Ecora Royalties (ECOR) Sidoti September Small-Cap Virtual Conference summary

Business model and portfolio strategy

• Focuses on mining royalties for commodities central to energy transition, such as copper, cobalt, nickel, and uranium, rather than precious metals.

• Royalties are structured as a percentage of mine revenue, providing long-term, inflation-resistant income streams.

• Portfolio is highly diversified geographically, with 96% exposure to OECD countries and low-cost assets.

• Eight producing royalties and several near-term development projects, aiming to double both for greater diversification.

• Operators include major industry players like Vale, BHP, and Capstone Copper, reducing operational risk.

Portfolio evolution and growth outlook

• Historically reliant on the Kestrel steelmaking coal royalty, which will phase out over the next two years.

• Successfully diversified income base, with 76% now in base metals and a growing share in copper.

• Key growth assets include Voisey's Bay (cobalt), West Musgrave (nickel-copper), and Santo Domingo (copper), with significant income expected from 2026-2028.

• Voisey's Bay underground expansion is ramping up, expected to reach steady-state cobalt deliveries by 2026.

• Additional projects like Piaui (nickel) and Nifty (copper) could contribute income from 2025-2028.

Financial position and market valuation

• Trades at a significant discount to NAV (0.4x), compared to peers trading above 1x.

• Net debt stands at $85 million, with substantial borrowing capacity for new acquisitions.

• Focused on adding near-term income-producing royalties to bridge the gap as legacy coal income declines.

• Plans to de-lever over time, using debt primarily for acquisitions with clear paths to repayment.

• Share price is seen as a constraint for growth, limiting the ability to use equity for acquisitions.