Ecora Resources PLC (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF) reported record results from its portfolio as it benefited from stronger commodity prices for the majority of the year, with the new year also starting strongly.
There was a portfolio contribution of US$143.2mln in 2022, up 67% on the year before, while royalty and metal stream-related revenue rose 66% to US$141.9mln.
Adjusted earnings increased 67% to US$87.9m and profit before tax leapt 147% to US$135.4mln.
Net debt was slashed to US$36mln by the end of December from US$90mln 12 months earlier, thanks to strong cash generation, with the board declaring a final dividend of 1.75p per share which lifts the total to 7p per share, as guided.
From the first quarter of this year, the dividend is to be rebased using a 12-month average sterling exchange rate of 1.21, meaning the 7p per share dividend will be converted and rounded up to 8.5 US cents per share, resulting in quarterly payments of 2.125 cents per share.
The board noted that copper, steel-making coal, uranium and iron ore pellet prices have all started 2023 strongly.
While cobalt and nickel prices have weakened so far this year, reflecting increased supply and a reduction in demand for consumer electronics, Class 1 nickel markets "remain tight", Ecora said, "and the medium-long term outlook for both commodities remains strong".
Around the portfolio, Kestrel saleable volumes are expected to be primarily weighted towards the first and fourth quarters, with total saleable volumes from the group's area approximately half of last year, while the Voisey's Bay stream is expected to generate 13-15 deliveries of cobalt compared to 19 received in 2022, while the underground mine life extension is expected to ramp up from 2024.
After Capstone Copper announced commercial production following the Mantos Blancos Phase I expansion, it is now evaluating the potential to increase throughput of the Mantos Blancos sulphide concentrator plant from 7.3mln to 10mln tonnes per year, with a Phase 2 feasibility study expected in the second half of the year.
Ecora said it remains in discussions with the operator of EVBC following recent margin pressure, and it is likely that in the short term a portion of cash royalties, including H2 22, will be deferred until a later date.
Production volumes at its other royalty assets for 2023 are expected to be broadly in-line with 2022 levels and noted that it retains "a strong balance sheet from which to pursue future growth opportunities as we continue to transition our portfolio towards future facing metals".