Ecora Resources Reports 117% QoQ Royalty Growth in Q1

Ecora Resources PLC (LSE/TSX: ECOR) issued a trading update for the 1st quarter of 2024 that saw royalty income up 117% and expectations of very strong earnings for the half year 2024. Volume growth is expected for the full year and continuing through the rest of the decade.


  • Coal royalties still on track for 15%-25% volume growth in 2024.
  • Expecting ramping cobalt volumes from Voisey’s Bay. 3-4 cobalt deliveries in Q2 and 12-16 for the full year, vs only 2 in Q1.
  • Santo Domingo, the largest contributor to medium term copper royalty growth is releasing an updated feasability study in 1H 2024.
  • Bought back 4.9M shares less than 30 days after announcing a US$10 million buyback and is on pace to complete the buyback by the end of May at the current pace.

Bottom Line:

2024 will likely mark the royalty income trough for Ecora. Ecora is going through a rapid transformation from a coal royalty company to a battery metals royalty company. Coal will decline from 75% of income in 2023 to only 10% in three years, driving a likely rerating of the multiple.

Royalty volumes are expected to increase in 2024 before ramping rapidly in 2025 and beyond. Earnings growth of up to 140% is expected over the next five years, driven by exposure to future facing commodities such as nickel, copper, cobalt and uranium.

Medium Term Royalty Outlook

Ecora trades at a significant discount to royalty peers offering both upside from rising cashflow as well as from a rerating of the stock multiple as coal royalties fall away and the company is rated in line with future facing commodity peers.

Ecora at >50% multiple discount, but leading FCF Generation

Sources: Broker research, company disclosure, and S&P Capital IQ. 1.Market data used for peers (per S&P Capital IQ) as of 22 March 2024.

First Quarter 2024 Portfolio Commentary

The portfolio performed in line with expectation, production at Kestrel returned to our private royalty area driving a 117% increase in portfolio contribution compared to Q4 23 ($19.5m vs $9m)(1). Mining at Kestrel is expected to remain within the bounds of our royalty area throughout the quarter which should underpin a strong H1.

We are keeping a close eye on the progress of the ramp up at Voisey’s Bay, the publication of the Santo Domingo Feasibility Study and the development plan for the West Musgrave nickel-copper project.  Marc Bishop Lafleche, CEO, Ecora Resources PLC

Asset Review:

Portfolio contribution of $19.5 million, up 117% on Q4 23(1) primarily due to operations at Kestrel moving back within the Group’s private royalty area, with the rest of the portfolio producing volumes in line with expectations.

Saleable production volumes within the Group’s private royalty lands at Kestrel totalled 660kt. FY 2024 guidance remains unchanged at a 1525% increase on FY 2023 (1.6Mt), with the majority of royalty receipts expected to be in H1.

Two cobalt deliveries from Voisey’s Bay during the period at an average realised sales price of $16.0/lb. FY guidance remains unchanged at 1216 deliveries of cobalt subject to scheduled ramp of underground activity in H2.

On 18 April, BHP stated that the results of a review into the potential phasing and capital spend for the West Musgrave development project will be announced in August 2024.

Capstone Copper is scheduled to release the updated Santo Domingo Feasibility Study during the first half of 2024.

Continue to expect year on year production volume growth at operations underlying producing royalty portfolio in 2024 and 2025.

Net debt at 31 March was $87 million, providing the balance sheet flexibility to pursue further

Q1 2024 Financial Table
(1) Excludes $5.4m of accrued income released to the income statement following the favourable Four Mile judgment announced on 4 December 2023.

About Ecora Resources 

Ecora Resources is a leading royalty company focused on supporting the supply of commodities essential to creating a sustainable future.

Our vision is to be globally recognised as the royalty company of choice synonymous with commodities that support a sustainable future by continuing to grow and diversify our royalty portfolio in line with our strategy. We will achieve this through building a diversified portfolio of scale over high quality assets that drives low volatility earnings growth and shareholder returns.

The mining sector has an essential role to play in the energy transition, with commodities such as copper, nickel and cobalt – key materials for manufacturing batteries and electric vehicles. Copper also plays a critical role in our electricity grids. All these commodities are mined and there are not enough mines in operation today to supply the volume required to achieve the energy transition.

Our strategy is to acquire royalties and streams over low-cost operations and projects with strong management teams, in well-established mining jurisdictions. Our portfolio has been reweighted to provide material exposure to this commodity basket and we have successfully transitioned from acoal orientated royalty business in 2014 to one that by 2026 will be materially coal free and comprised of over 90% exposure to commodities that support a sustainable future. The fundamental demand outlook for these commodities over the next decade is very strong, which should significantly increase the value of our royalty portfolio.

Ecora’s shares are listed on the London and Toronto Stock Exchanges (ECOR) and trade on the OTCQX Best Market (OTCQX: ECRAF).

Ecora is a Marketing Awareness Client of Capital 10X

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Duane Hope is a Partner at Capital 10X, he brings over 15 years of communications and research experience to the firm. His research and writing have appeared in publications for North American, European and Asian audiences.


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