Ecora acquires $20 million Vizcachitas copper royalty, shares active
Ecora Resources Plc [ECOR-TSX, LSE, ECRAF-OTC Pink] said Monday it is spending $20 million to acquire a 0.25% net smelter royalty (NSR) over all metal production from the planned open pit of the Vizcachitas copper project in Chile, owned by Andes Copper Ltd.
The company said the agreement marks a rare opportunity to acquire a royalty over one of the world’s largest undeveloped copper projects located in a well-established mining jurisdiction.
Ecora said the owner forsees first production in 2029, with a royalty rate stepping up in the event commercial production does not occur before June 30, 2030.
Estimated annual copper production from the site is forecast to be 183,000 tonnes in the first eight years with an average of 153,0000 tonnes over the life of the mine. Ecora said the transaction will be funded through a combination of cash at hand and a drawing down of the group’s revolving credit facility.
Ecora shares were active on the news, easing `1.9% or $0.04 to $2.08 on volume of 813,000. The shares are currently trading in a 52-week range of $2.84 and $1.92.
Ecora is a London Stock Exchange non-precious focused royalty and streaming company. Rather the company is focused on commodities which support a sustainable future.
Prior to Monday’s announcement, the company had 18 principal royalty and streaming assets across five continents in countries that include Canada, Brazil, Chile, Spain, Australia and the U.S.A.
Its portfolio includes a 22.82% stream on Vale SA’s [VALE-NYSE] Voisey’s Bay nickel mine in Labrador, as well as a 22.5% toll mining revenue stake in Cameco Corp.’s [CCO-TSX, CCJ-NYSE], McClean Lake uranium mill in Saskatchewan.
In 2022, the company reported portfolio contributions of $143.2 million, an increase of 67% from 2021. The company attributed the increase to stronger commodity prices for the majority of 2022.
Ecora CEO Marc Bishop said 2022 was an outstanding year for Ecora. He said the company achieved record portfolio contributions for the second year running. “We completed the acquisition of a high- quality development-stage copper nickel royalty portfolio from South32, further aligning our commodity exposure to the energy transition thematic, as well as recasting the company as a growth story,” he said.
“Our revenue derived from future facing commodity royalties now has the potential to grow over the medium term from $33 million in 2022 to above $100 million.’’
The Vizcachitas project is located approximately 120 kilometres north of Santiago, within Chile’s prolific copper belt alongside the large-scale producing Los Pelambres, Los Bronces and Rio Blanco-Andina and El Teniente mines.
A pre-feasibility study is based on 1.2 billion tonnes of mineral reserves at 0.40% CuEq (copper equivalent). On top of that is a measured and indicated resource 1.5 billion tonnes, grading 0.44% CuEq, and 1.8 billion tonnes of inferred resources at 0.38% CuEq.