Ecora Resources PLC (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF) reported a pick-up in income in the final quarter of 2023 as operations moved back into its royalty areas.
Total income for the year came in at US$63.6 million (US$143.2 million) due to less production from its royalty at Kestrel in Australia and lower commodity prices generally.
Fourth-quarter income was US$14.4 million compared to US$5.8 million in the previous quarter, including US$5.4 million of accrued income.
Net debt on 31 December 2023 was US$75 million (2022: US$36 million).
Marc Bishop Lafleche, Ecora’s chief executive, 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 the second half, and other volumes across the portfolio are expected to be ahead or in line with last year.
“Current commodity price levels would imply year-on-year portfolio contribution growth in the year ahead.”
Ecora acquired an incremental royalty interest over the Piauí project for US$7.5 million during the quarter, money that operator Brazilian Nickel will use to de-risk the project by undertaking detailed engineering studies before project construction, Bishop Lafleche added.
“This was financed by recycling a portion of our LIORC holding in the quarter, which realised a 110% total pre-tax return on the investment,” he added.
Looking further ahead, Bishop Lafleche sees the mining sector facing underinvestment and a challenging market backdrop.
“We anticipate these conditions will persist over the next 2-3 years, during which royalty financing should be a highly attractive source of capital.”
Separately, Ecora added it had extended its US$150 million revolving credit facility agreement with its existing syndicate of Scotiabank (TSX:BNS), CIBC and RBC, with an accordion to take the total funds available to US$225 million.