Hello, welcome to Virtual Investor Conferences. On behalf of OTC Markets, we are very pleased you've joined us for the second day of our Precious Metals & Critical Minerals Conference. The next presentation is from Ecora Royalties. Please note you may submit questions for the presenter in the box to the left of the slides. You can also view a company's availability for one-on-one meetings by clicking Book a Meeting. At this point, I am very pleased to welcome Geoff Callow, Head of Investor Relations of Ecora Royalties, which trades on the OTCQX Best Market under the symbol ECRAF and on LSE and TSX under the symbol ECOR. Welcome back, Geoff.
Why, thank you, and hello, everybody. Thank you for your time this afternoon or in London, this morning, wherever you are in North America. I'll take you through the story of Ecora Royalties, tell you why we are so excited about this business at the moment, and leave you with some time for Q&A at the end. We'll move very quickly past the disclaimer, which you can read at your leisure. Why Ecora? Why are we interested? Why are we excited about Ecora? Well, Ecora is a royalty company that does not play the precious metal space, so that's a real differentiator for us. I'm sure you're all very familiar with the plethora of royalty companies covering the precious metal space. We are very deliberately taking that proven business model and applying it to the critical minerals basket.
The reasons why we're doing it for critical minerals is because we just think there's some real megatrends there. If you look at electrification, if you look at AI, if you look at robotics, data centers, these all play into that critical minerals thematic. We think there's gonna be continued increase in demand here, which means it's a great way for investors to get access to that basket of critical minerals through that royalty model, which is not really readily available elsewhere. Copper is at the heart of our portfolio. It's around 50% of our NAV. We've taken a long time to build this up. It's taken us 10 years to build this portfolio of copper up. That's something we will continue to have at the heart and the center of this business going forward.
We are a relatively small company, and we're still building awareness of us, ourselves, particularly in North America, but we've been in existence for some time. We have a cash producing portfolio of nine royalties, which last year generated around $60 million of revenue. Well, we're a reasonably sized business and starting from very solid foundations with some very blue chip operators who I'll talk you through in a moment. The thing that really excites us is we're in a bit of a transition point, an inflection point, which I'll look at in a second. We've got a really strong organic growth profile as well to take this business from around $60 million of revenue last year to over 100 on analyst forecast by the end of the decade.
The management's built up a track record of successfully sourcing, diligencing, structuring, and executing on royalty transactions over the past 10 years. We call 2020-2025 a landmark year, and what I mean by this is the transition this company's been on. As I said a few moments ago, Ecora has been around for some time. If you look at us in 2015, we've been predominantly a coal business. That light blue there you can see is the composition of portfolio contribution. It's our proxy for sort of revenue. In 2015, it was about 75% coming from coal. That was one main asset in Australia called Kestrel, and we knew that that asset was gonna depleting and would move out of our private royalty area by around the middle of this decade.
This year is the last material year of contribution from Kestrel. What we've been doing over the last 10 years is taking those coal cash flows and redeploying them into building this critical minerals portfolio. In 2025, it was a real inflection point. As you can see here, it's the first year when that darker blue from the critical minerals were made up the vast majority of the income, with it being about 65%, 70%, and the coal was in the minority. You can see that trend continuing as we go out towards the end of the decade. That is, as I say, as you get to 2030, a revenue profile which will be bigger than it is in 2025 as well.
We're really pleased that now to see this transition that we've been talking about for some time really coming through now in our financial reporting. I think the other thing which is lost, perhaps it's a subtle point, but is really important in driving the re-rating and why we think it's an excellent time for people to be looking at Ecora, is the fact that if you think about the rating, those earnings was applied to those earnings when they were short-dated met coal, it was quite punitive 'cause the quality of earnings was not great, knowing that, A, it was a commodity that's not particularly in focus, and B, there was a relatively short timeline, a few years left on those earnings.
We've transitioned that into a portfolio of critical minerals, which attracts a higher multiple and higher rating than coal generally, these are mines that have decades left to run. The quality of earnings have changed considerably, that's again another reason why we're really excited about where we are as a business. A quick snapshot of the portfolio. I won't dwell on this for too long. I'd say 80% best base metals and 50% copper, as you can see in the top left. We don't take much geographic risk, 85% is OECD or Brazil, which is a, you know, well-established mining jurisdiction. Of the rest, Zambia is also a very well-established mining jurisdiction. Top right is worth dwelling on for a moment. Cost curve positioning. This is something which is essential to us when we're analyzing new investments.
As a royalty company, you know, we're making 20, 30-year investments, so we need to make sure these projects sit very low on the cost curve and have a lot of margin built into them to withstand whatever sorts of shocks might come during that period. Equally, if it's a development project, if it's low on the cost curve, it'll be the first project to attract capital and help it move forwards. We've got a real balance now in the stage of development. If you looked at this in bottom line 10 years ago it was 85%, 90% producing. We think we've got a nice balance now with about half of our royalties in producing and the rest in development and early stage. I mentioned a moment ago the quality of our operating partners.
You can see there some of the names that we have, operating the mines were very familiar to a North American audience. Vale, Capstone Copper, BHP, Cameco, NexGen, Fortescue, you know, some really well-established leading world-leading mining companies. The operating exposure, although we're a small cap company, the operating exposure you get through Ecora is very much to some of the world-leading mining companies. Our portfolio is listed here. I won't dwell on this or go through them one by one. You can see the kind of nine producing royalties here. Then we've got a series of development royalties coming in behind that, and then some earlier stage. There's layers to our growth profile, which we're really pleased about. One or two I'll dwell on in the producing royalties.
If you look at Voisey's Bay, that is a cobalt stream on Vale's mine in a nickel mine in Canada. That is a project which was ramped up considerably over the last 12 months. We saw a more than doubling in the cobalt volumes that we received from that mine in 2025, and we expect further growth this year of 12%-25% in terms of the volumes that we receive. That's a producing asset that is actually still generating growth for us this year and into next year as it hits steady state production in the second half of this year. We've also seen the benefit of a cobalt price tailwinds there. The price has gone from around $13 per pound at the start of last year.
'Cause it's an alloy grade product that we get priced off, we're actually seeing just under $ 30 per pound today. We've seen volume and pricing growth there. Mantos Blancos, if you follow Capstone Copper, very high quality mine they have in Chile. That had a record year last year, and we benefited very strongly from that. In Q1 last year, we acquired a copper stream over a project called Mimbula in Zambia, which again, this is a project which is already in production but is ramping up. In 2024, production was around 14,000 tons per annum, and it's ramping up towards 56,000 tons per annum in the next couple of years. That's one that's generating income today, but is growing further over the coming years.
I'll point to a couple of developments, and I'll talk about these in a second and tell you what to look out for. The Santo Domingo, again, if you follow Capstone, you'll be very familiar with this project. This is a project which should be FID. According to Capstone, their target is for Q4 this year. At current copper prices, that's worth around $35 million-$40 million a year to us when it comes into production. A very, very meaningful royalty for Ecora. West Musgrave is another project which has significant potential. We have a rare earth exposure, which is clearly very topical in North America right now through Phalaborwa. This is a project in South Africa which it hasn't actually got any primary mining. It's mining or it's actually treating stacks, tailing stacks from an old phosphate mine.
The risk profile and the margin in this project is very, very strong. The risk profile is very low, the margin is very strong, and the speed to market is very fast. Rainbow Rare Earths are doing a very good job of bringing that project forward, and we're expecting to see a the next study come out on that later this year. That should hopefully be into production in the next couple of years. It's very well-positioned in the current marketplace, I say, with all the sentiment around rare earths and people looking to stockpile them. Finally, in the early stage, just one I'll draw your attention to. This isn't just a growth profile that goes out for the next sort of four to five years.
If you follow NexGen at all, Patterson Corridor East, it is not their kind of Rook I Arrow deposit, which they are currently in the process of developing, having just received the permitting. It is the drilling they have been doing next door, They have drilled some spectacular results by their own, in their own words. They think it is sort of commensurate what they saw in the Arrow project next door. We have a royalty over Patterson Corridor East, That could be very valuable to us as we look out into the next decade. If you put all that together for a second, I will give you a feel for how that plays through into our income. I have talked about growth a few times. What you can see here is I think where the market was focused two or three years ago was the gray.
The gray is the old revenue principally coming from coal. In 2020, as you can see, it was about $50 million at group level, and less than $10 million was coming from the critical minerals, which is the blue being the Specialty Metals and Uranium, and the green, which is the Base Metals. We were seen really as a coal runoff business with this gray diminishing. What we've been saying to people is actually it's a fast-growing critical minerals business, and that $10 million in critical minerals in 2020 was up to just about $35 million last year. We see further growth in that this year, and that's what will be on the end of the decade, it should be up at $ 100 million.
The hashed bars here in the green represent the growth projects I talked about, and that's the analysts' kind of risk view on when those will be coming into production. There's various different risk profiles or different timelines that make that up. What we're trying to do on the right-hand side here is just show you our exposure to commodity prices. We are a nominal business, and by that I mean when they price these, they price them in real terms, but Ecora does not get impacted by inflation. We take our revenue from the top line, from the revenue of the mine, so we take a percentage of the revenue from the mine. That means that in times of inflation, if commodity prices go up, whilst the operators might get their margin squeezed, we see the full benefit of those increases in commodity prices.
Today, the copper price is around $ 6 per pound, that 2030 number is based off a long-term analyst price of $ 4.80. You can see if we just have inflation, let alone any sort of real growth in the copper price, we could see quite significant upside. You can see how the talk that we have to that here, where we could easily see a sort of $ 6 or above, another $ 20 million, $30 million, $40 million coming onto that revenue stream in 2030. We have quite a lot of talk there to the copper price. We're not required to deploy any further capital into our portfolio to realize this growth profile. Everything we see here has already been invested and paid for from our perspective.
There are some very near-term catalysts, I'll run through these quite quickly. We see, as I say, layered growth to this business now. We've got producing assets that are ramping up, Voisey's Bay and Mimbula, which I touched on. We have brownfield expansions. Mantos Blancos Phase II is a good example of that. Capstone's hoping to publish a study in Q3 which details the opportunity there to increase production from some relatively low risk incremental projects that can take production up by about 40,000 tons per annum from a project that did around 60,000 tons last year. Quite a meaningful step forward in production, and Capstone will be releasing more information on that hopefully in Q3. Santo Domingo FID, Capstone targeting that in Q4. Some really meaningful catalysts coming through in the second half of the year.
Phalaborwa, the DFS there, definitive feasibility study due before year-end. We're starting to see the timelines towards some of these projects be de-risked, I think, as we go through the year and get more information from some of the operators. I won't dwell on this slide, it just shows you our kind of organic copper growth profile. You know, we were down with just Mantos Blancos this time last year at about 2.5 million pounds of attributable production to Ecora Royalties. We can see a very clear pathway to sort of increasing that 10 x over the next decade as these projects come through. We think we've got really material copper growth and probably offer more copper growth than any other royalty company.
I talked at the start, and I won't dwell on this slide too much, but I did talk about the fact that, you know, we are offering it in a, in a royalty model in a different commodity basket. You can see at the bottom here how congested the precious metal side of things is compared to the diversified critical minerals, which you can see at the top. We really do see Altius is probably our main peer or our main comp. Altius is a fantastic business, but they trade on a much higher multiple to Ecora. I think that's the opportunity for us today, is to close that ratings multiple gap and improve the rating of Ecora and close that sort of gap in terms of where we sit with Altius.
We do see that when we look for business and we look for new deals, we are not competing head-to-head with any of these companies. Everything we have done to date has been on a one-to-one basis, whereas in the precious metal space, it's hugely competitive and really about the lowest cost of capital. There's still plenty of space and plenty of opportunity and enough deal flow in the diversified critical minerals section for us to be able to negotiate, I say, deals one-on-one, and that's historically what we've done, which enables us to capture more value. You can see our track record here of capital allocation. I will let people sort of look at this in their own time. Suffice to say, we've got the acquisition price on the left, if we take Maracás Menchen as a good example.
We've received $30 million to date from a $25 million acquisition price. The analysts are still forecasting there's $28 million of NAV in that project today. We're just giving you a sense for how that then looks in terms of the return we generated. You we're really pleased to see that everything we've done to date is positive, and we've not lost money, which is very easy to do in the mining sector. Even projects like West Musgrave, which has been delayed slightly, has actually seen an increase in value due to the copper price. That's a really important thing for us, is entry prices when we do transactions. West Musgrave we acquired in 2022 along with Santo Domingo.
We acquired that assuming a long-term copper price of around $ 3.30, $ 3.40. As I say, today, the spot price is about $ 6. We've seen, you know, value appreciation there and NAV appreciation despite the fact that project has been delayed slightly. I've mentioned a couple of times now, I think we trade at an attractive entry point relative to peers, this is just some data points that can back that up. You know, Ecora on a P/NAV basis, we trade at about 0.6x, 0.7 x our risked NAV. If you compare that to the other peers like Evolve and Deterra, it's a significant discount. If you look at Altius, which we think is our closest peer, they're at about 1.4 x. We see two real drivers for a re-rating at Ecora.
One, you've got that sort of just a growing income profile, up to $200 million by the end of the decade. As we think the quality of earnings comes through and people get confidence in that, we should see an improvement in this sort of P/NAV multiple and take us back to just over 1x, which is certainly the baseline you'd expect for most royalty companies. That has, you know, significant opportunity for us to re-rate further and see material capital appreciation. If you look on an EV / EBITDA basis, our EBITDA is actually very similar to Altius. If you look at analyst numbers, we're trading at around 10 x, they're around 35 x. Again, free cash flow yield, we are on a kind of high yield at about 8.5%.
We do think there's still despite the fact the shares have had a very good run, we still think there is a long way to go. It's just a factor of how low when we were trading at 0.4 NAV at parts of last year, just because of that we were seen as a coal runoff royalty company. Now I think the market's actually starting to see us as a critical minerals and a growing critical minerals royalty company, which is what makes it so exciting for us. The share structure, there's no warrants or anything like that. It's very clean. The institutional shareholders, the largest are Aberforth, which is a Scottish institution, and Schroder, who's probably a name you're more familiar with, the U.K. money manager.
There's a number of other institutions which have smaller holdings. South32, the mining company, is the biggest shareholder. We issued them equity as part of the consideration for the acquisition of the West Musgrave and Santo Domingo royalties in 2022. We're well-researched out of both London and Toronto, and certainly the Atrium Research is available to anybody to view. If you're interested in finding out further or reading more on the valuation, then that's somewhere I suggest you maybe go and have a look as a starting point. Our Directors are not a founding management team. They've been with the business for Marc for over 10 years. He joined on the investment team and worked his way up to CIO and became CEO four years ago.
Kevin's been with the business for 14 years, and they've both been buying stock in the market consistently over the last two to three years, along with other directors. I'll sum up and leave ourselves some time for questions. The outlook really, as I say, we see strong volume growth coming through this year from the expansions of Voisey's and Mimbula in our key Base Metals royalties. I've gone through the catalysts. We're very excited about those. There's continued de-leveraging. We have $85 million of net debt. I should touch on that. We took that up to $128 million last year to complete the acquisition of the Mimbula stream. We de-levered very quickly thereafter to get down to $85 million at year-end.
We only use the balance sheet to fund transactions, then we look to de-lever very quickly there afterwards. We look to expect to continue some aggressive de-leveraging in the second half of this year. We're still very much focused on growth, whilst we've got nine production royalties and six development, we feel we can serve our shareholders best by further diversifying that. 18 will be better as in terms of producing royalties and 12 development royalties will be better than five or six. Finally, I've mentioned briefly the royalty model is very defensive in an inflationary environment. We think it's a very attractive time for people to be considering the merits, and I'm sure North American investors are much more au fait with that, as we say, than they are over here in Europe.
With that, I'll pause. If you just give me a moment to sort through some of these questions, I will read them out. Please, if you've got any further questions, submit them, and we'll try and get to them. If I don't get to your question, then, I believe a record is taken and sent to me, and I will endeavor to respond to all of those in the next couple of days. First question here: The deck shows Ecora trading at a discount on NAV and EV/EBITDA versus critical metals royalty companies. What do you think needs to happen operationally or strategically to close that valuation gap? Thank you for that question.
I think I partly covered that a moment ago, but I think really what needs to happen is we just need to keep printing and demonstrating quarter- on- quarter the growth that's coming through from those Base Metals royalties and the critical minerals side of the business to give confidence to the market that the transition from the coal is now complete and there won't be any sort of runoff or dip in the profile of our income. I think the more we do that, the more the market understands that we are now a critical minerals as opposed to a coal business.
I think as we go through the year and see some of those growth opportunities de-risked as well, it will give further confidence in that growth profile that we see, and we should start to get more credit for that as well, hopefully. On Mimbula, you invested $50 million into a producing copper stream with clear brownfield expansion potential based on current ramp-up and copper prices. Are you tracking ahead, in line, or behind your original payback expectations? I think that one's one where the copper price has run ahead of our initial price where it was 12 months ago. Certainly due to the copper price and the prevailing copper price environment, we're probably tracking slightly ahead there of our initial expectations.
If you look at the sort of analyst numbers and look at the one that, the chart I showed, I'll bring it back up on slide here. We paid $50 million for that. The analyst today, with the way the copper price has gone, believe it's worth around $79 million if you look at that, plus the $5.6 million we've received to date. We're tracking well ahead of that, and that we're really pleased with that transaction. It's a fantastic management team. It's a really high-quality asset, and we look forward to seeing the sort of the team continue to develop that project and move it up towards nameplate capacity in the next couple of years. Thank you for that question.
There's a question here: Given the relative valuation of Ecora versus other royalty players, have you considered share buybacks to move the stock price closer to NAV? Thank you for that. That is a question that we do get on occasion. We have done share buybacks in the past. The most recent one about two years ago when I think we bought back stock at an average price of around GBP 0.70 or GBP 0.80 per share versus the GBP 1.45 I think we're trading at today. Generally we are still in growth mode though, and if we have any spare capital today, whilst yes, we could move the stock price closer to NAV, we believe that actually there's a scarcity value in terms of the opportunity to acquire new royalties.
We are very patient and disciplined and stick to our investment criteria. It's not easy to find. It's not easy. It's the danger is if you buy back stock, you're depleting your capital, and you're just reducing your ability to grow the business further and further diversify because there's an opportunity cost clearly to deploying capital to share buybacks as opposed to growth. Share buybacks are part of our capital allocation framework, at the moment I think we still see de-leveraging as preferable to share buybacks. I don't think we should be buying back stock necessarily when we've got $85 million of net debt.
As I say, we see opportunities to grow, further diversify the business, which we think will help to drive that valuation gap, or close that valuation gap to the NAV. We think that's probably the better way to use our spare capital today, and I think most of our shareholders are in agreement with that strategy. Okay, a question here: Ecora highlighted portfolio could reach 85% Base Metals by 2030 with no additional capital required for the existing growth profile. What are the key milestones over the next 12-24 months that will give the market confidence in that pathway? I think I've covered Santo Domingo. You know, that's Capstone's looking to move that towards a FID in Q4 this year according to their latest results last week. That would clearly be a big de-risking event for us.
As we then look further forwards, Mantos Blancos Phase II is not in anybody's numbers 'cause that's pre-study, that study will actually see potentially NAV appreciation, as well as some additions of those numbers. I think the other one which we haven't really touched on much, in benefit of time I'll give a very brief precis of is West Musgrave. This is the other project we acquired alongside Santo Domingo or the royalty we acquired alongside Santo Domingo. It was bought into construction by and post us acquiring the royalty by a company called OZ Minerals. OZ Minerals was sold to BHP. It's a copper nickel project in Australia. When the nickel market came under stress two years ago, BHP suspended all of its Western Australian nickel operations, including the construction of this project.
This project is about 50% copper at current prices and 50% nickel. It's 25% constructed, and BHP started a sales process last year. There's potentially a big catalyst for that, but if that project gets sold and moved to a buyer who restarts construction. That's definitely one to look out for as well. I think there's 3 or 4 really material ones, and then there's some other things that will de-risk some of those catalysts that we talked about, sort of longer term like NexGen and Fortescue acquiring the Cañariaco project and coming in to do some more work on that. As I say, the slide in the deck hopefully gives some more detail around that as well. Thank you for that question.
The stock has already attracted attention as a potential growth name on the LSE. If 2026 shapes up as a bumpier as some commentators suggest, how open are you to using equity as currency for larger accretive deals? We're clearly in a position where our equity is getting close to the point where you could use your equity, I guess, compared to where we were at 60p this time last year. I think we still are very much focused on per share growth and growing in the most accretive way possible. That's not to say we wouldn't use equity, but I think we'll certainly look at the right blended or right form of financing. De-leveraging is very important for us.
We can continue to de-lever, then we can open up the balance sheet and continue to fund things through the balance sheet as well. We look at the right options when at the time to do a transaction. Review them on their merits at that particular point in time. Go on here. Specialty Metals and Uranium contribution grew 35% in Q1, of which Four Mile is now at normalized sales. Does this part of the portfolio have the potential to surprise the upside if uranium and vanadium prices stay at current levels? I think it has the potential to surprise, clearly, if the commodity prices there do well.
I think just the size and scale of those, they're slightly smaller, so we'll never have quite as much exposure or leverage to those ones as we do to, perhaps the copper and the cobalt, which will be the main things in the near term. You know, any price increase, any of the commodities will clearly help us. There seems to be increasing institutional interest and ongoing analyst buy ratings on Ecora. Do you feel the critical minerals story is now resonating with a broader investor base compared to when the portfolio was more coal-weighted? In the interest of time, I think the answer to that is yes.
I think the other thing that we've seen, this has really changed the level of institutional interest in the stock over the last three to six months, is institutions that have said to us for 10 years they haven't been looking to allocate capital to the mining space, they are now looking to allocate capital to the mining space again. Particularly the small cap in the U.K. fund managers. They like the royalty model as a more defensive way of getting that exposure than having to pick individual stocks. We're definitely seeing that resonate now, as you said in your question. Try and squeeze one more in. I'm sorry, I'm going rapidly through these now. The company has been very visible in the market recently from trading updates to conference appearances.
Do you see a step change in your engagement with global investors as part of unlocking a re-rating, and how are you organizing the internal team around that? Very briefly, in 10 seconds, yes, we do see international as very important. As Head of IR, we run a strategy that targets both institutions, sort of wealth managers and retail, both in North America and in the U.K., and that's something we will continue to do, and we go to lots of conferences in the U.S., like the Rule Conference and others as well. That's something we very much look to do. I think I'm now out of time, thank you very much. If you have any further questions, please do get in touch and contact us at ir@ecoraroyalties.com. Thank you for your time today, I'll get back to anybody who's been outstanding on those questions. Thank you.