Ecora Resources Returns to Growth in Q4 2023

Ecora Resources PLC (LSE:ECOR)(TSX:ECOR) (OTCX:ECRAF) issued a trading update for the 4th quarter of 2023 that saw royalty income grow strongly, with additional royalty increases expected in 2024.


  • 150% QoQ growth in royalty income, 55% ex-uranium legal settlement.
  • Coal royalties to grow 15%-25% in 2024 with 75% of royalties paid in Q1.
  • Voisey’s Bay cobalt royalties to benefit from up to 16 deliveries in 24′ vs only 11 in 23′.
  • Increased royalty in Piaui’s nickel-cobalt project from 1.25% to 1.60%
  • Borrowing facility increased to $225 million leaving ~$150 million capacity for future royalty growth.
  • 2.6x coverage of the US$0.02125/sh quarterly dividend

Bottom Line: Ecora has reached the royalty trough as management transitions the portfolio away from coal and toward future commodities that will be key to enabling the buildout of low-carbon energy sources such as solar, wind and electric vehicles.

Royalty income is expected to increase in 2024 on the way to growing 140% over the next five years, driven by exposure to future facing commodities such as nickel, copper, cobalt and uranium.

Medium Term Royalty Outlook

Source: Ecora Estimates

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 due to peer leading royalty growth.

Fourth Quarter and Full Year 2023 Portfolio Contribution

FY23 portfolio contribution of $63.6m (2022: $143.2m), with the YoY decline primarily a result of expected lower production within the Group’s private royalty area at Kestrel as well as a normalisation of commodity prices in 2023 from near record levels the previous year. Q4 portfolio contribution was $14.4m (including $5.4m of accrued income). Net debt as at 31 December 2023 was $75m (2022: $36m).

In-line with our expectations, portfolio contribution rebounded from third quarter levels as operations at Kestrel moved back within the Group’s private royalty area and a higher weighting of quarterly cobalt deliveries from Voisey’s Bay.

This momentum has continued into 2024. Kestrel production within the Group’s private royalty area is expected to increase 15-25% compared to 2023. The Voisey’s Bay underground ramp-up is expected to accelerate in H2, and other volumes across the portfolio expected to be ahead or in-line with last year.

Current commodity price levels would imply year-on-year portfolio contribution growth in the year ahead. In the fourth quarter, we acquired an incremental royalty interest over the Piauí project for $7.5m. Brazilian Nickel will primarily use these funds to de-risk the project by undertaking detailed engineering studies prior to project construction. This was financed by recycling  a portion of our LIORC holding in the quarter, which realised a c. 110% total pre-tax return on the investment.

The mining sector continues to see underinvestment and a challenging market backdrop. We anticipate these conditions will persist over next 2-3 years, during which royalty financing should be a highly attractive source of capital. The extension of our revolving credit facility puts us in a strong position to continue to grow and diversify our portfolio, which currently offers the leading copper growth profile in the royalty sector.Marc Bishop Lafleche, CEO, Ecora Resources PLC.

Ecora will release full year results on 27 March 2024.

Asset Review:

  • FY23 portfolio contribution of $63.6m (2022: $143.2m), with the YoY decline primarily a result of lower production within the Group’s private royalty area at Kestrel as well as a normalization of commodity prices in 2023 from near record levels the previous year.
  • Q4 portfolio contribution was $14.4m (including $5.4m of accrued income released to the income statement following the favourable Four Mile judgment announced on 4 December 2023). On a recurring basis, Q4 portfolio contribution was $9.1m, up 57% on Q3 2023 ($5.8m).
  • The Voisey’s Bay stream produced four deliveries in Q4 (Q3 2023: one delivery) taking the number of deliveries for 2023 to 11 (2022: 19 deliveries), in line with guidance and reflecting the ramp up profile of the underground transition.
  • During Q4 2023, the Group invested $7.5m into Brazilian Nickel’s Piauí nickel-cobalt project, increasing its royalty by 0.35% to 1.60%.
    • The proceeds will primarily be used to finance detailed engineering studies and flow sheet optimization that will further de-risk the project prior to the start of construction.
    • The Group has the right to acquire a further 2.65% royalty over the Piauí project for a consideration of $62.5m. These funds would form part of the construction financing package.
  • During Q4, the Group sold ~60% of its residual stake in Labrador Iron Ore Royalty Corporation (LIORC) realising C$18.9m, a total pre-tax return on investment of c. 110% and a gain on disposal of C$4.1m. The proceeds were used to pay down debt and remain available to fund growth opportunities, including the recent investment into Piauí.
  • Net debt at the end of the period, following these investment activities, was $75m (2022: $36m).

Portfolio Outlook:

  • Production at Kestrel moved back into the Group’s private royalty area at the end of 2023. Saleable volumes produced within the Group’s private royalty area are forecast to be 15-25% higher in 2024 than those achieved in 2023 (c 1.6 Mt) and are expected to be weighted towards Q1, with approximately 75% of the full year volumes in Q1, and approximately 15% in Q4.  Steelmaking coal prices have started the year at elevated levels compared to the previous year.
  • Voisey’s Bay stream is expected to produce between 12-16 deliveries of cobalt in 2024. Between 5-6 deliveries are scheduled for H1 2024, as deliveries will be heavily weighted towards the second half of the year when production from the underground mining operations is expected to ramp up. More detailed guidance for H2 will be provided in the Q2 2024 trading update.
  • Mantos Blancos production volumes are forecast to increase in 2024 due to higher mill throughput with the increase being second half weighted.
  • Capstone Copper is expecting to release a Feasibility Study for the Santo Domino project by mid-2024, with a potential project sanctioning decision not anticipated prior to mid-2025.
  • BHP continues construction of the West Musgrave nickel-copper project in Australia with first production targeted as early as end-2025.
  • Production volumes at the Group’s other royalty assets for 2024 are expected to be broadly in line with 2023 levels.

Post Period Events

  • In January 2024, the Group made the final $9.2m deferred consideration payment to South32 in relation to the royalty portfolio acquired in 2022.
  • Completion of a refinancing of the Group’s corporate debt facilities has increased the borrowing potential to $225m on broadly similar terms to the previous facility.

Q4 2023 Royalty Results

Portfolio contribution – Unaudited(1)

Q4 2023


Q3 2023

FY 2023


FY 2022








Core Portfolio







Voisey’s Bay (cobalt)







Mantos Blancos (copper)






Maracás Menchen (vanadium)






Four Mile (uranium) (3)







Other (copper)






Royalty and stream income







Dividends – LIORC & Flowstream







Interest – McClean Lake













Royalty and stream related revenue














Principal repayment – McClean Lake














Metal streams cost of sales







Total portfolio contribution from core assets







Near term run-off portfolio

Kestrel (steel making coal)







Total near term run-off portfolio













Total portfolio contribution







(1)The portfolio contribution above is unaudited and based on narrow midpoint range, therefore, the actual number reported in the forthcoming annual report may be slightly higher or lower.
(2) Under IFRS 9, the royalties received from EVBC are reflected in the fair value movement of the underlying royalty rather than recorded as royalty income.
(3) Four Mile Q4 revenue includes A$8.1m (US$5.4m) of previously underpaid royalties recognized as a result of  the Appeal being upheld in December 2023

For further information

Ecora Resources PLC

+44 (0) 20 3435 7400

Geoff Callow                      Head of Investor Relations



Gordon Poole / Owen Roberts / Elfie Kent


+44 (0) 20 3757 4997


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 a coal 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).

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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