Ecora Resources' royalty over the Vizcachitas project in Chile gives it access at a relatively early stage to an asset it might potentially struggle to enter later down the line, says broker Peel Hunt
Vizcachitas is a large-scale, low-cost copper-moly porphyry development, with reserves estimated at 1.2Bt 0.4% copper equivalent, or 26 years of production at an average 153,000tpa, with upside potential.
Peel Hunt adds this latest acquisition builds out Ecora’s copper development portfolio in the medium to long term, ready for a step-change in demand as the energy transition process accelerates.
Ecora has partially mitigated the potential for project delays (common in Chile) by structuring the royalty rate to increase through an option for vendor Los Andes to make a cash payment instead for each year the project is late (out to 2032).
Buy with a 200p price target is the broker’s view.