Ecora Resources Share Discussion Threads

[the deacon] 13/2/2024 21:24

https://www.proactiveinvestors.co.uk/companies/news/1040747/ecora-resources-royalty-over-san-domingo-franked-by-fund-raise-broker-1040747.html"We see the 2% royalty Ecora holds on the Santo Domingo project as the most significant copper royalty within the portfolio," added Peel Hunt."At current copper prices, our estimates suggest that this royalty could generate over US$16m in income for Ecora, placing it as one of the group's more important income streams."On an unrisked basis, our DCF valuation of the project surpasses 35p/share, a significant amount, particularly when compared to Ecora's current share price of 85p."Buy with a target of 190p, is the broker's investment view.

[the deacon] 13/2/2024 19:35

Good post LLB, and I agree with you. ECOR represents good value down here. I'll be honest, I'm not MBL's biggest fan (I've been open about that for a while), but there comes a time (or valuation) where you have to acknowledge that most of the negativity is in the price. Many of the royalty and streamers are offering good value at present. ECOR is one of them.

[andydaf] 11/2/2024 10:36

LLB is always positive and i like that.However after q1 passes and hopefully kestrel pays another 30million off the debt surely then for at least a couple of years income is going to be stuck around 6million per quarter.I would like to add here but i am not convinced that earnings in the short term are going to be enough to cover debt payments and dividends.Share price will probably recover to 160 now i have decided to top up elsewhere.Good luck to all

[laurence llewelyn binliner] 11/2/2024 09:40

#Santos123, this is how the royalty/streaming business model works, we invest 5/10 years before any production to enable a junior to move a project forward through PEA/PFS/DFS/BFS stages, and if the economics are there we double down, Piaui is an example of this as they have proved the pilot plant works and the results meet our criteria to add..

The S32 basket of royalties were already well advanced with WM currently being built by BHP and only 12 months off production..

[santos123] 10/2/2024 19:37

Thank you for the link LLewelyn.

Interesting interview.

Still not convinced it's a great idea to buy the royalties, before the mine is in full production.

I will go the A.G.M. again this year to ask a few questions, that are bothering me.

Anyway thanks for the link.

Stay prosperous.
Santos123.

[laurence llewelyn binliner] 10/2/2024 14:33

A recent Proactive interview with MBL emphasising the potential for growth in the high rate environment we now have where bank debt is hard to get and very expensive..

[pockstones] 10/2/2024 12:40

Reference management previously did not an investor relations and presented themselves answering questions in depth and intelligently now they do employ someone and that is both an additional cost and a poorer messaging outcome.
At this point shareholders are probably right to be aggrieved

[laurence llewelyn binliner] 10/2/2024 10:11

#1Knocker, the BOD just need to keep paying off debt obligations (S32) now complete, reducing borrowings, adding new royalties and building the business out of earnings which is what they are doing..

Waiting for timing and opportunity in the economic cycle with the high interest rate environment when royalties are best value to buy is the correct approach while currencies are strong and commodity prices are are weak.

S32 has now been paid for, Vizcachitas has been added, Piaui has been increased, next we wait for income to buy the next one or further reduce debt..

Kestrel will be adding to Q1 income giving us more scope, rushing into new royalties and not waiting for the bottom of the cycle does not maximise returns and is the wrong approach when we buy to reap the rewards for 15/20/25 years from new project income start up..

[haywards26] 09/2/2024 17:54

It’s the mining sector in general - metals pricing due to current global economic fears..it feels like we around the bottom to me..surely now is the time to be buying metals and commodities for a 5-10 year investment time period…..

[1knocker] 09/2/2024 14:28

Coco, take a look at the Altius SP, or Trident. The whole sector is down. It is not Ecor specific.

As to the management, I really can't say. I have made no secret of the fact that I would like to see more coal, and that I thought the change of name bloody silly, but otherwise I have no particular criticisms.

What needs 'correcting' and what is the 'corrective action' which should be taken?

[cocopah] 09/2/2024 08:42

#1knocker … high purchase price 😂😂😂 not really £1.28 was nowhere near any highs. Fortunately I bailed a lot of shares at b/e! Too many rosy-eyed on here about the current leadership. MBL seems way out of his depth and unable/unwilling to take the corrective action necessary. Dividends are only part of the equation, capital losses are far more damaging.

[1knocker] 07/2/2024 20:11

Short of the wheels coming off in some wholly exceptional disaster, purchasing at under 100p ought to be pretty safe IMO. I increased my holding substantially with purchases in the low 90s and mid 80s.

Nothing is certain. One has to ask oneself whether some other company looks a safer /stronger bet.

[flying pig] 07/2/2024 18:00

LLB
Hope more upside potential than downside at this price

[laurence llewelyn binliner] 07/2/2024 17:29

A nice time to consider doubling down around here for the dividend alone, the tide should turn in the summer as a cut comes into view, just ride it out an mop up the >8% dividends IMO....

High inflation, high interest rates, and now the rate cut outlook can has been kicked a quarter down the road giving us Dollar strength and commodity pricing weakness..

Net debt 31.03.2023 of USD35M
Net debt 30.06.2023 of USD43M
Net debt 31.09.2023 of USD68M
Net debt 31.12.2023 of USD75M

But now we have completed the 6 quarterly payments for the S32 deal we can focus on reducing the debt next as the Ketrel income comes back online in Q1/Q2, then VB ramps up..

FY23 Kestrel income USD 35.9M
Kestrel production within the Groups private royalty area for 2024 is expected to increase 15-25% compared to 2023 with 75% of the income in Q1.

[1knocker] 07/2/2024 16:52

I should like to see more coal investments.
Coal for steel making at any rate (and probably thermal coal too) are going to remain in demand, the banks are unwilling to lend to coal producers (bad for their ESG credentials) and the big cash rich general miners are moving out of the sector for the same reason. So there should be plenty of opportunity to cut highly lucrative deals wkith smal coal miners with limited sources from which to raise capital.

[riskvsreward] 07/2/2024 16:34

It feels MBL’s investment in South32 might have been too big, mistimed and mispriced. It has led to big indebtness and effectively a small cut in dividend

[1knocker] 07/2/2024 15:15

I am sorry to hear about your high purchase price, coco.

I learned many years ago (the hard way needless to say, though fortunately only with a comparatively small purchase) that the Ecor price moves over a very wide range and that it is essential to be patient when buying and not to hesitate to sell when it is high, with a view to repurchasing lower.

The trick, I think, is to note how often it has been under 100, and how often in the high 100s over a decade and more, and buy and sell accordingly. Trading in and out gets one's capital committed down while increasing the size of one's holding, and it is the dividend income as a percentage of capital committed which properly reflects one's personal return on any income holding.

[cocopah] 06/2/2024 09:58

Only another 15p fall to go and ‘his smugness’ a.k.a. MBL will have overseen a 50% fall in my investment. now that takes some real doing! 🫣🫣🫣

[masurenguy] 31/1/2024 07:25

Q4 Trading Update

Ecora Resources PLC issues the following trading update for the period 1 October 2023 to 31 December 2023. This update is released ahead of the Group's audited full year results on 27 March 2024.

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 last year. Q4 portfolio contribution was $14.4m (including $5.4m of accrued income). Net debt as at 31 December 2023 was $75m (2022: $36m).

Marc Bishop Lafleche, Chief Executive Officer of Ecora, commented: "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 imply year-on-year portfolio contribution growth in the year ahead.

In the 4th 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, 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."

[laurence llewelyn binliner] 22/1/2024 17:51

#1Knocker 14.02.2024 for the next one here, the FX works both ways as you say and we did very well when the GBP tanked to almost par, best to take a 10 year view on it rather than spot, but it will not be too far out from 7 pence overall..

We have had mention of a progressive policy too, I look forward to that, when the debt is wound off we will have more FCF, for payouts and for the next acquisitions..

[1knocker] 16/1/2024 13:47

We are stuck with currency movement (sometimes to our advantage, sometimes not) in any stock where the earnings are in dollars. that is to say virtually any commodity based stock. A currency fluctuation in the sterling value of the dividend is merely one facet of that wider consideration.

[grahamburn] 16/1/2024 11:49

The announcement today shows the inevitable volatility of the revised dividend policy in terms of "notional" percentage yield for UK shareholders. The last dividend was "down" and the upcoming dividend is "down" still further.

It's not a major consideration, but if the dollar strengthens still further (or put another way, sterling weakens), then this may grow in significance for UK income seeking investors.

[laurence llewelyn binliner] 15/1/2024 20:35

Ready for the next leg up here after the Q4 update 31.01.2024 with the income lows behind us now, Q4 is guaranteed to double from Q3 on account of the reallocation of Quasar funds already received moving to the income statement.

Net debt of USD68M as at 30 September 2023, excluding a USD9.2M payment to South32 in early October. The final USD9.2M deferred consideration instalment to South32 will be paid in January 2024.

So now that is done and dusted, we can push on and hammer the debt out next..

VB anticipated ramp up from 2024.
Capstone ramp up from 2024

Next dividend income 14.02.2024, very nice too.. :o)

[quepassa] 15/1/2024 19:39

...you couldn't make it up if you tried.

Ecora's URANIUM royalty at McClean Lake is structured in such a way that it is interest only and NOT related the the price of uranium.

This being at a time when spot uranium has hit a 15 year high and has gone ballistic by 150% over the last twelve months from $40 to $100+ per lb...

...and rising.


For a commodity streamer which has apparently been wholeheartedly embracing the Green Revolution for a number of years now, how have they missed this stellar opportunity in uranium with a mere 4% of portfolio invested in this essential Green commodity?


ALL IMO. DYOR.
QP