Ecora Resources stock rises following Q4 results

Published 29/01/2025, 11:10
© Reuters.

Investing.com -- Shares of Ecora Resources PLC (LSE:ECOR) climbed 5% today after the company reported its fourth-quarter portfolio income of $6.7 million. The slight increase in income was attributed to higher than expected deliveries from the Voisey’s Bay mine, which is continuing to ramp up to full capacity.

The London-based mining company also ended the fiscal year with a net debt of $82 million. Despite this increase in debt, Ecora Resources confirmed its production guidance for the 2025 fiscal year, anticipating a 5-10% increase in volumes from Kestrel over the 2024 levels of approximately 2 million tonnes. The company also provided additional details on the expected seasonality of volumes, with the bulk now projected to occur in the second and third quarters of 2025.

For the Voisey’s Bay operations, Ecora Resources has guided for a slight uptick in deliveries, expecting between 24 to 28 deliveries (335-390 tonnes) compared to the previously estimated range of 20 to 28 deliveries (280-390 tonnes). This guidance comes as the company anticipates the ramp-up of the underground mine to accelerate, with full capacity expected by the second half of 2026.

However, sales at Four Mile have been suspended for the quarter, with no guidance provided for a restart of sales, as the company is awaiting a response from the operator after exercising its information rights. Four Mile accounts for less than 1% of Ecora’s operating Net Asset Value (NAV).

RBC Capital Markets commented on the company’s outlook, stating, "Looking into 2025, with mining activities at Kestrel returning to ECOR’s private royalty area and the steady ramp up of Voisey’s Bay, we view the company as well positioned, generating an average 20% Free Cash Flow (FCF) yield and healthy dividend yield of circa 5% over the next two years.

Beyond that, as the Kestrel coal royalty rolls off in 2026, we expect the current focus of the group to remain on growing and diversifying the portfolio with a preference for royalties in assets at or very close to production."

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