Ecora Royalties (ECOR) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of a copper stream at the Mimbula mine aligns with the strategy to increase copper exposure, diversify income sources, and support a transition away from coal, raising copper to ~45% of NAV.

• Mimbula is a high-quality, low-cost, producing mine with a brownfield expansion underway, expected to quadruple production capacity to 56,000 tons per annum by mid-2026.

• The deal enhances the organic copper growth pipeline, cements copper at the core of the portfolio, and supports a transition to critical minerals.

• The asset is located in Zambia's established Copperbelt, offering strong cash flow potential across commodity cycles.

• The transaction is expected to be immediately accretive to earnings and free cash flow per share, supporting income growth and shareholder returns.

Financial terms and conditions

• Upfront consideration for the stream is $50 million, funded through cash-on-hand and an upsized revolving credit facility now totaling $180 million.

• Stream entitlement is tiered: 4.7% on the first 15,000 tons, 2.5% on the next 15,000, and 1% above 30,000 tons per year, reducing to 1% after 9,150 tons delivered (~7–8 years).

• The stream covers Mimbula's 11-year reserve-based life of mine, with potential for extension.

• Ongoing payments to Moxico are set at 30% of the LME quarterly average copper price for all copper received.

• Expected stream EBITDA is just under $10 million annually at full ramp-up, with IRR estimated at 8%-9% based on consensus copper prices.

Synergies and expected cost savings

• Immediate earnings and free cash flow accretion from year one, supporting material deleveraging within 12–24 months.

• Front-loaded cash flows reduce payback period and volatility in earnings, with payback expected in 6–7 years.

• 80% of the portfolio will be in the lower half of cost curves, enhancing margin stability.