Ecora Royalties (ECOR) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of a copper stream at the Mimbula mine aligns with the strategy to increase copper exposure, diversify income sources, and support a transition away from coal, raising copper to 45–50% of estimated NAV.

• Mimbula is a high-quality, low-cost, producing mine with a brownfield expansion underway to quadruple capacity by mid-2026.

• The deal is immediately accretive to earnings and free cash flow per share, supporting income growth and shareholder returns.

• Focus remains on assets in established mining jurisdictions and first/second cost quartile operations, reducing risk.

Financial terms and conditions

• Upfront consideration for the stream is US$50 million, funded through cash-on-hand and an upsized revolving credit facility totaling US$180 million.

• Stream entitlement is tiered: 4.7% on first 15,000 tons, 2.5% on next 15,000, and 1% above 30,000 tons annually, reducing to 1% after 9.15kt delivered (~7–8 years).

• The stream covers Mimbula's 11-year reserve-based life of mine, with potential for extension.

• Ongoing payments to Moxico are set at 30% of the LME quarterly average copper price for all copper received.

• Expected stream EBITDA is just under $10 million per year until the step-down date, with IRR estimated at 8%-9% based on consensus copper prices.

Synergies and expected cost savings

• Immediate earnings and free cash flow accretion from year one, with payback expected in 6–7 years.

• Material deleveraging expected within 12–24 months due to front-loaded cash flows.

• 80% of the portfolio will be in the lower half of cost curves, enhancing margin stability.

• Diversifies and stabilizes income profile, reducing volatility.