Ecora Resources PLC (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF) said it expects a number of key growth milestones to be achieved in its near-term development portfolio, while the overall portfolio continues its transition phase and one-off factors resulted in a lull during the latest quarter.
For the third quarter of the year, the royalty group reported a portfolio contribution of US$5.8 million compared to US$14.7 million in the second quarter and US$34.1 million a year ago.
This reflected operations at Kestrel in Australia mainly being outside the group's private royalty area, with 60,000 tonnes of attributable coking coal contributed from within the period, while a maintenance period at Voisey's Bay restricted deliveries of the cobalt stream to one delivery, or 14 tonnes.
Voisey's Bay has three deliveries scheduled for the fourth quarter, Ecora said, keeping it in line with guidance for the current year, before an anticipated ramp-up in 2024.
At Kestrel, the group said production is expected to move back inside its royalty area towards the end of the fourth quarter, driving a “material increase” in volume in the first half of 2024.
"The third quarter was very much in line with our expectations and reflective of the transition phase of the portfolio,” said chief executive Marc Bishop Lafleche, adding that he hoped to see some positive news flow from other portfolio assets during the remainder of the year.
Mantos Blancos, the copper project in Chile, for example, is expected to see higher throughput rates in the second half of 2023 and to be fully ramped up to capacity at year end, operator Capstone Copper announced in August.
One acquisition was completed in the quarter, with the purchase of a royalty at the Vizcachitas copper project in Chile.
Looking forward to the next few quarters, Bishop Lafleche said more income volatility is expected as mining at Kestrel moves in and out of the private royalty area, and with the latest information suggesting the next material volumes are due to come in the first quarter of next year.
“Steelmaking coal has been one of the stand-out commodity performers in FY 23 and should prices remain elevated this would boost earnings in FY 24,” he said.
Net debt was US$68 million at the end of September, with a US$9.2 million payment made to South32 in early October, the penultimate payment before the final US$9.2 million deferred consideration is due to be made in January 2024.