Ecora Resources has received a significant boost from a financing deal struck by Capstone Copper, says broker Peel Hunt.
Part of the C$431 million raised has been earmarked for the Santa Domingo project, where Ecora has a 2% royalty in production or development.
An investment decision on the project is likely in 2025 with a feasibility update due later this half year.
“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.