Ecora Resources: Critical Minerals Royalties

Ecora’s royalty model continues to blend inflation protection, revenue upside, and low operating risk. Voisey’s Bay cobalt throughput hit 93.7% over 90 days, driving record $6 m quarterly contribution (up 122%) and reaffirming Ecora’s low-risk exposure to production growth. Base-metal royalty income reached an all-time high of $9.9 m in Q3, up 87% quarter-on-quarter as Mantos Blancos and Mimbula ramped. Royalties tied to revenues, not costs which continue to offer structural inflation protection and scalable margin expansion

Ecora’s portfolio remains tightly aligned with global electrification and decarbonisation trends, with ~80% of assets now linked to base metals such as copper, cobalt, and nickel. Q3 2025 base-metal income surged 81% YoY to $9.9 m, led by record performances at Voisey’s Bay and Mantos Blancos. The sale of the non-core Dugbe royalty sharpened Ecora’s critical-minerals focus while accelerating deleveraging. Over 75% of royalty assets remain anchored in stable jurisdictions like Brazil and Zambia, limiting geopolitical risk. With Santo Domingo’s JV progress clearing the path to a final investment decision in 2026, Ecora’s strategic alignment with the energy transition is deepening.

Despite strong progress, Ecora’s shares still trade at a meaningful discount. The valuation gap reflects lingering concerns over legacy coal exposure, even as the portfolio transitions toward copper, cobalt, and nickel. With Kestrel output easing and base-metal contributions doubling year-on-year, the portfolio mix is rapidly shifting toward growth. Q3 2025 delivered a record $25 m portfolio contribution, up 112% quarter-on-quarter, driven by base-metal strength and Kestrel’s return to Ecora’s private royalty area. Net debt fell to $104 m by September (-30% since Q1) following Dugbe sale proceeds. With disciplined capital allocation and dividends steady at ~25% of free cash flow, Ecora enters 2026 with a stronger balance sheet and clear deleveraging momentum.

• Base-Metal Momentum Accelerates: Q3 2025 delivered record $25 m portfolio contribution (+112 % QoQ), driven by strong Voisey’s Bay and Mantos Blancos performance and first steady contribution from Mimbula.

• Dugbe Sale Boosts Deleveraging: The $20 m sale of the non-core Dugbe gold royalty (including $16.5 m upfront) cut net debt to $104 m by September, providing financial flexibility for new royalty opportunities.

• Copper Market Tailwinds: Tight supply and sustained demand for critical metals continue to favour Ecora’s copper-heavy portfolio, supporting cash flow visibility through 2026.

• Santo Domingo JV on Track for FID 2026: Capstone’s JV with Orion remains a key medium-term driver. The binding agreement clears the path to a Final Investment Decision in H2 2026, with Ecora’s 2 % NSR royalty expected to generate $30–35 m annual revenue post-start-up.

• Voisey’s Bay Cobalt Delivers Record Quarter: Q3 2025 contribution jumped 122 % to $6 m as throughput held steady at 93.7 % over 90 days. Stable operations and higher realised cobalt prices ($18.13/lb) reinforce growth visibility through 2026.

• Mimbula Ramping Smoothly: Copper output of 150 t in Q3 marks steady progress toward target capacity and supports base-metal cash flow expansion.

• Steady-State Output in Sight: Mimbula and Mantos Blancos remain on track for full steady-state production by 2026–2027, cementing Ecora’s base-metals dominance and consistent cash flow profile.

• Growing Mimbula Contribution: Q3 2025 delivered $1.1 m from Mimbula (+120 % QoQ), reflecting 150 t of copper attributable to Ecora. Steady ramp-up and higher prices are expected to significantly enhance free cash flow and accelerate deleveraging through 2026.

• Long-Term Critical-Minerals Exposure: With ~80 % of the portfolio now weighted to base metals and uranium, Ecora is positioned for multi-cycle growth aligned to global electrification and supply-chain security.

Ecora’s earnings remain tied to commodity trends, notably copper, cobalt, and nickel. Q3 2025 resilience was supported by tight cobalt supply (DRC export quota limits) and strong realised prices at Voisey’s Bay ($18.13/lb). Yet, markets remain volatile, and any extended price weakness could still weigh on cash flow, dividends, and debt reduction progress. The portfolio’s low-cost positioning and broad exposure, spanning stable jurisdictions and rising critical-minerals demand, provide partial insulation. Nonetheless, Ecora will retain moderate sensitivity to base-metal cycles, consistent with its royalty-based earnings profile.

Execution at Voisey’s Bay, Mimbula, and Mantos Blancos remains central to Ecora’s growth outlook. Q3 2025 saw Voisey’s Bay contribution rise 122% to $6 m, validating steady-state delivery and reducing operational risk at this asset. Remaining focus areas are Mimbula’s ramp-up to full-year guidance of 500–560 t cobalt equivalent and the ongoing optimisation of Mantos Blancos’ processing performance. Mantos Blancos continues to address bottlenecks with incremental gains, while Mimbula’s copper production ramp of 150 t output in Q3 which remains the key variable for cash flow timing. Any operational slippage could delay deleveraging progress, though recent Dugbe proceeds and record $25 m quarterly portfolio contribution have strengthened liquidity buffers.

Following the $50 m Mimbula acquisition, Ecora’s net debt fell to $104 m by 30 September 2025 (from $124.6 m in June) as Dugbe sale proceeds accelerated deleveraging. The balance sheet now supports improved liquidity and greater headroom under its $180 m RCF, though management remains focused on reducing leverage further over the next year. Stronger cash generation of $25 m and portfolio contribution in Q3, positions Ecora to meet its debt targets faster, but commodity price or production setbacks could still moderate the pace of reduction. Management’s priority remains disciplined capital allocation over buybacks until leverage reaches structural lows.