New capital allocation framework positions Ecora firmly for Energy Transition growth

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Ecora Resources PLC CEO Marc Bishop Lafleche discusses the company’s transition away from its Kestrel royalty and its impact on the company’s 2023 financials, highlighting periods of variable mining activity within the orchestral royalty area.

In an interview with Proactive’s Stephen Gunnion, Bishop Lafleche said this transition is part of a broader shift towards future-facing commodities, resulting in volume growth across the company’s portfolio excluding Kestrel.

Despite this, strong metal pricing has continued to make cash flow from royalties a significant revenue source. For 2024 and 2025, volume growth is expected across various assets, including Kestrel, Voisey’s Bay, and others, contributing to the company’s growth.

Bishop Lafleche said the current challenging market for mining companies presents opportunities for Ecora, especially in leveraging the royalty partnership model as a mainstream funding source. This dynamic allows Ecora to grow and diversify its business while maintaining a disciplined investment approach and a high-quality asset base.

Ecora also announced an updated capital allocation framework, including a change in dividend policy, emphasizing growth, balance sheet strength, cash dividends, and share buybacks. The share buyback program is seen as a strategic move to capitalize on the current discount to estimated net asset value, recycling capital effectively.

Development projects remain a significant part of Ecora’s value proposition, with a shift from nearly all assets being income-producing in 2015 to a more diversified asset base today. The company expects de-risking events and operating updates to provide clarity on income generation from these assets in the near future.

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