Ecora Resources PLC (LSE/TSX: ECOR) issues the following trading update for the period 1 January to 31 March 2023.
Highlights:
Portfolio contribution of $29.6 million, up 66% on Q4 22 due to a combination of strong steel making coal prices and higher saleable production from Kestrel, with c. 850,000t derived from the Group’s private royalty area
Copper, vanadium, and uranium prices are all up year to date. Cobalt prices recovered from a low of $15.6/lb in February to $17.0/lb in April – the medium and long term outlook for cobalt remains positive
Construction of the West Musgrave copper nickel mine continued whilst the BHP takeover of OZ Minerals is scheduled to complete on 2 May 2023
Three cobalt deliveries were received from Voisey’s Bay during the period at an average realised sale price of $17/lb. Planned maintenance operations scheduled for Q2 will impact production at Voisey’s Bay with calendar year 2023 cobalt deliveries substantially weighted to the second half
Transition to the Voisey’s Bay underground mining activities progressing on schedule for ramp-up in 2024
Maracás Menchen ilmenite concentration plant scheduled to complete in Q2 2023 with first sales expected in 2024
Net debt at 31 March was $35 million, providing the balance sheet flexibility to pursue further growth
Under IFRS 9, the royalties received from EVBC are reflected in the fair value movement of the underlying royalty rather than recorded as royalty income.
The Group remains in discussions with the operator of EVBC in light of the sustained margin pressures and operational constraints of the mine. While negotiations are ongoing, the royalty remains in full force and effect and the Group continues to accrue the unpaid royalties for the period 1 July 2022 to 31 March 2023.
Marc Bishop Lafleche, Chief Executive Officer of the Company, commented:
“The portfolio delivered in-line with our expectations for the quarter. Over the next twelve months the producing royalty portfolio is expected to deliver organic growth at Mantos Blancos, Voisey’s Bay and from the Maracás Menchen ilmenite plant. In the second half of the year we also expect to see a number of key milestones at development projects including Piauí, Santo Domingo and Mantos Blancos Phase II.
“At West Musgrave, we are delighted that we will have BHP, one of the world’s largest diversified mining companies, as a partner during the construction of the copper-nickel mine and its subsequent operation over an expected 24 year mine life, with further production as well as life-of-mine extension upside potential.”
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