The effective management of risk is integral to delivering our strategy
The Board and the Executive Committee provide oversight of our principal and emerging risks, and the Audit Committee monitors the overall effectiveness of our risk management processes and internal controls. As understanding and effectively managing the Group’s risks are fundamental to being able to execute our strategy, we are committed to a robust system of identifying and responding to the risks we face.
Risk management process
Our risk management process is designed to be a consistent and clear framework for embracing, managing and reporting risks from the Group’s business activities to the Executive Committee and the Board by allowing us to:
- Understand the risk environment, identify the specific risks, and assess the potential opportunities and exposure for Ecora.
- Determine how best to deal with these risks to manage overall potential exposure.
- Manage the identified risks in appropriate ways.
- Monitor the effectiveness of the management of these risks and intervene for improvement where necessary.
- Report to the Executive Committee and Board on a periodic basis on how principal risks have been managed, and are being managed and monitored, with any identified enhancements that are being made.
The impact of risk on our strategy and viability
Risk can arise from events outside of our control or from operational matters. Each of the risks described on the following pages can have an impact on our ability to deliver our strategy and on the Group’s ongoing viability.
1. Identify
Material risks that we consider may lead to threats to our business model, strategy and liquidity are identified through our risk management framework which encompasses the analysis of individual processes and procedures and consideration of the strategy and operating environment of the Group.
2. Access
We analyse the risks and evaluate their commercial, strategic, regulatory and other impact as well as the likelihood of occurrence together with the mitigating controls in place.
3. Monitor
The executive management team is responsible for the day-to-day monitoring of the controls and progress of actions to manage principal risks. It is supported through the Group’s audit and assurance programmes and the principal risks are reviewed on a semi-annual basis by the Board.
4. Respond
We respond to changes in the materiality of risks by reviewing the mitigating actions and checking that they are still appropriate for the level of risk.
Emerging risks that are currently being monitored are:
Cause
The physical impacts from climate change, together with the impact of the response to address climate change, may have a significant impact on the Group’s existing portfolio of royalties and streams together with its ability to acquire further royalties and streams in the future.
Commentary
During 2025, we again assessed the physical and transitional risks and opportunities associated with climate change
Supporting our assessment of the physical and transitional risks and opportunities, together with our assessment of the resilience of our existing portfolio to these risks, was the scenario analysis undertaken in the prior year.
While our assessment to date does not indicate that climate change will have a material adverse impact on the Group’s business model given the commodity mix underlying our portfolio, the assessment is an iterative process, as assumptions relating to both the physical and transitional impacts are refined. As a result, we continue to classify climate change as an emerging risk.
Cause
Persistent higher rates of inflation continue to be experienced across most of the jurisdictions in which the mines and mills underlying the Group’s portfolio are located.
The increased costs could delay or prevent expansion projects or development projects in the case of our non-producing royalties.
Commentary
The royalty model largely insulates the Group from the impact of inflation, with costs primarily limited to corporate overheads in comparison to the operating costs and capital expenditure incurred by the operators of the mines and mills underlying the Group’s portfolio.
The significant increase in operating costs and capital expenditure could result in projects becoming uneconomic with operations or development suspended temporarily or entirely. This could in turn result in delays over the short term of royalty revenue and potentially impact the valuation of the Group’s royalties. To address this potential risk, the Group’s strategy is to acquire royalties and streams over projects operating in the lower half of industry cost curves which provides headroom to protect the economics of the underlying project.
This risk is closely linked with the principal risk of ‘operator dependence’ and ‘investment success’, particularly with a focus on the cost curve position of the investments undertaken and the ability of operations to remain economic through cycle.
Cause
Severe supply chain and logistics disruptions have the potential to impact not only the production and distribution of our operators’ underlying commodities but also the timely delivery of development projects in the case of our non-producing royalties.
Commentary
Supply chain and logistics disruptions continue to be observed, typically resulting in higher capital expenditure and maintenance costs. While the Group is shielded from such costs through the royalty model, there is the potential for delays over the short-term of royalty related revenue.
This risk is closely linked with the principal risks of ‘operator dependence’ and ‘geopolitical events’.
The Group's principal risks and uncertainties are:
A potentially catastrophic incident such as a mine shaft failure, slope wall failure, fire or flood at one of the operations underlying the Group’s portfolio or royalties and streams, which could result in the loss of life, the destruction or loss of ore body or render it uneconomic.
Cause
Inadequate design or construction, adverse geological conditions, natural events such as seismic activity or floods.
Impact
A major incident could result in our mining partner losing its licence to operate. In addition, such an incident could result in loss of resource or destruction of the ore body together with a halt in production or metal deliveries, resulting in lower cash flows, potential impairments/valuation losses, ability to service debt obligations and limiting the Group’s ability to pursue its growth strategy.
Mitigation
Although these risks cannot be easily mitigated or transferred, the Group undertakes extensive due diligence engaging both internal and external experts to assess the viability of the project, before proceeding with an investment.
The Group monitors, through ongoing engagement with its mining partners, technical and ESG related matters. Any significant ESG risks and opportunities are reviewed and discussed by the Sustainability Committee.
Commentary
While such risks have a low frequency, their impact is potentially very high, as a result they are treated with the highest priority.
Climate change risks and opportunities:
Physical risk
Ecora Royalties’ success will depend on the Board making sound investment decisions to ensure that the royalties and streams acquired match or exceed expectations at the point of acquisition.
Cause
The actual performance of the royalties and streams acquired fail to achieve the expected returns, due to variations in the commodity prices, production volumes and start dates assumed in the investment base case model.
Impact
The underperformance of an investment could result in the inability to achieve cash flow or profitability targets. In turn the Group’s ability to obtain funding for future growth, service its debt obligations and provide shareholder returns could be significantly reduced.
Potential damage to Ecora Royalties’ reputation, and loss of support from stakeholders.
Mitigation
The Group undertakes a thorough due diligence and screening process when considering each investment opportunity, which is key to reducing the risks of making a bad investment.
Disciplined approach to investment, with all material investments subject to review and challenge by the Executive Committee and the independent Directors.
Commentary
The performance of the Group’s base metals portfolio during the year was supported by record operational performance at Mantos Blancos, together with the maiden contribution from the newly acquired Mimbula copper stream. Volumes at Mantos Blancos increased by
~40% compared to the prior and, combined with stronger copper prices, resulted in this royalty continuing to outperform its original investment case. The Mimbula copper stream also benefited from the strong copper price environment and outperformed its investment
case during the year.
A number of the Group’s development royalties, including Santo Domingo, Nifty and Phalaborwa, continue to progress in line with their respective investment cases as the operators advance these projects towards key development milestones.
Conversely, despite volumes at Voisey’s Bay increasing by ~113% year on year, together with the recovery in the underlying cobalt price, its cumulative performance since acquisition in 2021 has not yet achieved its investment case. However, following receipt of an updated mine plan which accelerates near-term production and extends the life of mine by four years compared to the 2024 plan, an impairment reversal totalling $14.1m was recognised at 31 December 2025.
The ongoing suspension of the West Musgrave project, together with the longer than anticipated timeline to a final investment decision in relation to the Piaui project, has resulted in both royalties not yet achieving their respective investment cases.
Overall, while several assets within the portfolio have performed strongly or remain in line with their investment cases, the investment success risk is assessed as neutral compared with 2024 due to the continued uncertainty surrounding the timing of first income from
certain development assets.
Climate change risks and opportunities:
Transition risk and opportunity
The Group is dependent on its counterparties operating effectively
while upholding industry best practices to provide the returns expected at the time of investment.
Of the Group’s 11 producing royalties and streams, two accounted for 58% of our portfolio contribution in 2025 (2024: 10 producing and two accounted for 73% of our portfolio contribution).
Cause
Ecora Royalties is not directly involved in the ownership or operation of mines and mills underlying its portfolio. As a result, it is generally the owners and operators that determine the manner in which the underlying projects are mined, including decisions to expand, advance, continue, reduce, suspend or discontinue production, together with decisions about the marketing of the minerals extracted from the projects.
Impact
The timing and quantum of cash flows may differ materially from those expected at the time of investment, potentially resulting in asset impairments/valuation losses, reduced profitability and lower corporate valuation. Lower cash flows and valuations may in turn constrain the Group’s ability to fund the acquisition of new royalties and streams required to pursue its growth strategy.
Mitigation
When assessing potential investment opportunities, the Group undertakes extensive counterparty due diligence. For our existing portfolio, we maintain ongoing engagement with our mining partners, to understand the mine plans and development timetables associated with our assets.
On certain royalties and streams, the Group has information and audit rights which it generally exercises on the identification of any unexpected royalty outcome. It has also developed an ESG Risk Assessment and Monitoring Framework which assist pre- and post-acquisition reporting on matters which are fundamental to the Group’s investment thesis.
The Group aims to include transfer restriction/change of control clauses into its new royalty agreements to help ensure its exposure continues to be to trusted counterparties underpinned by strong ESG principles.
The Group is actively expanding and diversifying its portfolio of royalties and streams, as demonstrated by the Mimbula copper stream acquisition in early 2025 to ensure that it has a well-balanced and diversified source of income to reduce reliance on any one operation,
operator, commodity or jurisdiction.
Commentary
In early 2025, the Group completed the $50 million acquisition of the Mimbula copper stream, which was immediately accretive to both earnings and cash flow per share. Together with record operational performance at Mantos Blancos and Voisey’s Bay following successful
ramp-ups, this increased contribution from a broader range of royalties and metal streams across the portfolio.
In addition to the diversification of the Group’s producing royalties and metal streams, the Group maintains a strong pipeline of development royalties, several of which are approaching key development milestones in the near term. As these projects progress, they are expected to further diversify the Group’s sources of portfolio contribution.
As a result, the operator dependence and concentration risk has decreased compared with the prior year.
Climate change risks and opportunities:
Physical and transition risk
Global macroeconomic conditions leading to sustained low product prices and/or volatility.
Cause
Commodity prices react to many macroeconomic events. Recent examples include armed conflict involving major economies, global trade disputes and sanctions and economic slowdown in a leading economy.
Impact
Low commodity prices can result in higher cost operations becoming uneconomic which can in turn result in lower levels of cash flow, profitability and valuation. Lower cash flows and valuations may in turn constrain the Group’s ability to fund the acquisition of new royalties and streams, or meet financial covenants associated with its borrowing facility.
Low commodity prices may also result in our mining partners delaying or suspending operations, which would also result in lower levels of cash flow and the impairment of the Group’s portfolio.
Mitigation
Maintaining a portfolio of royalties and streams that is diversified by both commodity and geography.
Regular updates of economic analysis and commodity price assumptions are discussed by the Executive Committee and the Board.
Disciplined approach to investment decisions, including the assessment of commodity price forecasts, with a focus on generating shareholder returns through the cycle.
Commentary
The Group’s diversified portfolio helps mitigate the impact of volatility in individual commodity prices. During the year, the Group benefited from strong copper and gold prices, alongside a recovery in the cobalt price.
The cobalt price rebound in 2025 followed intervention by the government of the Democratic Republic of Congo, which introduced export controls and quota measures to address prolonged oversupply. This resulted in a significant uplift in cobalt pricing compared with the
prior year.
Nickel prices, however, continue to reflect surplus conditions driven by substantial Indonesian production. This has maintained pressure on pricing and contributed to the suspension of certain higher-cost operations, demonstrating persistent volatility in the nickel market.
While the Group has benefited from stronger pricing in copper, gold and cobalt, commodity price risk is considered to have remained neutral compared with the prior year, reflecting ongoing nickel market pressure, supply-side interventions in key producing jurisdictions, and
broader geopolitical uncertainty.
Climate change risks and opportunities:
Transition risk and opportunity
The Group is dependent on access to capital in order to achieve its growth ambitions.
Cause
Sudden adverse change in capital market conditions, including higher cost of capital. Production issues or significant commodity price volatility.
Impact
The inability to access either debt or equity funding could materially impact the Group’s ability to achieve its growth ambitions.
Mitigation
The Group has a strong shareholder base and a syndicate of lenders who understand the royalty and streaming business model and are supportive of the Group’s strategy.
We regularly meet with advisers, shareholders and lenders to discuss the types of transactions we are considering to gauge their support.
Commentary
While the Group took on additional leverage to acquire the $50m Mimbula copper stream, the acquisition was immediately accretive to both earnings and free cash flow per share. In addition, management accelerated the receipt of deferred and contingent consideration relating to the 2021 Narrabri royalty and realised $16.2m in net proceeds from the disposal of the long-dated royalty over the earlystage Dugbe gold project in Liberia.
Combined with strong operational performance across the portfolio, these factors allowed
the Group to deleverage rapidly in the second half of 2025, with net debt increasing only
modestly to $85.5m (2024: $82.4m) despite the $50m deployment for Mimbula.
At the time of completing the Mimbula acquisition, the Group also extended the maturity of its revolving credit facility to January 2028 and increased total commitments to $180m. As at the date of this report, and subject to continued covenant compliance, the Group has access
to a further $86.7m through its revolving credit facility. In the absence of further acquisitions, the Group expects to achieve additional meaningful deleveraging throughout 2026.
As a result of these factors, the financing capability risk has decreased compared with 2024.
Climate change risks and opportunities:
Transition risk and opportunity
Demand for financing via royalties and streams may change depending on macroeconomic conditions.
Increased competition within the royalty and streaming sector may impact the ability to continue adding accretive assets to the portfolio.
Cause
High commodity price environments typically reduce the demand for near-term financing through royalties or streams, as operators have greater access to conventional sources of financing. Conversely inflationary pressure and increases in cost of capital for operators may increase the demand for near-term financing through royalties and streams.
Increased competition in the royalty and stream sector could also make it difficult to execute deals.
Impact
Royalties and streams are, by their nature, depleting assets, and as a result failing to acquire new assets may lead to lower cash flows, profitability and valuation, which in turn limit the Group’s ability to pursue its growth strategy.
Mitigation
Disciplined application of investment criteria which includes the preference for long-life assets that will generate returns through the cycle.
Ecora Royalties has built a credible global brand and network, backed by a successful track record of identifying and executing royalty transactions.
Commentary
Demonstrating the Group’s ability to leverage its networks, during 2025 it completed the $50m acquisition of the Mimbula copper stream, which was immediately accretive to both earnings and free cash flow per share. In addition, the Group’s portfolio of development-stage royalties, notably Santo Domingo and the Phalaborwa Rare Earths Project, is expected to support medium- to long-term portfolio growth, while the option to upsize the Piaui royalty provides an additional organic growth opportunity within the existing portfolio.
The Group continues to face competition for royalty and streaming opportunities, although the last three acquisitions were completed on a bilateral basis, reflecting the Group’s strong industry relationships. Competition from larger precious metals peers is expected to continue as they seek to increase exposure to critical minerals.
Overall, the competitive environment in the royalty and streaming sector has remained broadly unchanged compared with 2024, and the risk of future demand is therefore considered neutral year on year.
Climate change risks and opportunities:
Transition risk
Geopolitical events and tensions have the potential to negatively impact our business.
Cause
Geopolitical disputes including armed conflict involving world powers and restrictions or constraints to free trade can have a direct impact on commodity prices. Furthermore, the results of recent elections could alter the outlook for commitments to climate change reduction and the speed at which countries commit to the energy transition.
The introduction of new policies linked to natural resources or capital controls as a result of changes in the domestic politics of the countries our counterparties operate may impact our business.
Impact
Commodity price and sales volume volatility experienced by the operations underlying the Group’s portfolio as a result of trade actions (increased tariffs, retaliations and sanctions) could lead to lower levels of cash flow, profitability and valuation, which in turn could constrain the Group’s ability to fund the acquisition of new royalties and streams, or meet financial covenants associated with its borrowing facility.
If capital controls are introduced by a country, this could subsequently lead to a counterparty being unable to remit funds to the Group.
Mitigation
The Group’s portfolio of royalties and metal streams is diversified by both commodity and geography.
Commentary
The ongoing war between Russia and Ukraine continues to create uncertainty in global markets and energy and commodity supply chains. The broadening of the Middle East conflict has heightened tensions across the region and increased the risk of disruption to
energy and commodity markets. In addition, ongoing uncertainty around China’s economic outlook and global trade dymanics adds to this risk environment. Together with the prospects of shifting trade and tariff policies in major economics, these geopolitical developments have contributed to an increased risk from geopolitical events compared with the prior year.
Ecora Royalties needs to be well supported by all stakeholders including:
- Operating counterparties
- Employees
- Shareholders
- Lending banks
- Brokers/analysts
Cause
Failure to identify, understand and respond to the needs and expectations of our stakeholders.
Impact
A breakdown in the relationship between Ecora Royalties and any of its stakeholders could materially impact its ability to achieve its strategy, fund future growth and execute on new acquisitions.
Mitigation
The Group’s Code of Conduct governs its interaction with all our stakeholders. In addition, the Executive Committee and the Board have regular and ongoing interaction with all of its stakeholders, with the support of external advisers.
Commentary
The Group engaged extensively with its largest shareholders during the year on a range of matters. In addition, the extention of the Group’s revolving credit facility at the start of 2025, with total commitments increased to $180m, demonstrates the strong ongoing support of the Group’s lending syndicate.
Climate change risks and opportunities:
Transition risk and opportunity