Ecora Resources PLC Announces Acquisition of Producing Copper Stream on Moxico's Mimbula Mine
Ecora Resources (ECRAF) has acquired a copper stream at the Mimbula copper mine in Zambia for US$50 million. The stream covers an 11-year Life Of Mine with potential extensions. Mimbula produced 14,000 tonnes of copper in 2024 and is undergoing a Phase II expansion to increase production capacity to 56,000 tonnes per annum by mid-2026.
The transaction will be funded through cash and debt facilities, with Ecora triggering US$30m of its Revolving Credit Facility's accordion feature. The stream is structured with frontloaded entitlements in the initial 7-8 years, with quarterly deliveries based on production levels. After receiving 9.15kt of copper, Ecora's entitlement reduces to 1.0% for the remaining mine life.
The deal increases Ecora's copper and base metal exposure to approximately 45% and 75% of NAV respectively. Mimbula operates in the lowest half of global copper mines' cost curve and produces Grade A LME cathodes.
Ecora Resources (ECRAF) ha acquisito un flusso di rame presso la miniera di rame Mimbula in Zambia per 50 milioni di dollari USA. Il flusso copre una vita mineraria di 11 anni con potenziali estensioni. Mimbula ha prodotto 14.000 tonnellate di rame nel 2024 e sta subendo un'espansione di Fase II per aumentare la capacità produttiva a 56.000 tonnellate all'anno entro la metà del 2026.
La transazione sarà finanziata tramite contante e linee di credito, con Ecora che attiva 30 milioni di dollari della funzione accordion del suo Revolving Credit Facility. Il flusso è strutturato con diritti anticipati nei primi 7-8 anni, con consegne trimestrali basate sui livelli di produzione. Dopo aver ricevuto 9,15 kt di rame, il diritto di Ecora si riduce all'1,0% per il resto della vita mineraria.
L'accordo aumenta l'esposizione di Ecora al rame e ai metalli di base rispettivamente al 45% e al 75% del NAV. Mimbula opera nella metà più bassa della curva dei costi delle miniere di rame a livello globale e produce catodi LME di grado A.
Ecora Resources (ECRAF) ha adquirido un flujo de cobre en la mina de cobre Mimbula en Zambia por 50 millones de dólares estadounidenses. El flujo cubre una vida útil de 11 años con posibles extensiones. Mimbula produjo 14,000 toneladas de cobre en 2024 y está llevando a cabo una expansión de Fase II para aumentar la capacidad de producción a 56,000 toneladas por año para mediados de 2026.
La transacción se financiará a través de efectivo y líneas de crédito, con Ecora activando 30 millones de dólares de la función accordion de su Revolving Credit Facility. El flujo está estructurado con derechos anticipados en los primeros 7-8 años, con entregas trimestrales basadas en los niveles de producción. Después de recibir 9.15 kt de cobre, el derecho de Ecora se reduce al 1.0% durante el resto de la vida de la mina.
El acuerdo aumenta la exposición de Ecora al cobre y a los metales básicos aproximadamente al 45% y al 75% del NAV, respectivamente. Mimbula opera en la mitad inferior de la curva de costos de las minas de cobre a nivel mundial y produce cátodos LME de grado A.
Ecora Resources (ECRAF)는 잠비아의 민불라 구리 광산에서 5000만 달러에 구리 스트림을 인수했습니다. 이 스트림은 11년의 광산 수명을 포함하며 잠재적인 연장이 가능합니다. 민불라는 2024년에 14,000톤의 구리를 생산하였으며, 2026년 중반까지 연간 생산 능력을 56,000톤으로 증가시키기 위한 2단계 확장을 진행 중입니다.
이번 거래는 현금과 부채 시설을 통해 자금을 조달하며, Ecora는 자사의 리볼빙 신용 시설의 아코디언 기능에서 3000만 달러를 활성화합니다. 이 스트림은 초기 7-8년 동안 전면적인 권리가 구조화되어 있으며, 생산 수준에 따라 분기별로 배송됩니다. 9.15kt의 구리를 수령한 후, Ecora의 권리는 남은 광산 수명 동안 1.0%로 줄어듭니다.
이번 거래는 Ecora의 구리 및 비철금속 노출을 각각 약 45% 및 75%의 NAV로 증가시킵니다. 민불라는 전 세계 구리 광산 비용 곡선의 하위 절반에서 운영되며, A급 LME 전극을 생산합니다.
Ecora Resources (ECRAF) a acquis un flux de cuivre à la mine de cuivre de Mimbula en Zambie pour 50 millions de dollars américains. Le flux couvre une durée de vie minière de 11 ans avec des extensions potentielles. Mimbula a produit 14 000 tonnes de cuivre en 2024 et est en train de réaliser une expansion de Phase II pour augmenter la capacité de production à 56 000 tonnes par an d'ici mi-2026.
La transaction sera financée par des liquidités et des lignes de crédit, Ecora déclenchant 30 millions de dollars de la fonction accordion de sa ligne de crédit renouvelable. Le flux est structuré avec des droits anticipés au cours des 7 à 8 premières années, avec des livraisons trimestrielles basées sur les niveaux de production. Après avoir reçu 9,15 kt de cuivre, le droit d'Ecora est réduit à 1,0% pour le reste de la durée de vie de la mine.
L'accord augmente l'exposition d'Ecora au cuivre et aux métaux de base respectivement à environ 45% et 75% du NAV. Mimbula opère dans la moitié inférieure de la courbe des coûts des mines de cuivre mondiales et produit des cathodes LME de grade A.
Ecora Resources (ECRAF) hat einen Kupferstrom in der Kupfermine Mimbula in Sambia für 50 Millionen US-Dollar erworben. Der Strom umfasst eine Lebensdauer von 11 Jahren mit potenziellen Verlängerungen. Mimbula produzierte 14.000 Tonnen Kupfer im Jahr 2024 und befindet sich in einer Phase-II-Erweiterung, um die Produktionskapazität bis zur Mitte des Jahres 2026 auf 56.000 Tonnen pro Jahr zu erhöhen.
Die Transaktion wird durch Bargeld und Kreditfazilitäten finanziert, wobei Ecora 30 Millionen US-Dollar der Accordion-Funktion seiner revolvierenden Kreditfazilität aktiviert. Der Strom ist so strukturiert, dass in den ersten 7-8 Jahren vorrangige Ansprüche bestehen, mit vierteljährlichen Lieferungen basierend auf den Produktionsniveaus. Nach Erhalt von 9,15 kt Kupfer reduziert sich Ecora's Anspruch auf 1,0% für die verbleibende Lebensdauer der Mine.
Der Deal erhöht Ecora's Exposition gegenüber Kupfer und Grundmetallen auf etwa 45% bzw. 75% des NAV. Mimbula operiert in der unteren Hälfte der Kostenkurve der globalen Kupferminen und produziert LME-Kathoden der Klasse A.
- Immediately accretive to earnings and free cash flow per share
- Increases copper exposure to 45% of NAV
- Low operating costs in bottom half of global copper cost curve
- Production growth from 14kt to 56kt by 2026
- 11-year mine life with extension potential
- Grade A LME cathode production
- Increases financial leverage with US$126m pro-forma net debt
- Reduced interest cover covenant from 4.0x to 3.0x
- Higher interest rate margin on credit facility
LONDON, UK / ACCESS Newswire / February 27, 2025 / Ecora (LSE:ECOR)(TSX:ECOR)(OTCQX:ECRAF), a critical minerals focused royalty company, announces that it has entered into a copper stream (the "Stream") with reference to production at the Mimbula copper mine ("Mimbula"), owned by Moxico Resources plc ("Moxico"), for a total cash consideration of US
Mimbula, located in the Zambian Copperbelt Province, achieved first copper production from Phase 1 of the project in late 2022 and in 2024 produced 14,000 tonnes of copper at operating costs in the lowest half of global copper mines. A brownfield Phase II expansion is currently in construction, which will increase total copper cathode production capacity to achieve 56,000 tonnes per annum in mid-2026.
Marc Bishop Lafleche, Chief Executive Officer of Ecora, commented:
"Following strong momentum in Q4, we are excited to start 2025 with the announcement of a new partnership with Moxico in relation to the Mimbula copper mine, which will cement copper at the core of our commodity exposure and be immediately accretive to earnings and free cash flow.
"Mimbula has everything we look for in an investment; it is a high-quality ore body, with low operating costs, and with an exceptional management team who have developed the project from concept to a high-margin operation currently undergoing a brownfield expansion to increase production capacity.
"To fund the acquisition, we have triggered US
"The acquisition of a producing copper stream enhances Ecora's strong organic copper growth profile across the short, medium and long-term. Following the transaction, Ecora's copper and base metal exposure as a percentage of NAV will be approximately
Highlights
Immediately accretive to earnings per share and free cash flow per share
Increased exposure to strong fundamental copper outlook (approximately
45% of NAV)High margin producing copper mine with low operating costs
Brownfield expansion underway to increase copper production from ~14 kt in 2024 to steady state capacity of ~56 ktpa
Stream structure reduces ramp-up risk and has an expected payback period of approximately 6-7 years
Reserve based LOM of 11 years (2035) with extension potential
Proceeds to bolster liquidity for Mimbula's brownfield expansion as well as for other general corporate purposes
Mimbula produces Grade A LME cathodes
High-quality management team with a proven operational track record and prior experience at large diversified miners
Transaction completion expected within the coming days
Analyst and Investor Presentation
There will be an analyst and investor webcast at 2pm (GMT) on 27 February 2025. The presentation will be hosted by Marc Bishop Lafleche (CEO), Kevin Flynn (CFO) and Geoff Callow (Head of IR)
Please join the event 5-10 minutes prior to the scheduled start time.
Slides will be available shortly on the Company's website (www.ecora-resources.com)
Event Conference Title | Ecora Resources - Acquisition announcement |
Time Zone | Dublin, Edinburgh, Lisbon, London |
Start Time/Date | 2pm, Thursday 27 February 2025 |
Duration | 60 minutes |
Stream details
The stream entitlement is structured as follows:
Ecora stream entitlement(1) | Calendar year copper production | Illustrative stream EBITDA per annum at full production(2) |
Nil to 15kt | ~ | |
>15kt to 30kt | ~ | |
>30kt | ~ |
1. Quarterly stream entitlements calculated with reference to pro-rated quarterly production levels (i.e.
2. Fully ramped up production of 56ktpa, assuming copper price of
Once Ecora has received a cumulative total of 9.15 kt of copper (expected to be in ~7-8 years), Ecora's stream entitlement will reduce to
Copper will be delivered to Ecora quarterly, with ongoing payments to Moxico at
Transaction financing and impact on Group earnings
Ecora will fund the US
Upsizing the facility from US
$150m to US$180m Extending the Group's RCF maturity to February 2028
Net debt to EBITDA ratio calculation uses an adjusted LTM EBITDA, calculated as trailing 6 quarters of Kestrel income annualised, rest of the portfolio is on a LTM basis
Interest cover covenant reduced from 4.0x to 3.0x for the term of the facility
Pricing of SOFR plus 2.25 -
4.50% depending on leverage levels (previously 2.25 -4.00% )No step-downs or amortisations associated with the facility
Accordion reduces to US
$45m following the US$30m increase in commitments
The above amendments ensure that the Group remains well capitalised with sizable headroom following the Transaction. The Group's income producing royalties, including the Stream, are expected to drive meaningful deleveraging throughout the next 12-24 months, as illustrated in the table below4:
| 2025 | 2026 |
Analyst consensus price forecasts - | US | US |
Analyst consensus price forecasts | US | US |
Analyst consensus price forecasts + | US | US |
3. The proforma net debt figure includes US
4.Operator partner production guidance and research analyst consensus commodity price forecasts: Met coal: 2025 =
The Mimbula Copper Project5
Mimbula is
The Phase 1 operations commenced in December 2022 and produced 14 kt of copper cathode in 2024 using a heap leach and solvent extraction/electrowinning (SX/EW) process, with copper cathodes consistently at
A bankable feasibility study ("BFS") for Phase 2 of Mimbula was completed in August 2022. This evaluated the opportunity to expand Phase 1 operations to 56 ktpa through a 46 ktpa agitated leach and SX/EW circuit and demonstrated an economically valuable, low cost and technically feasible project.
The final stages of Mimbula Phase 2, consisting of the expansion of the SX capacity, the construction of an elevated temperature leach circuit and the construction of an additional 80 EW cells to complete the overall EW circuit, is expected to be completed in mid-2026. Stockpiles of fines ore material and weathered ore material are ready to be processed through the ETL circuit once it has been commissioned.
An updated mineral resource statement for Mimbula was completed in March 2024, and contains 76.4 million tonnes at
Based on the current JORC Reserve and production at the rate of 56 ktpa, Mimbula has a life of mine to 2035. Moxico anticipates that the life of mine can be extended further with additional exploration drilling, both infill and near mine.
The initial part of Mimbula Phase 2, consisting of the construction of the first half of the EW (80 cells), has been completed and commissioned, and produced its first copper cathode in January 2024. This expansion has doubled cathode capacity to 20,000 ktpa, with Mimbula achieving a run rate of over 16,000 ktpa in the final months of 2024.
Transaction Completion
Payment of the US
5Source: www.moxicoresources.com
6JORC compliant MRE as of March 2024
For further information
Ecora Resources PLC | +44 (0) 20 3435 7400 |
Geoff Callow - Head of Investor Relations |
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Website: | |
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FTI Consulting | +44(0) 20 3727 1000 |
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About Ecora
Ecora is a leading critical minerals focused royalty company.
Our vision is to be globally recognised as the royalty company of choice synonymous with commodities that support trends of electrification by continuing to grow and diversify our royalty portfolio in line with our strategy. We will achieve this through building a diversified portfolio of scale over high quality assets that drives low volatility earnings growth and shareholder returns.
The mining sector has an essential role to play in the energy transition, with commodities such as copper, nickel and cobalt - key materials for manufacturing batteries and electric vehicles. Copper also plays a critical role in our electricity grids. All these commodities are mined and there are not enough mines in operation today to supply the volume required to achieve the energy transition.
Our strategy is to acquire royalties and streams over low-cost operations and projects with strong management teams, in well-established mining jurisdictions. Our portfolio has been reweighted to provide material exposure to this commodity basket and we have successfully transitioned from a coal orientated royalty business in 2014 to one that by 2026 will be materially coal free and comprised of over
Ecora's shares are listed on the London and Toronto Stock Exchanges (ECOR) and trade on the OTCQX Best Market (OTCQX: ECRAF).
About Moxico
Moxico's principal objective is to be an effective creator of value for its shareholders, other stakeholders and partners by establishing itself as one of the main copper producers in Zambia through the expansion of the Mimbula Copper Project and developing its portfolio of near term development and exploration assets, including the highly prospective Kalengwa copper project in the Republic of Zambia the Khnaiguiyah zinc-copper project in the Kingdom of Saudi Arabia, and the Esperanza copper project in Argentina.
Further Information
UK Listing Rules
The Transaction, because of its size in relation to Ecora, constitutes a Significant Transaction for the purposes of the UK Listing Rules made by the Financial Conduct Authority (the "FCA") for the purposes of Part VI of the Financial Services and Markets Act 2000 (as amended), which came into effect on 29 July 2024 (the "UKLRs"), and is therefore notifiable in accordance with UKLR 7.3.1R and 7.3.2R. In accordance with the UKLRs, the Transaction is not subject to shareholder approval.
Board's views on the Transaction
Considering all the information that is outlined above, the board of directors of Ecora believes that the Transaction is in the best interests of Ecora shareholders as a whole, offering income growth, increased exposure to copper and is expected to be immediately accretive to earnings per share and free cash flow per share.
Risks to Ecora as a result of the Transaction
The Transaction will increase the Group's financial leverage
The Transaction is being funded through a combination of cash-on-hand and the Group's RCF, which has been upsized from US
The future production profiles and commodity prices are uncertain
As with all of the Group's royalties and streams, Ecora is not directly involved in the ownership or operation of the Mimbula mine. The Group is therefore reliant on the owners and operators achieving their stated development and production milestones. In the event these production levels and development milestones are not achieved, the timing and quantum of cash flows and the EBITDA generated by the Stream may differ materially to those expected at the time of investment.
In addition to the impact that changes in the development and production profile may have on the Stream's cash flows and EBITDA, fluctuations in the underlying commodity prices may also result in the timing and quantum of cash flows and the EBITDA generated by the Stream differing materially to those expected at the time of investment.
Appendix I
SIGNIFICANT CHANGE, LEGAL AND ARBITRATION PROCEEDINGS AND RELATED PARTY TRANSACTIONS
1. Significant change
Ecora
Aside from the amendments to the Group's RCF as detailed above, there has been no significant change in the financial performance or financial position of Ecora since 30 June 2024, the last period for which financial information for Ecora was published.
2. Legal and arbitration proceedings
Ecora
There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which Ecora is aware) during the period covering the 12 months preceding the date of this announcement which may have, or have had in the recent past, significant effects on the financial position or profitability of Ecora or the Group.
Mimbula
There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which Ecora is aware) during the period covering the 12 months preceding the date of this announcement which may have, or have had in the recent past, significant effects on the financial position or profitability of the Mimbula mine.
3. Related Party Transactions
Ecora's annual reports and accounts for each of the 12-month periods ended 31 December 2022 and 31 December 2023 and unaudited interim report and accounts for the six months ended 30 June 2024 contain details of related party transactions entered into by Ecora and/or the Group during such periods.
There were no related party transactions entered into by Ecora or the Group during the period since 30 June 2024.
Appendix II
MATERIAL CONTRACTS
Part A
Material Contracts of the Group
No contracts have been entered into by the Group (not being contracts entered into in the ordinary course of business): (i) within the period of two years immediately preceding the date of this announcement that are, or may be, material to the Group; or (ii) that contain any provisions under which any member of the Group has any obligation or entitlement that is, or may be, material to the Group, save as disclosed below.
Section 1
The Transaction
A summary of the principal terms of the Transaction is set out in the main body of this announcement.
Section 2
Material financing arrangements entered into within the period of two years immediately preceding the date of this announcement.
Revolving Credit Facility
(i) In connection with the Transaction, the Group made certain amendments to the RCF on 26 February 2025 as set out above under "Transaction Financing" in the main body of this announcement.
Cautionary statement on forward-looking statements and related information
Certain statements in this announcement, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Group's expectations and views of future events. Forward-looking statements (which include the phrase 'forward-looking information' within the meaning of Canadian securities legislation) are provided for the purposes of assisting readers in understanding the Group's financial position and results of operations as at and for the periods ended on certain dates, and of presenting information about management's current expectations and plans relating to the future. Readers are cautioned that such forward-looking statements may not be appropriate other than for purposes outlined in this announcement. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, cash flow, requirement for and terms of additional financing, performance, prospects, opportunities, priorities, targets, goals, objectives, strategies, growth and outlook of the Group including the outlook for the markets and economies in which the Group operates, costs and timing of acquiring new royalties and making new investments, mineral reserve and resources estimates, estimates of future production, production costs and revenue, future demand for and prices of precious and base metals and other commodities, for the current fiscal year and subsequent periods.
Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as 'expects', 'anticipates', 'plans', 'believes', 'estimates', 'seeks', 'intends', 'targets', 'projects', 'forecasts', or negative versions thereof and other similar expressions, or future or conditional verbs such as 'may', 'will', 'should', 'would' and 'could'. Forward-looking statements are based upon certain material factors that were applied in drawing a conclusion or making a forecast or projection, including assumptions and analyses made by the Group in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. The material factors and assumptions upon which such forward-looking statements are based include: the stability of the global economy; the stability of local governments and legislative background; the relative stability of interest rates; the equity and debt markets continuing to provide access to capital; the continuing of ongoing operations of the properties underlying the Group's portfolio of royalties, streams and investments by the owners or operators of such properties in a manner consistent with past practice; no material adverse impact on the underlying operations of the Group's portfolio of royalties, streams and investments from a global pandemic; the accuracy of public statements and disclosures (including feasibility studies, estimates of reserve, resource, production, grades, mine life and cash cost) made by the owners or operators of such underlying properties; the accuracy of the information provided to the Group by the owners and operators of such underlying properties; no material adverse change in the price of the commodities produced from the properties underlying the Group's portfolio of royalties, streams and investments; no material adverse change in foreign exchange exposure; no adverse development in respect of any significant property in which the Group holds a royalty or other interest, including but not limited to unusual or unexpected geological formations and natural disasters; successful completion of new development projects; planned expansions or additional projects being within the timelines anticipated and at anticipated production levels; and maintenance of mining title.
Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions, which could cause actual results to differ materially from those anticipated, estimated or intended in the forward-looking statements. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. No statement in this communication is intended to be, nor should it be construed as, a profit forecast or a profit estimate.
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate; that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved.
A variety of material factors, many of which are beyond the Group's control, affect the operations, performance and results of the Group, its businesses and investments, and could cause actual results to differ materially from those suggested by any forward-looking information. Such risks and uncertainties include, but are not limited to current global financial conditions, royalty, stream and investment portfolio and associated risk, adverse development risk, financial viability and operational effectiveness of owners and operators of the relevant properties underlying the Group's portfolio of royalties, streams and investments; royalties, streams and investments subject to other rights, and contractual terms not being honoured, together with those risks identified in the 'Principal Risks and Uncertainties' section of our most recent Annual Report, which is available on our website. If any such risks actually occur, they could materially adversely affect the Group's business, financial condition or results of operations. Readers are cautioned that the list of factors noted in the section herein entitled 'Risk' is not exhaustive of the factors that may affect the Group's forward-looking statements. Readers are also cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.
The Group's management relies upon this forward-looking information in its estimates, projections, plans and analysis. Although the forward-looking statements contained in this announcement are based upon what the Group believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. The forward-looking statements made in this announcement relate only to events or information as of the date on which the statements are made and, except as specifically required by applicable laws, listing rules and other regulations, the Group undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
This announcement also contains forward-looking information contained and derived from publicly available information regarding properties and mining operations owned by third parties.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
SOURCE: Ecora Resources PLC
View the original press release on ACCESS Newswire
FAQ
What is the value and structure of Ecora's (ECRAF) Mimbula copper stream acquisition?
How much copper does Mimbula mine currently produce and what is its expansion target for 2026?
What is the expected payback period for ECRAF's Mimbula copper stream investment?
How will ECRAF finance the US$50 million Mimbula copper stream acquisition?
What percentage of ECRAF's NAV will be in copper and base metals after this acquisition?
