Ecora Resources PLC

Supporting a

sustainable future

Ecora Resources PLC



We are a leading royalty company focused

on supporting the supply of commodities

essential to creating a sustainable future.

Strategic report

 

 

 

 

8 Chairman’s statement

 

 

 

18 Our markets

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Governance report

 

 

 

 

 

 

 

 

Financial statements

 



 

 



 



 



 

 



135 Notes to the consolidated



Other information

 

 

 

Alternative performance measures































Portfolio contribution



































Adjusted earnings per share

























Dividend cover







Free cash flow per share











Discover

more online:

Our purpose

Providing capital to the mining sector

required to supply the commodities central

to a sustainable future.

Sustainability

We believe long-term value

can only be achieved

through sustainable and

responsible investment.

Read more on p53

Portfolio and sustainability highlights

New sustainability reporting

framework







Increased operator ESG

engagement







86%

response rate from operators on ESG matters

South32 royalty





development stage copper and nickel projects. The



the Group’s prior substantial weighting to income

producing assets.

~$50m

of incremental annual portfolio contribution



Rebranding as



We completed the rebranding to Ecora Resources PLC

in October 2022. The rebranding was driven by a desire



predominantly coal weighted business just two years





Record portfolio

contribution



especially in steelmaking coal and cobalt, drove record



Increased exposure to future

facing commodities







$143.2m +67% 85% +16%

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

North America*

South America*

Other*

Australia*

Group at a glance

A portfolio positioned

for organic growth

What we do

Our vision is to be globally recognised as the royalty











low volatility earnings growth and shareholder returns.



cost operations and projects with strong management

teams, in well-established mining jurisdictions. Our



















How we do it

Royalties explained

A natural resources royalty is a non-operating interest in

a project that provides the royalty holder with the right









environmental or reclamation liabilities. A primary

royalty is entered into when the royalty company makes







Streams explained









not royalties because they do not constitute an interest in



purchase the physical metal. However, a stream holder is



capital costs, nor environmental or reclamation liabilities.



Commodity exposure*

Base metals 74%

Uranium 4%

Vanadium 2%

Steelmaking coal 12%

Other 8%



85%

of the portfolio

is future facing

Geographic exposure*

North America 42%

South America 30%

Australia 27%

Other 1%



95%

of the portfolio in

OECD countries

Stage of production*

Producing 63%

Development 35%

Early-stage 2%



63%

of the portfolio is

producing

Read more on p6

Energy consumption

Operations with robust



Low carbon energy generation

Energy transmission

44%

Lorem ipsum

Lorem ipsum cology

energy green whash.

Lorem ipsum

Lorem ipsum cology

energy green whash.

Lorem ipsum

Lorem ipsum cology

energy green whash.

Lorem ipsum

Lorem ipsum cology

energy green whash.

1 2

4 3

 



Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Producing

Asset Commodity Location Operator/developer Royalty basis  See more

Voisey’s Bay Cobalt Canada Vale 22.82% stream 2035

p29

Mantos

Blancos

Copper Chile Capstone

Copper

 2038

p30

Kestrel Steelmaking coal Australia EMR Capital

and Adaro



2026



p31

Maracás

Menchen

Vanadium Brazil Largo

Resources

2.0% NSR 

p32

McClean Lake

mill

Uranium Canada Orano 



revenue

2037

p33

IOC Iron ore Canada Rio Tinto 7.0% GRR

(indirect)



p34

EVBC Gold Spain Orvana

Minerals

2.5–3.0% NSR 2026

p35

Four Mile Uranium Australia Quasar

Resources

 

p35

Carlota Copper US KGHM 5.0% NSR 

p35

Our portfolio

Exposure to world-

class operators

Royalties cover mining operations run by

some of the largest mining companies in

the world.

Visit www.ecora-resources.com/

our-portfolio/

 

Ecora Resources PLC

Annual Report and Accounts 2022

Early-stage

Asset Commodity Location Operator/developer Royalty basis  See more

Cañariaco Copper and gold Peru Candente

Copper

0.5% NSR N/A

p41

Ring of Fire Chromite Canada Wyloo Metals  N/A

p42

Pilbara Iron ore Australia BHP  N/A

p42

Amapá Iron ore Brazil DEV

Mineracao S.A.

 N/A

p43

Dugbe 1 Gold Liberia  2-2.5% NSR N/A

p43

Mine locations

Development

Asset Commodity Location Operator/developer Royalty basis  See more

West Musgrave Nickel and copper Australia OZ Minerals 2.0% NSR 

p36

Santo Domingo Copper and

cobalt

Chile Capstone

Copper

2.0% NSR 

p37

Piauí Nickel and cobalt Brazil Brazilian Nickel  

p38

Nifty Copper Australia Cyprium 

value

6 years

p39

Incoa Calcium

carbonate

Dominican

Republic/US

Incoa  N/A

p40

Salamanca Uranium Spain Berkeley

Energia

 

p41

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Chairman’s statement





Group’s history. As I look back at 2022, I am pleased to





major transaction, 2022 was arguably more











economic disruption and geopolitical uncertainty. The



prices to increase rapidly, which contributed to the







return to normal, China remained locked down which





upwards price pressure. China will continue to play a

central role in commodity demand and as it has started





potentially pricing, in 2023.















As we highlighted in last year’s report, the Board was













developed a very constructive culture internally and has



stakeholders, including shareholders and our investee







in the coming years.

Portfolio development







From the Board’s perspective, these royalties deepened















Rebranding

In October we began trading as Ecora Resources PLC.

Having done the hard work to completely reposition the











Board and governance





Group’s strategy, together ensuring we operate with

integrity and to the highest ethical standards. During 2022









C. Coignard to the Board as an independent Non-





I am pleased to

report another

record year



Patrick Meier

Chairman

“

Ecora Resources PLC

Annual Report and Accounts 2022





and Polymetal International.











out in the FCA policy statement ‘Diversity and inclusion on



will report against in our 2023 Annual Report.





in assisting the Company through its considerable growth,







to the Company and his wise advice over the years. He

will be missed, and we all wish him well. Following Bob’s











is under constant review and changes will be made as tenures

come to an end and as the business continues to evolve.





Returns to shareholders

Our core capital allocation principles remain in place,

which will see us continue to prioritise the maintenance















The Group’s current annual dividend is 7p per share. The







is proposing to round this to 8.5c per share, which would













Shareholder engagement

We were pleased to be able to hold our Annual General

Meeting in person again in 2022 and welcome shareholders

to the event. We strengthened our investor relations



engagement with both our institutional and retail

shareholders during 2023. During the year we saw the











support over the year.

Thanks



dedication and hard work. To have completed another





my own conversations that the team shares the Board





Patrick Meier

Chairman

28 March 2023

A new sustainability

framework



Ecora’s sustainability strategy that clearly communicates



activities have been divided up to sit underneath two

key pillars: Responsible Business and Responsible

Investors. Underneath these, as can be seen in the



we will report under as we continue to evolve our

sustainability reporting.

Supporting a

sustainable

future

More detail on the new reporting framework can be

found in the sustainability section on p52 to 61

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022











Read more on p19

We offer investors exposure to a basket





 

Portfolio contribution ($m)

Future facing contribution Other







2023 2024 2025 Medium term

Ecora Resources PLC

Annual Report and Accounts 2022

Copper Cobalt

Nickel

Uranium

Iron ore

pellets

Vanadium

Balance sheet flexibility













Read more on p26

Income from assets acquired ($m)





2015 2016 2017 2018 2019 2020 2021 2022

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Marc Bishop Lafleche









achieved record results. I am writing under our new name,







Resources to be the globally recognised leading royalty



energy transition and decarbonisation. We will continue to





costs and leading sustainability credentials, and backed by

well-established operators.





is highly capital intensive by nature, and substantial



meet the supply growth to enable a global energy

transition. Capital market conditions remain challenging,







Delivering on our strategy











energy transition.





over the Santo Domingo copper cobalt development in



located in well-established mining jurisdictions.

Furthermore, they have proven operators in Capstone

Copper at Santo Domingo, and OZ Minerals at West

Musgrave. I am pleased to note that in the short time

since we have owned these royalties, there have been a





project, along with a positive Mantoverde-Santo Domingo



We were delighted to welcome South32 as our largest









ability to deliver shareholder value.























Group’s assets and revenues were almost entirely linked









Results







elevated commodity prices, particularly steel making coal,









It is clear Ecora has

undergone its own

transition over the



“

Ecora Resources PLC

Annual Report and Accounts 2022

















Outlook





















Capstone Copper is evaluating the potential to increase











cobalt project is underway, and targeted to complete





it will produce battery precursor nickel and cobalt











CASE STUDY

South32 royalty portfolio







providing growth and complementing the Group’s

prior weighting towards income producing assets.

















The two main assets are the West Musgrave copper

nickel project in Australia, currently operated by OZ

Minerals but which will move under the BHP banner



the Santo Domingo copper cobalt project in Chile,





beyond Final Investment Decision and construction



production in H2 2025. At Santo Domingo, Capstone

Copper has completed the Mantoverde-Santo Domingo

district integration plan, which was looking at synergies







The transaction also included a royalty over a copper





















During 2023, operations at Kestrel will begin to transition















mining operation, resulting in lower planned 2023 cobalt

production relative to 2022, with underground production







demand. Cobalt prices are now seen to be at or around

bottom price levels, with the medium-and longer-term

outlook remaining strong.

I was delighted to visit the Voisey’s Bay mine, which









achievements and progress we have made on many







becoming the globally recognised leading royalty





Marc Bishop Lafleche



28 March 2023

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Mining has a critical role to

play in the energy transition

Without the mining industry it will be impossible to fully

transition to a net-zero economy.

Supporting a sustainable future



The chart below demonstrates this through looking at













BloombergNEF under both energy transition and net



and highlights that under the energy transition scenario



copper that is consumed today. Under the net zero



Annual metals demand from power

grid under BNEF’s net zero scenario

(Mtpa)

Aluminium

Copper

Clean energy is dependent on

mineral extraction (‘000 kg/MW)

Copper

Nickel

Zinc

Other minerals

Natural

gas

Coal

Nuclear

Solar PV

Onshore

wind



wind

0 4 8 12 16





2020 2030 2040 2050

NZS

Source: BloombergNEF.



Source: IEA.

3.1x

4.8x

Ecora Resources PLC

Annual Report and Accounts 2022













global nickel supply. CIC energiGUNE estimate that over



and North America alone.



increase materially over the coming years. The chart













commodities shown in the chart.

Tesla’s Texas 140 GWh battery gigafactory Value of market for commodities involved in



Copper

$319

$168

$68

$14

$3.3

2050 NZS

$57

$37

$0.6

$0.1

2022

Lithium

Nickel

Cobalt

Rare earths

High purity manganese

Annual value in energy transition



Source: Benchmark Minerals. Source: BloombergNEF – copper, lithium, nickel, and cobalt 2022







Graphite anode

140-170,000t

13.5%

High purity

manganese

9-14,000t

14%

Class 1 nickel

110-125,000t

~10%

Lithium

100-115,000t

18.1%

Aluminium

1-1,500t

Cobalt

11-15,000t

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Supporting a sustainable future continued





networks, battery storage and electric vehicles. The



copper mines.



impacting the ability to meet rising demand. This is due















undergo the energy transition. It is widely believed that







(source: Anglo American).

This is the reason that Ecora has been deploying capital



many other commodities in our basket then they would

tell a similar story. The world needs these commodities

to deliver the energy transition and Ecora’s major growth

assets, such as West Musgrave and Santo Domingo,

provide leverage to this thematic.

Demand and supply (Mt)

Current supply

Forecast demand







2020 2022 2024 2026 2028 2030

Projected

supply



Limited exploration over the last decade





150

125

100

1990 1995 2000 2005 2010 2015 2020

Copper market dynamics

Copper has a variety of end uses due to its conductivity,

ductility, recyclability and low reactivity. It also has very

few cost effective substitutes.

6Mtpa as





supply graphic based on sustainability development scenario, operating mines only.









resources that meets or surpasses the major discovery threshold criteria.

Source: S&P Global Market Intelligence.

Ecora Resources PLC

Annual Report and Accounts 2022

CASE STUDY

West Musgrave

- a high quality

copper and nickel

project driving

medium-term

income growth

Expected annual royalty contribution:

c. $10-15m

Life of mine

24 years

Discover

more online:

West Musgrave



copper and nickel sulphide development projects are

scarce. As such we were delighted to add a royalty over



progress has been made on the project since we



Investment Decision in September 2022 and starting

construction activities in November 2022. First









a best in class operator. The project is in the lowest







Our investment was predicated on long-term copper









Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Our markets

Commodity prices

Prices of the key commodities underlying

Ecora’s royalty portfolio performed well

relative to historical levels, particularly



Cobalt

US$/lb

Copper

US$/lb

5.0

4.5

4.0

3.5

3.0

2.5

Vanadium

US$/lb

Iron ore

US$/t

Steel making coal

US$/t

600

500

400

300

200

100

Uranium

US$/lb

Jan 22 Apr 22 Jul 22 Sep 22 Dec 22

$190

140

Jan 22 Apr 22 Jul 22 Sep 22 Dec 22

Jan 22 Apr 22 Jul 22 Oct 22 Dec 22

Ecora Resources PLC

Annual Report and Accounts 2022

Our key markets

Overview









normal business conditions, and instead triggered events







inventories helped prices reach decade highs as an





and concerns over a looming recession. As an asset

class, however, commodities alongside cash would be

the only instruments to post a positive return over the



As Russia restricted natural gas volumes to Europe,

countries pursued alternative energy sources. In the









carbon sources such as renewables and nuclear power



China’s zero-COVID policy and lagging property sector

continued to impact demand and cause bottlenecks in



over various commodity markets, the West determined



granted. Protectionist measures were implemented such











2023. China’s role within commodity markets remains



energy security, responsible sourcing and decarbonisation







price volatility in 2023.

Cobalt





demand coupled with the war in Ukraine and logistical



























also impacted by a reduction in EV subsidies, leading to a





to through its Voisey’s Bay stream) remains supported



















Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Nickel











margin calls.



























battery processing. Questions remain, however, on













Our markets continued

Steel making coal

Metallurgical coal used in steel making reached a market









would support metallurgical coal prices even when



struggled with high input costs and weak steel markets.



interest rates and recession risks pointed to a slowdown

in the steel and construction sectors. Reports surrounding

China’s reopening, however, helped metallurgical coal







Copper

The copper market is deeply entwined with the global



























Chilean output continues to struggle just as China

abandons its zero-COVID policy, and producers battle













Ecora Resources PLC

Annual Report and Accounts 2022

Other













Chinese property sector.



to the steel market, but is also used in the growing vanadium



alongside renewables to store energy without degradation,







Uranium

The global sentiment surrounding uranium and nuclear









and new builds were announced. These included the UK









phase out by ten years.





as well as key technology and conversion capacity. Most







Russia may prove challenging due to limited Western







demand is set to increase as energy security and transition

to low carbon electricity picks up pace. Producers have



the projected high demand in the coming years. Cameco,













The royalty sector

Following a year with strong commodity price appreciation



















streams underwritten.

Corporate transactions contributed close to one-third







Altus Strategies and Elemental Royalties were the largest







over a decade. The sector, however, remains highly





deals to be heavily weighted towards secondary royalties

and streams, particularly when compared to previous











to their asset base has also continued, increasing competition

















Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Our business modelOur business model

Applying a proven

business model

Our business model is proven and offers low risk exposure





Investment











Resources



















































To the mine operator:

1. Non-dilutive – 











 













To the royalty company:

 



















 















Annual Report and Accounts 2022

Inputs 











































Internal























External























Strategic report



Annual Report and Accounts 2022



investment strategy















• 





• 





• 







• 







• 







• 









7 96 8







• 

• 

• 

• 

• 



• 





• 



• 



• 



• 

• 

• 



7 96 8





• 

• 

• 



• 





• 



• 





• 







7 96 8



• 



• 





• 





• 





• 



• 





• 





• 





7 96 8

Investment

framework



































Annual Report and Accounts 2022











































$17.5-



CASE STUDY

The Piauí project

offers material

near-term income

growth

Discover

more online:



Annual Report and Accounts 2022

Strategic report





$141.9m +65%

‘22

‘21

‘20

‘19

‘18

140.9

85.3

43.7

71.2

61.5





















































 +49%

‘22

‘21

‘20

‘19

‘18

37.55

25.18

15.69

26.06

24.05









































4.4x +69%

‘22

‘21

‘20

‘19

‘18

4.4

2.6

1.4

2.3































Measuring our

performance





 

Strategy key:





Annual Report and Accounts 2022



 +67%

‘22

‘21

‘20

‘19

‘18

143.2

85.6

47.5

75.9

65.9





































56.46c +144%

‘22

‘21

‘20

‘19

‘18

56.87

23.28

14.09

33.77

29.74





















































 -10.9%





























 -76%

‘22

‘21

‘20

‘19

‘18

0.27

1.12

1.15

0.58

0.07































 +64%































‘22

‘21

‘20

‘19

20.74

12.68

-28.62

33.14

2.46

‘22

‘21

‘20

‘19

‘18

185.0

207.7

9.8

75.8

50.4

‘18

Strategic report



Annual Report and Accounts 2022

Business review

A transformational

year

In 2022 we added medium-term









Group and up 67% on the prior



































































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

Annual Report and Accounts 2022



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

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Strategic report



Annual Report and Accounts 2022

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

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



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

Mantos



$6m



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





Operator





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

Annual Report and Accounts 2022



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













































Strategic report



Annual Report and Accounts 2022

















































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

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95%

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

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







Annual Report and Accounts 2022



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

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

Annual Report and Accounts 2022

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





















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

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



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Operator



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







Annual Report and Accounts 2022





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



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

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



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Four Mile



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



































Strategic report



Annual Report and Accounts 2022













































































































Operator



























































Annual Report and Accounts 2022



































































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

Strategic report



Annual Report and Accounts 2022

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























EVs





















Operator

















































































Annual Report and Accounts 2022

























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































6th



























Operator















Strategic report



Annual Report and Accounts 2022











































Annual Report and Accounts 2022



















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

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

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

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

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



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Strategic report



Annual Report and Accounts 2022





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

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











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











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

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





















Annual Report and Accounts 2022





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

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 

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



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

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













































Strategic report



Annual Report and Accounts 2022



“ To fully appreciate

the transformation

achieved requires a

two-year look back.”

Overview























































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 

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





Annual Report and Accounts 2022

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

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



• 



• 































Strategic report



Annual Report and Accounts 2022













2022





 

 107.2  

 18.8  

 6.0  

 3.6  

 1.0  

 0.2  

Narrabri (disposed) 0.0 3.4 (100%)

 136.8  

 2.9  

 2.1  

 141.7  

 2.8  

 2.9  



 (4.3)  

 143.2  

















































































Annual Report and Accounts 2022





• 

• 

• 

• 

• 





• 

• 

• 

• 





• 

• 

• 





• 

• 



• 

• 

LIORC



• 





• 

• 

• 





2022 

  

 141.8  

 2.8  

 (4.3)  

 (10.8)  

 (6.4)  

 (0.4)  

 (34.8)  

 87.9  

 234,062 

 37.55c  





















Strategic report



Annual Report and Accounts 2022































1 January 2022



31 December 2022

Adjusted

earnings





1 January 2022



31 December 2022

154.5

Portfolio contribution

5.0

Narrabri consideration

49.50

Debt draw drown

9.7

Overheads

0.7

FX & other

11.9

Taxes

4.2

Finance costs

119.3

Repayment of debt

3.3

Contingent consideration

59.36

Royalty acquisitions

19.4

Dividends

1.3

M&EI disposals

Issue of

ordinary

























Kestrel



Amortisation

depletion &

impairment

FV movement

- Royalty

Financial

Instruments

MtM M&EI

Revaluation of

contingent

consideration

Dividends





Annual Report and Accounts 2022

























































































• 



• 



• 



• 





• 





• 



• 





















returns

Strategic report



Annual Report and Accounts 2022



and mine

operators















• 



• 



• 







• 





• 



• 



Outcomes

• 







• 



• 





Strong relationships across

all stakeholder groups















• 





• 

• 

• 

• 

• 



• 







• 



• 

• 

• 

• 

• 



Outcomes

• 

• 





• 



• 





Strategy key:

Investment



  

























• 





• 



• 

• 



• 



• 



• 







• 

• 

• 

• 



• 

• 

Outcomes

• 





• 



• 





Annual Report and Accounts 2022

















• 



• 

• 



• 



• 



• 









































































Distributions to shareholders and capital allocation



























Acquisition of royalty portfolio from South32









































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engagement

Strategic report



Annual Report and Accounts 2022

Our business modelOur business model

Applying a proven

business model

Our business model is proven and offers low risk exposure





Investment











Resources



















































To the mine operator:

1. Non-dilutive – 











 













To the royalty company:

 



















 















Annual Report and Accounts 2022

Inputs 











































Internal























External























Strategic report



Annual Report and Accounts 2022



investment strategy















• 





• 





• 







• 







• 







• 









7 96 8







• 

• 

• 

• 

• 



• 





• 



• 



• 



• 

• 

• 



7 96 8





• 

• 

• 



• 





• 



• 





• 







7 96 8



• 



• 





• 





• 





• 



• 





• 





• 





7 96 8

Investment

framework



































Annual Report and Accounts 2022











































$17.5-



CASE STUDY

The Piauí project

offers material

near-term income

growth

Discover

more online:



Annual Report and Accounts 2022

Strategic report





$141.9m +65%

‘22

‘21

‘20

‘19

‘18

140.9

85.3

43.7

71.2

61.5











































 +49%

‘22

‘21

‘20

‘19

‘18

37.55

25.18

15.69

26.06

24.05









































4.4x +69%

‘22

‘21

‘20

‘19

‘18

4.4

2.6

1.4

2.3































Measuring our

performance





 

Strategy key:





Annual Report and Accounts 2022



 +67%

‘22

‘21

‘20

‘19

‘18

143.2

85.6

47.5

75.9

65.9





































56.46c +144%

‘22

‘21

‘20

‘19

‘18

56.87

23.28

14.09

33.77

29.74













































 -10.9%





























 -76%

‘22

‘21

‘20

‘19

‘18

0.27

1.12

1.15

0.58

0.07































 +64%































‘22

‘21

‘20

‘19

20.74

12.68

-28.62

33.14

2.46

‘22

‘21

‘20

‘19

‘18

185.0

207.7

9.8

75.8

50.4

‘18

Strategic report



Annual Report and Accounts 2022

Business review

A transformational

year

In 2022 we added medium-term









Group and up 67% on the prior



































































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

Annual Report and Accounts 2022



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

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Strategic report



Annual Report and Accounts 2022

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

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



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

Mantos



$6m



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





Operator





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

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

Annual Report and Accounts 2022



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











































Strategic report



Annual Report and Accounts 2022























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























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









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





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

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95%

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

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









Annual Report and Accounts 2022



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

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

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

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

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

Strategic report



Annual Report and Accounts 2022

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

















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

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

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



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Operator



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





Annual Report and Accounts 2022





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







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

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

Four Mile



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

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























Strategic report



Annual Report and Accounts 2022













































































































Operator



































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





















Annual Report and Accounts 2022



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

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

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





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



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

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





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Strategic report



Annual Report and Accounts 2022

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

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















EVs





















Operator

















































































Annual Report and Accounts 2022

























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































6th



























Operator















Strategic report



Annual Report and Accounts 2022











































Annual Report and Accounts 2022



















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

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

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

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

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



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Strategic report



Annual Report and Accounts 2022





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

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











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











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

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





















Annual Report and Accounts 2022





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

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 

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



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

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













































Strategic report



Annual Report and Accounts 2022



“ To fully appreciate

the transformation

achieved requires a

two-year look back.”

Overview























































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 

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





Annual Report and Accounts 2022

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



• 



• 































Strategic report



Annual Report and Accounts 2022







2022





 

 107.2  

 18.8  

 6.0  

 3.6  

 1.0  

 0.2  

Narrabri (disposed) 0.0 3.4 (100%)

 136.8  

 2.9  

 2.1  

 141.7  

 2.8  

 2.9  



 (4.3)  

 143.2  

















































































Annual Report and Accounts 2022





• 

• 

• 

• 





• 

• 

• 

• 





• 

• 





• 



• 

• 

LIORC



• 





• 

• 

• 



2022 

  

 141.8  

 2.8  

 (4.3)  

 (10.8)  

 (6.4)  

 (0.4)  

 (34.8)  

 87.9  

 234,062 

 37.55c  





Strategic report



Annual Report and Accounts 2022































1 January 2022



31 December 2022

Adjusted

earnings





1 January 2022



31 December 2022

154.5

Portfolio contribution

5.0

Narrabri consideration

49.50

Debt draw drown

9.7

Overheads

0.7

FX & other

11.9

Taxes

4.2

Finance costs

119.3

Repayment of debt

3.3

Contingent consideration

59.36

Royalty acquisitions

19.4

Dividends

1.3

M&EI disposals

Issue of

ordinary

























Kestrel



Amortisation

depletion &

impairment

FV movement

- Royalty

Financial

Instruments

MtM M&EI

Revaluation of

contingent

consideration

Dividends





Annual Report and Accounts 2022

























































































• 



• 



• 



• 





• 





• 



• 





















returns

Strategic report



Annual Report and Accounts 2022



and mine

operators















• 



• 



• 







• 





• 



• 



Outcomes

• 







• 



• 





Strong relationships across

all stakeholder groups















• 





• 

• 

• 

• 

• 



• 







• 



• 

• 

• 

• 

• 



Outcomes

• 

• 





• 



• 





Strategy key:

Investment



  

























• 





• 



• 

• 



• 



• 



• 







• 

• 

• 

• 



• 

• 

Outcomes

• 





• 



• 





Annual Report and Accounts 2022

















• 



• 

• 



• 



• 



• 









































































Distributions to shareholders and capital allocation



























Acquisition of royalty portfolio from South32









































Our stakeholder

engagement

Strategic report



Annual Report and Accounts 2022

Our approach

to sustainability

Introduction

Ecora Resources believes that investment

success and long-term value can only be

achieved through sustainable and responsible

investment with a strong focus on environmental,

social and governance (ESG) factors. As a



considerations into our strategic decision

making and capital allocation process and

corporate behaviours.

While we do not operate any of the assets underlying our

royalty portfolio and hence do not control the manner in

which operations are carried out, we recognise that we

face ESG risks through the investments we make and



practice in the mining industry. Therefore, we seek to



management of ESG issues through a range of

mechanisms at our disposal, including our policies,









Ecora Resources is committed to upholding high

corporate governance standards as a standard listed





Our Board and employees are committed to











Sustainability

Sustainability highlights 2022

Engagement with our operators

An increased level of engagement with operators







Increase in response rate from operators

+126%

TCFD disclosure and SBTI aligned

objective setting



comprehensive disclosure. We have also set





UNGC membership and SDG alignment



have started to seek to align our investment strategy



We believe that long-term value can





Marc Bishop Lafleche



Ecora Resources PLC

Annual Report and Accounts 2022



investment in natural

resources to enable a























coming years.

UN Global Compact and

Sustainable Development

Goals











environment and anti-corruption. As such, in our







operations, and have made progress in doing











continuously improve our performance as a















arise though the investments that we decide



As such, we have started to seek to align our





and ensure relevance of the implementation





Supporting a

sustainable

future

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Sustainability continued

Responsible

business









operating our business with the highest standards of ethics







While Ecora does not take an active role in the





our purpose is to provide capital to the mining sector

























Business and Human Rights and the World Gold



Ecora started to align its investment strategy with the











As an investor, our goal is also to assist our mining



through supporting local community initiatives.







and environmental assurance programme for copper

production and is a means to demonstrate commitment











Industry

levers

Encouraging sustainable practices at the

industry level.

Progress in 2022

• 



• Started to seek to align our investment strategy



2023 priorities

• 



• 



• 



Ecora Resources PLC

Annual Report and Accounts 2022

Responsible

employer

We aim to be an equal opportunities

employer, offering an attractive environment

through promoting excellent learning



Progress in 2022

• 

• 

and development opportunities

• 

2023 priorities

• 



• Provide further training sessions to employees





• 

initiatives programme

Diversity, inclusion and equal opportunities

At Ecora, we create an environment where everyone is

seen, heard, valued and empowered to succeed. We value



















its diversity training programme which will focus on the

promotion of diversity of thought and the inclusion of







governance section for further information on our

diversity disclosures.

Health and safety



and the support needed to our employees that work





Health and well-being

Ecora is committed to promoting mental, physical and





all employees, which includes life insurance, and access

to our long-term illness and sickness policy. To ensure

the physical health of employees, Ecora provides access





Training and development





pipeline of talent and organic succession planning from



with every employee to understand their personal

development goals and implemented a tailored plan to





participation in professional courses, training and

coaching in areas of agreed focus.



Gender diversity

Male 43%

Female 57%



Employee nationalities

British 50%

Irish 14%

Canadian 7%

Slovakian 7%

New Zealand 7%

Australian 7%

South African 7%

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Effective

governance

Enabling our sustainability strategy through clear, robust and effective governance.

Progress in 2022

• 

• 

• 



2023 priorities

• Roll-out of corporate governance training

programme

• 



• 

Sustainability continued

Corporate charitable initiatives

We strengthened our commitment to supporting our

































that has launched a collective appeal to provide emergency

aid and rapid relief to Turkish and Syrian civilians who are



Employee relations   

Performance indicator

   9

   

   

Health and safety   

Performance indicator

   

   

   

Ecora Resources PLC

Annual Report and Accounts 2022

Ecora Resources is committed to upholding high

corporate governance standards as a standard listed



Our policies and governance framework are drafted to





direct operational control of mining operations. Accordingly,

we do not disclose information more akin to mining

operations in relation to our corporate activities such as













environment. We ensure that our internal controls are





issues. Our Board and employees are committed to











Ecora has an annual training programme for all





Please refer to the corporate governance section for

further information on our governance disclosures.

Key governance highlights in 2022

Charitable donations policy

















donations and that any donations are made in line with the



Policy and following due process.

Cybersecurity















assessment and implement the correct security and

information technology infrastructure and policies





addition will provide ongoing monitoring and training





Modern slavery statement













portfolio level, and also through its supply chains. Ecora





The key performance indicators under the Statement





 

principles of the Statement;

 

operators; and



   

Performance indicator

   

   33

   

Ethics and compliance   

Performance indicator

   

   

   

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Sustainability continued

Responsible

investors

Long-term value for all our stakeholders can only be









United Nations Sustainable Development Goals

(‘SDGs’)











•

Description:



• Reason for alignment: Ecora invests in mining



central to the production, storage and transmission



•

Description: Build resilient infrastructure, promote





• Reason for alignment: Ecora invests in mining











CASE STUDY

South32 royalty acquisition













track record, an emphasis on creating shared



governance frameworks.





















low emissions mine.



environment; therefore, water management is a key













environmental footprint of the two operations.

Ecora Resources PLC

Annual Report and Accounts 2022



approach to evaluating potential royalty investments and









and stream opportunities due to ESG-related issues



Due diligence process for potential royalty

transactions

Ecora recognises that the most critical time for assessing

and mitigating risks, including ESG risks, relating to an

asset is at the outset prior to entering into any royalty

agreement. Before completing any new investment,



our ESG risk due diligence framework. The due diligence













of carefully evaluating the risks, opportunities and







ESG due

diligence

We commit to conducting robust ESG risk

due diligence throughout all of our

investment decisions.

Progress in 2022

• 



during the due diligence process]

• 



2023 priorities

• 



new royalty documentation

• Ongoing review of ESG risk due diligence

framework and continued commitment to

annually review



Initial

screening

Tailored due

diligence

Assessment

criteria

Regular

review

We employ rigorous

screening tools and





investment opportunities

We use a tailored and

detailed due diligence

framework to assess the





We assess potential

investments using a set of



criteria, which look at the

level of a particular ESG





Our screening and due

diligence tools are regularly

reviewed and updated to

ensure that they continue



date developments and

mining industry







Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Sustainability continued

Engaging with

our operators

Be a positive influence on our



Progress in 2022

• Enhanced our monitoring and





• 





2023 priorities

• 

partners to encourage greater transparency



• 















Operator sustainability metrics





meaningful metrics. We achieved this through greater

engagement with operating partners as demonstrated







• water management;

• energy;

• climate;

• waste management;

• health and safety and;

• diversity.











partners to proactively monitor the performance of our



engagement on, any risks and opportunities. To the



related audit rights and inspection rights into our agreements;

and conduct regular site visits and gather periodic reports

from our mining partners on their ESG activities.

Our ongoing engagement includes regular discussions



investment teams, which also allow for the opportunity to



















Community initiatives with operators

Ecora maintains an ongoing dialogue with its operating







Group has invested. The Group is committed to investing



























Go to page 80 to read our sustainability metrics.

Ecora Resources PLC

Annual Report and Accounts 2022









future, it also means we only invest in mining operations





Commodity mix



nickel play a vital role in the generation, storage and



invests in commodities such as high purity iron ore





versus more standard forms of iron ore.

Thematic

investing

Investing in commodities that support



Progress in 2022

• 

• 

• 



• 



• 



2023 priorities

• 





chains, the construction of solar panels and wind









concerns over the high emissions associated with coal



















Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Risk management

Our risks and risk

management

The risk management framework

Our strategy, values and risk appetite inform and shape

our risk management and internal controls framework.



oversight of our principal and emerging risks, and the



our risk management processes and internal controls.







identifying and responding to the risks we face.

Risk management process











• 





• 



• 

• 





• 







The impact of risk on our strategy and viability

Risk can arise from events outside of our control or







Risk appetite







enhancing royalties and streams to its portfolio. The







Identify

Material risks that we consider may lead to

threats to our business model, strategy and





processes and procedures and a consideration





Assess

We analyse the risks and controls and evaluate

the commercial, strategic, regulatory and other



Monitor

The executive management team is responsible

for monitoring the controls and progress of





programmes and the principal risks are reviewed



Respond

We respond to changes in the materiality of risk

by reviewing the mitigating actions and checking



Our risk management and internal control framework is

well-embedded and continuously reviewed and overseen



Ecora Resources PLC

Annual Report and Accounts 2022

the risk, and that status of management actions to mitigate



year was the way in which the Board assessed the



achieiving production in line with the investment thesis.









Our risk assessment process considers the likelihood

and impact of risks, and the timescale over which a risk







Emerging risks





they might have if they did materialise. We will investigate



as principal risks. Typically, emerging risks are those on a



For more on the Group’s emerging risks refer to page 64

Principal risks



















longer period.

For more on the Group’s principal risks refer to page 65 to 68.



to other risks related to the day-to-day operation of the

















Cybersecurity







solvency as it is not linked to the operations underlying









information technology infrastructure and education and

training of all employees and directors.







infrastructure of our operating partners as it is their



in their operations.

Catastrophic risks

The Group also faces certain risks that are deemed

catastrophic risks. These are very high severity, very low

likelihood events that could result in an unplanned











Changes to our risks in 2022































addressed the critical strategic challenge of replacing











together with the increase in cost of capital in the mining

sector is likely to increase the demand from operators



recent consolidation within the royalty and streaming



and streaming peers potentially adding non-precious









within the sector, the risk of future demand for royalties





its disciplined approach to investment as outlined on







remain our highest priority risk, given the potential



Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Emerging risks



Climate change

Cause

The physical impacts from climate change,

together with the impact of the response





portfolio of royalties and streams, together



and streams in the future.

Commentary





Supporting our assessment of the physical and transitional risks and opportunities,





While our assessment to date does not indicate that climate change will have a







climate change as an emerging risk.

Supply chain disruption

Cause

Severe supply chain and logistics disruptions

have the potential to impact not only the







in the case of our non-producing royalties.

Commentary







the short term of royalty-related revenue.





Inflation

Cause









The increased costs could delay or prevent



in the case of our non-producing royalties.

Commentary



primarily limited to corporate overheads in comparison to the operating costs and









uneconomical with operations or development suspended temporarily or entirely. This

could in turn result in delays over the short term of royalty revenue and potentially





Interest rate risk

Cause



interest rates could adversely impact the







Commentary





underlying interest rates, management is proposing an interest rate hedging programme.



Energy security

Cause



‘supply chain disruption; the real prospect



impact on the end users of the raw materials

derived from the commodities underlying



Commentary

The temporary reduction in productivity or closure of end user operations in response

to government rationing could result in a reduced demand for the commodities







Ecora Resources PLC

Annual Report and Accounts 2022

Principal risks



Catastrophic and natural catastrophic risk

A potentially catastrophic

incident such as a mine shaft



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 uneconomical.

Risk movement

since 2021:



Link to strategy

Cause





Impact













Mitigation







proceeding with an investment.

The Group monitors, through ongoing engagement with our mining

partners, monitors technical and ESG related matters. Any





Commentary

While such risks have a low



potentially very high; as a

result they are treated with

the highest priority.

Climate change risks



Physical risk

See more on p75

Future demand







macro-economic conditions.

Competition within the royalty

and streaming sector may impact

the demand for royalty and

streaming opportunities,

particularly from the Group’s

precious metals peers.

Risk movement

since 2021:



Link to strategy

Cause

High commodity price environments typically reduce the demand









and streams.





Impact













facing metals.

Mitigation



preference for long-life assets that will generate returns through







royalty transactions.

Commentary



medium-term revenue



initiatives, including the

organic growth options





competition within the

royalty and streaming

space is which could result



lower returns in future.

Additional competition



precious metals peers in

future, should they change

focus and look to increase



facing metals.



competition within the

royalty and streaming

sector has resulted in the

risk for future demand

increasing.

Climate change risks



Transition risk

Risk movement:













Strategy key:



Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Commodity prices

Global macro-economic

conditions leading to





Risk movement

since 2021:



Link to strategy

Cause





trade disputes and sanctions, economic slowdown in a leading





Impact











Mitigation





Regular updates of economic analysis and commodity price assumptions





assessment of commodity price forecasts, with a focus on

generating shareholder returns through the cycle.

Commentary



portfolio should reduce













the energy transition and





portfolio could command









Climate change risks



Transition risk and

opportunity

See more on p74

Operator dependence and concentration risk

The Group is dependent on



effectively while upholding high

standards of ESG practices to

provide the returns expected



Of the Group’s eight producing

royalties and streams, two

account for 71% of our portfolio

contribution in 2021.

Risk movement

since 2021:



Link to strategy

Cause

Ecora Resources 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 who determine the manner in which the underlying



reduce, suspend or discontinue production, together with decisions



Impact













Mitigation

When assessing potential investment opportunities, the Group



portfolio, we maintain ongoing engagement with our mining partners,



with our assets.

On certain royalties and streams, the Group has information and audit

















The Group aims to include transfer restrictions change of control clauses









Commentary





engagement together with

its information and audit





Climate change risks



Physical and transition risk

See more on p75

Principal risks continued

Risk movement:













Strategy key:



Ecora Resources PLC

Annual Report and Accounts 2022

Geopolitical events

Geopolitical events and tensions

have the potential to negatively

impact our business.

Risk movement

since 2021:



Link to strategy

Cause



powers and restrictions or constraints to free trade can have a

direct impact on commodity prices.

The introduction of new policies linked to natural resources or

capital controls as a result of changes in the domestic politics of the



Impact

















Mitigation





Commentary

The ongoing war







policies although currently



Australian imports, creates

uncertainty. As a result



events is considered to



Financing capability

The Group is dependent on

access to capital in order to

achieve its growth ambitions.

Risk movement

since 2021:



Link to strategy

Cause

Sudden adverse change in capital market conditions, including



price volatility.

Impact





Mitigation







We regularly meet with advisers, shareholders and lenders to

discuss the types of transactions we are considering to gauge



Commentary









facility increasing its overall











Climate change risks



Transition risk and

opportunity

Stakeholder support

Ecora Resources needs to



stakeholders including:

• Operating counterparties

• Employees

• Shareholders

• 

• 

Risk movement

since 2021:



Link to strategy

Cause





Impact







Mitigation





have regular and ongoing interaction with all of our stakeholders,



Commentary









Climate change risks



Transition risk &

opportunity

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Investment approval

Ecora Resources’ success will

depend on the Board making

sound investment decisions









Risk movement

since 2021:



Link to strategy

Cause





prices, production volumes, and start dates assumed in the



Impact











support from stakeholders.

Mitigation

The Group undertakes a thorough due diligence and screening

process when considering each investment opportunity, which is









Commentary









portfolio of near-term

development stage

royalties addressing the



challenge of replacing the





longer-term and reduce the



Climate change risks



Transition risk and

opportunity

Pandemic

On-going disruption caused



Risk movement

since 2021:



Link to strategy

Cause



supply chain.

Impact







Mitigation







underlying operations at revenue level.

Ecora Resources updated its health and safety policies and

procedures, responded to government guidelines on working





Commentary

We are continuing to see

sporadic lockdowns in





policy, which is having









Risk movement:













Strategy key:



Principal risks continued

Ecora Resources PLC

Annual Report and Accounts 2022

Task Force on Climate-related Financial Disclosures (TCFD)



challenges of our times. As a result, we have a



and transitional risks and opportunities together with the











While the Group does not control or directly operate any

of the mines or mills from which it receives royalties or

physical metal deliveries, it does control its strategy and





arises indirectly through the operations underlying our





• undertake our assessment of climate-related risks and

opportunities, including the scenario analysis used;

• 

• 

climate-related risks and opportunities as well as







undertaken climate-related scenario analysis. As our

understanding of the impacts of climate change and





further initiatives to enhance our climate resilience.







is not yet in a position to make the 3 recommended





(a) Disclose the metrics used by the organisation to

assess climate related risks and opportunities in line









the most appropriate metric with a view to including it









(b) Disclose Scope 1, Scope 2 and, if appropriate,

Scope 3 greenhouse gas (GHG) emissions and the

related risks









has commenced collating an emissions inventory for the











encourage transparent climate change disclosure with



manage climate related risks and opportunities and

performance against targets



which it manages climate related risk and opportunities,



emissions and determining the most appropriate













Task Force on Climate-related Financial Disclosures

Climate-related risks

and opportunities

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Governance





purpose, values, culture, strategy, governance and risk











assessment of potential investments and the review of any









processes, with a particular focus on climate-related risks



and opportunities and the scrutiny of the mitigation plans.





climate-related decisions taken in the year.

Some climate-related decisions and matters are reserved





Audit Committee











Remuneration Committee









monitors performance against the targets set and

approves remuneration accordingly.

Task Force on Climate-related Financial Disclosures continued

TCFD framework

 Our response  

Governance







including climate-change related risk







portfolio and in the assessment of new





sessions on climate change to ensure













processes for climate risks

and opportunities are



Strategy



opportunities most material to the Group.





in relation to the likely future demand for



portfolio of royalties and streams. The



results and assessed the appropriateness



results were considered as part of the















assessment are updated with the latest



understanding.

Highest ranked climate

related risks and

opportunities, are shown



Scenario analysis and results



Risk

management











The climate risk register was further













opportunity implementation through







and principal risks and







highest ranked climate related

risks and opportunities.



targets





The Group has commenced collating an

emissions inventory for the operations



















linked key performance indicator.



to engage with its operating partners to

encourage transparent climate change

disclosure with a view to provide a more

complete emissions inventory.

The Group will continue to assess











emissions, together with







Ecora Resources PLC

Annual Report and Accounts 2022











a result, we continue to classify climate change as an

emerging risk.

Risk assessment criteria

The likelihood and potential impact of each risk were rated in



within its ESG due diligence framework, the results of which

are summarised in the risk assessment heat map.

Impact

Negligible Moderate MajorMinor Critical

Likelihood

Rare PossibleUnlikely Likely Very likely

Rising temperatures

Extreme weather



Heavy rainfall

Stakeholder concern for climate

Drought and water scarcity

GHG emissions pricing

Uncertain demand for commodities



Rising sea level

Increasing climate regulation

Unpredictable technological development

Climate litigation

7 8



Management’s role







streams through a disciplined approach to investment in













diligence process to identify and address among other

factors, climate-related risks and opportunities. As the





















and climate-related risks for the Board and its



Risk management

To fully understand the implications of climate change,





review of the key climate change related risks to and







risk assessment and climate-related scenario analysis, the

geographical location of each of the operations underlying



considered, with particular focus on South America,







mitigate climate change or adapt to a new environment and

resulted in the creation of a climate risk and opportunities







and respond to climate risk, the Group engaged Ever





climate change scenarios and facilitating workshops





the scenarios and identifying mitigation plans where



and Board have considered the outputs of the scenario











Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Strategy



























opportunities could impact our investment strategy,





Our climate-related risks and opportunities



risks and opportunities with the highest impact ratings



operations or indirectly through the operations of our

mining partners underlying our portfolio.











changes to production, for a variety of reasons including,



production closely linked to the principal risk of ‘operator









Task Force on Climate-related Financial Disclosures continued

Risk management continued

Risk assessment criteria continued







consideration desktop research in addition to evidence





























climate-related transition risks, physical risks and

opportunities with the highest risk ratings are shown



period over which the risks and opportunities could





Short term: 



Medium-term: 



Long term: 

producing and near-term development

royalties and streams are over mines





Risk management and response



review the climate risk register as part of the semi-annual

risk review to ensure that the assigned mitigating actions



is given to those risks with a high rating that may manifest

over the short to medium term. The Board also formally









Ongoing oversight of the implementation and





team. The senior leadership team meets monthly to





Ecora Resources PLC

Annual Report and Accounts 2022

Transition risks



Risk description:





increasingly making



relating to climate impacts



and in some cases raising

the rate of loans of

divesting completely

from organisations that

do not align with their



increasingly focused on

understanding the

impacts of Scope 3

emissions.

Related principal risks

and uncertainties:

• Operator dependence

• 

• 

• Stakeholder support

Potential impact

Operators

• 





Potential impact on Ecora

• 

• 



• 



• 

• 



• 

Mitigating activities:

• 



• 



• 

Scope 3 emissions

• 

Time horizon:



Overall rating:



Increasing regulation



Risk description:

• Policymakers will need



and environmental

compliance regulations,



localised according







may therefore

encounter changing



their climate impacts.

Related principal risks

and uncertainties:

• 

• Operator dependence

Potential impact

Operators

• 



• 

address mandatory compliance with local or national greenhouse



• Potential impact on Ecora

• 



• 

accurately



• 



• 

• 

Mitigating activities:

• Proactive work to enhance greenhouse gas inventory methodology

and align with standardised ESG reporting frameworks including



• 



• Regular market and regulation scans and forecasting in



Time horizon:



Overall rating:



Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Transition risks continued

Stakeholder concern



Risk description:

• 

more aware of and



impacts of climate

change on their daily

lives and the future,







supporting or

detracting from the

energy transition.

Related principal risks

and uncertainties:

• Operator dependence

• Stakeholder support

Potential impact

Operators

• 







• Potential impact on Ecora

• Stigmatisation of the industry leads to challenges in talent





• 

stream revenue



• 



Mitigating activities:

• 



• 



• 



Time horizon:



Overall rating:



Physical risks

Extreme weather events

Risk description:

• 

and intensity of acute

weather events



and intense storms,



These events may



infrastructure and

disruption to supply

chains and livelihoods



Related principal risks



• 

• Operator dependence

Potential impact

Operators

• 





• 



with developments in response to climate-related events

Potential impact on Ecora

• 



• 

stream revenue



Mitigating activities:

• 

• 





Time horizon:



Overall rating:





Task Force on Climate-related Financial Disclosures continued

Ecora Resources PLC

Annual Report and Accounts 2022

Physical risks continued

Drought and water

scarcity

Risk description:

• 

precipitation patterns

and increasing aridity



groundwater and





several regions around



Related principal risks



• Operator dependence

• 

• Stakeholder support

Potential impact

Operators

• 





uneconomical

• 

communities on water withdrawal

Potential impact on Ecora

• 



• 

and metal stream revenue



Mitigating activities:

• 

• 

environmental aspects, including water usage

Time horizon:



Overall rating:



Opportunity

Increased demand for commodities

Opportunity description:









Price premium may eventuate for those commodities

ethically sourced or derived from operations with low



















Related principal risks and uncertainties:

• 

• 

• 

• Geopolitical events

Potential impact



• 

increases in royalty and metal



Time horizon:



Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Scenario analysis







long term.



Parameter Selection Rationale

Scenario source 

















Base scenarios 





to support the energy transition, this scenario was chosen















was thus selected to understand how our operator dependence

risk could evolve in light of increased physical climate risk.

Time frame 













Geographies 





geographical emphasis was kept wide with some tailoring



  











result metallurgical coal is not a focus commodity for the

scenario analysis









policies are continued, leading to severe physical climate risks and long-term socioeconomic tensions.

Task Force on Climate-related Financial Disclosures continued

Ecora Resources PLC

Annual Report and Accounts 2022

Assessing our resilience















Delayed Transition Current Policies

• 









• 



However, poor market conditions may also provide

opportunities for the Group to identify attractive deals.

• 

headwinds from government in the medium term,



• 



• 



to physical climate impacts in the long term. The Group is



part of its ESG due diligence framework.

• Lower productivity levels at mine sites due to environmental



talent shortage facing the industry.

• Lower demand or market uncertainty linked to depressed



long-term supply dynamics suggest that even in a reduced





Total mineral demand for clean energy technologies by scenario

Hydrogen

Electricity networks

 

Other low-carbon power generation

Wind

Solar PV











2010 2020 2030 2040 2030 2040

STEPS SDS



Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Task Force on Climate-related Financial Disclosures continued

Critical mineral needs for clean energy technologies

   Lithium REEs    Aluminium*



Wind

Hydro



Bioenergy

Geothermal



Electricity networks



Hydrogen



  = low, which are discussed in their respective sections in this chapter.



 

Delayed transition



across the short, medium and long term.

Risk category Risk Short  Long

Physical risk





Rising temperatures

Rising sea level

Heavy rainfall

Transition risk



GHG emissions pricing mechanisms









Stakeholder concern for climate change

Ecora Resources PLC

Annual Report and Accounts 2022

Current policies

across the short, medium and long term.

Risk category Risk Short  Long

Physical risk





Rising temperatures

Rising sea level

Heavy rainfall

Transition risk



GHG emissions pricing mechanisms









Stakeholder concern for climate change

  = low













Metrics and targets







emissions.

Greenhouse Gas Emissions





• 

• 









• 











Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Corporate level emissions







   

Performance indicator

   

   

   

   

Scope 1 (direct) and Scope 2 (indirect) emissions







Scope 3 (upstream) emissions























• 



• 

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• 

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• 

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

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

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



countries in which we invest.

Task Force on Climate-related Financial Disclosures continued

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Annual Report and Accounts 2022

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

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





monitoring tools. Part of this process includes continuing to engage with our operating partners to understand their

















Operating partners GHG emissions   

Voisey’s Bay Stream





































Mantos Blancos Mine





   —





   —

Kestrel Mine





   —





   —

Maracas Menchen Mine





   —





   —

Carlota





   





 — — —

Piauí Project





  — —





  — —

Strategic report

Ecora Resources PLC

Annual Report and Accounts 2022

Viability statement























The Board reviews our internal controls and risk

management policies and approves our governance







prospects of Ecora as a whole. The focus is on continuing





royalties and streams to sustain our long-term











commodities. This approach is aligned with the long-life

















statement is most appropriate as it aligns with the





streams with an assessment of the period over which





Assessment process and key assumptions





most important of which include commodity prices,













Assessment of viability

















• 

• 



• 

from their current levels

This scenario is directly related to the following principal



concentration, geopolitical events and pandemic. The

other principal risks are either likely to manifest outside







over the three year period.

The three-year review also assumes there are no











headroom remaining positive throughout and the

















Ecora Resources PLC

Annual Report and Accounts 2022

Corporate governance

Our approach towards corporate governance

As a standard listed company on the London Stock

Exchange, the Company is required to comply with, at



















Compliance with the UK Corporate



















throughout the year with the Code, with the exception

























1. Board leadership and Company purpose

Role of the Board





• 



• 



• 













The Company’s purpose, values and strategy, and

alignment with culture















The Board assesses and monitors the ongoing alignment







strategic direction and ways in which communication









Company performance and risk management







































Stakeholder engagement



















Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Board Committees

Corporate governance continued

Chairman











Senior Independent Director (SID)

















Nomination

Committee





ensuring an optimum













Committees and



Audit

Committee



reporting, audit, internal

control and risk



Sustainability

Committee















climate change and



Remuneration

Committee











the chairman, senior

management and

considers the





Independent Non-executive Directors (NEDs)





























Executive Committee





The Board



For more information

see pages 94-95

For more information

see pages 96 to 99

For more information

see pages 100 to 101

For more information

see pages 102 to 116

Ecora Resources PLC

Annual Report and Accounts 2022

1. Board leadership and Company purpose

continued

Stakeholder engagement continued



















































































all employees attend the semi-annual strategy sessions











Annual General Meeting (AGM)

















shareholders to raise questions and comments to the









Our workforce policies and practices















insider dealing and share dealing and human rights and















programme, which includes topics such as insider







Whistleblowing and anti-corruption policies and practices

























across the Group, appropriate due diligence is carried

out on counterparties and suppliers, and there are











Conflicts of interest

































Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Corporate governance continued

2. Divisions of responsibility



















engagement with external stakeholders and attendance





























































Time commitment





Committee then takes this into account when considering

a proposed appointment to ensure that the potential



















expected to commit additional time as necessary to

















Full Board Audit Nomination  

Total meetings held 9 4 4 8 4







 — — — 





— — — — —

 9 4 4  —

 9 — — — —

 9 — 4 — —

 9 4 4  4

 9 4 4  4

 9 4 4  —





 — — — 

 

 

 

Ecora Resources PLC

Annual Report and Accounts 2022

3. Composition, succession and evaluation

Appointments to the Board

































management succession planning, regularly assessing











Committee, and monitoring senior management













































Committee agreed the skills and experience it considered



















Diversity and Inclusion













• 

• 



• 



The Group has considered the new disclosure

requirements and has decided to report early on the



















































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

inclusion and equal opportunity, including the gender







Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

3. Composition, succession and evaluation

continued

Skills, experience and knowledge of the Board and







experience to the Board, so that the Board is equipped































Independence of the Non-Executive Directors



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





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

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contained in the Code when he was appointed as the

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

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





Board effectiveness



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



















progress measured throughout the year, as illustrated









Corporate governance continued

Ecora Resources PLC

Annual Report and Accounts 2022

3. Composition, succession and evaluation continued

Board effectiveness continued



Topic  

Strategy 













meeting, in addition to the dedicated strategy



The Board discussed the progress towards







Succession planning

and development













the Board, concluding the recommendation to













Board experience and diversity

Professional experience

Percentage

Board

members

Core industry 

 

 —

 

E & S 

Technical/Engineering 

 

 

 —

Gender diversity

Male 75%

Female 25%



Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Corporate governance continued

3. Composition, succession and evaluation

continued

Board effectiveness continued













and alignment on strategy, particularly in relation to

















Topic 

Succession planning

and development

The Board is committed to

















consider the succession





Strategy 

the highest priority to ensure

we are optimally positioned





stakeholder experience in a

changing world as well as

ensuring we are well prepared

























Committee effectiveness











Board information and support











































Board induction and development







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4. Audit, risk and internal control

Internal and external audit

The Audit Committee monitors the independence and

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Annual Report and Accounts 2022

4. Audit, risk and internal control continued

Internal and external audit continued

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





• The Audit Committee reports regularly to the Board













• 





















period and concluded that the controls and procedures













Fair, balanced and understandable assessment













other market announcements, to ensure that this is



Risk management and internal control framework































5. Remuneration

































N.P.H. Meier

Chairman



Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Committee

membership:

Audit



Nomination





Chair

Board of Directors

N.P.H. Meier









Chairman, appointed







































strong relationships within



















M. Bishop Lafleche















and stream sector, Ecora



as well as its culture and





the Group, most recently as







instrumental in the recent

















at Citigroup primarily in the



Banking team as well as in the



team, where he worked on a











in Banking and International













K. Flynn



















Chartered Accountant with





practice and in the London











originated and negotiated















J.E. Rutherford



















management, specialising in













the capital markets and a deep



























































president, equity research



mining and metals industry





Ecora Resources PLC

Annual Report and Accounts 2022

R.G. Dacomb

Independent Non-





















multinational mining and







countries including emerging









structures, risk management,

acquisitions, disposals and

















C. Coignard

Independent Non-



















specialising on emerging



commodities including copper,



She has also worked as





independent strategic and









Corporate Finance at Norilsk











was an independent non-







committee, the nomination

committee and the

remuneration committee

throughout this period, chairing

the remuneration committee









Coignard is currently a



Eramet SA where she is a













V. Shine

Independent Non-







She is a highly experienced













where she worked with

stakeholders across the

supply chain to introduce











and nomination committee











independent director and

remuneration committee



and lead independent

director and remuneration















R.H. Stan

Independent Non-











engagement













with Fording Coal Limited,









Grande Cache Coal





































represented the mining













Silica Corporation and Spruce



Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Nomination Committee

We aim to optimise the mix of

skills, experience, diversity and

perspectives necessary for Ecora

Resources to achieve its strategic

objectives now and in the future.”

N.P.H. Meier



Role and responsibilities







and makes recommendations to the Board as part













For more information, visit:

www.ecora-resources.com/about-us/governance

Committee focus in 2022











• 





• 









• 







• 





• recommending that the Board support the election









independent and recognising the need to



• 



• 

Committee members

Meetings attended

 4/4



 -/-

 4/4

 4/4

 4/4

 4/4





For more on biographies and Board experience details refer to

pages 92 and 93

Ecora Resources PLC

Annual Report and Accounts 2022

Process used in relation to Non-Executive









































Committee agreed the skills and experience it considered







and discussed with the Chairman to agree a shortlist to











N.P.H. Meier





Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Audit Committee

The committee has the authority

to investigate any matter within its

remit, using any Group resources

it may reasonably require and has

direct access to the external auditor.”

Graeme Dacomb



Role and responsibilities







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about-us/governance



• 





• making recommendations to the Board concerning the



• 



• 





• making recommendations to the Board on the





• 



• 





• 



• 







• 

assumptions underlying the going concern





• 























Committee members

Meetings attended

 4/4

 4/4

 4/4

 4/4

 











Financial Controller and Company Secretary and the





For more on biographies and Board experience details refer to

pages 92 and 93.

Ecora Resources PLC

Annual Report and Accounts 2022

Fair, balanced and understandable













• 



• 



• 



• 





• 





Committee focus in 2022















the Audit Committee in relation to

 

Review of carrying

value of the Kestrel

coal royalty















Review of carrying

value of royalty













Review of carrying

values of royalties





impairment charges













Review of accounting



treatment of

completed

acquisitions





















Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Audit Committee continued



the Audit Committee in relation to

 

Group tax exposures









Going concern basis of

accounting in



statements

















Audit Committee 

Application of the

policy for calculating

adjusted earnings















Risk management





Viability Statement











Internal audit













Ethical business

conduct





External audit











Ensuring independence of the external auditor









• 





• 



• 





Committee focus in 2022 continued

Ecora Resources PLC

Annual Report and Accounts 2022

Committee focus in 2022 continued

Ensuring independence of the external auditor

continued

• 

















Auditor tenure













Audit tender









Conclusion of the Audit Committee for 2022





The Committee held meetings with the external auditors







Consideration given to the appointment of the







recommendation to the Board to propose to











Risk management and internal control

























• 







• 







• 













process undertaken during the year is discussed in









• 







controls and procedures documentation are regular





• The Audit Committee reports to the Board on these









• 





In carrying out its role and determining in its opinion







• 





• 





• 







• 

• policies and procedures in place to detect, monitor and















R.G. Dacomb





Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Sustainability Committee

We deliver on our sustainability

strategy by acting as both





J.E. Rutherford



Role and responsibilities

















The Committee’s objectives and responsibilities are set out

in its terms of reference, which are available to view online.

For more information, visit:

www.ecora-resources.com/about-us/governance





• 

• 





• 



• 







• 













• making recommendations to the Board on the







• 









• 









• meeting with the General Counsel and the Company





Committee members

Meetings attended

 4/4

 4/4



 



 



 











For more on biographies and Board experience details refer to

pages 92 and 93

100

Ecora Resources PLC

Annual Report and Accounts 2022

Role and responsibilities continued

















Our approach to sustainability





Committee focus in 2022















due diligence and screening tools, particularly in relation









Climate change

• 







• 







• 



• 







• Explored ways in which to work with our operating





Sustainability reporting and governance framework

• 





• 











• 







• 



• 





• 



• 



Communities and social performance

• 









• 

employees in areas such as physical and mental health,









J. E. Rutherford





101

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Remuneration Committee

The Committee takes account



throughout the Group when

determining executive remuneration.”

V. Shine



Role and responsibilities







For more information, visit www.ecora-resources.com/

about-us/governance



• 





• 





• 



• 



• consulting shareholders and other stakeholders,





conditions throughout the Group when determining











Committee focus in 2022

• 





• 



• 





• 





Committee focus in 2023

• 

• 

including consultation with shareholders on any



• 



• 





• 



Committee members

Meetings attended

 



 

 

 

 









For more on biographies and Board experience details refer to

pages 92 and 93

102

Ecora Resources PLC

Annual Report and Accounts 2022

Directors’ Remuneration

Report

Introductory letter

I am delighted to present my second report as the Chair

























































Our response to the cost-of-living crisis































2022 outcomes

Annual bonus



































and streams, this resulted in another record year with

























The Committee did not exercise any discretion in relation











Long-term incentives













Operation of the policy in 2023

Salaries

























result, the Committee intends to start the phased salary



103

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Remuneration Committee continued

Operation of the policy in 2023 continued

 continued

















































Non-Executive Chairman

















Annual bonus

























Long-term Incentives















 









 































Engagement with Shareholders





















Engagement with employees





















Conclusion

























V. Shine

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104

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Annual Report and Accounts 2022

Directors’ remuneration policy











How our remuneration policy addresses UK Corporate Governance Code provision 40 principles





 

Clarity 



Simplicity 

Risk 

• 

• 



• 

• 



• 

Predictability 





Proportionality 









Alignment to culture 



Summary of policy and statement of implementation of policy in 2023







Performance measures







105

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Remuneration Committee continued

Directors’ remuneration policy continued

Key aspects of the remuneration policy for Executive Directors

Element, purpose and link to strategy   

Salary

To recruit, retain and





and duties required

















complexity, taking into account









































• 



• 









money purchase pension

scheme, or a cash allowance in











medical insurance schemes









































Annual bonus

To encourage and reward







To ensure through the





encouraged and in line with















Bonus outturns are























The Committee uses a









discretion in the calculation















maximum, increasing on a











and personal conditions and



















• 







and streams

• 









• 

strategic priorities agreed



Committee and the





• 









106

Ecora Resources PLC

Annual Report and Accounts 2022

Long-term incentives

– PSP

To encourage and reward





shareholder returns and







and senior management

interests to shareholder



























holding period, other than to

















































attached to each award



strategy and may include,



























• 









per annum

• 







• 















Malus and clawback























• 

• Gross misconduct

• 



serious reputational damage

• Error in calculation

• 

Shareholding guidelines







consideration these in-post guidelines when making





shareholders, and in line with the UK Corporate



















Non-Executive Director fee policy













Chairman and Non-Executive Director (NED) fees:

Implementation for 2023















• 





• 

















Key aspects of the remuneration policy for Executive Directors continued

107

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Remuneration Committee continued

Directors’ remuneration policy continued

Chairman and Non-Executive Director (NED) fees: Implementation for 2023 continued









2023



 

Chairman 153,000  

 48,400  

Increment

 10,000  —



 10,000  

 7,000  —

 6,600  

Annual Remuneration Report for 2022



Audited information





 



Total

  

Total

remuneration



remuneration



remuneration

       

Executive Directors





2022 270 3 225 27 7



532 300 232

 — — — — — — — —





2022 95 5 62 10 20



192 110 82

     



  

 2022 285 4 225 28 — 542 317 225

     



  

Non-Executive Directors

 2022 145 — — — — 145 — —

  — — — —  — —





2022 57 — — — — 57 — —

  — — — —  — —





2022 — — — — — — — —

  — — — —  — —

 2022 67 — — — — 67 — —

  — — — —  — —





2022 57 — — — — 57 — —

  — — — —  — —

 2022 50 — — — — 50 — —

  — — — —  — —

 

 

 



 



 

 

 

 

 

108

Ecora Resources PLC

Annual Report and Accounts 2022

Annual bonus for the year ending 31 December 2022 (audited)





Discretion











Criteria  

Corporate Performance Criteria

Growth  



• 

adding producing and/or near producing royalties

• 

ESG  



• 



• 

Financial performance  



• 

Personal

Performance

Criteria

Professionalism and holistic contribution  

• 

• Leadership and direction

• 

• 

• Stakeholder engagement

• 

Total  

Growth:











ESG:









Financial Performance: 















109

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Remuneration Committee continued

Annual Remuneration Report for 2022 continued

Annual bonus for the year ending 31 December 2022 (audited) continued

Discretion continued

 continued

Professionalism and holistic contribution:









Bonus outturn:











2022 CEO Scorecard – Julian Treger

Criteria  

Corporate Performance Criteria

Growth  



• 



• 

ESG  6



• 



Financial performance  



• 

Personal

Performance

Criteria

Professionalism and holistic contribution  

• 

• Leadership and direction

• 

• 

• 

Total  

Growth:

ESG:



Financial Performance:

Professionalism and holistic contribution:







Bonus outturn:











110

Ecora Resources PLC

Annual Report and Accounts 2022

Annual bonus for the year ending 31 December 2022 (audited) continued

2021 CFO Scorecard – Kevin Flynn

Criteria  

Corporate Performance Criteria

Growth  



• 



• 

ESG  



• 



• 

• 

Financial performance  



• 

• 

Personal

Performance

Criteria

Professionalism and holistic contribution  

• 

• Leadership and direction

• 

• 

• 

• 

Total  

Growth:

ESG:

Financial Performance:









Professionalism and holistic contribution:









Bonus outturn:







111

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Remuneration Committee continued

Annual Remuneration Report for 2022 continued

Scheme interests granted during 2022 (audited)











 



period end  



shares awarded



at grant

LTIP-PSP share

awards









equal to the







 





salary









 

salary





















stretch









earnings per









stretch





 















 





Vesting of share-based awards during 2022 (audited)









  



















     

     

 

 

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112

Ecora Resources PLC

Annual Report and Accounts 2022

Total pension entitlements (audited)

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• 







Directors’ shareholding and share interests (audited)





owned at







owned at







shareholding





Shareholding

requirement













conditions

options



 

Executive Directors

    N/A — — 





N/A 



N/A N/A —  

     N/A —  

Non-Executive Directors

   N/A N/A — — —

  — — N/A N/A — — —

   N/A N/A — — —

   N/A N/A — — —

  — — N/A N/A — — —

   N/A N/A — — —

 



 

 





 





113

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Annual Remuneration Report for 2022 continued

Total shareholder return

EMIX Global Mining Index (excluding gold and energy) vs Ecora Resources PLC

Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22

£225

£200

£175

£150

£125

£100

£75

£50

£25

£0

Ecora Resources (Re-based to 100) Mining Index















Total remuneration for the CEO over time

          2022 2022

 



Bishop





 



     696    192 532

 — — 64 —       66 83

 — — — — — — — — — — — —

 

 

 







Change in Directors’ remuneration compared to UK employees











Remuneration Committee continued

114

Ecora Resources PLC

Annual Report and Accounts 2022

Change in Directors’ remuneration compared to UK employees continued



Salary/













Bonus



Salary/













Bonus

2022

Salary/





2022





2022

Bonus

Executive Directors





 N/A N/A N/A N/A N/A N/A N/A N/A N/A

        6%  

 



 N/A N/A N/A    14% 30% 5%

Non-Executive Directors

        16% -% -%

        -% -% -%





       N/A N/A N/A

        3% -% -%

 



 N/A N/A N/A    4% -% -%

        4% -% -%

UK employees        6% 20% 

 



 

 

 

 

 

Distribution statement for 2022





2022







/increase





5.6  

 19.4  





185.0  

Income taxes paid



12.0  

 

 





 

Statement of shareholder voting







  







   

 





  







   

 

 

115

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Annual Remuneration Report for 2022 continued

External advisers

















External advisers and fees





committee

assistance

Korn Ferry 











Directors’ service agreements













 

 











  

   

   

   

   

   

   

Approval



V. Shine



Remuneration Committee continued

116

Ecora Resources PLC

Annual Report and Accounts 2022

Directors’ report







Principal activities





Going concern



































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Results and dividends

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Outlook

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Directors

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





Directors’ powers















• issue new shares up to an aggregate nominal amount















• 







• 

other than pro-rata to existing shareholders up to an





general purposes and an additional power to disapply

pre-emption rights up to an aggregate nominal amount















117

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

Directors’ disclosures continued













Political donations













Our greenhouse gas emissions





that any emission sources within its operational and





















Capital structure





Issued





per share

Total





total

capital



shares    

Change of control













Rights and obligations

Dividends





Voting rights





Relationship agreement















































• the Company has complied with the independence



• 







• 



companies/associates included in the relationship



Restrictions on transfer of holdings























Special control rights















Employee share schemes





Shares held in treasury







Directors’ report continued

118

Ecora Resources PLC

Annual Report and Accounts 2022

Allotment of ordinary shares



























and rank pari passu in all respects with the existing















Purchase of own shares















Substantial shareholdings

















 

  



  

  

Canaccord Genuity Wealth

  



Internal controls











Statement as to disclosure of information





















Other statutory and regulatory information







Auditor









Designated Foreign Issuer status















reporting requirements as most other reporting issuers





complies with the UK Financial Conduct Authority in its

















J. Gray

Company Secretary











London



119

Governance report

Ecora Resources PLC

Annual Report and Accounts 2022

















adopted international accounting standards and

















• 

• 





• 









and

• 

































• 

United Kingdom adopted international accounting













• 







undertakings included in the consolidation taken as a





























N.P.H. Meier

Chairman



Statement of Directors’ responsibilities

120

Ecora Resources PLC

Annual Report and Accounts 2022

Independent auditor’s report to the members of Ecora Resources plc



1. Opinion

In our opinion:

• 





• 



• 





• 



• 

• 

• 

• 

• 

• 

• 







2. Basis for opinion



















3. Summary of our audit approach

Key audit matters 

• 

• 

• 

Materiality 





Scoping 



















121

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Independent auditor’s report to the members of Ecora Resources plc

4. Conclusions relating to going concern









• 

• 





• 

• 

• 



• 



• 

















5. Key audit matters













5.1. Accounting for royalties acquired from South32 Royalty Investments Pty Limited

Key audit matter

description









• 

• 

• 

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





















Key observations 





5.2. Valuation of the Kestrel royalty

Key audit matter

description





























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

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

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

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



































Key observations 



123

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Independent auditor’s report to the members of Ecora Resources plc

5. Key audit matters continued

5.3. Impairment assessment of the royalty intangibles and metal stream portfolio

Key audit matter

description







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audit responded to

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



Key observations 





124

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6. Our application of materiality

6.1. Materiality









 

Materiality  



materiality















































































6.2. Performance materiality





 



materiality

 



Basis and rationale





materiality









6.3. Error reporting threshold









125

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Independent auditor’s report to the members of Ecora Resources plc

7. An overview of the scope of our audit























7.2. Our consideration of the control environment









7.3. Our consideration of climate-related risks































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

8. Other information



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

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

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

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9. Responsibilities of directors













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

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

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10. Auditor’s responsibilities for the audit of the



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

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



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126

Ecora Resources PLC

Annual Report and Accounts 2022

11. Extent to which the audit was considered

capable of detecting irregularities, including fraud















11.1. Identifying and assessing potential risks related





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• 





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• 



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

• 





– 



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– 

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– 

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

























127

Financial statements

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Annual Report and Accounts 2022

Report on other legal and regulatory requirements

12. Opinions on other matters prescribed by the

Companies Act 2006











• 







• 















13. Corporate Governance Statement











• 





• 





• 



• 





• 





• 



14. Matters on which we are required to report



14.1. Adequacy of explanations received and







• 



• 







• 





14.2. Directors’ remuneration













15. Other matters which we are required



15.1. Auditor tenure

















15.2. Consistency of the audit report with the additional

report to the Audit Committee







16. Use of our report









































David Paterson ACA









Independent auditor’s report to the members of Ecora Resources plc

128

Ecora Resources PLC

Annual Report and Accounts 2022

Consolidated income statement

for the year ended 31 December 2022

Notes

2022

$’000

2021

$’000

Royalty and metal stream-related revenue 5 1 4 1 ,87 0 85,295

Metal streams cost of sales 16 (4 , 2 6 5) (4,046)

Amortisation and depletion of royalties and streams 16, 18 (9 , 3 51) (14,845)

Operating expenses 6a (10 , 8 4 9) (10,740)

Operating profit before impairments, revaluations and gains on disposals 11 7, 4 0 5 55,664

Impairment of royalty intangible assets 18 (4 , 0 8 3) (5,232)

Revaluation of royalty financial instruments 17 (1, 3 7 3) 17,501

Revaluation of coal royalties (Kestrel) 15 2 7, 8 3 3 13,037

Finance income 8 8 1

Finance costs 9 (6,109) (7,615)

Net foreign exchange (losses)/gains (1, 5 9 3) 616

Other income/(losses) 10 3,356 (19,333)

Profit before tax 1 35 ,444 54,639

Current income tax charge 11 (3 4 , 47 0) (4,965)

Deferred income tax charge 11, 26 (6 , 3 3 7) (12,198)

Profit attributable to equity holders 94 ,6 37 37,476

Total and continuing earnings per share

Basic earnings per share 12 40. 43c 18.03c

Diluted earnings per share 12 4 0.3 0c 18.00c

The notes on pages 135 to 188 are an integral part of these consolidated financial statements.

129

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Consolidated statement of comprehensive income

for the year ended 31 December 2022

Notes

2022

$’000

2021

$’000

Profit attributable to equity holders 94 ,6 37 37,476

Items that will not be reclassified to profit or loss

Changes in the fair value of equity investments held at fair value through other

comprehensive income

Revaluation of royalty financial instruments – net of income tax 17 (3 ,6 70) 712

Revaluation of mining and exploration interests 19 642 (4,171)

Deferred taxes relating to items that will not be reclassified to profit or loss 26 390 1,621

(2 ,63 8) (1,838)

Items that have been or may be subsequently reclassified to profit or loss

Net exchange loss on translation of foreign operations (10 , 3 5 5) (10,058)

(10 , 3 5 5) (10,058)

Other comprehensive loss for the year, net of tax (12 , 9 9 3) (11,896)

Total comprehensive profit for the year 81,64 4 25,580

The notes on pages 135 to 188 are an integral part of these consolidated financial statements.

130

Ecora Resources PLC

Annual Report and Accounts 2022

Consolidated balance sheet and Company balance sheet

as at 31 December 2022

Group Company

2022 2021 2022 2021

Notes $’000 $’000 $’000 $’000

Non-current assets

Property, plant and equipment 14 3,632 797 3,632 797

Coal royalties (Kestrel) 15 10 6 , 6 6 9 84,465 — —

Metal streams 16 16 4 ,7 5 5 170,567 — —

Royalty financial instruments 17 43,8 80 53,791 — 13,920

Royalty and exploration intangible assets 18 252 , 54 9 69,518 — —

Mining and exploration interests 19 3,483 4,396 1,059 1,721

Deferred costs 20 2 ,491 4,415 2,491 4,415

Investments in subsidiaries 21 — — 352,325 214,189

Other receivables 22 3 7, 4 2 9 39,127 160,838 199,682

Deferred tax 26 36,632 36,478 — —

6 51 , 5 2 0 463,554 520,345 434,724

Current assets

Trade and other receivables 22 2 1, 5 6 6 34,913 604 1,134

Cash and cash equivalents 23 5,850 21,992 5,351 8,649

27 , 416 56,905 5,955 9,783

Total assets 678,93 9 520,459 526,300 444,507

Non-current liabilities

Borrowings 25 42,250 112,000 42,250 112,000

Other payables 27 22 ,6 4 9 2,910 3,423 1,376

Deferred tax 26 40,857 36,711 — 3,480

1 05, 756 151,621 45,673 116,856

Current liabilities

Income tax liabilities 23,245 7,103 — —

Derivative financial instruments 28 32 — 32 —

Trade and other payables 27 46,2 99 4,632 59,342 57,711

69, 5 76 11,735 59,374 57,711

Total liabilities 17 5 , 3 3 2 163,356 105,047 174,567

Net assets 503,604 357,103 421,253 269,940

Capital and reserves attributable to

shareholders

Share capital 29 6 ,7 61 5,706 6,761 5,706

Share premium 29 16 9 , 2 12 87,883 169,212 87,883

Other reserves 10 6,74 2 118,637 104,317 104,109

Retained earnings 220,889 144,877 140,963 72,242

Total equity 503,604 357,103 421,253 269,940

The notes on pages 135 to 188 are an integral part of these consolidated financial statements.

The Company has elected to take the exemption under section 408 of the Companies Act 2006 (United Kingdom) not

to present the parent company income statement. The profit for the parent company for the year was $86,232,000

(2021: profit of $6,356,000).

The financial statements of Ecora Resources PLC (registered number: 897608) on pages 129 to 188 were approved by

the Board and authorised for issue on 28 March 2023 and are signed on its behalf by:

N.P.H. Meier M. Bishop Lafleche

Chairman Chief Executive Officer

131

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Consolidated statement of changes in equity

for the year ended 31 December 2022

Other reserves

Notes

capital

$’000

premium

$’000

Merger

reserve

$’000

Warrant

reserve

$’000

Investment

revaluation

reserve

$’000

Share-

based

payment

reserve

$’000

Foreign

currency

translation

reserve

$’000

Special

reserve

$’000

Treasury

$’000

Investment

in own

$’000

Retained

earnings

$’000

Total

equity

$’000

Balance at 1 January 2021 4,670 83,214 38,416 189 25,800 6,759 24,365 833 122 (1,535) 110,653 293,486

Profit for the year — — — — — — — — — — 37,476 37,476

Other comprehensive income:

Changes in fair value of equity

investments held at fair value

through other comprehensive

income

Valuation movement taken

toequity 17, 19 — — — — (3,459) — — — — — — (3,459)

Deferred tax 26 — — — — 1,621 — — — — — — 1,621

Foreign currency translation — — — — — — (10,058) — — — — (10,058)

Total comprehensive profit — — — — (1,838) — (10,058) — — — 37,476 25,580

Transferred to retained earnings

on disposal 17, 19 — — — — (14,399) — — — — — 14,399 —

Dividends 13 — — — — — — — — — — (25,365) (25,365)

Expiration of warrants — — — (189) — — — — — — 189 —

Issue of ordinary shares 29 1,028 4,669 56,431 — — — — — — — — 62,128

Utilisation of treasury shares to

satisfy employee-related

share-based payments 29, 30 8 — — — — (159) — — (8) — 511 352

Value of employee services 30 — — — — — (6,092) — — — — 7,014 922

Total transactions with

owners of the Company 1,036 4,669 56,431 (189) (14,399) (6,251) — — (8) — (3,252) 38,037

Balance at 31 December 2021 5,706 87,883 94,847 — 9,563 508 14,307 833

114 (1,535) 144,877 357,103

Balance at 1 January 2022 5, 706 87 ,883 94 , 8 47 — 9,5 6 3 508 1 4,307 833

114 (1,535) 144,877 357,103

Profit for the year — — — — — — — — — — 9 4,6 37 94,6 37

Other comprehensive income: — — — — — — — — — — — —

Changes in fair value of equity

investments held at fair value

through other comprehensive

income — — — — — — — — — — — —

Valuation movement taken to

equity 19 — — — — (3 ,0 28) — — — — — — (3,0 2 8)

Deferred tax 26 — — — — 39 0 — — — — — — 390

Foreign currency translation — — — — — — (10 , 3 5 5) — — — — (10 , 3 5 5)

Total comprehensive profit — — — — (2 ,63 8) — (10 , 3 5 5) — — — 94 ,637 81,64 4

Transferred to retained earnings

on disposal 19 — — — — (6 0 4) — — — — — 604 —

Unclaimed dividends transferred

to retained earnings — — — — — — — — — — 92 92

Dividends 13 — — — — — — — — — — (19 , 3 8 4) (19, 3 8 4)

Issue of ordinary shares 29 1, 0 4 3 81, 3 2 9

— — — — — — — —

82,372

Utilisation of treasury shares to

satisfy employee -elated

share-base payments 30 12 — — — — (23 0) — — (12) — 983 753

Utilisation of shares held by the

employee benefit trust to satisfy

employee-related share-based

payments 30 — — — — — (19 4) — — — 1,535 (9 2 0) 421

Value of employee services 30 — — — — — 6 03 — — — — 603

Total transactions with

owners of the Company 1, 0 5 5 81, 3 2 9 — — (60 4) 17 9 — — — 1,535 (18 , 6 2 5) 64,857

Balance at 31 December 2022 6 ,7 61 16 9 , 2 12 9 4 ,8 47 — 6,321 687 3,952 833 102 — 220,889 503,6 0 4

The notes on pages 135 to 188 are an integral part of these consolidated financial statements.

132

Ecora Resources PLC

Annual Report and Accounts 2022

—

Company statement of changes in equity

for the year ended 31 December 2022

Other reserves

capital

premium

Merger

reserve

Warrant

reserve

Investment

revaluation

reserve

Share-

based

payment

reserve

Foreign

currency

translation

reserve

Special

reserve

Treasury

Retained

earnings

Total

equity

Notes $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Balance at 1 January 2021 4,670 83,214 38,416 189 5,479 6,759 7,595 833 122 82,235 229,512

Changes in equity for 2021

Changes in fair value of equity investments

held at fair value through other

comprehensive income

Valuation movement taken to equity 19 — — — — (3,965) — — — — — (3,965)

Net income recognised direct into equity — — — — (3,965) — — — — — (3,965)

Profit for the period — — — — — — — — — 6,356 6,356

Total recognised income and expenses — — — — (3,965) — — — — 6,356 2,391

Transferred to retained earnings on

disposal 19 — — — — (1,302) — — — — 1,302 —

Dividends — — — — — — — — — (25,365) (25,365)

Foreign currency translation — — — — — — — — — — —

Expiration of warrants — — — (189) — — — — — 189 —

Issue of ordinary shares 29 1,028 4,669 56,431 — — — — — — — 62,128

Utilisation of treasury shares to satisfy

employee -related share-based payments 29, 30 8 — — — — (159) — — (8) 511 352

Value of employee services 30 — — — — — (6,092) — — — 7,014 922

Balance at 31 December 2021 5,706 87,883 94,847 — 212 508 7,595 833 114 72,242 269,940

Balance at 1 January 2022 5,706 87,883 94,847 — 212 508 7,595 833 114 72,242 269,940

Changes in equity for 2022

Changes in fair value of equity investments

held at fair value through other

comprehensive income

Valuation movement taken to equity 19 — — — — 645 — — — — — 645

Net income recognised direct in equity — — — — 645 — — — — — 645

Profit for the period — — — — — — — — — 86,232 86,232

Total recognised income and expenses — — — — 645 — — — — 86,232 86,877

Transferred to retained earnings on

disposal 19 — — — — (604) — — — — 604 —

Unclaimed dividends transferred to

retained earnings — — — — — — — — — 92 92

Dividends — — — — — — — — — (19,384) (19,384)

Foreign currency translation — — — — — — — — — — —

Issue of ordinary shares 29 1,043 81,329 — — — — — — — — 82,372

Utilisation of treasury shares to satisfy

employee-related share-based payments 29, 30 12 — — — — (230) — — (12) 983 753

Utilisation of shares held by the employee

benefit trust to satisfy employee-related

share-based payments 30 — — — — — (194) — — — 194 —

Value of employee services 30 — — — — — 603 — — — — 603

Balance at 31 December 2022 6,761 169,212 94,847 — 253 687 7,595 833 102 140,963 421,253

The notes on pages 135 to 188 are an integral part of these consolidated financial statements.

133

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Consolidated statement of cash flows and Company statement of cash flows

for the year ended 31 December 2022

Group Company

2022 2021 2022 2021

Notes $’000 $’000 $’000 $’000

Cash flows from operating activities

Profit before taxation 1 3 5, 444 54,639 83,189 10,671

Adjustments for:

Finance income 8 (8) (1) (349) (367)

Finance costs 9 6,109 7,615 6,722 7,929

Net foreign exchange losses/(gains) 1, 5 9 3 (616) 402 (32)

Other (income)/losses 10 (3, 3 56) 19,333 726 —

Impairment of royalty and exploration intangible assets 18 4,0 8 3 5,232 — 3,207

Revaluation of royalty financial instruments 17 1, 3 7 3 (17,501) 11,138 (13,852)

Royalties due or received from royalty financial instruments 17 2 ,7 8 2 3,115 2,782 3,115

Revaluation of coal royalties (Kestrel) 15 (2 7, 8 3 3) (13,037) — —

Depreciation of property, plant and equipment 14 355 277 355 277

Amortisation and depletion of royalties and streams 16, 18 9, 3 51 14,845 — —

Amortisation of deferred acquisition costs 22 17 17 17 17

Impairment of investment in subsidiaries — — 169 15,978

Forgiveness of loan to subsidiary undertaking — — — 371

Intercompany dividends — — (105,486) (26,597)

Share-based payment 30 70 9 328 709 328

13 0 , 619 74,246 374 1,045

Decrease/(increase) in trade and other receivables 8,22 4 (11,637) (926) (103)

Increase/(decrease) in trade and other payables 5,700 837 (72) 1,211

Cash generated from operations 14 4 , 5 4 3 63,446 (624) 2,153

Income taxes paid (12 ,0 4 8) (7,666) (984) (1,226)

Net cash generated from/(used in) operating activities 13 2 , 4 9 5 55,780 (1,608) 927

Cash flows from investing activities

Proceeds on disposal of mining and exploration interests 19 1, 3 10 2,512 1,310 2,512

Purchase of property, plant and equipment 14 (537) (38) (537) (38)

Purchase of royalty and exploration intangibles 18 (59, 3 6 0) — — —

Proceeds on disposal of royalty intangibles 18 5,02 9 4,400 — —

Proceed on disposal of royalty financial instruments 17 — 62,984 — —

Purchase of metal streams 16 (3,32 3) (207,705) — —

Repayments under commodity-related financing agreements 22 2 ,859 1,256 2,859 1,256

Prepaid acquisition costs — (22) — (22)

Finance income 8 8 1 — —

Investment in subsidiaries — — (53,717) (23,374)

Intercompany dividends — — 113,554 34,344

Loans granted to subsidiary undertakings — — (6,136) (127,993)

Loan repayments (to)/from subsidiary undertakings — — (13,700) 2,358

Net cash (used in)/generated from investing activities (5 4,014) (136,612) 71,033 (110,957)

Cash flows from financing activities

Drawdown of revolving credit facility 24, 25 49, 5 0 0 123,500 49,500 123,500

Repayment of revolving credit facility 24, 25 (1 19,250) (72,494) (119,250) (72,494)

Loans from subsidiary undertakings — — 45,049 18,011

Repayment of loans from subsidiary undertakings — — (24,751) —

Proceeds from issue of share capital 29 922 62,128 922 62,128

Dividends paid 13 (19 , 3 8 4) (25,365) (19,384) (25,365)

Lease payments 14 (3 12) (268) (312) (268)

Finance costs 9, 20 (4 , 2 13) (10,874) (3,776) (10,627)

Net cash (used in)/generated from financing activities (9 2 ,7 3 7) 76,627 (72,002) 94,885

Net (decrease)/increase in cash and cash equivalents (1 4,256) (4,205) (3,010) (15,145)

Cash and cash equivalents at beginning of period 21, 9 9 2 27,513 8,649 24,127

Effect of foreign exchange rates (1, 8 8 6) (1,316) (721) (333)

Cash and cash equivalents at end of period 5,850 21,992 5,351 8,649

The notes on pages 135 to 188 are an integral part of these consolidated financial statements.

134

Ecora Resources PLC

Annual Report and Accounts 2022





1 General information

Ecora Resources PLC merly Anglo Pacific Group PLC) (the ‘Company’) and its subsidiaries (together, the ‘Group’)

secure natural resources royalties and streams by creating new royalties directly with operators or by acquiring

existing royalties and streams. The Group has royalties and investments in mining and exploration interests primarily

in Australia, North and South America and Europe, with a diversified exposure to commodities represented by cobalt,

steelmaking coal, iron ore, copper, vanadium, uranium and gold.

The Company changed its name on 5 October 2022 from Anglo Pacific Group PLC to Ecora Resources PLC. The

new name reflects the Group’s successful transformation from a predominantly coal royalty business to one that

by 2026 is expected to generate the majority of its portfolio contribution from commodities required to support a

sustainable future.

The Company is a public limited company, which is listed on the London Stock Exchange and Toronto Stock Exchange.

The Company was incorporated and is domiciled in the United Kingdom, and registered in England and Wales. The

address of its registere Kent House, 3rd Floor North, 14-17 Market Place, London W1W 8AJ, United Kingdom

(registered number: 897608).

2 Changes in accounting policies and disclosures

The accounting policies applied are consistent with those adopted and disclosed in the Group financial statements

for the year ended 31 December 2021. The Group has applied the following amendments for the first time for the

financial year commencing 1 January 2022:

• Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16

• Onerous Contracts – Cost of Fulfilling a Contract – Amendments to IAS 37

• Annual Improvements to IFRS Standards 2018 – 2020, and

• Reference to the Conceptual Framework – Amendments to IFRS 3

None of the amendments effective 1 January 2022 had an impact on the Group.

New and revised IFRS Standards in issue but not yet effective

The Group has not early adopted any other amendment, standard or interpretation that has been issued but is

not yet effective. It is expected that, where applicable, these standards and amendments will be adopted on each

respective effective date. The following new or amended IFRS accounting standards, amendments and interpretations

not yet adopted are not expected to have a significant impact on the Group:

Definition of Accounting Estimate – Amendments to IAS 8

In February 2021 the IASB issued amendments to IAS 8 that replace the definition of a change in accounting estimates

with a definition of accounting estimates.

Under the new definition, accounting estimates are clarified as monetary amounts in financial statements that are

subject to measurement uncertainty. Where an entity’s accounting policy requires an item to be measured at monetary

amounts that cannot be observed directly, it should develop an accounting estimate to achieve this objective.

The amendments are effective for annual periods beginning on or after 1 January 2023, and will be applied from

that date.

Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2

In February 2021 the IAS issued amendments to IAS 1 that require entities to disclose their material accounting

policies rather than their significant accounting policies. The amendments to IFRS Practice Statement 2 provide

guidance on the concept of materiality and its application to accounting policy information.

Under the amendments, accounting policy information is material if, when considered together with other information

included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary

users of general purpose financial statements make on the basis of those financial statements.

that date.

• Deferred tax relates to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

In May 2021 the IAS issued amendments to IAS 12, ‘Income Taxes’. The amendments require companies to recognise

deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible

temporary differences.

The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and will be applied

from that date.

• Lease liability in a Sale and Leaseback – Amendments to IFRS 16

135

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

2 Changes in accounting policies and disclosures continued

New and revised IFRS Standards in issue but not yet effective continued

The amendment specifies requirements for seller-lessees to measure the lease liability in a sale and leaseback

transaction. The amendment does not change the accounting for leases unrelated to sale and leaseback transactions.

The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and will be applied

from that date.

Classification of Liabilities as Current or Non-current – Amendments to IAS 1

The narrow-scope amendments to IAS 1 Presentation of Financial Statements clarify that liabilities are classified as

either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is

unaffected by the entity’s expectations or events after the reporting date (e.g. the receipt of a waver or a breach of

covenant). The amendments also clarify what IAS 1 means when it refers to the ‘settlement’ of a liability.

The amendments are effective for annual periods beginning on or after 1 January 2024, and will be applied from

that date .

3 Significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out

below. These policies have been consistently applied to all the years presented unless otherwise stated.

3.1 Basis of preparation

The financial statements have been prepared in accordance with the requirements of the Companies Act 2006, UK-

adopted International Accounting Standards and those parts of the Companies Act 2006 applicable to companies

reporting under those standards and the requirements of the Disclosure and Transparency Rules of the Financial

Conduct Authority in the United Kingdom as applicable to periodic financial reporting.

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of

coal royalties (investment property) and certain financial instruments, to the extent required or permitted under IFRS

as set out in the relevant accounting policies. A summary of the principal Group accounting policies is set out below.

The preparation of financial statements in conformity with generally accepted accounting principles requires the

use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of

applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas

where assumptions and estimates are significant to the Consolidated Financial Statements are disclosed in note 4.

3.1.1 Going concern

The financial position of the Group and its cash flows are set out on pages 131 and 134. The Directors have

considered the principal risks of the Group which are set out on pages 65 to 68, and considered key sensitivities which

could impact the level of available borrowings. As at 31 December 2022, the Group had cash and cash equivalents of

$5.9m, as set out in note 23, and borrowings of $42.3m under its revolving credit facility, as set out in note 25. Subject

to continued covenant compliance, the Group has access to a further $108m through its secured $150m revolving

credit facility as at the date of this report.

The Directors considered the Group’s cash flow forecasts for the period to the end of March 2024 under base and

downside scenarios, including the demand for the commodities produced and the prices realised by the underlying

operations of the Group’s royalty and stream portfolio, and the ongoing operations themselves, including production

levels. In all of the scenarios modelled (including reductions in forecast commodity prices and volumes of 10% and

15% respectively. together with adverse currency movements of 10%), the Group continues to operate within its

banking covenant limits with no debt redemption or amortisation commitments within the 12-month period from the

date of approval of these consolidated financial statements.

The Board is satisfied that the Group’s forecasts and projections, taking account of reasonably possible changes in

trading performance and other uncertainties, together with the Group’s cash position and access to the revolving

credit facility, show that the Group will be able to operate within the level of its current facilities for the period

assessed. For this reason, the Group continues to adopt the going concern basis in preparing its financial statements.

3.2 Consolidation

The financial statements incorporate a consolidation of the financial statements of the Company and entities

controlled by the Company, its subsidiaries. Control is achieved when the Company has the power over the investee,

is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those

returns through its power over the investee.

The existence and effect of potential voting rights that are currently exercisable or convertible are considered when

assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which

control is transferred to the Group. They are de-consolidated from the date that control ceases .

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Annual Report and Accounts 2022

3 Significant accounting policies continued

3.2 Consolidation continued

Investments in subsidiaries are accounted for in the parent company at cost less impairment. Cost is adjusted

to reflect changes in consideration arising from contingent consideration amendments. The carrying values of

investments in subsidiaries are reviewed at each reporting date to determine whether there is any indication

of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated

on consolidation. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where

necessary to ensure consistency with the policies adopted by the Group.

3.3 Foreign currencies

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the

primary economic environment in which the entity operates (the ‘functional currency’). The consolidated financial

statements are presented in US dollars, which is the Company’s functional and the Group’s presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency of the respective Group entity, using

the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign

exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end

exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income

statement. Non-monetary assets and liabilities measured at historical cost are translated using the exchange rates

at the date of the transaction (and not retranslated). Non-monetary assets and liabilities measured at fair value are

translated using the exchange rates at the date when fair value was determined.

(c) Group companies

The results and financial position of all the Group entities that have a functional currency different from the

presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each balance sheet presented are translated at the closing rate at the balance sheet date;

• income and expenses for each income statement are translated at average exchange rates; and

• all resulting exchange differences are charged/credited to other comprehensive income and recognised in the

currency translation reserve in equity.

Exchange differences on foreign currency balances with foreign operations for which settlement is neither planned

nor likely to occur in the foreseeable future, and therefore form part of the Group’s net investment in these foreign

operations, are recognised in other comprehensive income and accumulated in the foreign currency translation

reserve in equity. If a foreign operation is partially disposed of or sold, exchange differences that were recorded in

equity are reclassified in the income statement as part of the gain or loss on sale.

3.4 Property, plant and equipment

Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment losses.

The cost of property, plant and equipment comprises its purchase price and any costs directly attributable to

bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended

by management. Once a mining project has been established as commercially viable, expenditure other than that on

land, buildings, plant and equipment is capitalised as a producing asset within ‘other assets’ together with any amount

transferred from ‘exploration and evaluation costs’ (note 3.7(b)).

Property, plant and equipment is depreciated over its useful life, or, where applicable, over the remaining life of the

mine if shorter once it is operating in the manner intended by management. The major categories of property, plant

and equipment are depreciated on a units-of-production and/or straight-line basis as follows:

Equipment and fixtures  4 to 10 years

Other assets:

Producing assets    Units of production (over reserves)

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales

proceeds and the carrying amount of the asset and is recognised in profit or loss.

3.5 Coal royalties (investment property)

Royalty arrangements which are derived from the ownership of sub-stratum lands are accounted for as investment

properties in accordance with IAS 40. Investment property is held to earn a return in the form of royalty entitlements

arising from mining activity and is initially measured at cost including any transaction costs. Investment property is

subsequently measured at fair value at each reporting date with any valuation movements recognised in the income

statement. Fair value is determined by a suitably qualified independent external consultant based on the discounted

future royalty income expected to accrue to the Group. 

137

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

3 Significant accounting policies continued

3.6 Metal streams (property, plant and equipment)

Agreements for which settlement is called for in the underlying commodity, the amount of which is based on

production at the mines, are stated at cost less accumulated depletion and accumulated impairment charges, if any.

The cost of the asset is comprised of its purchase price, any closing costs directly attributable to acquiring the asset,

and, for qualifying assets, borrowing costs. The purchase price is the aggregate cash amount paid and the fair value of

any other non-cash consideration given to acquire the asset.

Depletion

The cost of these mineral streams is allocated to the total expected deliveries to be received over the life of the mine

determined by reference to reserves, resources and exploration potential. The cost of the mineral streams is depleted

on a unit-of-production basis over the total expected deliveries to be received.

3.7 Intangible assets

(a) Royalty arrangements

Royalty arrangements which are identified and classified as intangible assets are initially measured at cost, including

any transaction costs.

Upon commencement of production at the underlying mining operation intangible assets are amortised on a straight-

line basis over the life of the mine. Amortisation rates are adjusted on a prospective basis for all changes to estimates

of the life of mine.

(b) Exploration and evaluation costs

Exploration expenditure relates to the initial search for deposits with economic potential. Evaluation expenditure arises

from a detailed assessment of deposits or other projects that have been identified as having economic potential.

Expenditure on exploration and evaluation activities is capitalised when there is a high degree of confidence in the

project’s viability and hence it is probable that future economic benefits will flow to the Group. If this is no longer

the case, an impairment loss is recognised in the income statement. Amortisation of capitalised exploration and

evaluation costs does not commence until the underlying project commences commercial production .

3.8 Impairment of property, plant and equipment, metal streams and intangible assets

At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment, metal streams

and intangible assets to determine whether there is any indication that those assets are impaired. If such an indication

is identified, the recoverable amount of the asset is estimated in order to determine the extent of any impairment.

The recoverable amount is the higher of fair value (less costs of disposal) and value in use. In assessing value in use,

the estimated cash flows are discounted to their present value using a pre-tax discount rate that has been adjusted to

reflect the risks specific to that asset. If the recoverable amount of the asset is estimated to be less than its carrying

value, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is also recognised in

the income statement.

Metal streams and intangible assets

Metal streams and royalty intangibles are assessed for indicators of impairment at each reporting date with the

assessment considering variables such as the production profiles, production commission dates where applicable,

forecast commodity prices and guidance from the mine operators.

Where indicators are identified, the starting point for the impairment review will be to measure the future cash flows

expected from the metal stream or royalty intangible should the project continue/come into production. A pre-tax

nominal discount rate is applied to the future cash flows. The discount rate applied to the metal stream or royalty

intangible is derived using a capital asset pricing model specific to the underlying project, making reference to the risk-

free rate of return expected on an investment with the same time horizon as the expected mine life, together with the

country risk associated with the location of the operation. Changes in discount rate are most sensitive to changes in

the risk-free rate, country risk premiums and the expected mine life.

For metal streams and royalty intangibles not currently in production, the outcome of this net present value

calculation is then risk weighted to reflect management’s current assessment of the overall likelihood and timing of

each project coming into production and stream income arising. This assessment is impacted by news flow relating to

the underlying operation in the period, in conjunction with management’s assessment of the economic viability of the

project based on commodity price projections.

Should an impairment loss subsequently reverse, the carrying amount of the asset is increased to the revised

estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount

that would have been determined had no impairment been recognised. A reversal of an impairment loss is also

recognised in the income statement. 

138

Ecora Resources PLC

Annual Report and Accounts 2022

3 Significant accounting policies continued

3.9 Financial instruments

Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group has become a

party to the contractual provisions of the instrument.

( a) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid

investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of

changes in value.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted

in an active market. On initial recognition loans and receivables are stated at their fair value. After initial recognition

these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting

is omitted where the effect of discounting is immaterial. The Group’s trade and other receivables fall into this category

of financial instruments .

( c) Contingent consideration – receivable

Contingent consideration – receivable, comprises that portion of the consideration receivable under the royalty sale

agreement relating to the Narrabri royalty, contingent upon permitting and the achievement of certain volume and

price thresholds as outlined in note 18. In addition, this also comprises the contingent consideration receivable based

on West Musgrave achieving commercial production, as outlined in note 18. On initial recognition the contingent

consideration is stated at its fair value. After initial recognition the contingent consideration is measured at fair value

at the end of each reporting period, with any fair value gains or losses recognised in the ‘other (losses)/income’ line

item of the income statement. Fair value is determined in the manner described in notes 18 and 34.

(d) Derivative financial instruments

The Group will selectively enter into foreign exchange forward contracts to manage its exposure to foreign exchange

risk associated with its Australian and Canadian dollar denominated royalty income, when considered necessary.

Further details of derivative financial instruments are disclosed in note 28.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently

remeasured to their fair value at each balance sheet date. The resulting gain or loss is recognised in profit or loss immediately.

A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value

is recognised as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the

remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12

months. Other derivatives are presented as current assets or current liabilities.

(e) Mining and exploration interests

Mining and exploration interests are recognised and derecognised on a trade date where a purchase or sale of an

investment is under a contract whose terms require delivery of the investment within the timeframe established by

the market concerned, and are initially measured at fair value, including transaction costs.

On initial recognition, the Group may make an irrevocable election to designate investments in mining and exploratio n

equity instruments as fair value through other comprehensive income (‘FVTOCI’). Designation as FVTOCI is not

permitted if the equity investment is held for trading or if it is contingent consideration recognised by an acquirer in a

business combination.

A financial asset is held for trading if:

•  it has been acquired principally for the purpose of selling in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together

and has evidence of a recent actual pattern of short-term profit taking; or

•  it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective

hedging instrument).

Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs.

Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised

in other comprehensive income and accumulated in the investment revaluation reserve, within ‘other reserves’.

The cumulative gain or loss is not reclassified to profit or loss on disposal of the equity investments; instead, it is

transferred to retained earnings.

Dividends on these investments in equity instruments are recognised in profit or loss in accordance with IFRS 9,

unless the dividends clearly represent a recovery of part of the cost of the investment.

The Group has designated all investments in equity instruments that are not held for trading at FVTOCI on initial

application of IFRS 9 (see notes 17 and 19).

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Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

3 Significant accounting policies continued

3.9 Financial instruments continued

(f) Royalty financial instruments

Royalty financial instruments are recognised or derecognised on completion date where a purchase or sale of the

royalty is under a contract, and are initially measured at fair value, including transaction costs.

All of the Group’s royalty financial instruments have been designated as at fair value through profit or loss (‘FVTPL’),

with the exception of the investment in Labrador Iron Ore Royalty Corporation, for which the Group has made an

irrevocable election to designate as at FVTOCI.

The royalty financial instruments at FVTPL are measured at fair value at the end of each reporting period, with any fair

value gains or losses recognised in the ‘revaluation of royalty financial instruments’ line item of the income statement.

Fair value is determined in the manner described in notes 18 and 34.

The Group’s investment in the equity instruments of Labrador Iron Ore Corporation is classified as a royalty financial

instrument as its primary asset is a royalty income stream. On initial recognition the Group made the irrevocable

election to designate this investment as FVTOCI. The dividends received from this investment are recognised in profit

or loss, and are included in the ‘royalty-related revenue’ line item (note 5).

(g) Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements

entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after

deducting all of its liabilities.

(h) Trade payables

Trade payables are not interest bearing and are stated at their fair value on initial recognition. After initial recognition

these are measured at amortised cost using the effective interest method.

(i) Contingent consideration – payable

Contingent consideration – payable, comprises that portion of the consideration payable under the Voisey’s Bay

acquisition agreement, as well as the West Musgrave, Santo Domingo, Nifty and Carlota royalties acquisition agreement.

These payments are contingent upon certain volume and price thresholds being achieved as outlined in notes 16 and

18 respectively. On initial recognition the contingent consideration is stated at its fair value. After initial recognition the

contingent consideration is measured at fair value at the end of each reporting period, with any fair value gains or losses

on the Voisey’s Bay acquisition recognised in the metal streams balance and any fair value gains or losses on the West

Musgrave, Santo Domingo, Nifty and Carlota royalties acquisition recognised in the royalty intangible assets balance on

the balance sheet. Fair value is determined in the manner described in notes 16, 18 and 34.

(j) Borrowings

Interest-bearing bank facilities are initially recognised at fair value, net of directly attributable transaction costs.

Transaction costs are recognised in the income statement on a straight-line basis over the term of the facility.

(k) Equity instruments

Equity instruments issued by the Company are recorded as the proceeds received, net of direct issue costs .

3.10 Impairment of financial assets

The Group recognises a loss allowance for expected credit losses (‘ECL’) on investments in debt instruments that are

measured at amortised cost or at FVTOCI and trade receivables. The amount of expected credit losses is updated

at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Group’s primary asset held at amortised cost is the interest-bearing loan to Denison Mines and the non-interest-

bearing deferred consideration from the sale of the Narrabri royalty (note 22).

The Group always recognises lifetime ECL for trade receivables. The expected credit losses on these financial

assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for

factors that are specific to the debtors, general economic conditions and an assessment of both the current and the

forecast direction of conditions at the reporting date, including time value of money where appropriate. Due to trade

receivables ultimately representing royalty and metal stream-related income which is typically paid within a month

after the reporting date, the amount of expected credit losses is immaterial. Trade receivables are written off where

there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include,

amongst others, the failure of a debtor to engage in a repayment plan with the Group.

For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in

credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly

since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to

12-month ECL.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected

life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to

result from default events on a financial instrument that are possible within 12 months after the reporting date .

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3 Significant accounting policies continued

3.11 Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in

the income statement because it excludes items of income or expense that are taxable or deductible in other years

and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated by

using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets

and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,

and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all

taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable

profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are

not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition

(other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable

profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and

associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary

difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax

assets arising from deductible temporary differences associated with such investments and interests are only

recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the

benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is

no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the liability is settled or

the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the balance

sheet date.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the

manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its

assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets

against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the

Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they related to items that are recognised in

other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised

in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the

initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

3.12 Share-based payments

The Group operates a number of equity-settled, share-based compensation plans, under which the entity receives

services from employees as consideration for equity instruments (options and jointly-owned shares) of the Company.

The fair value of the employee services received in exchange for the grant of the options is recognised as an expense.

The total amount to be expensed is determined by reference to the fair value of the options granted:

•  including any market performance conditions;

•  excluding the impact of any service and non-market performance vesting conditions; and

•  including the impact of any non-vesting conditions.

Non-market vesting conditions are included in assumptions about the number of options and jointly-owned shares

that are expected to vest. The total expense is recognised over the vesting period, which is the period over which

all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its

estimates of the number of options and jointly-owned shares that are expected to vest based on the non-market

vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a

corresponding adjustment to equity.

When options are exercised, the Company issues new shares. The proceeds received net of any directly attributable

transaction costs are credited to share capital and share premium when the options are exercised.

141

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

3 Significant accounting policies continued

3.13 Reserves

Equity comprises the following:

• ‘Share capital’ represents the nominal value of equity shares in issue.

•  ‘Share premium’ represents the excess over nominal value of the fair value of consideration received for equity

shares, net of issuance costs.

Other reserves comprise the following:

•  ‘Merger reserve’ is created when more than 90% of the shares in a subsidiary are acquired and the consideration

includes the issue of new shares by the Company.

• ‘Warrant reserve’ was created in June 2014 in connection with the issue of share warrants as part consideration

of the Maracás Menchen royalty; these warrants expired in 2020 with the associated reserve being transferred to

retained earnings during 2021.

• ‘Investment revaluation reserve‘ represents gains and losses due to the revaluation of the investments in mining

and exploration interests and royalty financial instruments designated as fair value through other comprehensive

income, from the opening carrying values, including the effects of deferred tax and foreign currency changes.

•  ‘Share-based payment reserve’ represents equity-settled share-based employee remuneration until such share

options are exercised.

•  ‘Foreign currency reserve’ represents the differences arising from translation of investments in overseas subsidiaries.

• ‘Special reserve’ represents the level of profit attributable to the Group for the period ended 30 June 2002 which

was created as part of a capital reduction performed in 2002.

•  ‘Treasury shares’ represents the shares acquired by the Group under the share buyback programme in 2020

(note 29).

•  ‘Investment in own shares’ represents the shares held by the Anglo Pacific Group Employee Benefit Trust for awards

made under the Group’s various share-based payment plans (notes 29 and note 30).

• ‘Retained earnings’ represents retained profits.

3.14 Revenue recognition

Revenue relating to the Group’s royalties, is measured at the fair value of the consideration received or receivable

after deducting discounts, value added tax and other sales tax. The royalty income becomes receivable on extraction

and sale of the relevant minerals, and once able to be reliably measured, the revenue is recognised.

Revenue relating to metal sales is recognised in a manner that depicts the pattern of the transfer of goods to

customers. The amount recognised reflects the amount to which the Group expects to be entitled in exchange for

those goods and services. Sales contracts are evaluated to determine the performance obligations, the transaction

price and the point at which there is transfer of control. In determining whether a sale has completed, the Group

considers the indicators of the transfer of control, which include, but are not limited to, whether:

• the Group has a present right to payment;

• the customer has legal title to the asset; or

•  the Group has transferred physical possession of the asset to the customer; and

• the customer has the significant risks and rewards of ownership of the asset.

Revenue from contracts with customers is measured at the fair value of consideration received or receivable as at the

date control is transferred.

Interest income is accrued on a time basis, by reference to the carrying value and at the effective interest rate

applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the

financial asset to that asset’s net carrying amount.

Dividend income from investments is recognised when the shareholders’ rights to receive payment have

been established.

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3 Significant accounting policies continued

3.15 Leases

Group as lessee

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a

right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee,

except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets

(such as small items of office equipment and telephones). For these leases, the Group recognises the lease payments

as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more

representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the

commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the

Group uses its incremental borrowing rate. The lease liability is subsequently measured by increasing the carrying

amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying

amount to reflect the lease payments made. The lease liability is included within non-current trade and other payables

(refer to note 27) in the consolidated balance sheet.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, and lease payments

made at or before the commencement date, less any lease incentives received and any initial direct costs. They are

subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which

it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a

provision is recognised and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the

costs are included in the related right-of-use asset.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a

lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects

to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset.

The depreciation starts at the commencement date of the lease.

The right-of-use assets are included within the property, plant and equipment (refer to note 14) line in the

consolidated balance sheet.

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified

impairment loss as described in the ‘Impairment of property, plant and equipment and intangible assets’ policy (refer

to note 3.8). 

3.16 Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in

the period in which the dividends are approved by the Company’s shareholders or, in the case of the interim dividend,

when it is paid to the shareholders.

3.17 Alternative Performance Measures

The financial statements include certain Alternative Performance Measures (APMs) which include adjusted earnings

per share, adjusted dividend cover, free cash flow per share and portfolio contribution. These APMs are defined in the

table of contents and explained in the Strategic Report on pages 26 and 27, and are reconciled to GAAP measures in

the notes 12, 13, 35 and 36 respectively .

4 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, the Directors are required to make judgements and estimates

that can have a significant impact on the financial statements. Estimates and judgements are regularly evaluated and

are based on historical experience and other factors, including expectations of future events that are believed to be

reasonable under the circumstances. The most critical accounting judgement relates to the Group’s classification of

royalty and stream arrangements and uncertain tax positions. The key sources of estimation uncertainty relate to the

calculation of the fair value of certain royalty arrangements, the key assumptions used when assessing impairment of

intangible assets and the determination of uncertain tax provisions. The use of inaccurate or unreasonable assumptions

in assessments made for any of these estimates could result in a significant impact on the financial statements. 

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Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

4 Critical accounting judgements and key sources of estimation uncertainty continued

Critical accounting judgements

Classification of royalty and streaming arrangements: initial recognition and subsequent measurement

The Directors must decide whether the Group’s royalty and metal stream arrangements should be classified as:

• intangible assets in accordance with IAS 38 Intangible Assets;

•  financial assets in accordance with IFRS 9 Financial Instruments;

• investment properties in accordance with IAS 40 Investment Property; or

• property, plant and equipment in accordance with IAS 16 Property, Plant and Equipment.

The Directors use the following selection criteria to identify the characteristics which determine which accounting

standard to apply to each royalty arrangement:

Type 1 – Intangible assets (‘vanilla’ royalties): Royalties, in their simplest form, are classified as intangible assets by

the Group. The Group considers the substance of a simple vanilla royalty to be economically similar to holding a

direct interest in the underlying mineral asset. Existence risk (the commodity physically existing in the quantity

demonstrated), production risk (that the operator can achieve production and operate a commercially viable

project), timing risk (commencement and quantity produced, determined by the operator) and price risk (returns

vary depending on the future commodity price, driven by future supply and demand) are all risks which the Group

participates in on a similar basis to an owner of the underlying mineral licence. Furthermore, in a vanilla royalty, there

is only a right to receive cash to the extent there is production and there are no interest payments, minimum payment

obligations or means to enforce production or guarantee repayment. These are accounted for as intangible assets

under IAS 38.

Type 2 – Financial assets (royalties with additional financial protection): In certain circumstances where the ‘vanilla’ risk

is considered too high, but the Group still fundamentally believes in the quality or potential of the underlying resource,

the Group will look to introduce additional protective measures. This has typically taken the form of performance

milestone penalties (usually resulting in the receipt of cash or cash equivalent), minimum payment terms and interest

provisions or mechanisms to convert the initial outlay into the equity instruments of the operator in the event of

project deferral. Once an operation is in production, these mechanisms generally fall away such that the royalty will

display identical characteristics and risk profile to the vanilla royalties; however, it is the contractual right to enforce

the receipt of cash through to production which results in these royalties being accounted for as financial assets

under IFRS 9.

Type 3 – Investment property (coal royalties): Royalties which are derived from the ownership of sub-stratum land are

accounted for as investment properties under IAS 40, although the substance of their commercial terms is identical

to vanilla royalties. The Group does not expect to obtain royalties in this manner going forward, as it is unusual for

sub-stratum minerals not to be the property of the state.

Type 4 – Property, plant and equipment (metal streams): Similar to the Group’s royalty intangible assets, metal streams

expose the Group to existence risk (the commodity physically existing in the quantity reported), production risk (that

the operator can achieve production and operate a commercially viable project), timing risk (commencement and

quantity produced, determined by the operator) and price risk (returns vary depending on the future commodity

price, driven by supply and demand) on a similar basis to the owner of the underlying mineral licence. However, unlike

the Group’s royalty intangible assets, metal streams result in the physical delivery of the underlying commodity with

the consequent inventory risk prior to sale and the revenue generated is under the Group’s direction, rather than

a percentage of revenue generated by the operator. As a result of physical delivery of the underlying commodity

and the associated inventory risk prior to sale, metal streams are classified as property, plant and equipment and

accounted for under IAS 16.

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4 Critical accounting judgements and key sources of estimation uncertainty continued

Critical accounting judgements continued

A summary of the Group’s accounting approach is set out below:

Accounting classification Substance of contractual terms Accounting treatment Examples

Royalty intangible

assets

• Simple royalty with no

right to receive cash other

than through a royalty

related to production

• Investment is presented as an intangible

asset and carried at cost less accumulated

amortisation and any impairment provision

• Royalty income is recognised as revenue in

the income statement

• Intangible asset is amortised on a

systematic basis

• Intangible asset is assessed for indicators

of impairment at each period end

• Mantos Blancos

• Maracás Menchen

• Four Mile

• Salamanca

• Pilbara

• Ring of Fire

• Cañariaco

• Ground Hog

• Amapá

• Santo Domingo

• West Musgrave

• Nifty

• Carlota

Royalty financial

instruments

• Royalty arrangement with

a contractual right to

receive cash (e.g. through

a mandated interest rate

or milestones which, if not

met, trigger repayment)

• Financial asset is recognised at fair value on

the balance sheet

• Fair value movements taken through the

income statement (FVTPL), with the

exception of the LIORC investment where

fair value movements are taken through

other comprehensive income (FVOCI)

• Royalty income is not recognised as

revenue in the income statement and

instead reduces the fair value of the asset,

with the exception of the dividends

received from the LIORC investment which

are included in royalty-related revenue on

the income statement

• EVBC

• Dugbe 1

• McClean Lake

• Piauí

•  L I O R C

Investment property

– coal royalties

• Direct ownership of

sub-stratum land

• Returns based on

royalty-related

production

• Coal royalties accounted for as investment

property is carried at fair value on the

balance sheet

• Movements in fair value recognised in

income statement

• Royalty income is recognised as revenue in

the income statement

• Kestrel

•  C r i n u m

Property, plant and

equipment – metal

streams

• Agreement settled

through the physical

delivery of the underlying

commodity

• Inventory risk prior to sale

is borne by the Group

• Revenue is generated

under the Group’s

direction, rather than a

percentage of revenue

generated by the operator

• Metal streams accounted for as property,

plant and equipment are carried at cost

less accumulated depletion and any

impairment provision

• Metal stream sales are recognised as

revenue in the income statement

• Metal streams are depreciated on a

systematic basis, using units of production,

and recognised as accumulated depletion

• Metal stream asset is assessed for

indicators of impairment at each period end

• Voisey’s Bay

145

Financial sta tements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

4 Critical accounting judgements and key sources of estimation uncertainty continued

Critical accounting judgements continued

Classification of West Musgrave, Santo Domingo, Nifty, and Carlota royalties acquired: initial recognition and

subsequent measurement

On 19 July 2022, the Group acquired a high-quality portfolio of royalties over advanced development stage copper

and nickel projects (note 18). The Directors considered the Group’s existing criteria to identify the characteristics

which determine which accounting standard to apply to the royalties as detailed in the ‘Classification of royalty and

streaming arrangements: initial recognition and subsequent measurement’ section above.

Under the royalty agreements the Group has no right to receive cash other than through a royalty related to

production (apart from the West Musgrave payment detailed below) and the Directors concluded that the royalties

should be classified as royalty intangible assets in accordance with IAS 38 – Intangible Assets.

In accordance with IAS 38, the royalty intangible assets are stated at cost less accumulated depreciation and

accumulated impairment charges, if any. The cost of the asset is comprised of its purchase price and any closing costs

directly attributable to acquiring the asset. The purchase price is the aggregate cash amount paid and the fair value

of any other non-cash consideration given to acquire the asset.

Under the West Musgrave royalty the Group is entitled to a A$10m payment on commercial production being

achieved at West Musgrave, which is distinct from and separate to the net smelter return royalty and is accounted

for as a financial asset and measured at fair value through profit or loss (“FVTPL”) (note 22).

The purchase price of the Santo Domingo royalty was partially settled in Company shares. The number of

consideration shares issued as part consideration for Santo Domingo was determined in the Royalty Sale Agreement

based on a 30-day volume weighted average price (“VWAP”), which then differed from the share price on the day the

shares were issued. In accordance with IFRS 2 ‘share-based payments’ the Santo Domingo royalty was recognised at

fair value. Therefore, the difference in the value ascribed to the shares in the agreement and the share price at date

of issue was recognised as share premium (note 29).

Amortisation

The cost of the royalty intangible assets is being allocated in accordance with the Group’s intangible assets accounting

policy detailed in note 3.7.

Impairment review

The royalty intangible assets are being assessed for indicators of impairment in accordance with the Group’s

intangible assets accounting policy detailed in note 3.8.

Contingent consideration

The contingent consideration payable in relation to the acquisition of the West Musgrave royalty is determined by

reference to minimum production thresholds and nickel prices, and has been classified as a financial liability that is

carried at fair value based on the discounted expected future cash outflows. The contingent consideration is included

as a non-current liability (note 27).

Deferred consideration

The deferred consideration in relation to the West Musgrave royalty is payable quarterly, over a period of 18 months.

Given the short period over which the deferred consideration is to be paid, the carrying value is deemed to

approximate the fair value and is recognised as a current and non-current liability (note 27).

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4 Critical accounting judgements and key sources of estimation uncertainty continued

Critical accounting judgements continued

Key sources of estimation uncertainty

Assessment of fair value of royalty arrangements held at fair value

A number of the Group’s royalty arrangements are held at fair value. Fair value is determined based on discounted

cash flow models (and other valuation techniques) using assumptions considered to be reasonable and consistent with

those that would be applied by a market participant. The determination of assumptions used in assessing fair values is

subjective and the use of different valuation assumptions could have a significant impact on the financial statements.

In particular, expected future cash flows, which are used in discounted cash flows models are, inherently uncertain

and could materially change over time. They are significantly affected by a number of factors including reserves and

resources and timing/likelihood of mines entering production together with economic factors such as commodity

prices, discount rates and exchange rates.

The Group’s most significant royalty arrangement held at fair value is Kestrel, for which the key assumptions and

sensitivity analysis are set out in note 15. The key assumptions relating to the Group’s royalty financial instruments

classified as fair value through profit or loss, are set out in notes 17 and 34.

Impairment review of royalty intangible assets and metal streams

Royalty intangible assets and metal streams are assessed for indicators of impairment at each reporting date with the

assessment considering variables such as the production profiles, production commissioning dates where applicable,

flows expected from the royalty arrangement should the project continue/come into production. A pre-tax nominal

discount rate of between 10.00% and 17.00% is applied to the future cash flows. The discount rate of each royalty and

metal stream arrangement is derived using a capital asset pricing model specific to the underlying project, making

reference to the risk-free rate of return expected on an investment with the same time horizon as the expected mine

life, together with the country risk associated with the location of the operation. Changes in discount rate are most

sensitive to changes in the risk-free rate, country risk premiums and the expected mine life.

The outcome of this net present value calculation is then risk weighted to reflect management’s current assessment

of the overall likelihood and timing of each project coming into production and royalty or metal stream income arising.

This assessment is impacted by news flow relating to the underlying operation in the period, in conjunction with

management’s assessment of the economic viability of the project based on commodity price projections.

The Group has reviewed the sensitivity of its assessment for indicators or impairment in relation to its royalty

intangibles, as detailed in note 18. A similar assessment was undertaken in relation to the Group’s metal streams

in note 16; however, there are no indicators of impairment where the discount rate was increased by 1% or the

commodity prices were reduced by 10%.

147

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Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

4 Critical accounting judgements and key sources of estimation uncertainty continued

Key sources of estimation uncertainty continued

Uncertain tax positions

The Group operates across many jurisdictions. Application of tax law can be complex and requires judgement to assess risk

and estimate outcomes, particularly in relation to the Group’s cross-border operations and transactions. The evaluation of

tax risks considers both amended assessments received and potential sources of challenge from tax authorities. In some

cases, it may not be possible to determine a range of possible outcomes or a reliable estimate of the potential exposure.

Tax matters with uncertain outcomes arise in the normal course of business and occur due to changes in tax law,

changes in interpretation of tax law, periodic challenges and disagreement with tax authorities. Tax obligations

assessed as having probable future economic outflows capable of reliable measurement are provided for (refer

to note 11). Matters with a possible economic outflow and/or presently incapable of being measured reliably are

contingent liabilities and disclosed in note 37.

5 Royalty and metal stream related revenue

2022 2021

$’000 $’000

Group

Royalty revenue 118,032 60,701

Metal stream sales 18,847 16,521

Interest from royalty-related financial assets 2,14 4 2,433

Dividends from royalty financial instruments 2,847 5,640

141,870 85,295

Interest from royalty-related financial assets for the year ended 31 December 2022 of $2.1m (2021: $2.4m) relates to

interest earned on the Group’s 13-year loan of C$40.8m with an interest rate of 10% per annum, to Denison Mines Inc

(‘Denison’), which is classified as a non-current other receivable (note 22).

Dividends from royalty financial instruments for the year ended 31 December 2022 of $2.8m (2021: $5.6m) relates to

the dividends received from the Group’s investments in Labrador Iron Ore Royalty Corporation (2022: $2.5m; 2021:

$4.9m) as described in note 17, together with the dividends received from the Group’s investment in Flowstream

Vintage (2022: $0.3m; 2021: $0.7m), an unquoted oil and gas streaming company included in the Group’s mining and

exploration interests (note 19).

6a Expense by nature

2022 2021

$’000 $’000

Group

Employee benefit expense (note 7a) 5,646 5,853

Professional fees 2,521 2,816

Listing fees 182 164

Depreciation of property, plant and equipment (note 14) 355 277

Other expenses 2,145 1,630

10,849 10,740

6b Auditor’s remuneration

2022 2021

$’000 $’000

Group

Fees payable to Company's auditor for the audit of parent company and consolidated

financial statements 437 429

Fees payable to the Company's auditor and its associates for other services:

– The audit of Company's subsidiaries 38 26

Total audit fees 475 455

– Other assurance services pursuant to legislation 155 135

– Other services — —

Total non-audit fees 155 135

Details of the Company’s policy on the use of the auditor for non-audit services, the reasons why the auditor was used

rather than another supplier and how the auditor’s independence and objectivity are safeguarded are set out in the

Audit Committee Report on pages 98 and 99. No services were provided pursuant to contingent fee arrangements.

148

Ecora Resources PLC

Annual Report and Accounts 2022

7a employee costs

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Wages and salaries 4,066 4,868 4,030 4,825

Share-based awards to Directors and employees 709 328 709 328

Social security costs 653 468 649 464

Other pension costs 218 189 218 189

5,646 5,853 5,606 5,806

7b Retirement benefits plans

The Group operates a money purchase group personal pension scheme. Under this scheme the Group makes

contributions to personal pension plans of individual Executive Directors and employees. The pension cost charge

represents contributions payable by the Group to these plans in respect of the year.

The total cost charged to the income statement of $218,000 (2021: $189,000) represents contributions payable to

these schemes by the Group at rates specified in the rules of the schemes. As at 31 December 2022, contributions of

$35,000 (2021: $30,000) due in respect of the current reporting period had not been paid over to the schemes.

7c Average number of people employed

2022 2021

Group

Number of employees 14 12

2022 2021

Group

Average number of people (including Executive Directors) employed:

Executive Directors 2 2

Administration 12 10

14 12

Company

The average number of administration staff employed by the Company during the year, including Executive Directors

was 13 (2021: 11).

Directors’ salaries are shown in the Directors’ Remuneration Report on pages 103 to 116, including the highest

paid Director.

8 Finance income

2022 2021

$’000 $’000

Group

Interest on bank deposits 8 1

Other interest — —

8 1

149

Financial statements

Ecora R esources PLC

Annual Report and Accounts 2022

 continued

for the financial year ended 31 December 2022

9 Finance costs

2022 2021

$’000 $’000

Group

Professional fees (2,334) (2,625)

Revolving credit facility fees and interest (3,775) (4,990)

(6,109) (7,615)

Professional fees represent legal and arrangement fees relating to the Group’s revolving credit facility. $1.9m relates

to the amortisation of capitalised facility fees that are amortised over the term of the facility; refer to note 20

(2021: $2.4m).

10 Other income/(losses)

2022 2021

$’000 $’000

Group

Revaluation of foreign exchange instruments (223) (140)

Provision for royalty revenue receivable (1,455) —

Loss on disposal of royalty intangible assets (note 18) — (18,974)

Other gains/(losses) 5,034 (219)

3,356 (19,333)

During the second half of 2022, the Group commenced discussions with the operator of EVBC in light of the sustained

margin pressures and operational constraints at the mine. While negotiations are ongoing, the most likely outcome

will be deferring the payment of the Group’s royalties from Q3 and Q4 2022 which totalled $1.5m together with any

royalties from 2023 until the start of 2024. Until the mine’s operating margins improve and the operational constraints

are addressed, management has assessed the recoverability of the Q3 and Q4 2022 royalties to be inherently

uncertain and has fully provided for the $1.5m receivable at 31 December 2022.

Included in other gains is a gain of $3.8m on revaluation of contingent consideration receivable on the disposal of

Narrabri (note 22), a gain of $0.5m on revaluation of contingent consideration receivable related to West Musgrave

(note 22) and a gain of $0.9m due to reversal of expected credit losses on the Denison receivable (note 22).

150

Ecora Resources PLC

Annual Report and Accounts 2022

11 Income tax expense

2022 2021

$’000 $’000

Analysis of charge for the year

United Kingdom corporation tax — —

Overseas tax 35,048 5,145

Adjustments in respect of prior years (578) (180)

Current income tax charge per consolidated income statement 34,470 4,965

Deferred income tax charge as per consolidated income statement 6,337 12,198

Adjustments in respect of prior years — —

Deferred tax 6,337 12,198

Income tax expense 40,807 17,163

Factors affecting tax charge for the year:

Profit before tax 135,444 54,639

Tax on profit calculated at United Kingdom corporation tax rate of 19.00% (2021: 19.00%) 25,734 10,381

Tax effects of:

Items non-taxable/deductible for tax purposes:

Non-deductible expenses 26,714 4,912

Non-taxable income (23,571) (5,186)

Temporary difference adjustments

Utilisation of losses not previously recognised (2,524) (1,335)

Current year losses not recognised 1,623 1,618

Adjustment in deferred tax due to change in tax rate (783) 191

Other temporary difference adjustments (2,174) (1,298)

Other adjustments

Withholding taxes 2,945 3,082

Effect of differences between local and United Kingdom tax rates 14,926 3,552

Prior year adjustments to current tax (578) (180)

Other adjustments (1,505) 1,426

Income tax expense 40,807 17,163

The Group’s effective tax rate for the year ended 31 December 2022 of 30.13% (2021: 31.4%) is higher (2021: higher) than

the applicable weighted average statutory rate of corporation tax in the United Kingdom of 19.00% (2021: 19.00%).

The higher effective tax rate in 2022 compared to the headline tax rate is mainly due to the Group’s primary source of

income, the Kestrel royalty, being held in Australian subsidiary and as such is subject to a higher corporation tax rate.

In future periods, it is expected that the Group’s effective tax rate will mainly be driven by the prevailing Australian

corporation tax rates.

Refer to note 26 for information regarding the Group’s deferred tax assets and liabilities.

Uncertain tax positions

As outlined in note 4, tax matters with uncertain outcomes arise in the normal course of business and occur due to

changes in tax law, changes in interpretation of tax law, periodic challenges and disagreement with tax authorities.

Where such matters are assessed as having probable future economic outflows capable of reliable measurement

they are provided for. As at 31 December 2022, the Group’s provision for uncertain tax positions was $4.0m

(31 December 2021: $4.2m) and is included in current income tax liabilities. Matters with possible economic outflow

and/or presently incapable of being measured reliably are contingent liabilities and are disclosed in note 37.

Apart from the matters outlined above, the Group does not currently have any material unresolved tax matters

or disputes with tax authorities. The interpretation of tax legislation in certain jurisdictions where the Group has

established structures may, however, be a potential source of challenge from tax authorities. Due to the complexity

of changes in international tax legislation, the Group has taken local advice and has recognised provisions where

necessary. None of these provisions are material in relation to the Group’s assets or liabilities.

151

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Ecora Resources PLC

Annual Report and Accounts 2022

 continued



12 Earnings per share

The disclosures in this note include certain Alternative Performance Measures (APMs). For more information on the

APMs used by the Group, including the definitions, please refer to page 1.

Earnings per ordinary share is calculated on the Group’s profit after tax of $94,637,000 (2021: $37,476,000) and the

weighted average number of shares in issue during the year of 234,062,267 (2021: 207,403,286).

2022 2021

$’000 $’000

Net profit attributable to shareholders

Earnings – basic 94,637 37,476

Earnings – diluted 94,637 37,476

The weighted average number of shares in issue for the purpose of calculating basic and diluted earnings per share

are as follows:

2022 2021

Weighted average number of shares in issue

Basic number of shares outstanding 234,062,267 207,901,255

Dilutive effect of Employee Share Option Scheme 765,835 322,006

Diluted number of shares outstanding 234,828,102 208,223,261

Earnings per share – basic 40.43c 18.03c

Earnings per share – diluted 40.30c 18.00c

At 31 December 2021, earnings per ordinary share excluded shares held by the Company’s Employee Benefit Trust

as it had waived its right to receive dividends on the 444,726 ordinary 2p shares it held. During the year ended

31 December 2022 these shares were transferred to employees in settlement of share awards and are included

in the calculation of weighted average numbers of shares above.

Adjusted earnings per share

Adjusted earnings represent the Group’s underlying operating performance from core activities. Adjusted earnings

is the profit/loss attributable to equity holders plus royalties received from financial instruments carried at fair value

through profit or loss, less all valuation movements and impairments (which are non-cash adjustments that arise

primarily due to changes in commodity prices), amortisation charges, unrealised foreign exchange gains and losses,

and any associated deferred tax, together with any profit or loss on non-core asset disposals as such disposals are not

expected to be ongoing.

Valuation and other non-cash movements such as these are not considered by management in assessing the level of

profit and cash generation available for distribution to shareholders. As such, an adjusted earnings measure is used

which reflects the underlying contribution from the Group’s royalties and metal streams during the year.

Earnings

per share

Diluted

earnings

per share

$’000 ¢ ¢

Net profit attributable to shareholders

Earnings - basic and diluted for the year ended 31 December 2022 94,637 40.43c 40.30c

Adjustment for:

Amortisation and depletion of royalties and metal streams 10,065

Amortisation of finance costs (339)

Impairment of royalty and exploration intangible assets 4,083

Receipts from royalty financial instruments 2,782

Revaluation of royalty financial instruments 1,373

Revaluation of coal royalties (Kestrel) (27,833)

Revaluation of foreign currency instruments 223

Effective interest on contingent consideration 169

Unrealised foreign exchange (gains)/losses 1,483

Other gains – revaluation of contingent consideration (4,143)

Tax effect of the adjustments above 6,019

Adjusted earnings – basic and diluted for the year ended 31 December 2022 87,894 37. 55c 37.43c

152

Ecora Resources PLC

Annual Report and Accounts 2022

12 Earnings per share continued

Adjusted earnings per share continued

Earnings

Earnings

per share

Diluted

earnings

per share

$’000 ¢ ¢

Net profit attributable to shareholders

Earnings - basic and diluted for the year ended 31 December 2021 37,476 18.03c 18.00c

Adjustment for:

Amortisation and depletion of royalties and streams 14,845

Amortisation of finance costs 339

Impairment of royalty and exploration intangible assets 5,232

Loss on disposal of royalty intangible assets 18,974

Receipts from royalty financial instruments 3,115

Revaluation of royalty financial instruments (17,501)

Revaluation of coal royalties (Kestrel) (13,037)

Revaluation of foreign currency instruments 140

Effective interest on contingent consideration 176

Unrealised foreign exchange (gains)/losses (744)

Tax effect of the adjustments above 3,325

Adjusted earnings – basic and diluted for the year ended 31 December 2021 52,340 25.18c 25.14c

In calculating the adjusted earnings per share, the weighted average number of shares in issue takes into account the

dilutive effect of the employee share option schemes in those years where the Group has adjusted earnings. In years

where the Group has an adjusted loss, the employee share option schemes are considered anti-dilutive as including

them in the diluted number of shares outstanding would decrease the loss per share; as such they are excluded.

The weighted average number of shares in issue for the purpose of calculating basic and diluted adjusted earnings

per share are as follows:

2022 2021

Weighted average number of shares in issue

Basic number of shares outstanding 234,062,267 207,901,255

13 Dividends and adjusted dividend cover

The disclosures in this note include certain Alternative Performance Measures (APMs). For more information on the APMs

used by the Group, including the definitions, please refer to page 1.

On 17 February 2022 an interim dividend of 1.75p per share was paid to shareholders ($5.1m) in respect of the year ended

31 December 2021. On 31 May 2022 a final dividend of 1.75p per share was paid to shareholders ($4.7m) to make a total

dividend for the year ended 31 December 2021 of 7.00p per share. The first quarterly dividend of 1.75p for the year ended

31 December 2022 was paid to shareholders ($4.4m) on 31 August 2022. On 26 October 2022 the second quarterly

dividend of 1.75p was paid to shareholders ($5.2m). Total dividends paid during the year were $19.4m (2021: $25.4m).

On 15 February 2023 a further quarterly dividend of 1.75p per share was paid to shareholders ($5.5m) in respect of

the year ended 31 December 2022. This dividend has not been included as a liability in these financial statements.

The Directors propose that a final dividend of 1.75p per share be paid to shareholders on 6 July 2023, to make a total

dividend for the year of 7.00p per share. This dividend is subject to approval by shareholders at the AGM and has not

been included as a liability in these financial statements.

The proposed final dividend for 2022 will be payable to all shareholders on the Register of Members on 12 May 2023. The total

estimated dividend to be paid is $5.3m. At the present time the Board has resolved not to offer a scrip dividend alternative.

Adjusted dividend cover

Adjusted dividend cover is calculated as the number of times adjusted earnings per share exceeds the dividend per

share. The Group’s adjusted earnings per share for the year ended 31 December 2022 is 37.55c per share (note 12)

with dividends for the year totalling 8.62c (7.00p), resulting in dividend cover of 4.4x (2021: adjusted earnings per share

25.18c, dividends totalling 9.63c (7.00p) and dividend cover 2.6x).

2023 dividend determination

The portfolio contribution generated by the Group’s royalties and metal streams arise from sales revenue denominated in US

dollars, making this the most appropriate measure of our business performance. It is also now our main reporting currency

and consequently the natural currency for dividend determination. Dividends for the year ended 31 December 2023 and

beyond will be determined in US dollars, translated at exchange rates prevailing on the record date of each dividend declared

and payable in sterling and Canadian dollars to our shareholders on the London and Toronto Stock Exchanges respectively.

153

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

14 Property, plant and equipment

Other

assets

Right-of-

use assets

Equipment

and fixtures Total

Group $’000 $’000 $’000 $’000

At 1 January 2022 1,851 1,295 443 3,589

Additions — 2,669 537 3,206

Disposals — — (424) (424)

At 31 December 2022 1,851 3,964 556 6,371

Depreciation and impairment

At 1 January 2022 (1,851) (536) (405) (2,792)

Depreciation — (312) (43) (355)

Disposals — — 408 408

At 31 December 2022 (1,851) (848) (40) (2,739)

Carrying amount 31 December 2022 — 3,116 516 3,632

Other

assets

Right of

use assets

Equipment

and fixtures Total

Group $’000 $’000 $’000 $’000

Gross carrying amount

At 1 January 2021 1,851 1,295 405 3,551

Additions — — 38 38

At 31 December 2021 1,851 1,295 443 3,589

Depreciation and impairment

At 1 January 2021 (1,851) (268) (396) (2,515)

Depreciation — (268) (9) (277)

At 31 December 2021 (1,851) (536) (405) (2,792)

Carrying amount 31 December 2021 — 759 38 797

Other assets relate to the Group’s Panorama and Trefi coal projects in British Columbia, Canada, and the Group’s talc

deposit in Shetland, Scotland. Right-of-use assets relate to the Group’s office premises.

Other

assets

Right-of-

use assets

Equipment

and fixtures Total

Company $’000 $’000 $’000 $’000

Gross carrying amount

At 1 January 2022 1,127 1,295 443 2,865

Additions — 2,669 537 3,206

Disposals — — (424) (424)

At 31 December 2022 1,127 3,964 556 5,647

Depreciation and impairment

At 1 January 2022 (1,127) (536) (405) (2,068)

Depreciation — (312) (43) (355)

Disposals — — 408 408

At 31 December 2022 — (848) (40) (2,015)

Carrying amount 31 December 2022 — 3,116 516 3,632

Other

assets

Right of

use assets

Equipment

and fixtures Total

Company $’000 $’000 $’000 $’000

Gross carrying amount

At 1 January 2021 1,127 1,295 405 2,827

Additions — — 38 38

At 31 December 2021 1,127 1,295 443 2,865

Depreciation and impairment

At 1 January 2021 (1,127) (268) (396) (1,791)

Depreciation — (268) (9) (277)

At 31 December 2021 (1,127) (536) (405) (2,068)

Carrying amount 31 December 2021 — 759 38 797

154

Ecora Resources PLC

Annual Report and Accounts 2022

15 Coal royalties (Kestrel)

Group

$’000

At 1 January 2021 76,268

Foreign currency translation (4,840)

Gain on revaluation of coal royalties 13,037

At 31 December 2021 84,465

Foreign currency translation (5,629)

Gain on revaluation of coal royalties 27,833

At 31 December 2022 106,669

The Group’s coal royalty entitlements comprise the Kestrel and Crinum coal royalties, and derive from mining activity

carried out within the Group’s private land area in Queensland, Australia. Rather uniquely to this royalty, the sub-

stratum land is the property of the freeholder, including the minerals contained within. The ownership of the land

therefore entitles the Group to a royalty, equivalent to what the State receives on areas outside the Group’s private

land. This royalty is accounted for as Investment Property in accordance with IAS 40. Further details on the calculation 

of the Kestrel royalty, together with its performance for 2022 can be found on page 31.

The carrying value of $106.7m (A$156.5m) (2021: $84.5m and A$116.3m) is based on a valuation completed during

December 2022 by an independent coal industry adviser, amended for management’s assessment of the nominal

discount rate and future commodity price assumptions. The independent coal industry adviser’s assumptions relating 

to volumes and foreign exchange were not changed.

The valuation is on a net present value of the pre-tax cash flow discounted at a nominal rate of 10.50% (2021: 6.00%)

(2022: independent discount rate of 9%; 2021: independent discount rate of 6.00%). The key assumptions in the

independent valuation relate to price, foreign exchange and discount rate.

Price assumptions

The independent coal industry adviser’s price assumptions were based on the December 2022 Consensus Economics 

forecast average price of U$277/t for the first half of 2023. Given the volatility in the commodity prices management

have assumed an average price for the first half of 2023 of U$325/t based on the Australian Premium Coking Coal FOB 

Financial Future price, before reverting to Consensus Economics pricing which decreases to an average nominal price

U$225/t between the second half of 2023 and 2026, and an average long-term nominal price of U$192/t.

If the price were to increase or decrease by 10% over the life of the mine the valuation effect would be:

• a 10% reduction in the coal price would have resulted in the coal royalties being valued at $86.6m (A$127m) and an

$20.4m decrease to the revaluation gain in the income statement to $7.4m; and

• a 10% increase in the coal price would have resulted in the coal royalties being valued at $128.5m (A$188.4m) and a

$22.2m increase in the revaluation gain in the income statement to a gain of $50m.

Foreign exchange rate assumptions

The independent coal industry adviser’s AUD:USD exchange rate assumptions used in the 2022 valuation assume a

slight strengthening in the Australia dollar from a short-term rate of 0.72 to a long term rate of 0.74 against the US

dollar. If the Australian dollar were to strengthen or weaken by 10% against the US dollar over the life of the mine that

valuation effect would be:

• a 10% strengthening of the Australian dollar against the US dollar would have resulted in the coal royalties being

valued at $88.3m (A$129.5m) and a $18.7m decrease to the revaluation gain in the income statement to $9.2m; and

• a 10% weakening of the Australian dollar against the US dollar would have resulted in the coal royalties being valued

at $131m (A$192.2m) and a $24.8m increase in the revaluation gain in the income statement to a gain of $52.6m.

Discount rate assumptions

The independent coal industry adviser’s pre-tax nominal discount rate was 9.00%, however, as this was outside

the range of discount rates determined by management, a pre-tax nominal discount rate of 10.5% was used for the

valuation. If the discount rate used were to increase or decrease by 1% the valuation effect would be:

• a 1% reduction in the nominal discount rate would have resulted in the coal royalties being valued at $108.5m

(A$159m) and a $1.8m increase in the revaluation gain in the income statement to $29.7m; and

• a 1% increase in the nominal discount rate would have resulted in the coal royalties being valued at $105m (A$154m) 

and a $1.8m decrease in the revaluation gain in the income statement to $26m.

The net royalty income from this investment is currently taxed in Australia at a rate of 30%. The revaluation of the

underlying Australian dollar asset is recognised in the Income Statement with the retranslation to the Group’s US

dollar presentation currency recognised in the foreign currency translation reserve.

Refer to note 34 for additional fair value disclosures relating to Kestrel.

155

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

15 Coal royalties (Kestrel) continued

Impact of climate change

The output from the Group’s climate-related scenario analysis outlined on pages 76 to 79, has been considered in

assessing the Group’s independent coal industry adviser’s valuation of Kestrel. The Group’s scenario analysis to date

does not indicate that climate change will have material impact on the Group’s business model, however, this analysis

is an iterative process with assumptions relating to both the physical and transitional impacts of climate change

continuing to be refined.

The Group’s independent coal industry adviser who undertook the valuation of Kestrel, also considered the impact of

climate change when undertaking their valuation by having regard to the following:

• the likely future demand for metallurgical coal which is the primary product produced by the mine;

• the historic and possible future impact of climate change on the operations of Kestrel, such as extreme weather

events; and

• possible legislative changes that may impact either our royalty or the underlying operations.

Considering mining at Kestrel progressively moving out of the Group’s private royalty lands between 2023 and 2026,

the impact of climate change is not expected to have a material impact on the carry value of the Kestrel royalty.

The shares over the entity which is the beneficial owner of the Kestrel royalty have been guaranteed as security in

connection with the Group’s borrowing facility (note 25). 

16 Metal streams

Cost

Contingent

consideration

Total

$’000 $’000 $’000

Gross carrying amount

At 1 January 2022 175,585 2,308 177,893

Fair value of contingent consideration — 670 670

At 31 December 2021 175,585 2,308 177,893

Depletion and impairment

At 1 January 2022 (7,197) (129) (7,326)

Depletion (6,356) (126) (6,482)

At 31 December 2022 (13,553) (255) (13,808)

Carrying amount 31 December 2022 162,032 2,723 164,755

Cost

Contingent

consideration

Total

$’000 $’000 $’000

Gross carrying amount

At 1 January 2021 — — —

Additions 175,585 — 175,585

Fair value of contingent consideration — 2,308 2,308

At 31 December 2021 175,585 2,308 177,893

Depletion and impairment

At 1 January 2021 — — —

Depletion (7,197) (129) (7,326)

At 31 December 2021 (7,179) (129) (7,326)

Carrying amount 31 December 2021 168,388 2,179 170,567

On 12 March 2021, the Group completed the acquisition of a holding company that, in turn, holds a 70% net interest

in a stream of cobalt production from the Voisey’s Bay mine in Canada for cash consideration of $205.6m at closing

and further potential contingent consideration subject to cobalt prices and production levels over the next five

years. Costs directly associated with the acquisition were $2.1m, resulting in a total payment of $207.7m. The holding

company acquired had working capital balances of $0.2m and carried forward tax losses of $120.5m, with the latter

resulting in $31.9m of the consideration being allocated to deferred tax assets on acquisition (note 26). 

156

Ecora Resources PLC

Annual Report and Accounts 2022

16 Metal streams continued

The stream agreement entitles the Group to 22.82% of all cobalt production from both the open pit and underground

operations at Voisey’s Bay. The Group’s entitlement steps down to 11.41% once 7,600 tonnes of finished cobalt has

been delivered. Deliveries under the stream agreement from its inception to 31 December 2022 total 900 tonnes.

The Group pays 18% of an industry cobalt reference price prevailing at the date of delivery, until the original upfront

amount paid for the stream, by its original holder, of $300m is reduced to nil (through accumulating credit from 82%

of the cobalt reference price), increasing to 22% thereafter. This payment is included in the $4.3m (2021: $4.0m) metal

streams cost of sales in the income statement. The accumulated credit for deliveries under the stream agreement

from its inception to 31 December 2022 was $46.0m, reducing the original upfront amount to $254.0m (31 December

2021: accumulated credit $23.6m, original upfront amount $276.4m).

The metal stream is being depleted on a units-of-production basis over the total expected deliveries to be received

of 15.5Mlbs. During the period to 31 December 2022, the Group received 0.59Mlbs (2021: 0.65Mlbs) of cobalt resulting

in a depletion charge of $6.5m (2021:$7.3m).

The contingent consideration in relation to the acquisition is determined by reference to minimum production

thresholds and cobalt prices, and has been classified as a financial liability that is carried at fair value based on the

discounted expected cash outflows. The fair value of the contingent consideration is remeasured at each reporting

date, and depreciated on a units-of-production basis over the total expected deliveries to be received from the

metal stream.

During the year ended 31 December 2022, $3.3m was paid in contingent consideration as a result of the minimum

production and price thresholds being achieved in the second half of 2021 ($1.0m) and the first half of 2022 ($2.3m).

As at 31 December 2022, the fair value of the contingent consideration for future period has been reduced to nil (note

27) as the minimum production and price thresholds are not expected to be achieved in the period to 30 June 2025.

Impairments of metal streams

As described in notes 3.7 and 3.8, at each reporting date the Group’s metal stream asset is reviewed for any

impairment indicators. Consideration is given to the presence or occurrence of adverse operational developments

at the underlying mine, together with any significant declines in the cobalt price and the impact of climate change,

as detailed below. Where impairment indicators exist, a full impairment review is carried out to determine whether

the discounted future expected cash flows (calculated on a value-in-use basis) exceed cost. Note 4 outlines the

impairment methodology applied.

Climate change considerations in assessing for indicators of impairment

the Board when undertaking the semi-annual impairment review of the Group’s royalty intangible assets. The Group’s

climate-related scenario analysis considered:

• the likely future demand for the commodities underlying the Group’s royalty and metal stream portfolio;

• the historic and possible future impacts of climate change on the operations underlying the Group’s metal stream,

such as extreme weather events; and

• possible legislative changes that may impact either our metal stream agreements or the operations underlying the

Group’s metal.

The Group’s scenario analysis to date does not indicate that climate change will have material impact on the Group’s

portfolio of royalties and streams, however, this analysis is an iterative process with assumptions relating to both

the physical and transitional impacts of climate change continuing to be refined. As at 31 December 2022 there were

no indicators of impairment in relation to the Group’s metal stream.

Further details on the Group’s Voisey’s Bay cobalt stream, including its performance during the period to

31 December 2022 can be found on page 29.

At 31 December 2022, the shares of the entity which is the beneficial owner of the Voisey’s Bay metal stream have

been guaranteed as security in connection with the Group’s borrowing facility (note 25).

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At 1 January 2021 99,923 3,183

Disposals (64,784) —

Royalties due or received from royalty financial instruments (3,115) (3,115)

Revaluation of royalty financial instruments recognised in profit or loss 17,501 13,852

Revaluation of royalty financial instruments recognised in equity 2,762 —

Foreign currency translation 1,504 —

At 31 December 2021 53,791 13,920

Royalties due or received from royalty financial instruments (2,782) (2,782)

Revaluation of royalty financial instruments recognised in profit or loss (1,373) (11,138)

Revaluation of royalty financial instruments recognised in equity (3,670) —

Foreign currency translation (2,086) —

At 31 December 2022 43,880 —

The details of the Group’s royalty financial instruments, which are held at fair value, are summarised below:

Carrying

value

31 December

2022

Carrying

value

31 December

2021

Commodity Royalty rate Escalation Classification $’000 $’000

EVBC Gold, silver, copper 2.50% 3% gold >US$1,100/oz FVTPL — 13,920

Dugbe 1 Gold 2.00%

2.5% >US$1,800/oz

and production

<50,000oz/qrt FVTPL 1,409 1,400

McClean Lake Uranium —

22.5% of tolling milling

receipt on production

>215Mlbs FVTPL 3,426 2,544

Piauí Nickel-cobalt 1.25% — FVTPL 13,455 5,433

Labrador Iron Ore Iron ore 7.00% — FVOCI 25,590 30,494

43,880 53,791

The Group’s royalty financial instruments are represented by four royalty agreements, EVBC, Dugbe 1, McClean Lake

and Piauí, which entitle the Group to either the repayment of principal and a net smelter return (“NSR”) royalty for the life

of the mine or a gross revenue royalty (“GRR”) where the project commences commercial production or the repayment

of principal where it does not. All four royalty agreements are classified as fair value through profit or loss (‘FVTPL’).

The Group’s entitlements to cash by way of the repayment of the principal and the NSR royalty or the GRR have been

classified as fair value through profit or loss in accordance with IFRS 9 and are carried at fair value in accordance with

the Group’s classification of royalty arrangements criteria set out in note 4.

The Group’s fifth royalty financial instrument is its equity investment in Labrador Iron Ore Royalty Corporation

(‘LIORC’), which entitles the Group to a share of the 7% GRR LIORC receives from the Iron Ore Company of Canada

(‘IOC’) mine and distributes to its shareholders via dividends. As LIORC is a single asset company, being GRR over the

IOC mine, the Group has classified its investment in LIORC as a royalty financial instrument and made an irrevocable

election to designate it as FVTOCI.

EVBC – refer to page 35 of the Business Review

The Group’s EVBC royalty acquired in 2008 and is classified as FVTPL resulting in movements in the fair value being

recognised directly in the income statement. The royalties received from EVBC reduce the fair value of the royalty

and are included in the total movement in fair value recognised directly in the income statement, in accordance

with IFRS 9.

will be deferring the payment of the Group’s royalties from Q3 and Q4 2022 which totalled U$1.5m together with any

are addressed, management has assessed the fair value of the EVBC royalty to be $nil as at 31 December 2022 (2021:

$13.9m), which when adjusted for the 2022 royalties due or received of $2.8m results in a valuation loss of $11.1m

recognised in the income statement (2021: gain of $13.8m). Amounts due but not settled at year end of $1.5m were

provided for and included in other losses (see note 10).

158

Ecora Resources PLC

Annual Report and Accounts 2022

17 Royalty financial instruments continued

Dugbe 1 – refer to page 43 of the Business Review

In 2016, Hummingbird Resources PLC (‘Hummingbird’), the operator of the Dugbe 1 project, gave notice under the

$15.0m royalty financing arrangement with the Group that a Mineral Development Agreement (‘MDA’) had been

approved by the Liberian Government, converting the financing agreement into a NSR royalty agreement.

The net smelter return royalty over the Dugbe 1 project is classified as FVTPL as outlined in note 4. As at 31 December

2022 the Group assessed the likely start date of commercial production at Dugbe 1 to be 2030 (2021: 2030), and

applied a 32.5% (2021: 25%) probability factor to the project reaching commercial production to the discounted future

cash flows of the royalty with an 31.50% (2021: 21.50%) pre-tax nominal discount rate, resulting in a valuation of $1.4m

(2021: $1.4m).

In certain circumstances where the operator fails pursue the development of the Dugbe 1 project or there is a

change in control, the Group has the option to terminate the royalty agreement and recover the $15.0m paid under

the royalty financing agreement. As at 31 December 2022, these circumstances had not arisen as development work

continued on the project.

McClean Lake – refer to page 33 of the Business Review

The Group completed a C$43.5m ($33.3m) financing and streaming agreement with Denison Mines Inc (‘Denison’) in

2017. The financing agreement comprises two separate transactions: (i) a 13-year amortising secured loan of C$40.8m

with an interest rate of 10% per annum payable to the Group which is classified as non-current other receivables (note

22); and (ii) a streaming agreement, which entitles the Group to receive Denison’s portion of toll milling proceeds from

the McClean Lake Mill after the first 215Mlbs of throughput from 1 July 2016, which was acquired for C$2.7m and is

classified as FVTPL in accordance with note 4.

As at 31 December 2022, the Group assessed the probability of the McClean Lake Mill achieving throughput in excess

of 215Mlbs at 60% (2021: 50%), and applied this to the discounted future cash flows of the stream with a 10.00% (2021:

8.00%) pre-tax nominal discount rate, resulting in a valuation of $3.4m (2021: $2.5m). The $0.9m increase (2021: $0.3m

decrease) in the carrying value of the stream has been recognised in the income statement for the year.

Piauí – refer to page 38 of the Business Review

The Group acquired a 1% gross revenue royalty over the Piauí nickel-cobalt project in Brazil for $2.0m in 2017. In

accordance with the acquisition agreement the gross revenue royalty rate increased to 1.25% on 31 December 2019

after certain development milestones had not been achieved. The Group also has the option to acquire additional

gross revenue royalties up to 4.50% for total consideration of $70.0m, subject to certain development milestones

under the acquisition agreement.

On initial recognition the Group decided to invoke the fair value option in classifying this royalty financial instrument,

due to there being one or more embedded options that are not closely related in the underlying contract. Following

the adoption of IFRS 9 the Group continues classify the Piauí royalty as FVTPL.

As at 31 December 2022 the Group assessed the probability of the Piauí project reaching commercial production at

100% in relation to the start-up plant and 55% in relation to expansion project (2021: 90% start-up and 25% expansion

project) and applied this to the discounted future cash flows of the royalty with a 18.50% (2021: 13.50%) pre-tax

nominal discount rate, resulting in a valuation of $13.5m (2021: $5.4m). The $8.1m increase in carrying value has been

recognised as a royalty financial instrument valuation gain in the income statement for the year (2021: $3.3m increase).

Labrador Iron Ore – refer to page 34 of the Business Review

LIORC is a single asset company, being the 7% gross revenue royalty over the IOC mine which is majority owned and

operated by Rio Tinto; as a result, the Group classifies its investment in LIORC as a royalty financial instrument. On

initial recognition the Group made the irrevocable election to designate this investment as FVTOCI. The resulting

dividends from the Group’s investment in LIORC have been classified as royalty-related revenue, as described in

note 3.14.

The Group sold 2,510,700 shares in the first quarter of 2021, generating a further C$82.4m ($63.0m) in proceeds to

fund the Voisey’s Bay cobalt stream acquisition, and retained 1,032,190 shares. The Group’s partial sale of its holding

in LIORC during the first quarter of 2021, resulted in a capital gain of C$19.2m ($15.5m) which was transferred directly

to retained earnings, net of C$2.6m ($2.1m) in income tax arising from the gain.

At 31 December 2022, the shares of the entity which is the beneficial owner of the investment in LIORC have been

guaranteed as security in connection with the Group’s borrowing facility (note 25).

159

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

18 Royalty and exploration intangible assets

The Group’s intangibles comprise capitalised exploration and evaluation costs and royalty interests.

Exploration

and

evaluation

costs

Royalty

interests

Contingent

consideration Total

Group $’000 $’000 $’000 $’000

Gross carrying amount

At 1 January 2022 919 135,561 — 136,480

Additions — 182,022 9,311 191,333

Revaluation of contingent consideration — — 827 827

Foreign currency translation — (5,373) (80) (5,453)

At 31 December 2022 919 312,210 10,058 323,187

Amortisation and impairment

At 1 January 2022 (919) (66,043) — (66,962)

Amortisation charge — (2,869) — (2,869)

Impairment charge — (4,083) — (4,083)

Foreign currency translation — 3,276 — 3,276

At 31 December 2022 (919) (69,719) — (70,638)

Carrying amount 31 December 2022 — 242,491 10,058 252,549

Exploration

and

evaluation

costs

Royalty

interests Total

Group $’000 $’000 $’000

Gross carrying amount

At 1 January 2021 919 207,222 208,141

Additions — — —

Disposals — (64,510) (64,510)

Foreign currency translation — (7,151) (7,151)

At 31 December 2021 919 135,561 136,480

Amortisation and impairment

At 1 January 2021 (919) (76,710) (77,629)

Amortisation charge — (7,519) (7,519)

Impairment charge — (5,232) (5,232)

Disposals — 20,534 20,534

Foreign currency translation — 2,884 2,884

At 31 December 2021 (919) (66,043) (66,962)

Carrying amount 31 December 2021 — 69,518 69,518

160

Ecora Resources PLC

Annual Report and Accounts 2022

18 Royalty and exploration intangible assets continued

Royalty

interests

Company $’000

Gross carrying amount

At 1 January 2022 3,206

At 31 December 2022 3,206

Amortisation and impairment

At 1 January 2022 (3,206)

At 31 December 2022 (3,206)

Carrying amount 31 December 2022 —

Royalty

interests

Company $’000

Gross carrying amount

At 1 January 2021 3,206

At 31 December 2021 3,206

Amortisation and impairment

At 1 January 2021 —

Impairment charge (3,206)

At 31 December 2021 (3,206)

Carrying amount 31 December 2021 —

Exploration and evaluation costs

The exploration and evaluation costs comprise expenditure that was directly attributable to the Trefi coal project in

British Columbia, Canada. Due to the inherent uncertainty that the Trefi coal project would be developed, the Group

fully impaired it in 2014.

Royalty intangible assets

and nickel projects from South32 Royalty Investments Pty Ltd (‘South32’) for a fixed consideration of $185m with

further contingent consideration of up to $15m.

The fixed consideration of $185m consisted of:

• $47.6m in cash paid on completion of the transaction;

• $82.4m in an equity issue of 43,622,091 ordinary shares of 2p each at £1.54/share to South32. These new

shares represent approximately 16.9% of the share capital of the Company (note 29). The Company entered into

a Relationship Agreement with South32 which governs the rights and obligations South32 has as a result of its

shareholding, further details are contained in the Directors’ Report on page 119; and

• deferred cash consideration totalling $55m to be paid in six equal quarterly instalments with the first instalment

paid in October 2022 and the final instalment due in January 2024, as detailed in note 27.

In addition, contingent consideration is payable subject to future nickel prices and minimum production levels at

West Musgrave post commencement of production and has been classified as a financial liability that is carried at fair

value based on the discounted expected future cash outflows. After initial recognition the contingent consideration is

measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in the royalty

intangible assets balance. As at 31 December 2022, the fair value of the contingent consideration payable is $10m as

detailed in note 27 based on a pre-tax nominal discount rate of 10.50%.

The royalties acquired are the West Musgrave, Santo Domingo, Nifty, and Carlota royalties. The royalties have been

recognised as intangible assets as detailed in note 4. The value of the royalty intangibles acquired consists of the fixed

and deferred consideration above ($185m) plus the value on acquisition of the contingent consideration payable ($9m)

less the value on acquisition of the contingent consideration receivable ($6m – as detailed below). Transaction costs

totalling $2.6m have been capitalised on acquisition.

Under the West Musgrave royalty the Group is entitled to a A$10.0m payment on commercial production being achieved

at West Musgrave, which is distinct from and separate to the net smelter return royalty and is accounted for as a

financial asset and measured at fair value through profit or loss (“FVTPL”). As at 31 December 2022, the fair value of the

contingent consideration receivable is $6.0m as detailed in note 22, based on a pre-tax nominal discount rate of 10.50%.

On 31 December 2021 the Group completed the sale of its 1% gross revenue royalty over the Narrabri mine to the

operator, Whitehaven Coal Limited, for fixed consideration of $21.6m, of which $4.4m was received on completion with

the remaining balance receivable in instalments until 31 December 2026 and further contingent consideration also

receivable over the period to 31 December 2026 .

161

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

18 Royalty and exploration intangible assets continued

Royalty intangible assets continued

The contingent consideration consists of $5.0m, receivable in instalments, upon the approval of the Narrabri South

extension project by state and federal authorities in Australia, prior to 31 December 2026. In addition, the Group is

entitled to receive bi-annual contingent payments linked to future realised coal prices during the period from closing

to 31 December 2026. Subject to minimum volumes of 3.0Mt per half year being achieved, where the realised prices

exceed $90/t the Group will be entitled to $0.05/t, increasing to $0.25/t if realised prices exceed $150/t. Both elements

of the contingent consideration in relation to the sale of the Narrabri royalty have been classified as a financial asset

that is carried at fair value based on discounted expected cash flows.

Total contingent consideration as at 31 December 2021 was valued at $4.0m resulting in total consideration on

completion of $25.6m. The carrying value of the Narrabri royalty immediately prior to completion was $44.0m, as a

result there was a loss on disposal of $19.0m and a translation effect of $0.6m.

As at 31 December 2022, the Group assessed the probability of the Narrabri South Extension being approved at

50% (2021: 50%) and applied this to the discounted future cash flows with an 11% (2021: 8.50%) pre-tax nominal

discount rate resulting in a fair value of $2.1m (2021: $2.3m) for this element of the contingent consideration. The

price and sales volume linked contingent consideration was also valued by applying an 11% (8.50%) pre-tax nominal

discount rate to the expected future cash flows, resulting in a fair value of $4.6m (2021: $1.7m) for this element of the

contingent consideration as detailed in note 22.

Amortisation of royalty intangible assets

The Group’s royalty intangible assets are amortised on a straight-line basis, upon the commencement of production

at the underlying mining operation, over the life of mine.

Four of the underlying mining operations of the Group’s royalty intangibles assets were in production during 2022,

and were amortised on the following basis:

Carrying value

31 December

2022

Carrying value

31 December

2021 Estimated Remaining

Royalty interest Currency ’000 ’000 life of mine life of mine

Mantos Blancos USD 40,387 42,911 17 years 14 years

Maracás Menchen AUD 20,764 21,856 21 years 19 years

Four Mile AUD 974 1,113 10 years 2 years

Carlota USD 818 — 2.5 years 2 years

The amortisation charge for the year, of $3.5m (2021: $7.5m including Narrabri) relates to the Group’s producing

royalties, Mantos Blancos, Maracás Menchen, Carlota and Four Mile. Amortisation of the remaining interests will

commence once they begin commercial production.

At 31 December 2022, the shares of the entities which are the beneficial owners of the Mantos Blancos and Maracás

Menchen royalties have been guaranteed as security in connection with the Group’s borrowing facility (note 25).

Impairments of royalty intangible assets

As described in notes 3.7 and 3.8, at each reporting date the Group’s royalty intangible assets are reviewed for any

at the underlying mines, together with any significant declines in commodity prices and the impact of climate change,

impairment methodology applied.

Climate change considerations in assessing for indicators of impairment

climate-related scenario analysis considered:

• the historical and possible future impact of climate change on the operations underlying the Group’s portfolio,

such as extreme weather events; and

• possible legislative changes that may impact either our royalty and metal stream agreements or the operations

underlying the Group’s portfolio.

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Ecora Resources PLC

Annual Report and Accoun ts 2022

18 Royalty and exploration intangible assets continued

Climate change considerations in assessing for indicators of impairment continued

physical and transitional impacts of climate change continuing to be refined.

2022 impairment of royalty intangible assets

Pilbara iron ore royalty

Despite the ongoing expansion of BHP’s mining operations in the Pilbara, limited public information is available for the

Group to assess the likely timing of the development of tenements covered by the Group’s royalty, the largest of which

covers the Railway Deposit which is located to the north of BHP’s South Flank development.

In the absence of any publicly available information, the Group has estimated the likely start date for production from

the tenements covered by the Group’s royalty to be 2050 (2021: start date 2040), and the probability factor of the

tenements being brought into production has been reduced from 75% in 2021 to 62.5% in 2022. Applying the 62.5%

probability factor together with a pre-tax nominal discount rate of 10.5% (2021: 9%) and a long-term iron ore price of

$239/dmtu for lump (2021: $133/dmtu) and $174/dmtu for fines (2021: £113/dmtu) resulted in a net present value of

the discounted future royalty cash flows of A$4.8m, compared to the carrying value of A$8.8m. As a result of the net

present value being lower than the carrying value, the Group recognised an impairment charge of A$4m ($2.8m) for

the year ended 31 December 2022.

Ring of Fire royalty

The proposed acquisition of Norton Resources Ltd, by Wyloo Metals Pty Ltd, an exploration company which forms

part of the Forrest family’s private office, is seen as a positive step toward the Ring of Fire tenements covered by the

Group’s royalty being developed.

In the absence of any publicly available information the Group estimates the likely start date for production from the

tenements covered by the Group’s royalty to be 2044 (2021: start date 2034). The probability factor of the tenements

being brought into production has remained unchanged at 25% and is expected to remain at this level until greater

certainty on the development timetable is known.

Applying this start date and probability factor to the Group’s valuation model, together with a pre-tax nominal

discount rate of 13.50% (2021: 11%) and a long-term chromite price of $360/t (2021: £174/t), resulted in a net present

value of the discounted future royalty cash flows of C$1.1m, compared to the carrying value of C$2.8m. As a result

of the net present value being lower than the carrying value, the Group recognised an impairment charge of C$1.7m

($1.3m) for the year ended 31 December 2022.

2021 impairment of royalty intangible assets

During the year ended 31 December 2021, the Group recognised impairment charges of $3.2m in relation to the

Salamanca royalty, $1.1m relation to the Pilbara iron ore royalty and $0.9m in relation to the Ring of Fire royalty.

Impairment sensitivity

The Group has reviewed the sensitivity of its assessment for indicators of impairment to an increase in the discount

rates applied to the expected future cash flows and a decrease in the underlying commodity prices of each royalty,

concluding the following:

• a 1% increase in the discount rate applied to expected future cash flow of the royalties, would result in impairment

charges being recognised for the Santa Domingo and Nifty royalties of $0.8m and $0.5m, as well as increasing the

impairment charges recognised in relation to the Pilbara and Ring of Fire royalties by $0.8m and $0.2m, increasing

the impairment charge in the income statement to $6.4m; and

• a 10% decrease in the underlying commodity prices would result in impairment charges being recognised for

the Santo Domingo and Nifty royalties of $4.2m and $0.5m respectively, as well as increasing the impairment of

the Pilbara and Ring of Fire royalties by a further $0.3m and $0.1m respectively, increasing the impairment charge

in the income statement to $9.2m.

163

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

19 Mining and exploration interests

Group Company

$’000 $’000

Fair value through other comprehensive income

At 1 January 2021 10,946 8,224

Additions — —

Disposals (2,512) (2,512)

Revaluation adjustment (4,171) (3,965)

Foreign currency translation 133 (26)

At 31 December 2021 4,396 1,721

Disposals (1,310) (1,310)

Revaluation adjustment 642 645

Foreign currency translation (245) 3

At 31 December 2022 3,483 1,059

The fair values of listed securities are based on quoted market prices. Unquoted investments are initially recognised using

cost where fair value cannot be reliably determined. In the absence of an active market for these securities, the Group

considers each unquoted security to ensure there has been no material change in the fair value since initial recognition.

Mining and exploration interests are held at fair value through other comprehensive income, with the effect that the

gains and losses on disposal and impairment losses are transferred directly to retained earnings.

For the year ended 31 December 2022 the Group realised $1.3m in cash (2021: $2.5m) through its disposal of a

number of its quoted mining and exploration interests. These disposals resulted in a gain of $0.6m for the year ended

31 December 2022 (2021: $1.3m) which was transferred to directly to retained earnings.

Total mining and exploration interests at 31 December are represented by:

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Quoted investments 988 1,648 988 1,646

Unquoted investments 2,495 2,748 71 75

3,483 4,396 1,059 1,721

Number of investments 8 8 5 5

20 Deferred costs

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Deferred acquisitions costs 280 309 280 309

Deferred financing costs 2,211 4,106 2,211 4,106

2,491 4,415 2,491 4,415

Deferred acquisition costs

As at 31 December 2022 deferred acquisition costs of $0.3m (2021: $0.3m) represent those costs associated

with royalty and metal stream opportunities that the Group is actively pursuing and expects to complete in 2023.

Should the opportunity not proceed to completion, these costs will be charged to the income statement.

Deferred financing costs

As at 31 December 2022 deferred financing costs of $2.2m represent the unamortised costs associated with the

Group’s $150m revolving credit facility entered into on 24 February 2021 (note 25). These deferred financing costs

are being amortised over the four-year term of the facility, with $1.9m (2021: $1.5m) being released to the income

statement for the period to 31 December 2022. Upon entering into the new facility in February 2021, the deferred

financing costs related to the Group’s amended and extended 2018 facility were released to the income statement.

As a result total deferred financing costs released to the income statement in 2021 were $2.4m.

164

Ecora Resources PLC

Annual Report and Accounts 2022

21 Investments in subsidiaries

The Group’s full listing of subsidiaries is provided in note 39. The Company’s investment in subsidiaries as

31 December 2022 and 31 December 2021 is as follows:

Company $’000

Cost

At 1 January 2022 258,807

Acquisition of additional share capital of subsidiaries 138,136

At 31 December 2022 396,943

Impairment of investment in subsidiary

At 1 January 2022 (44,618)

Impairment —

At 31 December 2022 (44,618)

Carrying amount 31 December 2022 352,325

The Directors believe that the carrying value of the investments is supported by their realisable value.

Company $’000

Cost

At 1 January 2021 255,203

Capital injection into subsidiaries 85,000

Return of capital from subsidiaries (81,396)

At 31 December 2021 258,807

Impairment of investment in subsidiary

At 1 January 2021 (28,642)

Impairment (15,976)

At 31 December 2021 (44,618)

Carrying amount 31 December 2021 214,189

22 Trade and other receivables

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Current

Income tax receivable 81 6,309 — 1

Prepayments 406 446 340 353

Royalty receivables – net of impairment 13,769 23,506 — 594

Other receivables 7,310 4,652 264 186

21,566 34,913 604 1,134

Current trade and other receivables

Trade and other receivables principally comprise amounts relating to royalties receivable from Kestrel, Mantos

Blancos, Maracás Menchen, EVBC and Carlota for the final quarter in each year (including Narrabri in 2021), together

with dividends declared but not yet received from Labrador Iron Ore Company. These amounts were received in full

subsequent to year end, with the exception of the Q3 and Q4 royalties due from EVBC totalling $1.5m.

will be deferring the payment of the Group’s royalties from Q3 and Q4 2022 which totalled $1.5m, together with

any royalties from 2023, until the start of 2024. Until the mine’s operating margins improve and the operational

constraints are addressed, management has assessed the recoverability of the Q3 and Q4 2022 royalties to be

inherently uncertain and has fully provided for the $1.5m receivable at 31 December 2022.

Current trade and other receivables also includes $7m (2021: $4.4m) in deferred and contingent consideration

receivable from Whitehaven Coal following the sale of the Narrabri royalty. A further $12.4m (2021: $12.8m) of deferred

and contingent consideration in respect of this sale is included in non-current other receivables and will be received

between January 2024 and December 2026.

165

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

 continued

for the financial year ended 31 December 2022

22 Trade and other receivables continued

Current trade and other receivables continued

The Directors consider that the carrying amount of trade and other receivables is approximately their fair value.

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Non-current

Other receivables 37,429 39,127 19,042 22,333

Amounts due from subsidiaries — — 141,796 177,349

37,429 39,127 160,838 199,682

Non-current other receivables

Non-current other receivables comprise amounts relating to the interest-bearing loan receivable from Denison Mines

Inc, the deferred consideration together with the contingent consideration arising from the disposal of the Group’s

Narrabri royalty (note 19) and the contingent consideration related to West Musgrave (note 18).

Denison financing agreement

In 2017, the Group completed a C$43.5m ($33.3m) financing and streaming agreement with Denison. The streaming

agreement is classified as a royalty financial instrument (note 17), with an initial value of C$2.7m ($2.1m).

The financing agreement is structured as a 13-year secured loan of C$40.8m ($31.2m) with an interest rate of 10%

per annum payable to the Group. The loan contains mandatory repayment provisions in any period where the

equivalent toll revenues exceed the interest liability. Conversely, in any period when toll revenues are less than the

interest payment, the shortfall is capitalised and carried forward to the next period. The loan principal, along with any

capitalised interest, is repayable in full at maturity.

Operations at the McClean Lake mill from which the toll revenue is generated were suspended from March 2020 to

September 2020 and from January 2021 to April 2021 in response to the COVID-19 pandemic. As a result, principal

repayments under the loan were lower than pre-pandemic levels, with the Group receiving principal repayments

totalling $1.3m in 2021. The Group earned $2.4m in interest, with $0.3m of the interest earned being capitalised as

described above.

In contrast, the McClean Lake mill remained fully operational during 2022. The Group earned $2.1m in interest

revenue and received principal repayments of $2.9m.

The Group assesses the carrying value of the Denison financing agreement for expected credit losses over the next 12 

months by making reference to the security held by the Group and the financial position of Denison at each reporting

date. As at 31 December 2022, the previously recognised expected credit losses of $0.9m were reversed due to the

improved financial condition of Denison.

As operations resumed in April 2021 and have continued uninterrupted since, the Directors do not consider the

COVID-19-related suspensions significantly increase default risk and therefore continue to recognise 12-month ECL

rather than lifetime ECL.

As at 31 December 2022, the outstanding loan balance was $18.9m (C$25.6m) and unamortised costs associated with

the loan were $0.1m. (31 December 2021: loan balance $23.1m (C$29.4m), provision for expected credit losses $0.9m

and unamortised costs $0.1m). The total amortisation of costs associated with the loan during the year was $17,000

(2021: $17,000).

West Musgrave acquisition

As described in note 18, under the West Musgrave Royalty the Group is entitled to a A$10m payment on commercial

production being achieved at West Musgrave, which is distinct from and separate to the net smelter return royalty

and is accounted for as a financial asset and measured at fair value through profit or loss (“FVTPL”). As at 31 December 

2022, the fair value of the contingent consideration receivable is $6.0m.

Narrabri disposal – deferred consideration and contingent consideration

As described in note 18, the Group disposed of its 1% gross revenue royalty over the Narrabri mine to the operator,

Whitehaven Coal Limited, for fixed consideration of $21.6m, of which $4.4m was received on completion with the

balance payable in annual instalments until 31 December 2026 and further contingent consideration also payable

over the period to 31 December 2026.

The Group assessed the carrying value of the deferred consideration for expected credit losses over the next 12

months by making reference to the security held by the Group and the financial position of Whitehaven Coal Limited.

As at 31 December 2022, the previously recognised expected credit losses of $43,000 were reversed due to the

improved financial condition of Whitehaven Coal Limited.

166

Ecora Resources PLC

Annual Report and Accounts 2022

22 Trade and other receivables continued

Denison financing agreement continued

As at 31 December 2022, the total outstanding deferred consideration net of expected credit losses is $12.0m

(2021: $17.2m), of which $4.0m is included in current trade and other receivables. The fair value of the contingent

consideration was $6.7m (2021: $4.0m), of which $2.3m is included in current trade and other receivables, together

with $0.7m in contingent consideration due from Whitehaven Coal following the volume and price thresholds being

achieved in second half of 2022 as detailed in note 18.

Non-current amounts due from subsidiaries

Amounts due from subsidiaries are considered long-term loans. The Directors consider that the carrying value of

amounts due from subsidiaries is approximately their fair value (note 32). 

23 Cash and cash equivalents

Cash and cash equivalents include the following for the purposes of the statement of cash flows:

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Cash at bank and on hand 5,723 21,903 5,224 8,561

Trading deposits with brokers 127 89 127 88

Cash and cash equivalents 5,850 21,992 5,351 8,649

Of the Group’s $22.0m cash at bank and on hand as at 31 December 2021, $4.4m related to proceeds from the

disposal of the Narrabri royalty. These funds were held in restricted accounts in 2021 as security under the Group’s

revolving credit facility and were utilised to fund the permitted acquisition of royalties in 2022 as allowed by the facility.

24 Net debt

See note 4.9(a) and note 4.9(h) for the Group’s accounting policy on cash and debt.

Net debt is a measure of the Group’s financial position. The Group uses net debt to monitor the sources and uses

of financial resources, the availability of capital to invest or return to shareholders, and the resilience of the balance

sheet. Net debt is calculated as total borrowings less cash and cash equivalents.

The Group and Company’s net (debt)/cash and cash equivalents position after offsetting the revolving credit facility

against cash and cash equivalents is as follows:

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Revolving credit facility (42,250) (112,000) (42,250) (112,000)

Cash and cash equivalents 5,850 21,992 5,351 8,649

Net debt (36,400) (90,008) (36,899) (103,351)

Movement in net debt

Cash and cash

equivalents

Medium and

long-term

borrowings Net debt

Group $’000 $’000 $’000

At 1 January 2021 27,513 60,767 (33,254)

Cash flow (4,207) 51,006 (55,213)

Foreign exchange differences (1,314) 227 (1,541)

At 31 December 2021 21,992 112,000 (90,008)

Cash flow (14,107) (69,750) 55,643

Foreign exchange differences (2,035) — (2,035)

At 31 December 2022 5,850 42,250 (36,400)

During the year ended 31 December 2022, the Group drew $49.5m (2021: $123.5m) on its revolving credit facility

(refer to note 27) and repaid $119.25m (2021: $72.5m).

The only financing related liabilities are the Group’s borrowings and the Group’s lease liabilities. The movements in the

former are shown above and the movements in the latter are shown in note 27.

167

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

25 Borrowings

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Secured borrowing at amortised cost

Revolving credit facility 42,250 112,000 42,250 112,000

42,250 112,000 42,250 112,000

Amount due for settlement within 12 months — — — —

Amount due for settlement after 12 months 42,250 112,000 42,250 112,000

In conjunction with the Voisey’s Bay cobalt stream acquisition, the Group repaid its borrowings in full and cancelled

its existing facility in March 2021, before entering a new $180m revolving credit facility which was reduced to $150m

following the completion of the equity placing detailed in note 16.

To part finance the Voisey’s Bay cobalt stream acquisition, the Group drew down $123.5m on the new facility. In 2022

the Group borrowed a further $43.2m to partially fund the completion payment due in relation to the acquisition of a

portfolio of royalties as detailed in note 18.

In addition to consenting to the acquisition of the portfolio of royalties, the Group’s lending syndicate agreed to maintain

the revolving credit facility at $150m and would no longer require the previously scheduled $25m facility step-down

which was due in August 2022. The lending syndicate also agreed a $50m accordion feature for future acquisitions which

can be drawn subject to lender consent.

In December 2022 the Group has exercised the option to extend the term of the facility by one year and as such the

facility now has a maturity date of 24 February 2025. In addition to the extension, the Group’s facility was restated to

reflect the discontinuation of LIBOR; as a result the facility is now available at SOFR, SONIA or EURIBOR for drawings

in US dollars, sterling and euros respectively, plus 2.75% to 4.50% depending on leverage ratios. The Group’s facility

is secured by way of a floating charge over the Group’s assets and is subject to a number of financial covenants, all of

which have been met during the period ended 30 December 2022.

The Directors consider that the carrying amount of the Group’s borrowings approximates their fair value.

168

Ecora Resources PLC

Annual Report and Acco unts 2022

26 Deferred tax

The following are the major deferred tax liabilities and assets recognised by the Group and the movements thereon

during the period:

Revaluation

of coal

royalty

Revaluation

of royalty

instruments

Accrual

of royalty

receivable

Other

tax losses

Other

tax losses Total

Group $’000 $’000 $’000 $’000 $’000 $’000

At 1 January 2021 22,881 (846) 982 — — 23,017

Deferred tax assets on acquisition (note 16) — — — — (31,930) (31,930)

Charge/(Credit) to profit or loss 3,911 3,847 4,697 — (448) 12,007

(Credit) to other comprehensive income — (1,621) — — — (1,621)

Exchange differences (1,452) 231 (210) — — (1,431)

Effect of change in tax rate:

Income statement — 191 — — — 191

At 31 December 2021 25,340 1,802 5,469 — (32,378) 233

(Credit)/charge to profit or loss 8,351 (902) (2,109) 1,243 (432) 6,337

(Credit) to other comprehensive income — (390) — — — (390)

Exchange differences 1,690 57 (299) (23) — (1,955)

At 31 December 2022 32,001 567 3,061 1,406 (32,810) 4,225

Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is

the analysis of the deferred tax balances (after offset) for financial reporting purposes:

2022 2021

$’000 $’000

Deferred tax liabilities (40,857) (36,711)

Deferred tax assets 36,632 36,478

(4,225) (233)

The Group has the following balances in respect of which no deferred tax asset has been recognised, as these losses

are not expected to be utilised:

2022 2021

Tax losses –

trading

Tax losses –

capital

Other

temporary

differences Total

Tax losses –

trading

Tax losses –

capital

Other

temporary

differences Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Expiry date

Within one year — — — — — — — —

Greater than

one year, less

than five years — — — — — — — —

Greater than

five years — — — — — — — —

No expiry date 19,704 60,152 12,345 92,201 17,885 66,429 12,151 96,465

19,704 60,152 12,345 92,201 17,885 66,429 12,151 96,465

Temporary differences associated with investments in subsidiaries, joint ventures and associates are insignificant.

169

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

26 Deferred tax continued

The following are the major deferred tax liabilities recognised by the Company utilising a rate of 25% (2021: 25%) and

the movements thereon during the period:

Revaluation

of royalty

instruments Total

Company $’000 $’000

At 1 January 2021 605 605

Charge to profit or loss 2,684 2,684

Effect of change in tax rate:

Income statement 191 191

At 31 December 2021 3,480 3,480

Credit to profit or loss (3,480) (3,480)

At 31 December 2022 — —

Deferred tax assets and liabilities are offset where the Company has a legally enforceable right to do so. The following

is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

2022 2021

Company $’000 $’000

Deferred tax liabilities — 3,480

— 3,480

27 Trade and other payables

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Current

Other taxation and social security payables 36 33 35 30

Trade payables 505 96 100 67

Borrowings from subsidiaries — — 55,819 54,366

Accruals and other payables 3,409 3,553 3,065 3,248

Lease liability 323 — 323 —

Deferred income 5,359 — — —

Deferred consideration 36,667 — — —

Contingent consideration — 950 — —

46,299 4,632 59,342 57,711

On 13 April 2022, the Supreme Court of Western Australia handed down a favourable judgement in relation to the

Group’s legal dispute with Quasar Resources Pty Ltd (‘Quasar’), the owner of the Four Mile uranium mine over which the

Group has a 1% net smelter return royalty. The judgement ruled that none of the processes at the Beverley plant or Four

Mile mine amount to refining which means that Quasar have wrongly claimed charges, costs and penalties that were for,

or related to the extraction or processing of uranium ore into yellowcake or uranium concentrate as “Allocable Charges”.

Quasar were ordered to pay A$2.7m in additional royalties and interest in the amount of A$0.3m for the original claim

which runs from Q4 2015 to Q4 2018. The funds for the judgement amount were received in May 2022. Prior to paying

the original judgement amount, Quasar lodged an appeal. As a result, the judgement amount received has been

and will remain classified as deferred income until the appeal is decided and the Group’s entitlement to the monies

becomes irrevocable. The appeal is expected to be hear in Q3 2023.

On 15 August 2022, the parties entered into a settlement agreement, which required Quasar to pay A$3.1m plus

interest in respect of the underpaid royalties during the period Q1 2019 to Q4 2021, which was not covered by the

original claim. The settlement agreement calculates the royalties in line with the judgement in relation to the original

claim. Under the terms of the settlement agreement, should Quasar’s appeal be successful, the settlement amounts

will be repaid with interest. The settlement payment has been and will remain classified as deferred income similar to

the judgement amount, until the appeal is decided and the Group’s entitlement to the monies becomes irrevocable.

Borrowings from subsidiaries are detailed further in note 32.

The average credit period taken for trade purchases is 20 days (2021: 28 days). The Directors consider that the carrying

amount of trade and other payables approximates their fair value. All amounts are considered short-term and none

are past due.

170

Ecora Resources PLC

Annual Report and Accounts 2022

27 Trade and other payables continued

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Non-current

Non-current 9,167 — — —

Deferred consideration 10,058 1,534 — —

Contingent consideration 3,025 769 3,025 769

Lease liability 399 607 398 607

Other taxation and social security payables 22,649 2,910 3,423 1,376

As at 31 December 2022, current deferred consideration and non-current deferred and contingent consideration

payable is in relation to the acquisition of West Musgrave as detailed in note 18. For the period from commencement

of production to 30 June 2027, the Group may become liable for additional consideration payments determined by

reference to minimum production thresholds and nickel prices.

The contingent consideration classified as non-current represents the net present value of the discounted future

cash outflows estimated based on forward-looking nickel prices and expected production volumes for the period to

30 June 2027, which the Directors consider represents the fair value of this potential liability.

As at 31 December 2021, current and non-current contingent consideration of $1.0m and $1.5m respectively, relates

to the Voisey’s Bay cobalt stream acquisition (note 16). For the period from completion date to 30 June 2025, the Group

may become liable for additional consideration payments determined by reference to minimum production thresholds

and cobalt prices. At 31 December 2022, the there is no contingent consideration owing based on actual and expected

cobalt prices and production volumes. Therefore, the Directors consider the fair value of this potential liability to be nil.

Current and non-current lease liability relates to the Group’s office premises in London, which comprises annual

payments of £0.4m and expires in 2032.

Non-current other taxation and social security payables relates to employer National Insurance due on vesting of the

certain share-based payments.

Movement in leases

Group Company

$’000 $’000

At 1 January 2021 1,038 1,038

Lease payments (268) (268)

Interest 40 40

Foreign exchange differences (41) (41)

At 31 December 2021 769 769

New lease 2,669 2,669

Lease payments (312) (312)

Interest

61 61

Foreign exchange differences 161 161

At 31 December 2022 3,348 3,348

28 Derivative financial instruments

The Group’s hedging policy allows foreign exchange forward contracts to be entered into to manage its exposure to foreign

exchange risk associated with its Australian and Canadian dollar royalty-related income (note 34). These foreign exchange

forward contracts are accounted for as financial assets or liabilities carried at fair value through profit or loss in accordance

with note 3.9(d). The fair value of the foreign exchange forward contracts as at 31 December is as follows:

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Financial liabilities carried at fair value through profit

or loss

Fair value as at 31 December 32 — 32 —

As at 31 December 2022 the Group had an outstanding forward contract totalling A$3.3m to receive £1.9m, with a fair

value of $32k. The Group had no outstanding forward contracts as at 31 December 2021.

171

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

 continued

for the financial year ended 31 December 2022

29 Share capital and share premium

Issued share capital

Number

of shares

Share

capital

Share

premium

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reserve Total

Group and Company $’000 $’000 $’000 $’000

Ordinary shares of 2p at 1 January 2021 177,129,016 4,670 83,214 38,416 126,300

Issue of share capital under private placing

(a)

33,664,371 952 — 56,431 57,383

Issue of share capital under retail offer

(a)

2,687,372 76 4,669 — 4,745

Utilisation of shares held in treasury on exercise of

employee options

(b)

300,000 8 — — 8

Ordinary shares of 2p at 31 December 2021 213,780,759 5,706 87,883 94,847 188,436

employee options

(c)

453,307 12 — — 12

Issue of share capital as consideration for acquisition

(d)

43,622,091 1,043 81,329 — 82,372

Ordinary shares of 2p at 31 December 2022

257,856,157

6,761 169,212 94,847 270,820

(a)  On 24 February 2021, the Company completed a private placing of 33,664,371 new ordinary shares of 2p each and a retail offer of 2,687,372 new

ordinary shares of 2 p each. Both the private placing and the retail offer were priced at 128p per share , raising total proceeds of $62.1m net of

costs. As the shares issued in relation to the private placing were placed in return for acquiring over 90% of the share capital of a related entity,

the proceeds raised in excess of the nominal value issued was recorded in the merger reserve. The funds raised through the private placing and

the retail offer were used to part finance the Voisey’s Bay acquisition (note 16).

(b)  On 11 March 2021, the Company utilised 300,000 ordinary shares of 2p each from treasury, following the exercise of options awarded to

employees under the Company’s Unapproved Share Option Plan.

(c)  On 21 February 2022, the Company utilised 19,974 ordinary shares of 2p each from treasury, following the exercise of options awarded to

employees under the Company’s Share Ownership Plan. On 25 February 2022, the Company utilised a further 433,333 ordinary shares of 2p

each from treasury, following the exercise of options awarded to employees under the Company’s Unapproved Share Option Plan.

(d)  On, 19 July 2022, the Company issued 43,622,091 new ordinary shares of 2p each to South32 as partial consideration for the acquisition of a

high-quality portfolio of royalties over advanced development stage copper and nickel projects (note 18).

Own shares

Included in the Company’s issued share capital are shares held by the Anglo Pacific Group Employee Benefit Trust

(‘EBT’) to settle existing employee-related share-based payments as follows:

2022 2021

Number

of shares $’000

Number

of shares $’000

Own shares

At 1 January 444,726 (1,535) 925,933 (3,430)

Transferred to employees in settlement of share awards (444,726) 1,535 (559,266) 2,072

Shares acquired to settle future share awards — — 78,059 (177)

At 31 December — — 444,726 (1,535)

As the EBT has waived its right to receive dividends, the Company’s shares held by the EBT are excluded from the

weighted average number of shares in issue for the purposes of calculating earnings per share in note 12.

Treasury shares

2022 2021

Number

of shares $’000

Number

of shares $’000

Treasury shares

At 1 January 4,329,703 114 4,629,703 122

Utilisation of shares held in treasury on exercise of employee options (453,307) (12) (300,000) (8)

At 31 December 3,876,396 102 4,329,703 114

Shares are held in treasury do not receive dividends; as such they are excluded from the weighted average number of

shares in issue for the purposes of calculating earnings per share in note 12 .

172

Ecora Resources PLC

Annual Report and Accounts 2022

30 Share-based payments

The Group had outstanding awards under the following equity-settled share-based compensation plans in

2021 and 2022:

• the HMRC approved Company Share Ownership Plan (‘CSOP’);

• the Unapproved Share Ownership Plan (‘USOP’);

• the Value Creation Plan (‘VCP’); and

• the Long-term Incentive Plan (‘LTIP’).

(a) Company Share Ownership Plan

Under the CSOP, share options were granted to Executive Directors and employees. The exercise price of the granted

options is equal to the average mid-market closing price of an ordinary share for the three days before the grant.

The options are conditional on the employee completing three years’ service (the vesting period). The options are

exercisable starting three years from the grant date, subject to the Group achieving its target growth in absolute

TSR over the period of 3% per annum (not compounded) in excess of the UK Retail Price Index; the options have a

contractual option term of ten years. The Group has no legal or constructive obligation to repurchase or settle the

options in cash.

In accordance with the CSOP rules, no further grants of awards under this plan can made after April 2020. As a result,

no awards were made under the CSOP in 2021 or 2020.

Movements in the number of share options outstanding and their related weighted average exercise prices are

as follows:

2022 2021

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Weighted

average

exercise price

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Weighted

average

exercise price

(£)

Outstanding at 1 January 19,974 0.7700 47,502 1.2708

Exercised during the year (19,974) 0.7700 — —

Forfeited during the year — — (27,528) 1.6342

Outstanding at 31 December — — 19,974 0.7700

Out of the 19,974 outstanding options (2021: 47,502), 19,974 options were exercisable (2021: 19,947). Share options

outstanding at the end of the year have the following expiry date and exercise prices:

Exercise price

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Expiry date in £ per share 2022 2021

2025 0.7700 — 19,974

— 19,974

Weighted average remaining contractual life in years — 4.00

(b) Unapproved Share Option Plan

The Group’s USOP was approved by shareholders at the 2016 AGM. The plan was established to provide the Group

additional scope to incentivise employees, over and above the limit of the CSOP.

The exercise price of the granted options is equal to the average mid-market closing price of an ordinary share for the

three days before the grant. The options are conditional on the employee completing three years’ service (the vesting

period). The options are exercisable starting three years from the grant date and have a contractual option term of

five years. The Group has no legal or constructive obligation to repurchase or settle the options in cash.

The weighted average fair value of options granted during March 2021 determined using a Black-Scholes valuation

model was £0.19 per option. The significant inputs into the model were the share price of £1.34 at the grant date,

exercise price of £1.389, volatility of 37.00%, expected dividend yield of 6.99%, expected option life of four years and

an annual risk-free rate of 0.20%.

The weighted average fair value of options granted during January 2020 determined using a Black-Scholes valuation

model was £0.30 per option. The significant inputs into the model were the share price of £1.760 at the grant date,

exercise price of £1.788, volatility of 34.00%, expected dividend yield of 4.55%, expected option life of four years and

an annual risk-free rate of 0.39%.

173

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

 continued

for the financial year ended 31 December 2022

30 Share-based payments continued

(b) Unapproved Share Option Plan continued

as follows:

2022 2021

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Weighted

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exercise

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Weighted

average

exercise

price

(£)

Outstanding at 1 January 1,500,000 1.2144 1,725,000 1.1487

Granted during the year — — 75,000 1.3887

Exercised during the year (800,000) 0.8801 (300,000) 0.8801

Forfeited during the year (150,000) 0.8801 — —

Outstanding at 31 December 550,000 1.7918 1,500,000 1.2114

Out of the 550,000 outstanding options (2021: 1,500,000), 375,000 options were exercisable as at 31 December 2022

(2021: 950,000).

Share options outstanding at the end of the year have the following expiry date and exercise prices:

Exercise price

Options

Expiry date in £ per share 2022 2021

2022 — — 266,667

2022 1.2607 — 683,333

2024 1.8617 300,000 300,000

2024 1.9208 75,000 75,000

2025 1.7883 100,000 100,000

2026 1.3887 75,000 75,000

550,000 1,500,000

Weighted average remaining contractual life in years 1.54 1.06

Following the approval at the 2021 AGM, the Group implemented the LTIP for the Executive Directors and employees.

The LTIP allows for the grant of Performance Share Awards (‘PSA’) whereby awards are granted to Executive Directors

and senior management to acquire shares in Ecora Resources PLC at no cost, subject to the achievement by the Group

of specified performance targets and Restricted Share Awards (‘RSA’) whereby awards are granted to employees who

are not granted PSAs to acquire shares in Ecora Resources Pacific Group PLC at no cost after a three-year vesting

period with no performance criteria attached. The granting of these restricted share awards has replaced the granting

of awards under the USOP to employees.

Performance Share Awards

Under the LTIP, Performance Share Awards are granted to Executive Directors and senior management at no cost.

The percentage of each award that vests is based upon the performance of the Group over a defined measurement

period. For awards granted in 2022 and 2021, the performance conditions are based on three equally weighted

measures over a three-year performance period. These are total shareholder return, portfolio contribution and

adjusted earnings per share.

The fair value of the awards is determined based on the closing share price on the day of grant. For the total

shareholder return performance element, this is adjusted by the likelihood of that conditions being met, as assessed

at the time of grant.

2022 2021

Shares

Weighted

fair value Shares

Weighted

fair value

At 1 January 793,067 0.8404 — —

Awards granted 611,646 0.7950 793,067 0.8404

At 31 December 1,404,713 0.8206 793,067 0.8404

174

Ecora Resources PLC

Annual Report and Accounts 2022

30 Share-based payments continued

Restricted Share Awards

Under the LTIP, Restricted Share Awards are granted to those employees not granted performance share awards,

at no cost. The awards vest after three years and there are no performance criteria attached. The fair value of these

awards is determined based on the closing share price on the day of grant.

2022 2021

Shares

Weighted

fair value Shares

Weighted

fair value

At 1 January 79,101 1.4014 — —

Awards granted 180,895 1.4035 79,101 1.4014

At 31 December 259,996 1.4029 79,101 1.4014

Refer to note 7(a) for the total expense recognised in the income statement for awards under the Group’s CSOP, USOP,

and LTIP granted to Executive Directors and employees.

31 Special reserve

As part of the capital reduction in 2002, a special reserve was created, which represents the level of profit attributable

to the Group for the period ended 30 June 2002. At 31 December 2022, this reserve remains unavailable for distribution.

Group Company

$’000 $’000

At 1 January 2022 and 31 December 2022 833 833

32 Related party transactions

During the year, the Company entered into the following transactions with subsidiaries:

2022 2021

$’000 $’000

Net financing of related entities (20,298) (18,011)

Net investing of related entities (7,56 4) 125,635

Dividends from related entities 105,486 26,597

Management fee 4,003 4,466

Amounts owed by related parties at year end 141,796 177,349

Amounts owed to related parties at year end (55,819) (54,366)

All transactions were made in the course of funding the Group’s continuing activities.

Amounts owed by related parties are non-interest bearing and are not due to be received in the next twelve months.

Amounts owed to related parties comprise both interest-bearing (at a rate of 1.6%) and non-interest-bearing

borrowings that are repayable on demand.

Remuneration of key management personnel

The remuneration of the key management personnel including Directors of the Group is set out below in aggregate

for each of the categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration

of individual Directors is provided in the audited part of the Directors’ Remuneration Report on pages 108 to 113.

2022 2021

$’000 $’000

Short-term employee benefits 2,305 1,765

Post-employment benefits 81 83

Share-based payment 58 199

2,444 2,047

Directors’ transactions

The Group received $26,707 from Audley Capital Advisors LLP, a company which Mr. J.A. Treger, former Chief Executive

Officer, is both a director and shareholder, for the reimbursement of travel costs and the subletting of office space

during the year ended 31 December 2022 (2021: $107,173.14). Transactions with Audley Capital Advisors have ceased

since Mr J.A. Treger’s resignation. At 31 December 2022 and 2021 there were no amounts owing from Audley Capital

Advisors LLP.

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 continued

for the financial year ended 31 December 2022

33 Segment information

The Group’s chief operating decision maker is considered to be the Executive Committee. The Executive Committee

evaluates the financial performance of the Group based on a portfolio view of its individual royalty and metal stream

arrangements. Royalty and metal stream related revenue and its associated impact on operating profit is the key

focus of the Executive Committee. The income from the Group’s royalties and metal streams is presented based on

the jurisdiction in which the income is deemed to be sourced as follows:

Australia: Kestrel, Narrabri (disposed of in 2021), Four Mile, Pilbara, West Musgrave and Nifty

Americas:

Voisey’s Bay, McClean Lake, Mantos Blancos, Maracás Menchen, LIORC, Ring of Fire, Piauí,

Cañariaco, Ground Hog, Flowstream, Carlota and Santo Domingo

Europe: EVBC and Salamanca

Other: Dugbe I, Corporate and also includes the Group’s mining and exploration interests (excluding

Flowstream)

Despite the Group’s royalty and metal stream arrangements being exposed to different commodities, the Executive

Committee, having considered the impact of climate change on the demand for and pricing of the commodities

underlying the Group’s portfolio, concluded the arrangements in each jurisdiction to have similar economic

characteristics which should result in similar long-term performance over the commodity cycle.

The following is an analysis of the Group’s results by reportable segment. The key segment result presented to the

Executive Committee for making strategic decisions and allocating resources, is operating profit as analysed below.

The segment information for the year ended 31 December 2022 is as follows (noting that total segment operating

profit corresponds to operating profit before impairments, revaluations and gains/losses on disposals on the face of

the consolidated income statement):

Australia

royalties

Americas

royalties

Europe

royalties

All other

segments Total

$’000 $’000 $’000 $’000 $’000

Royalty and metal stream-related revenue 108,214 33,656 — — 141,870

Amortisation and depletion of royalties and streams (97) (9,968) — — (9,351)

Metal streams cost of sales — (4,265) — — (4,265)

Operating expenses (4,399) (272) — (6,178) (10,849)

Total segment operating profit/(loss) 103,718 19,866 — (6,178) 117,406

Total segment assets 247,758 419,812 — 11,366 678,936

Total assets include:

Additions to non-current assets (other than financial

instruments and deferred tax assets) 96,062 95,271 — 3,206 194,539

Total segment liabilities 119,960 47,316 — 8,055 175,332

The segment information for the year ended 31 December 2021 is as follows:

Australia

royalties

and streams

Americas

royalties

and streams

Europe

royalties

and streams

All other

segments Total

$’000 $’000 $’000 $’000 $’000

Royalty and metal stream-related revenue 51,774 33,521 — — 85,295

Amortisation and depletion of royalties and streams (3,311) (11,534) — — (14,845)

Metal streams cost of sales — (4,046) — — (4,046)

Operating expenses (5,061) (386) — (5,293) (10,740)

Total segment operating profit/(loss) 43,402 17,555 — (5,293) 55,664

Total segment assets 145,532 340,137 14,514 20,276 520,459

Total assets include:

instruments and deferred tax assets) — 181,083 — 38 181,121

Total segment liabilities 35,164 119,247 3,480 5,465 163,356

176

Ecora Resources PLC

Annual Report and Accounts 2022

33 Segment information continued

The amounts provided to the Executive Committee with respect to total segment assets are measured in a manner

consistent with that of the financial statements. These assets are allocated based on the operations of the segment

and the physical location of the asset.

The amounts provided to the Executive Committee with respect to total segment liabilities are measured in a manner

consistent with that of the financial statements. These liabilities are allocated based on the operations of the segment.

The royalty and metal stream-related revenue in Australia of $108.2m (2021: $51.8m) includes the Kestrel royalty

which generated $107.2m (2021: $48.1m). Individually the revenue generated by Kestrel represented greater than 10%

of the Group’s revenue in both 2021 and 2022.

The royalty and metal stream-related revenue in the Americas of $33.7m (2021: $33.5m) includes the Voisey’s Bay

cobalt stream which generated $18.9m (2021: $16.5m), which individually represents more than 10% of the Group’s

revenue in 2022 (2021: 10%).

The royalty and metal-related revenue from Voisey’s Bay of $18.9m (2021: $16.5m), together with $3.6m from Maracás

Menchen (2021: $3.3m), $6m from Mantos Blancos (2021: $5.7m), $1m from Four Mile (2021: $0.3m) and $0.2m from

Carlota (2021: $nil) represents revenue recognised from contracts with customers as defined by IFRS 15. In 2021, this

also included $3.4m from Narrabri.

Impairments

During the year ended 31 December 2022, the Group recognised an impairment charge of $4.1m, of which $1.3m

relates to the Ring of Fire royalty and $2.8m relates to the Pilbara royalty, both within the ‘Australia royalties

and streams’.

During the year ended 31 December 2021, the Group recognised an impairment charge of $3.2m in relation to the

Salamanca royalty, which is within the ‘Europe royalties and streams’ segment. In addition, the Group recognised

impairment charges of $1.2m (2021: $3.5m) in relation to the Pilbara royalty and $0.9m in relation to the Ring of Fire

royalty which within the ‘Australia royalties and streams’ and ‘Americas royalties and streams’ segments respectively.

Refer to note 18 for further details on the Group’s impairments.

34 Financial risk management

The Group’s principal treasury objective is to provide sufficient liquidity to meet operational cash flow and dividend

requirements and to allow the Group to take advantage of new growth opportunities whilst maximising shareholder

value. The Group’s activities expose it to a variety of financial risks including liquidity risk, credit risk, foreign exchange

risk and price risk. The Group operates controlled treasury policies which are monitored by management to ensure

that the needs of the Group are met while minimising potential adverse effects of unpredictability of financial markets

on the Group’s financial performance. The Group’s financial risk management should be read in conjunction with the

principal risks outlined on pages 65 to 68 of the Strategic Report.

Liquidity and funding risk

The objective of the Company in managing funding risk is to ensure that it can meet its financial obligations as and

when they fall due. As at 31 December 2022 the Group had borrowings of $42.3m (2021: $112.0m). Subsequent to

the year end, the Group repaid $9.5m of these borrowings and drew down $9.2m and subject to continued covenant

compliance, the Group has access to a further $108m through its secured $150.0m revolving credit facility.

The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with

agreed repayments periods as at 31 December 2022. The table has been drawn up based on the undiscounted cash

flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes

both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount

is derived from the interest rate at the balance sheet date. The contractual maturity is based on the earliest date on

which the Group may be required to pay.

Weighted

average

effective

interest rate 1-5 years Total

% $’000 $’000

31 December 2022

Interest-bearing revolving credit facility 4.84 42,250 42,250

42,250 42,250

31 December 2021

Interest-bearing revolving credit facility 4.29  112,000  112,000

 112,000  112,000

177

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

34 Financial risk management continued

Credit risk

The Group’s principal financial assets are bank balances, royalty financial instruments (excluding the investment in

LIORC), trade and other receivables. These represent the Group’s maximum exposure to credit risk in relation to

financial assets and total $83.1m at 31 December 2022 ($112.3m at 31 December 2021).

The Group’s credit risk is primarily attributable to its trade and other receivables, including royalty and metal stream

receivables, the interest-bearing long-term receivable from Denison Mines Inc (note 22) and the deferred consideration

due from Whitehaven Coal Limited following the disposal of the Narrabri royalty (notes 18 and 22). It is the policy of

the Group to present the amounts in the balance sheet net of allowances for doubtful receivables and expected credit

losses, estimated by the Group’s management based on prior experience and the current economic environment.

The Group’s credit risk on royalty interests held as financial instruments has been reviewed and the estimated

current exposure is as disclosed in note 17 where the future contractual right to cash flows from these instruments

is reflected in their fair value.

The credit risk on bank deposits is mitigated by banking with financial institutions with credit ratings assigned by

Standard & Poor’s and Moody’s of ‘A’ or higher, in reputable jurisdictions. The Group has no significant concentration

of credit risk, with exposure spread over a number of currencies and financial institutions.

The Group’s credit risk on foreign exchange forward contracts is mitigated by the restriction that such contracts can

only be entered into with the existing lending syndicate. The Group limits its exposure to credit risk, together with that

of the contracting financial institution, by restricting the settlement date to no more than a year from the contract

date. In addition, the Group limits the quantum of the forward contracts to no more than an average 70% of forecast

royalty and metal stream-related revenue expected to be received by the date of settlement.

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The Group is exposed to share price risk in respect of its mining and exploration interests (note 19) which include

listed and unlisted equity securities, together with its investment in LIORC which is classified as a royalty financial

instrument (note 17).

A 10% increase or decrease in the fair value of our mining and exploration interests (quoted and unquoted) would

increase/decrease the mining and exploration interests balance (and investment revaluation reserve in equity) by

$0.3m at 31 December 2022 ($0.4m at 31 December 2021).

Similarly, had there been a 10% increase or decrease in the underlying share price of the Group’s investment in LIORC,

the Group’s royalty financial instrument designated as FVTOCI (and the investment revaluation reserve in equity)

would have increased/decreased by $2.6m as at 31 December 2022 ($3.0m at 31 December 2021).

The Group’s mining and exploration interests are in entities whose primary projects the Group already holds a royalty

over, for example Berkeley Energia and Brazilian Nickel plc, or in entities where a future royalty or metal stream

opportunity may exist. While these interests are considered long-term, strategic investments, they are no longer a

significant part of the Group’s approach to securing new royalties and metal streams.

No specific hedging activities are undertaken in relation to these interests and the voting rights arising from these

equity instruments are utilised in the Group’s favour.

Other price risk

The royalty and metal stream portfolio exposes the Group to other price risk through fluctuations in commodity

prices, particularly the prices of steelmaking coal, cobalt, vanadium, nickel, copper, iron ore, gold and uranium. As the

Directors obtain independent commodity price forecasts, the generation of which takes into account fluctuations in

prices, limited analysis of the impact of fluctuations on the valuations of the royalties has been undertaken in note 15

and note 17.

Foreign exchange risk

The Group’s transactional foreign exchange exposure arises from income, expenditure and purchase and sale of

assets denominated in foreign currencies. With royalty-related revenue from Kestrel accounting for over 75% of

the Group’s income (2021: over 60% including Narrabri), the Group’s primary foreign exchange exposure is to the

Australian dollar, which these royalties are denominated in. In addition to the Group’s exposure to the Australian

dollar, it is also exposed to the Canadian dollar through the royalty-related revenue from LIORC and McClean Lake

which is denominated in Canadian dollars and accounted for 3.3% of the Group’s income in 2022 (2021: 9%).

The Group’s hedging policy allows foreign exchange forward contracts to be entered into with a maximum exposure of

70% of forecast Australian and Canadian dollar denominated royalty revenue expected to be received during a period

not exceeding 12 months from contract date to settlement. As at 31 December 2022 the Group had an outstanding

forward contract totalling A$3.3m to receive £1.9m, with a fair value of $32k. There were no outstanding foreign

exchange forward contracts at 31 December 2021 (note 28). The Group has no other hedging programme in place. 

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Ecora Resources PLC

Annual Report and Accounts 2022

34 Financial risk management continued

Foreign exchange risk continued

In terms of material commitments, the risk in relation to currency fluctuations is assessed by the Executive Committee

at the time the commitment is made and regularly reviewed. As at 31 December 2022 that Group has no material

commitments denominated in a foreign currency (31 December 2021: nil).

Financial assets and liabilities are split by currency as follows:

2022 2021

USD AUD CAD GBP EUR USD AUD CAD GBP EUR

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Financial assets 29,748 139,289 45,545 3,797 11 46,525 120,125 55,536 9,724 18

Financial liabilities 98,674 1 3 3,025 — 114,566 — 8 — 5

Net exposure (68,927) 139,288 45,542 772 11 (68,042) 120,125 55,528 9,724 13

Foreign exchange sensitivities

With the exception of the cash balances, non-current other receivables and borrowings, the majority of the financial

instruments not denominated in USD are held in entities with the same functional currency and for the purpose

of this sensitivity analysis, the impact of changing exchange rates on the translation of foreign subsidiaries into the

Group’s presentation currency has been excluded.

In terms of the cash balance, the significant sensitivities are as follows:

•  a +/- 10% change in the USD:AUD rate would increase/decrease profit after tax and equity by $0.03m (2021: $0.8m);

• a +/- 10% change in the USD:CAD rate would increase/decrease profit after tax and equity by $0.02m (2021:

$0.2m); and

• a +/- 10% change in the USD:GBP rate would increase/decrease profit after tax and equity by $0.08m (2021: $0.4m).

In terms of the non-current other receivable balance, which relates to the Canadian dollar denominated loan to Denison

(note 22), a +/- 10% change in the USD:CAD rate would increase/decrease profit after tax and equity by $1.9m (2021: $2.2m).

In terms of borrowings, the Group had drawings under the revolving credit facility in USD only; at 31 December 2022

and 31 December 2021 and therefore, would not be impacted by movements in foreign exchange rates.

Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions.

Nonetheless, the analysis above is considered to be representative of the Group’s exposure to currency risk.

Capital risk management

The Group’s capital management objectives are to safeguard the Group’s ability to continue as a going concern

in order to realise the full value of its assets and to enhance shareholder value in the Company and returns to

shareholders by acquiring further royalty assets.

The Directors continue to monitor the capital requirements of the Group by reference to expected future cash flows.

Capital for the reporting periods presented is summarised in the consolidated statement of changes in equity.

In funding the business activities of the Group, the Directors consider both debt and equity, having regard to the

Group’s available debt facility and the prevailing share price at the time funding is required. Where funding is obtained

through debt, the Group maintains its targeted debt capacity of 2-2.5 times adjusted EBITDA, although a higher ratio

can be tolerated for shorter periods when there is a reasonable expectation of a recovery in free cash flow.

179

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

34 Financial risk management continued

Financial instruments

The Group and Company held the following investments in financial instruments and other items held at fair value:

Group Company

2022 2021 2022 2021

$’000 $’000 $’000 $’000

Investment property (held at fair value)

Coal royalties (Kestrel) 106,669 84,465 — —

Fair value through other comprehensive income

Royalty financial instruments 25,590 30,494 — —

Mining and exploration interests 3,483 4,396 1,059 1,721

Fair value through profit of loss

Royalty financial instruments 18,290 23,297 — 13,920

Contingent consideration – receivable

(1)

12,650 4,018 — —

Cash at bank and in hand 5,850 21,992 5,351 8,649

Financial assets at amortised cost

Trade and other receivables

(2)

45,177 63,267 161,102 200,462

Contingent consideration – receivable

(1)

681 — — —

Financial liabilities at amortised cost

Trade and other payables

(3)

505 96 55,919 54,433

Borrowings

(4)

42,250 112,000 42,250 112,000

Deferred consideration

(5)

45,834 — —

Contingent consideration – payable

(6)

— 950 — —

Lease liability 3,275 769

Financial liabilities at fair value through profit or loss 769 3,275 769

Derivative financial instruments

(7)

32 — 32 —

Contingent consideration – payable

(6)

10,058 1,534 — —

(1) Contingent consideration – receivable as detailed in notes 18 and note 22.

(2)  Trade and other receivables include royalty receivables, other receivables and other non-current receivables, less contingent consideration only,

as set out in note 22.

(3) Trade and other payables include trade payables only, as set out in note 27.

(4) Borrowings include the revolving credit facility only, as set out in note 26.

(5) Deferred consideration as detailed in notes 18 and 27

(6) Contingent consideration – payable as detailed in notes 16, 18 and note 27.

(7 ) Derivative financial instruments include the Group’s foreign exchange forward contracts, as set out in note 23.

Cash and cash equivalents comprise cash and short-term deposits held by the Group treasury function. The carrying

amount of these assets approximates their fair value.

Fair value hierarchy

The following tables present financial assets and liabilities measured at fair value in the balance sheet in accordance

with the fair value hierarchy. This hierarchy aggregates financial assets and liabilities into three levels based on the

significance of the inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy

has the following levels:

• Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The level within which the financial asset or liability is classified is determined based on the lowest level of significant

input to the fair value measurement.

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Annual Report and Accounts 2022

34 Financial risk management continued

Fair value hierarchy continued

The following table presents the Group’s assets that are measured at fair value at 31 December 2022:

2022

Level 1 Level 2 Level 3 Total

Group Notes $’000 $’000 $’000 $’000

Assets

Coal royalties (Kestrel) (a) — — 106,669 106,669

Royalty financial instruments (b) 25,590 — 18,291 43,880

Mining and exploration interests – quoted (c) 988 — — 988

Mining and exploration interests – unquoted (d) — 2,495 — 2,495

Contingent consideration – receivable (e) — — 12,650 12,650

Cash at bank and in hand 5,850 — — 5,850

Liabilities (f)

Contingent consideration – payable (g) — — (10,058) (10,058)

Financial derivative instruments (h) — (32) — (32)

Net fair value 32,428 2,463 127,551 162,442

Level 1 Level 2 Level 3 Total

Group Notes $’000 $’000 $’000 $’000

Assets

Coal royalties (Kestrel) (a) — — 84,465 84,465

Royalty financial instruments (b) 30,494 — 23,297 53,791

Mining and exploration interests – quoted (c) 1,648 — — 1,648

Mining and exploration interests – unquoted (d) — 2,748 — 2,748

Contingent consideration – receivable (e) 4,018 4,018

Cash at bank and in hand (f) 21,992 — — 21,992

Liabilities

Contingent consideration – metal stream acquisition (g) — — (1,534) (1,534)

Net fair value 54,134 2,748 110,246 167,128

The following table presents the Company’s assets that are measured at fair value at 31 December 2022:

Level 1 Level 2 Level 3 Total

Company Notes $’000 $’000 $’000 $’000

Assets

Royalty financial instruments (b) — — 0 0

Mining and exploration interests – quoted (c) 988 — — 988

Mining and exploration interests – unquoted (d) — 71 — 71

Cash at bank and in hand (e) 5,351 — — 5,351

Liabilities

Financial derivative instruments (f) — (32) — (32)

Net fair value 6,339 39 — 6,378

181

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

34 Financial risk management continued

Fair value hierarchy continued

Level 1 Level 2 Level 3 Total

Company Notes $’000 $’000 $’000 $’000

Assets

Royalty financial instruments (b) — — 13,920 13,920

Mining and exploration interests – quoted (c) 1,646 — — 1,646

Mining and exploration interests – unquoted (d) — 75 — 75

Cash at bank and in hand (e) 8,649 — — 8,649

Net fair value 10,295 75 13,920 24,290

There have been no significant transfers between Levels 1 and 2 in the reporting period.

The methods and valuation techniques used for the purposes of measuring fair value of royalty financial instruments

gives more prominence to the probability of production by applying a risk weighting to the discounted net present

value outcome in order to fully reflect the risk that the operation never comes into production rather than factoring

this risk into the discount rate applied to the future cash flow.

(a) Coal royalties (investment property)

The Group’s coal royalties derive from its ownership of certain sub-stratum land in Queensland, Australia. In accordance

with IAS 40, this land is revalued at each reporting date on the basis of future expected income discounted at 9%

(2021: 6%) by an independent valuation consultant. Refer to note 15 for details of the key inputs into the valuation,

together with a sensitivity analysis for fluctuations in the price assumptions and discount rate. All unobservable inputs

are obtained from third parties.

(b) Royalty financial instruments

The Group’s royalty financial instruments comprise of the investment in LIORC and the McClean Lake streaming

agreement, together with the NSR and GRR royalties over EVBC, Dugbe 1 and Piauí as detailed in note 17.

At the reporting date, the fair value of the Group’s investment in LIORC has been determined by reference to the

quoted bid price of the instrument. As LIORC has a quoted share price in an active market, it has been categorised

as level 1 in the fair value hierarchy.

The Group’s remaining royalty financial instruments are valued based on the net present value of pre-tax cash flows

discounted at a rate between 10.00% and 31.50% at the reporting date. The discount rate of each royalty arrangement

is derived using a capital asset pricing model specific to the underlying project, making reference to the risk-free rate

of return expected on an investment with the same time horizon as the expected mine life, together with the country

risk associated with the location of the operation.

For those royalty financial instruments not in production, the outcome of this net present value calculation is then

risk weighted to reflect management’s current assessment of the overall likelihood and timing of each project coming

into production and royalty income arising. This assessment is impacted by news flow relating to the underlying

operation in the period, in conjunction with management’s assessment of the economic viability of the project based

on commodity price projections.

The table below outlines the discount rate and risk weighting applied in the valuation of the Group’s royalty financial

instruments:

31 December 2022 31 December 2021

Classification

Discount

rate

Risk

weighting

Discount

rate

Risk

weighting

EVBC FVTPL 13.00% 0% 8.50% 100%

Dugbe 1 FVTPL 31.50% 32.50% 21.50% 25%

McClean Lake FVTPL 10.00% 60% 8.00% 50%

Piauí FVTPL 18.50% 55% – 100% 13.50% 25%–90%

The Group has reviewed the impact on the carrying value of its royalty financial instruments, and does not consider a

+/- 1% change in the discount rate or a +/- 10% change in the underlying commodity prices to have a material impact .

182

Ecora Resources PLC

Annual Report and Accounts 2022

34 Financial risk management continued

Fair value hierarchy continued

(c) Mining and exploration interests – quoted

All the quoted mining and exploration interests have been issued by publicly traded companies on well-established

security markets. Fair values for these securities have been determined by reference to their quoted bid prices at the

reporting date.

(d) Mining and exploration interests – unquoted

All the unquoted mining and exploration interests are initially recognised using cost as the best approximation of

fair value. The Group notes any trading activity in the unquoted instruments and will value its holding accordingly.

At present the Group holds these investments with a view to generating future royalties and there is no present

intention to sell. The vast majority of these are in investments which the Group anticipates a realistic possibility of a

future listing.

(e) Contingent consideration – receivable

Contingent consideration – receivable, relates to the West Musgrave royalty intangible purchased on 19 July 2022

and the sale of the Narrabri royalty intangible completed on 31 December 2021 (note 18).

for as a financial asset and is carried at fair value based on the net present value of the discounted future cash flows

estimated based on the expected start of commercial production. The financial asset in relation to the contingent

consideration will be remeasured at each reporting date, with movements recognised in profit or loss.

In relation to the disposal of Narrabri, the Group may receive additional consideration following state and federal

government approvals in Australia of the Narrabri South extension for the period from completion date until

31 December 2026, together with price and volume linked consideration. The contingent consideration has been

classified as a financial asset that is carried at fair value based on the net present value of the discounted future cash

flows estimated based on the probability of the Narrabri South extension being approved and the forward-looking

thermal coal prices and expected production volumes. The financial asset in relation to the contingent consideration

will be remeasured at each reporting date, with movements recognised in profit or loss over the period to

31 December 2026 during which the additional consideration may be received.

(f) Cash at bank and in hand

changes in value.

(g) Contingent consideration – payable

Contingent consideration – payable, relates to the acquisition of the West Musgrave royalty intangible in on 19 July

2022 (note 18) and Voisey’s Bay metal stream completed on 11 March 2021 (note 16).

In relation to the acquisition of the West Musgrave royalty intangible the Group may become liable for additional

consideration payments for the period from commencement of production to 30 June 2027, determined by reference

to minimum production thresholds and nickel prices. This contingent consideration has been classified as a financial

liability that is carried at fair value based on the net present value of the discounted future cash outflows estimated

based on forward-looking nickel prices and expected production volumes. The financial liability in relation to the

contingent consideration will be remeasured at each reporting date, with movements recognised in carrying value

of royalty intangible and amortised at straight line over the life of the mine.

In relation to the acquisition of Voisey’s Bay metal stream for the period from completion date until 30 June 2025, the

Group may become liable for additional consideration payments determined by reference to minimum production

thresholds and cobalt prices. This contingent consideration has been classified as a financial liability that is carried at

fair value based on the net present value of the discounted future cash outflows estimated based on forward-looking

cobalt prices and expected production volumes. The financial liability in relation to the contingent consideration will

be remeasured at each reporting date, with movements recognised in carrying value of metal stream and depreciated

on a unit-of-production basis over the total expected deliveries to be received.

(h) Derivative financial instruments

The derivative financial instruments consist of the foreign exchange forward contracts entered into to hedge the

Group’s Australian dollar denominated royalty income. At the reporting date the foreign exchange forward contracts

are valued based on the net present value of the discounted future cash flows estimated based on forward exchange

rates and contract forward rates, discounted at rates that reflect the credit risk of various counterparties.

183

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

34 Financial risk management continued

Fair value measurements in Level 3

The Group’s financial assets classified in Level 3 use valuation techniques based on significant inputs that are not

based on observable market data.

The following table presents the changes in Level 3 instruments for the year ended 31 December 2022.

Royalty

financial

instruments

Coal

royalties

(Kestrel)

Contingent

consideration

– receivable

Contingent

consideration

– acquisition Total

$’000 $’000 $’000 $’000 $’000

At 1 January 2022 23,297 84,465 4,018 (1,534) 110,246

Fair value on initial recognition — — 5,544 (9,311) (3,767)

Contingent consideration – (received)/paid — — (629) 2,373 1,744

Effective interest — — — (169) (169)

Revaluation gains or losses recognised in:

 Income statement (1,373) 27,833 4,083 — 26,952

 Royalty intangible and metal stream — — — (1,497) 1,783

Royalties due or received from royalty financial instruments (2,782) — — — (2,782)

Foreign currency translation (852) (5,629) (366) 80 (6,456)

At 31 December 2022 18,290 106,669 12,650 (10,058) 127,551

Royalty

financial

instruments

Coal

royalties

(Kestrel)

Contingent

consideration

– royalty

intangible

disposal

Contingent

consideration

– metal stream

acquisition Total

$’000 $’000 $’000 $’000 $’000

At 1 January 2021 9,251 76,268 — — 85,519

Revaluation gains or losses recognised in:

 Income statement 17,501 13,037 — — 30,538

Royalties due or received from royalty financial

instruments (3,115) — — — (3,115)

Fair value on initial recognition — — 4,018 (1,534) 2,484

Foreign currency translation (340) (4,840) — — (5,180)

At 31 December 2021 23,297 84,465 4,018 (1,534) 110,246

There have been no transfers into or out of Level 3 in any of the years.

The Group measures its entitlement to the royalty income and any optionality embedded within the royalty financial

instruments using discounted cash flow models. In determining the discount rate to be applied, management

considers the country and sovereign risk associated with the projects, together with the time horizon to the

commencement of production and the success or failure of projects of a similar nature.

184

Ecora Resources PLC

Annual Report and Accounts 2022

35 Free cash flow

APMs used by the Group, including the definitions, please refer to page 1,

The structure and classification of a number of the Group’s royalty arrangements result in a significant amount of cash

flow not being included in the income statement. As the Group considers dividend cover based on the free cash flow

generated by its assets, management has determined that free cash flow per share is a key performance indicator.

Free cash flow per share is calculated by dividing net cash generated from operating activities and proceeds from the

disposal of non-core assets, less finance costs, by the weighted average number of shares in issue.

2022

Free

cash flow

per share

$’000 ¢

Net cash generated from operating activities

Net cash generated from operating activities for the year ended 31 December 2022 132,529

Adjustment for:

Proceeds on disposal of mining and exploration interests 1,310

Finance income 8

Finance costs (4,213)

Lease payments (312)

Repayments under commodity-related financing agreements 2,859

Free cash flow for the year ended 31 December 2022 132,181 56.47

2021

Free

cash flow

per share

$’000 ¢

Net cash generated from operating activities

Net cash generated from operating activities for the year ended 31 December 2021 55,780

Adjustment for:

Proceeds on disposal of mining and exploration interests 2,512

Finance income 1

Finance costs (10,874)

Lease payments (268)

Repayments under commodity-related financing agreements 1,256

Free cash flow for the year ended 31 December 2021 48,407 23.28

The weighted average number of shares in issue for the purpose of calculating the free cash flow per shares is as follows:

2022 2021

Weighted average number of shares in issue 234,062,267 207,403,286

36 Portfolio contribution

Portfolio contribution represents the funds received or receivable from the Group’s underlying royalty and metal

stream-related assets. A number of the Group’s royalty financing arrangements result in a significant amount of cash

flow being reported as principal repayments, which are not included in the income statement. In addition, following

the adoption of IFRS 9, royalty receipts from those royalty financial instruments classified as FVTPL, are no longer

recognised in the income statement. The Group considers total portfolio contribution as a means of assessing the

overall performance of the Group’s underlying royalty and metal stream-related assets .

+ denotes interest is held indirectly.

185

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

Notes to the consolidated financial statements continued

for the financial year ended 31 December 2022

36 Portfolio contribution continued

Portfolio contribution is royalty and metal stream related revenue (note 5), less metal stream cost of sales, plus

royalties received or receivable from royalty financial instruments carried at FVTPL (note 17) and principal repayment

received under the Denison financing agreement (note 22) as follows:

2022 2021

Group $’000 $’000

Royalty and metal stream-related revenue (note 5) 141,870 85,295

Royalties due or received from royalty financial instruments 2,782 3,115

Repayments under commodity-related financing agreements 2,859 1,256

Metal streams cost of sales (4,265) (4,046)

143,246 85,620

Metal streams costs of sales represent the cost of cobalt purchases under the Voisey’s Bay stream agreement,

marketing costs and insurance. The cost of cobalt purchases is 18% of an industry cobalt reference price until the

original upfront amount paid for the stream, by its original holder, of $300m is reduced to $nil (through accumulating

credit from 82% of the cobalt reference price), increasing to 22% thereafter.

37 Contingent liabilities

During 2022 on advice from professional advisers, the Group undertook the capital restructuring of a number of

subsidiaries with significant historical losses and impairment charges. This advice involved the interpretation of

certain tax legislation for which there is no clear precedent or guidance. Absent clear guidance from relevant tax

authorities there is the possibility that those tax authorities could interpret the legislation in a different way from the

Group. Should the relevant tax authorities interpret the legislation in a different way from the Group, this could result

in an additional income tax charge of $5.5m for the year ended 31 December 2022 .

38 Events occurring after year end

Subsequent to year end, following the receipt of its Q4 2022 royalties, the Group made a partial repayment of $9.5m

of its borrowings (note 27) and drew down a further $9.2m and, subject to continued covenant compliance, the Group

has access to a further $108m through its secured $150.0m revolving credit facility as at the date of this report.

On 15 February 2023 a quarterly dividend of 1.75p per share was paid to shareholders ($5.5m) in respect of the year

ended 31 December 2022 (note 13).

There are no other events that have occurred subsequent to the year end that require additional disclosure.

186

Ecora Resources PLC

Annual Report and Accounts 2022

39 Subsidiaries

The following tables outline the Group’s subsidiaries, as defined in Regulation 7 of the UK Companies Act 2006.

All subsidiaries are included in the Group consolidation.

Company and country of incorporation/operation Principal activities Class of shares held

Proportion of

class held at

31 December

2022

Proportion of

class held at

31 December

2021

%

Australia

Alkormy Pty Ltd Investments Ordinary A$1.00 100+ 100+

APG Aus No 1 Pty Ltd Owner of iron ore royalties Ordinary A$1.00 100 100

APG Aus No 2 Pty Ltd Owner of iron ore royalties Ordinary A$1.00 100+ 100

APG Aus No 3 Pty Ltd Owner of uranium royalties Ordinary A$1.00 100 100

APG Aus No 4 Pty Ltd

Owner of iron ore and copper

royalties Ordinary A$1.00 100 100

APG Aus No 5 Pty Ltd Owner of iron ore royalties Ordinary A$1.00 100 100

APG Aus No 6 Pty Ltd Owner of vanadium royalties Ordinary A$1.00 100 100

APG Aus No 7 Pty Ltd Owner of coal royalties Ordinary A$1.00 100 100

APG Aus No 8 Pty Ltd Owner of nickel royalties Ordinary A$1.00 100 100

APG Aus No 9 Pty Ltd

Owner of nickel and copper

royalties Ordinary A$1.00 100 100

APG Aus No 10 Pty Ltd Investments Ordinary A$1.00 100 100

Argo Royalties Pty Ltd Investments Ordinary A$1.00 100+ 100+

Gordon Resources Ltd Owner of coal royalties Ordinary A$0.20 100+ 100+

HydroCarbon Holdings Pty Ltd Dormant Ordinary A$1.00 100+ 100+

Indian Ocean Resources Pty Ltd Investments Ordinary A$0.25 100+ 100+

Indian Ocean Ventures Pty Ltd Dormant Ordinary A$0.20 100+ 100+

Starmont Holdings Pty Ltd Investments Ordinary A$1.00 100 100

Starmont Finance Pty Ltd Treasury Ordinary A$1.00 100+ 100+

Starmont Ventures Pty Ltd Investments Ordinary A$1.00 100 100+

Woodford Wells Pty Ltd Dormant Ordinary A$0.25 100+ 100+

The registered office of all of the entities listed above is 6 Price Street, Subiaco, Western Australia 6008

Barbados

Entrée International Holdings Inc Intermediate holding company Ordinary U$1.00 100 100

Entrée Peru Holdings Inc Intermediate holding company Ordinary U$1.00 100+ 100+

The registered office of all of the entities listed above is Suite 208, Building No 8, Harbour Road, Bridgetown, St Michaels, Barbados

Canada

Advance Royalty Corporation

(1)

Owner of uranium royalties Ordinary C$0.01 100+ 100+

Albany River Royalty Corporation

(1)

Owner of chromite royalties Ordinary C$1.00 100+ 100+

Panorama Coal Corporation

(1)

Owner of coal royalties Ordinary C$1.00 100 100

Polaris Royalty Corporation

(1)

Intermediate holding company Ordinary C$1.00 100+ 100+

Trefi Coal Corporation

(1)

Owner of coal tenures Ordinary C$0.01 100 100

2809558 Ontario Inc

(2)

Intermediate holding company Ordinary U$1.00 100+ N/A

APG Metals Holdings Limited

(2)

Intermediate holding company Ordinary U$1.00 100+ N/A

APG Metals Limited

(3)

Owner of metal stream Ordinary U$1.00 100+ N/A

(1) The registered office of this entity is 1720 Queens Avenue, West Vancouver, British Columbia, Canada V7V 2X7

(2) The registered office of these entities is 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1

(3) The registered office of this entity is 620-111 Melville Street, Vancouver, British Columbia, Canada, V6E 3V6

187

Financial statements

Ecora Resources PLC

Annual Report and Accounts 2022

 continued



Proportion of

class held at

31 December

2022

Proportion of 

class held at 

31 December 

2021 

%

England

Anglo Pacific Cygnus Ltd Investments Ordinary £1.00 100 100

Centaurus Royalties Ltd Investments Ordinary £1.00 100 100

Southern Cross Royalties Ltd Investments Ordinary £1.00 100 100

Pyxis Royalties Limited Intermediate holding company Ordinary £1.00 100 100

Vela Royalties Limited Owner of copper royalties Ordinary £1.00 100 —

Carina Royalties Limited Owner of copper royalties Ordinary £1.00 100 —

Scutum Royalties Limited Dormant Ordinary £1.00 100 —

Pyxis Royalties Limited Intermediate holding company Ordinary £1.00 100 N/A

The registered office of all of the entities listed above is Kent House, 3rd Floor North, 14-17 Market Place, London W1W 8AJ, United Kingdom

Guernsey

Anglo Pacific Group Employee

Benefit Trust

Administering Group

incentive plans

100 100

The registered office of the entity listed above is, Frances House, Sir William Place, St Peter Port GY1 4HQ

Ireland

Anglo Pacific Finance DAC Treasury Ordinary £1.00 100+ 100

The registered office of the entity listed above is Atlantic Avenue, Westpark Business Campus, Shannon, Co Clare

Peru

Exploraciones Apolo Resources SAC Owner of copper royalties Ordinary S/1.00 100+ N/A

The registered office of the entity listed above is Av. Ricardo Angulo No 776, Office 301, District of San Isidro, Lima, Peru

Scotland

Shetland Talc Ltd Mineral exploration Ordinary £1.00 100 100

The registered office of the entity listed above is Grant Thornton, 95 Bothwell Street, Glasgow, Scotland G2 7JZ

+ denotes interest is held indirectly.

39 Subsidiaries continued

188

Ecora Resources PLC

Annual Report and Accounts 2022



 

    

    

    

    

    

    



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190

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Annual Report and Accounts 2022

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192

Ecora Resources PLC

Annual Report and Accounts 2022

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