Ecora Resources confident despite half-year loss

(Sharecast News) - Ecora Resources reported a swing to a half-year loss on Wednesday, putting the performance down to the timing of mining activity at its key Kestrel steelmaking coal royalty. The results were contrasted by strong growth in its base metals portfolio, which the London-listed company highlighted as a successful part of its ongoing strategic pivot towards critical minerals.

For the six months ended 30 June, the royalty and streaming company recorded a loss before tax of $10.9m, compared to a profit of $17.9m in the first half of 2024.

The total portfolio contribution fell to $17.9m from $51.3m year-on-year, driven almost entirely by the Kestrel royalty generating just $3.5m, down from $40.8m.

Net debt increased to $124.6m following the acquisition of a copper stream.

An interim dividend of 0.6 cents per share was announced.

"The continued growth from our critical minerals portfolio is the highlight of these results, with our base metals portfolio delivering an 81% increase in contributions compared to the same period last year," said chief executive officer Marc Bishop Lafleche.

"This growth has been driven by the strong on-going ramp up at Voisey's Bay, the acquisition of a copper stream over the producing Mimbula copper mine, and record performance at the Mantos Blancos copper mine."

Lafleche said the company was "delighted", post period end, to unlock significant value through the sale of the non-core, development stage Dugbe gold royalty, with total consideration of up to $20m.

"The $16.5m we will receive at close enables us to accelerate the group's deleveraging and provides further flexibility to acquire cash generative royalties in our targeted commodity basket in time.

"2025 is proving to be a significant year for Ecora as we continue to pivot towards a revenue profile underpinned by a growing critical minerals portfolio, with copper at its core."

The firm explained that mining operations at Kestrel were outside of its private royalty area for the majority of the first half.

However, activity returned to its area at the end of the second quarter, and was expected to remain there for the rest of the year, leading to a much stronger contribution in the second half.

Full-year production guidance for Kestrel remained unchanged.

In contrast, the base metals portfolio contribution grew 81% to $8.7m, boosted by higher volumes from the Voisey's Bay cobalt stream and the Mantos Blancos copper mine.

Looking ahead, Ecora said it expected the growth from its critical minerals assets to continue and has narrowed its full-year guidance for its Voisey's Bay cobalt stream upwards.

Combined with the anticipated stronger contribution from Kestrel, the company said it expected increased cash flow in the second half to enable further reduction of net debt by year-end.

At 0915 BST, shares in Ecora Resources were up 5.31% at 78.98p.

Reporting by Josh White for Sharecast.com.