% of copper produced between nil to 3,750t; 2.5% of copper produced between 3,750t – 7,500t; 1.0% of copper produced in excess of 7,500t per quarter). Annual true up to occur following Q4 of any given calendar year.

2. Fully ramped up production of 56ktpa, assuming copper price of $4.22/lb, the average LME Copper 3-month price over last 6 months (assessed 24-Feb 2025).

Once Ecora has received a cumulative total of 9.15 kt of copper (expected to be in ~7-8 years), Ecora’s stream entitlement will reduce to 1.0% of copper cathode produced for the remaining life of mine.

Copper will be delivered to Ecora quarterly, with ongoing payments to Moxico at 30% of the LME quarterly average copper price for all copper received under the Stream.

Transaction financing and impact on Group earnings

Ecora will fund the US$50m consideration through a combination of cash-on-hand and the Group’s debt facilities.

Proforma net debt at 31 December 2024 adjusted for the Transaction is approximately US$126m³. In conjunction with the Transaction, pursuant to an amendment dated 26 February 2025 the Group has made certain amendments to its revolving credit facility dated 24 February 2021, between Ecora and the syndicate of Scotiabank, CIBC and RBC (the “RCF“), the key terms of the amendment as follows:

• Upsizing the facility from US$150m to US$180m

• Extending the Group’s RCF maturity to February 2028

• Net debt to EBITDA ratio calculation uses an adjusted LTM EBITDA, calculated as trailing 6 quarters of Kestrel income annualised, rest of the portfolio is on a LTM basis

• Interest cover covenant reduced from 4.0x to 3.0x for the term of the facility

• Pricing of SOFR plus 2.25 – 4.50% depending on leverage levels (previously 2.25 – 4.00%)

• No step-downs or amortisations associated with the facility

• Accordion reduces to US$45m following the US$30m increase in commitments

The above amendments ensure that the Group remains well capitalised with sizable headroom following the Transaction. The Group’s income producing royalties, including the Stream, are expected to drive meaningful deleveraging throughout the next 12-24 months, as illustrated in the table below⁴:

3. The proforma net debt figure includes US$6.2m that the Group expects to receive in Q1 2025 as a result of an agreement with Whitehaven Coal Ltd. to bring forward payment of the contingent consideration due as part of the sale of the Narrabri thermal coal royalty. Whitehaven has agreed to make a single payment of US$6.2m for the period 2025-2026 for the deferred consideration, as well as contingent consideration linked to future coal prices levels, Narrabri sales volumes and the successful permitting of the Narrabri South project.

4.Operator partner production guidance and research analyst consensus commodity price forecasts: Met coal: 2025 = $209/t, 2026 = $215/t; Copper: 2025 = $4.28/lb, 2026 = $4.49/lb; Cobalt: 2025 = $12.4/lb, 2026 = $13.9/lb; Uranium: 2025 = $92/lb, 2026 = $101/lb; Vanadium: 2025 = $6.0/lb, 2026 = $6.0/lb.

The Mimbula Copper Project⁵

Mimbula is 93% owned by Moxico and is located in Zambia, approximately 10 kilometres south-east of the town of Chingola.

The Phase 1 operations commenced in December 2022 and produced 14 kt of copper cathode in 2024 using a heap leach and solvent extraction/electrowinning (SX/EW) process, with copper cathodes consistently at 99.999% and within LME Copper Grade A specifications.

A bankable feasibility study (“BFS“) for Phase 2 of Mimbula was completed in August 2022. This evaluated the opportunity to expand Phase 1 operations to 56 ktpa through a 46 ktpa agitated leach and SX/EW circuit and demonstrated an economically valuable, low cost and technically feasible project.

The final stages of Mimbula Phase 2, consisting of the expansion of the SX capacity, the construction of an elevated temperature leach circuit and the construction of an additional 80 EW cells to complete the overall EW circuit, is expected to be completed in mid-2026. Stockpiles of fines ore material and weathered ore material are ready to be processed through the ETL circuit once it has been commissioned.

An updated mineral resource statement for Mimbula was completed in March 2024, and contains 76.4 million tonnes at 1.07% TCu, with 89% of the Resource estimate classified as Measured or Indicated⁶. The stockpile Resources are estimated to contain 7.6 million tonnes at 1.19% TCu.

Based on the current JORC Reserve and production at the rate of 56 ktpa, Mimbula has a life of mine to 2035. Moxico anticipates that the life of mine can be extended further with additional exploration drilling, both infill and near mine.

The initial part of Mimbula Phase 2, consisting of the construction of the first half of the EW (80 cells), has been completed and commissioned, and produced its first copper cathode in January 2024. This expansion has doubled cathode capacity to 20,000 ktpa, with Mimbula achieving a run rate of over 16,000 ktpa in the final months of 2024.

Transaction Completion

Payment of the US$50m cash consideration is conditional upon the execution and delivery of certain security-related documents, expected within the coming days.

⁵Source: www.moxicoresources.com

⁶JORC compliant MRE as of March 2024

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