Elemental Royalty (ELE) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 57% year-over-year to $3.7M, with adjusted revenue at $4.8M and adjusted EBITDA up 72% to $3.7M; adjusted operating cash flow increased 44% to $2.8M.

• Record EBITDA margin of 77% achieved, with net profit of $0.6M reversing a prior loss; net cash position reached $20.1M and $50M in available liquidity.

• Completed AlphaStream acquisition, doubling key royalties and adding 21 Australian exploration royalties; portfolio expanded with lithium and tungsten assets.

• Portfolio underpinned by established, revenue-producing assets with significant exploration potential and near-term catalysts from new and expanded royalties.

• Completed sale of 95% of Altau Holdings, recognized a $0.1M gain and received new royalty interests.

Financial highlights

• Adjusted revenue up 32% year-over-year to $4.8M, driven by higher gold prices and asset performance; total Q3 2024 revenue was $3.7M, up 57%.

• Adjusted EBITDA for Q3 2024 was $3.7M, a 72% increase; net profit from continuing operations was $0.6M.

• Operating cash flow after working capital adjustments was $2.8M, up 44% year-over-year; free cash flow for the quarter was $2.5M.

• Gross margin and EBITDA margin continued to improve post-merger, with Q3 2024 EBITDA margin at 77%.

• G&A expenses considerably lower year-over-year after monetizing the royalty generation business.

Outlook and guidance

• 2024 adjusted revenue guidance set at $21.6M–$23.1M; gold equivalent ounce guidance for 2024 reduced to 9,000–9,500 due to delays at Korali Sud (Diba).

• Pro forma 2025 revenue expected at $37M, driven by AlphaStream and Korali Sud contributions.

• Significant organic growth expected in 2025 and 2026 from cornerstone assets and new royalties.

• Subsequent to quarter-end, acquired full ownership of Alpha 2 and Alpha 3 SPVs, adding 24 royalties including producing assets.

• Completed $12.8M private placement and increased credit facility to $50M, with $30M undrawn.