Ecora Resources PLC's (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF) interim profits after tax at US$11.5 million were significantly higher than expectations, says broker Peel Hunt.
A lower-than-expected impairment of the Kestrel coal royalty plus a positive revaluation of other royalty financial instruments helped the numbers with a net gain of $8.5 million.
At a 33% payout of free cash flow, the dividend ratio was also well ahead of well ahead of the 25% assumption by the broker.
Over the remainder of the year, Ecora’s income will be dominated by its future-facing portfolio, aided by the ramp-up coming at Voisey’s Bay.
Trading at 0.38 times book value, vs a 0.6-1.6 times historic range, means points to real value in Ecora shares, adds the broker.
“Over the next months, we expect further clarity over the Santo Domingo project, as well as the Piaui option.
“Between them, the two projects contribute a little over half our risked development NAV.”
Buy with a target price of 149p is the broker’s view against the 58.8p spot price.