Q2 2024 Elemental Altus Royalties Corp Earnings Call
Operator: on their very first quarterly Investor Town Hall Forum.
Operator: on their very first quarterly Investor Town Hall Forum.
Joanne: on their very first quarterly investor town hall forum.
Quarterly Investor Town Hall Forum.
Operator: Before we commence, this is just a reminder that if you do have any questions for the company, please place them in the Q&A tab located at the top of this screen.
Operator: Before we commence, this is just a reminder, that if you do have any questions for the company, please place them in the Q&A tab located at the top of this screen.
Joanne: Before we commence, this is just a reminder that if you do have any questions for the company, please place them in the Q&A tab located at the top of this screen.
Before we commence this is just a reminder, that if you do have any questions for the company. Please place them in the Q&A tab located at the top of the screen.
Operator: After the presentation, I will be delighted to moderate the questions submitted by our audience.
Operator: After the presentation, I will be delighted, to moderate the questions submitted by our audience.
Speaker Change: After the presentation I will be delighted to moderate the questions submitted by our audience with US. This morning, I am delighted to introduced CEO, Frederic Bell and CFO, David Baker, who will take you through the highlights of the most recent quarterly results Fred the stage is yours.
Operator: With us this morning, I am delighted to introduce CEO Frederick Bell and CFO David Baker, who will take you through the highlights
Operator: With us this morning, I am delighted to introduce...
Operator: CEO Frederick Bell and CFO David Baker, who will take you through the highlights of the most recent quarterly results.
Operator: of the most recent quarterly results.
Operator: Fred, the stage is yours.
Operator: Fred, the stage is yours.
Yeah.
Frederick Bell: Thank you very much Joanne and thank you everyone for joining us today, and this is the first quarterly investor call we've done for a while so very pleased to put it together and we'll do it going forward to try and give shareholders and potential investors a better guide to the company and really an explanation of some of the results as we go forward.
Frederick Bell: Thank you very much, Joanne, and thank you everyone for joining us today.
Joanne: After the presentation, I will be delighted to moderate the questions submitted by our audience.
Speaker Change: Thank you very much Rob and thank you everyone for joining us today.
Frederick Bell: And this is the first quarterly Investor Call, we've done for a while, so very pleased to put it together and we'll do it going forward to try and give shareholders and potential investors a better guide to the company and really an explanation of some of the results as we go forward.
Speaker Change: This is this is the first quarterly investor call with them for a while so.
Speaker Change: Very pleased to put it together and we will do it going forward to try and give shareholders and potential investors about a guidance of the company.
Speaker Change: I'm really an explanation of some of the results as we go forward.
Frederick Bell: At any point if there are questions we'll hopefully just keep them in mind and then we can come back to them at the end of the presentation and try and address anything that's there.
Frederick Bell: At any point, if there are questions, we'll hopefully just keep them in mind and then we can come back to them at the end of the presentation and try and address anything that's there.
Speaker Change: At any point.
Speaker Change: <unk> will hopefully just keeping in mind and then we can come back to them at the end of the presentation.
Frederick Bell: So in terms of the slides here if we move on to the first slide here and note we're going to be making forward-looking statements and there's a disclaimer there and the two presenters from the company today are myself, Frederick Bell and David Baker who is our CFO and we'll really run through the results today with you so starting on if we turn to the next slide thank you.
Speaker Change: Try and address anything that's out.
Frederick Bell: So in terms of the slides here, if we move on to the first slide here and note we're going to be making forward-looking statements, there's a disclaimer there, and the two presenters from the company today are myself, Frederick Bell, and David Baker, who is our CFO, and we'll really run through the results today with you.
Joanne: With us this morning, I am delighted to introduce CEO Fredric Bell and CEO David Baker, who will take you through the highlights of the most recent quarterly results.
Speaker Change: So in terms of <unk>.
Speaker Change: In terms of the slides here.
Speaker Change: If we move on to the first slide.
Frederick Bell: The second quarter, the real highlight here is we had a strong royalty revenue of $3.8 million and adjusted revenue. So that is a term to incorporate caserones, but adjusted revenue of $5.2 million US, which is about a 10% increase on Q2 2023.
Speaker Change: Slide her in a note.
Speaker Change: We're going to be making forward looking statements and the disclaimer that on.
Speaker Change: The two presenters from the company today myself Fredrik.
David Baker: David Baker.
Frederick Bell: It's the, I believe, the second highest adjusted revenue number quarterly in the company's history.
David Baker: Who is our CFO.
David Baker: We're already run through the results today.
Frederick Bell: So starting on, if we turn to the next slide, thank you.
Fredric Bell: Fred, the stage is yours.
David Baker: So starting on if we turn to next slide thank you.
Frederick Bell: The second quarter, look, the real highlight here, is we had a strong royalty revenue of 3.8 million and adjusted revenue, so that is a term to incorporate caserones, but adjusted revenue of 5.2 million US, which is about a 10% increase on Q2 2023.
Fredric Bell: Thank you very much, Joanne, and thank you everyone for joining us today.
David Baker: The second quarter look the real highlight here is we had strong royalty revenue of $3 8 million and adjusted revenue say that as a time to incorporate <unk>, but adjusted revenue of $5 2 million U S, which is about a 10% increase from Q2 2023.
Frederick Bell: It's the, I believe, the second highest adjusted revenue number quarterly in the company's history.
Fredric Bell: This is the first quarterly investor call we have done for a while, so very pleased to put it together and we will do it going forward to try and give shareholders and potential investors about a guide to the company and really an explanation of some results as we go forward.
David Baker: The I believe the second highest adjusted revenue number quarterly in the company's history.
Frederick Bell: And as we continue to grow from 2023, 2024, going into 2025, we expect to continue to get really solid quarters growing along that period. In terms of adjusted, EBITDA stands at 3.4 million US, which is about up 4% from Q2 2023, respective period, and margins improving towards pre-merger levels.
David Baker: As we continue to grow from 2023 2024 going into 2025, we expect to continue to get.
Frederick Bell: And as we continue to grow from 2023, 2024 going into 2025, we expect to continue to get really solid quarters growing along that period.
David Baker: Really solid quarters growing along that period in terms of adjusted EBITDA stands at $3 4 million in U S dollars, which is about 4% from Q2 2023 respective period margins improving towards pretty much allowance.
Frederick Bell: In terms of adjusted EBITDA stands at $3.4 million US, which is about 4% from Q2 2023 respective period and margins improving towards pre-merger level, in terms of gold equivalent ounces, that's geos, we have 2,211 ounces, and for the half year to the end of June, that is 4,415 ounces.
Fredric Bell: At any point, if there are questions, we will hopefully just keep them in mind and then we can come back to them at the end of the presentation and try and address anything that is there.
Frederick Bell: In terms of gold equivalent ounces, that's geos, we have 2,211 ounces, and for the half year to the end of June, that is 4,415 ounces. We expect to meet the lower end of our guidance, on a geo basis of 10,000 to 11,700 gold equivalent ounces, and that's driven in second half of the year by first royalty revenue we're anticipating from DIVA in Q3, and partially offset by lower copper prices compared to gold prices at caserones. And I think worth mentioning for that, that that is for a gold equivalent ounce term.
Fredric Bell: In terms of the slides here, if we move on to the first slide here and note what we are going to be making forward with some statements, there is a disclaimer there and the two presenters from the company today are myself Fredric Bell and David Baker, who is our CFO and we will run through the results today with you.
David Baker: In terms of gold equivalent ounces Geos, we have 2211 ounces.
David Baker: For the half year to the end of June that is 4450 answers.
Frederick Bell: We expect to meet the lower end of our guidance on a GEO basis of 10,000 to 11,700 gold equivalent ounces and that's driven in the second half of the year by first royalty revenue we're anticipating from DIVA in Q3 and partially offset by lower copper prices compared to gold prices at Caterham, and I think worth mentioning for that, that that is for a gold equivalent ounce term.
David Baker: We expect to meet the lower end of our guidance on a geo basis of 10000 to 11700 gold equivalent ounces and that's driven in second half of the year by FES royalty revenue were anticipating for <unk> in Q3.
David Baker: And partially offset by lower copper prices compared to gold prices, the customer base and I think worth mentioning for that.
David Baker: That is for gold equivalent ounce Tom in terms of revenue we get the same.
Frederick Bell: In terms of revenue, we get the same.
Frederick Bell: In terms of revenue, we get the same, it is just lower on gold equivalent ounce basis when we're looking at copper from caserones.
Frederick Bell: It is just a lower gold equivalent ounce base, when we're looking at copper from capsaicin.
David Baker: Alex basis, when we look at Copa from peso runners.
Frederick Bell: Yn ystod y llwybrau sylfaenol, rydyn ni wedi cyflawni eich gwella'r llwybrau sylfaenol dros y blynyddoedd, is something we said we would do last year and we repaid 5 million in Q1 and we repaid another 5 million in Q2 taking a total repayment 2024 year to date to 10 million US dollars and at the quarter end we held approximately 6.5 million in cash and we retained approximately 20 million of undrawn debt that's available for transactions which along with free cash flow generation and expected milestone payments you know giving us a lot of capacity for future acquisitions and those milestone payments across 2024 and 2025 which said we think approximately 19 million US dollars to come in over that period.
Frederick Bell: In terms of the balance sheet, we've continued to strengthen the balance sheet over the course of the year. This is something we said we would do last year, and we repaid 5 million in Q1, and we repaid another 5 million in Q2, taking the total repayment 2024 year to date to 10 million US dollars.
Speaker Change: In terms of the balance sheet, we've continued to strengthen the balance sheet over the course of this is <unk>.
Speaker Change: Something we said, we would do last year, and we repaid $5 million in Q1, and we repaid another $5 million in Q2, taking a total repayment to 2024 year to date 10 million U S dollars.
Frederick Bell: And at the quarter end, we held approximately 6.5 million in cash, and we retained approximately 20 million of undrawn debt that's available for transactions, which along with free cash flow generation and expected milestone payments, giving us a lot of capacity for future acquisitions. And those milestone payments across 2024 and 2025, would set up approximately 19 million US dollars to come in over that period.
Speaker Change: And the core trends out of approximately $6 5 million in cash.
Speaker Change: We retained approximately $20 million of Undrawn debt.
Speaker Change: Ratable transactions.
Speaker Change: Which along with free cash flow generation and expected milestone payments.
Speaker Change: Giving us a lot of capacity for future acquisitions, and those milestone payments across 2024 and 2025.
Speaker Change: Saturday, approximately 19 million U S dollars.
Speaker Change: To come in without Merit.
Frederick Bell: The two assets that are really going to be driving growth for us in 2024 and continuing, into 2025 are Bonnecrow and Diba. Bonnecrow has already started to demonstrate that. We had USD$1.8M in revenue in the first half of this year, which is a material increase on the approximately USD$300,000 we had in the equivalent period in 2023.
Frederick Bell: The two assets that are really going to be driving growth for us in 2024 and continuing into 2025 are BonaCro and Diva. BonaCro has already started to demonstrate that. We had USD$1.8 million in revenue in the first half of this year, which is a material increase on the approximately USD$300,000 we had in the equivalent period in 2023.
Speaker Change: The two assets that are really going to be driving growth for us.
Speaker Change: In 2024 and continuing into 2025.
Speaker Change: On a pro dealer.
Speaker Change: <unk> has already started to demonstrate that we had $1 8 million in U S dollars and revenue in the first half with a chip which is a material increase on the approximately 300000, we have in the equivalent period in 2023.
Frederick Bell: And Diva, Allied Gold, the operator there, have announced that they may commence mining and we're expecting royalty revenue to start coming in from Q3.
Speaker Change: Dave.
Frederick Bell: And Diba, Allied Gold, the operator there, have announced that they may commence mining, and we're expecting, royalty revenue to start coming in from Q3.
Speaker Change: Now I'd go with the operator that has announced that they may commence mining and we're expecting royalty revenue to start coming in from Q3.
Frederick Bell: In terms of the deal pipeline, look, it remains very, very robust.
Frederick Bell: In terms of the DIL pipeline, it remains very robust.
Speaker Change: In terms of the Doe pipeline look it remains at.
Frederick Bell: We've got a lot of opportunities we're looking at, both on an individual acquisition basis, but also in terms of portfolios and consolidation discussions across the junior royalties space.
It remains very very robust with a lot of opportunities. We're looking at based on individual acquisition basis, but also in terms of portfolios and.
Frederick Bell: We've got a lot of opportunities we're looking at both on an individual acquisition basis but also in terms of portfolios and, consolidation discussions across the junior royalties space.
Speaker Change: Consolidation discussions across the junior royalty space.
Frederick Bell: So, in sum, it's been a good quarter in terms of revenue.
Frederick Bell: So, in sum, it's been a good quarter in terms of revenue.
Speaker Change: So in sum it's been a good.
Speaker Change: Good quarter in terms of revenue.
Frederick Bell: We've strengthened the balance sheet over the course of this year to date, and we expect to continue to do that where the opportunity is there.
Frederick Bell: We've strengthened the balance sheet over the course of this year to date, and we expect to continue to do that where the opportunity is there.
Speaker Change: With the strength of the balance sheet over the course of this year to date and we expect to continue to do that where the opportunity is that.
Frederick Bell: Bonnecrow has really started to deliver growth for us in 2023, and Diba coming on in the second half of this year, and we're continuing to
Frederick Bell: Bonnecrow has really started to deliver growth versus 2023, and Diva coming on in the second half of this year.
Speaker Change: On a CRO.
Speaker Change: Really started to deliver growth to us is 2023 and data coming on in the second half of the shifts and we're continuing to look for acquisitions as they go.
Frederick Bell: And we're continuing to look at acquisitions.
Frederick Bell: deliver acquisitions as we go.
Frederick Bell: So if we then turn to slide five.
Fredric Bell: Starting on if we turn to the next slide, thank you.
So if we then turn to slide five.
Frederick Bell: Two key royalties for us are Carla Winder in Australia and Casa Rones in Chile. Carla Winder operated by, Capricorn Metals on a major expansion of 2 to 2.5 million tonnes per annum at the mine, and that's an approximate 50% increase in throughput, so they're looking to have that study completed by the end of this calendar year and we should have further news on that but that's one of our largest royalties there looking at a 50% increase in throughput.
Speaker Change: Two key royalties for us I'll call it Linda in Australia, and Castlereagh Nathan Chile.
Frederick Bell: So, if we then turn to slide five, two key royalties for us are Karlawinda in Australia and Casarones in Chile. Karlawinda operated by Capricorn Metals, and it was a record quarter in terms of revenue at Karlawinda, partly driven by, really the gold price there. Capricorn, the operator, are guiding to 110,000 to 120,000 ounces in the next 12 months.
Carlo into operated by.
Speaker Change: Chemical and metals.
And it was a record revenue and a record quarter in terms of revenue color Linda.
Speaker Change: Partly driven by really the gold price that cap.
Speaker Change: Capricorn, the operator are guiding to a 110 to 120000 ounces in the next 12 months and really importantly.
Frederick Bell: And really importantly for us is Capricorn also announced the commencement this month of a study on a major expansion of 2 to 2.5 million tonnes per annum at the mine, and that's an approximate 50% increase in throughput. So, they're looking to have that study completed by the end of this calendar year, and we should have further news on that. But that's one of our largest royalties there, looking at a 50% increase in throughput.
Speaker Change: <unk> for US is technical and also announced.
Speaker Change: The commencement of this month.
Speaker Change: All the study on a major expansion.
Speaker Change: Two to two and a half million tons per annum at the mine not to approximate 50% increase in throughput.
Speaker Change: So they're looking to have that study.
Speaker Change: Study completed by the end of this calendar year and.
Speaker Change: We should have a file of the news on that but that's one of our largest royalties that looking at a 50% increase in throughput.
Frederick Bell: And I think important to note as well that the management team at Capricorn, this is a management team that in their previous company built three mines in Australia in a five year period and had throughput increases, expansion to all of those mines over that same period of 30 to 50% at each.
Frederick Bell: And, I think important to note as well that the management team at Capricorn, this is a management team that in their previous company built three mines in Australia in a five-year period and had throughput increases, expansion to all of those mines over that same period of 30% to 50% at each.
Speaker Change: Important to note as well that the management team.
Speaker Change: Comparable.
This is a management team that in that previous company.
Speaker Change: The three mines in Australia or in a five year period.
Speaker Change: Throughput increases expansion to all of those mines over that same period of 30% to 50% at each so it's a management team in Australia are exceptionally well known and have already strong track record in not just building mines on time on budget, but actually then taking.
Frederick Bell: So, it's a management team that in Australia are exceptionally well-known, and have a really strong track record, not just building mines on time or budget, but actually then taking expansion studies through successfully and implementing them.
Frederick Bell: So it's a management team that in Australia are exceptionally well-known and have a really strong track record not just building mines on time or budget but actually then taking expansion studies through successfully and implementing them.
Speaker Change: Taking expansion studies through.
Speaker Change: Successfully implementing them, so really pleased to see that needs to come out and look forward to further updates from chemical and that.
Frederick Bell: So really pleased to see that news come out and look forward to further updates from Capricorn there.
Frederick Bell: So, really pleased to see that news come out and look forward to further updates from Capricorn there. At the same time as the throughput expansion, they also announced a 15% increase to the reserves, just over 1.4 million ounces of gold, and that supports current mine life of approximately 13 years.
Frederick Bell: At the same time as the throughput expansion they also announced a 15% increase to the reserves to just over 1.4 million ounces of gold and that supports current mine life of approximately 13 years.
Speaker Change: At the same time as the throughput expansion. They also announced a 15% increase to the reserve to just over $1 4 million ounces of gold and that supports.
Speaker Change: Yeah.
Frederick Bell: The second real cornerstone asset in the portfolio is Casarones with Lundi Mining in Chile.
Speaker Change: Current mine life of approximately 13 years.
Frederick Bell: The second real cornerstone asset in the portfolio is Casa Renes with Lundin Mining in Chile, and this accrued adjusted royalty revenue of USD$1.4M based on reported production on copper and molybdenum by Lundin.
Speaker Change: The second real cornerstone assets in the portfolio as customer in Asia with Lindsay mining in Chile.
Frederick Bell: And this accrued adjusted royalty revenue of 1.4 million US dollars based on reported production on copper and molybdenum by Lundi.
Speaker Change: And this accrued adjusted royalty revenue of $1 4 million in U S dollars based on reported production.
Frederick Bell: And at the same time, I think Lundin actually increased their guidance here for the 2024 year to 124,000 to 135,000 tonnes of copper. And you can see it was previously 120,000 to 130,000 tonnes. So it has continued the pattern since Lundin acquired majority ownership in this mine.
Speaker Change: On copper and molybdenum by that date.
Frederick Bell: And at the same time, Lundi actually increased their guidance here for the 2024 year to 124,000, to 135,000 tonnes of copper.
Speaker Change: At the same time, Lindsey and actually increase that guidance here for the 'twenty 'twenty four yet.
Speaker Change: 224 to 135000 tons of copper.
Frederick Bell: And you can see it was previously 120,000 to 130,000 tonnes. So, it has continued the pattern since Lundi acquired majority ownership in this mine.
Speaker Change: And you can see it was previously 120 to 130000 tonnes. So has continued the pattern central Indian acquired majority ownership in this mine.
Frederick Bell: I think we've seen, from a royalty holder's perspective, we've seen really good, consistent production.
Frederick Bell: I think we've seen, from a royalty holder's perspective, we've seen really good, consistent, production.
<unk> seen for a royalty holders perspective, we're seeing really good consistent production.
Frederick Bell: And we've actually seen really positive trends, both in terms of the direction they're taking the mine, in terms of the outlook and cost improvements, and also exploration drilling, which is an excellent point here, and which they are starting for the first time since the mine was constructed approximately 10 years ago.
Frederick Bell: And we've actually seen really positive trends, both in terms of the direction they're taking the mine, in terms of the outlook on cost improvements, and also exploration drilling, which is the next bullet point here, and which they have started for the first time since the mine was constructed approximately 10 years ago.
Speaker Change: And we've actually seen really positive trends both in terms of.
Speaker Change: The direction, we're taking the mine in terms of the outlook for cost improvements and also exploration drilling.
Speaker Change: Which is an extra point here.
Speaker Change: And which they have starting for the first time since the mine was constructed approximately 10 years ago.
Frederick Bell: So one of the things with a long mine life is you don't always prioritize, exploration when you build it and I think it's great to see that with the incoming operators they've started exploration and a very good outlook in terms of some of the targets they're looking at which I should emphasize are all as a royalty holder done at no cost to us.
Frederick Bell: So one of the things that aligns with a long mine life is you don't always prioritize exploration when you build it.
So one of the things at the mine with a long mine life. If you don't always prioritize exploration when you built it and I think it's great to see that with Lindsay coming in as operators.
Frederick Bell: And I think it's great to see that with Lundin coming in as operators, they've started exploration there and a very good outlook in terms of some of the targets they're looking at, which I should emphasize are all, as a royalty holder, done at no cost to us.
Speaker Change: Desktop that exploration that and probably a good outlook in terms of some of the targets that they're looking at which I should emphasize the rule as a royalty held that done at no cost to us.
Frederick Bell: So if we turn on to the next slide.
Speaker Change: So if we turn onto the next slide.
Frederick Bell: So if we turn on to the next slide there's a number of opportunities to see to see growth in the portfolio most notably and we mentioned DIVA first here and this had first production in June and we're expecting maiden gold sales in Q3 2024 subject to receipt of authorizations for processing at Saniola which is the mine they currently operate immediately adjacent to the DIVA deposit.
Frederick Bell: There's a number of opportunities to see growth in the portfolio, most notably, and we mentioned Diva First here, and this had first production in June, and we're expecting Maiden Gold sales in Q3 2024, subject to receipt of authorizations for processing at Saniola, which is the mine they currently operate immediately adjacent to the Diva deposit.
Speaker Change: There's a number of opportunities to see to see growth in the portfolio.
Speaker Change: Most notably in you mentioned D. The first half and this had first production in June and we're expecting maiden gold sales in Q3 2024.
Speaker Change: Subject to receipt of authorizations for protesting it should not be out of that which.
Speaker Change: As the mine. They currently operate immediately adjacent to the depot to pull it.
Frederick Bell: So I think we've seen a lot of work that Allied have completed since that transaction was announced at the end of last year. And they've built a whole road to site.
Speaker Change: So.
Frederick Bell: So we've seen a lot of work that Allied have completed since that transaction was announced at the end of last year and they've built a whole road to site, they declared maiden reserves and then they announced that in Q2 they started first mining there so very encouraging to see how fast Allied have been progressing it and they also announced an eight million dollar exploration program really focused on DIVA so that's again very encouraging for us to see resource growth that's already happened the mine being put into production and the future exploration potential that we're going to see from the drilling they're doing now.
Speaker Change: We've seen a lot of what our lineup completed since that transaction was announced at the end of last year and that builds a whole road decides they declare maiden reserves.
Frederick Bell: They declared made in reserves.
Frederick Bell: And then they announced that in Q2, they started first mining there.
And then they announce that in Q2, they started mining at.
Frederick Bell: So very encouraging to see how fast Allied have been progressing it.
Speaker Change: So very encouraging to see how fast ally to be progressing it and they also announced an 8 million dollar exploration program really focused on adoption.
Frederick Bell: And they also announced an $8 million exploration program really focused on DIVA.
Frederick Bell: So that's, again, very encouraging for us to see resource growth that's already happened, the mine being put into production, and the future exploration potential that we're going to see from the drilling there.
Speaker Change: Again, very encouraging perhaps to see results growth thats already happened in mind being put into production in the future.
Exploration potential.
Speaker Change: But we're going to see from the drilling that right now.
Frederick Bell: The second asset here Bonacro it's also operated by Allied Gold and as mentioned provided significant royalty revenue you can, see on that chart there from Q3 last year that it's materially increased and been averaging approximately a million dollars a quarter for the last three quarters as production has moved into the royalty area which we expect to continue in the coming years and Allied have also guided that they're expecting to access higher grade ore in 2025 and 2026 which should further drive production from the royalty area.
Frederick Bell: The second asset here, Bonacro, it's also operated by Allied Gold and, as mentioned, provided significant royalty revenue.
The second answer on it.
Speaker Change: Also have operated by cold.
Frederick Bell: You can see on that chart there from Q3 last year that it's materially increased and been averaging approximately a million dollars a quarter for the last three quarters as production has moved into the royalty area, which we expect to continue in the coming years.
Speaker Change: And as mentioned provided significant royalty revenue you can you can see on that chart back from Q3 last year.
Speaker Change: It's materially increased.
Speaker Change: <unk> been averaging approximately $1 million a quarter for the last three quarters as production has moved into the royalty area, which we expect to continue.
Frederick Bell: And Allied have also guided that they're expecting to access higher grade or in 2025 and 2026, which should further drive production from the royalty area.
Speaker Change: In the coming years and alloy have also guided that theyre expecting to access higher grade ore in 2025, and 2026, which should drive production from the royalty area.
Frederick Bell: And the last royalty we're talking about here is an asset that is not in production, but a really material PEA announced by Arizona and Sonoran on the Cactus Copper project. And that's moving it to a larger open pit operation from the previously envisaged underground project.
Speaker Change: And the last royalty we're talking about here is an asset that is not in production.
Frederick Bell: And the last royalty we're talking about here is an asset that is not in production but a really material PEA announced by Arizona-Sonoran on the Cactus Copper Project and that's, moving it to a larger open pit operation from the previously envisaged underground project.
Speaker Change: Really material.
Speaker Change: By hours have been shneur on the cactus copper project.
And.
Speaker Change: Moving it from.
Speaker Change: Yeah.
Speaker Change: Moving it to a larger open pit operation from the previously envisaged underground project.
Frederick Bell: The full technical report should be put out soon by the operator Arizona-Sonoran but the first indications for us are that we expect royalty to cover significantly higher tons which ultimately will drive in the future more revenue for us as a royalty holder and we should also note that this is prior to the Newton studies that are expected to come out later in the year that Arizona-Sonoran is doing in conjunction with Rio Tinto.
Frederick Bell: The full technical report should be put out soon by the operator, Arizona and Sonoran, but the first indications for us are that we expect royalty to cover significantly higher tons, which ultimately will drive in the future more revenue for us as a royalty holder.
Speaker Change: Full technical report.
Arizona: Should be put out soon by the operator, Arizona.
Arizona: First indications for us.
Arizona: We expect royalties to cover significantly higher tons.
Arizona: Which ultimate label or drive in the future and more revenue for us as a royalty held up and we should also impact sorry. We should also note that this is proud to be.
Frederick Bell: And we should also note that this is prior to the Newton studies that are expected to come out later in the year that Arizona and Sonoran are doing in conjunction with Rio Tinto.
Arizona: Newton studies that are expected to come out later in the yet.
Arizona: The Arizona insurance or in conjunction with Rio Tinto.
Frederick Bell: Moving on to slide seven here.
Yeah.
Arizona: Yeah.
Frederick Bell: Moving on to slide seven here.
Arizona: Moving on to slide seven.
Frederick Bell: Recently, other than other updates from the portfolio, we've recently completed the acquisition of two royalties. Really, the driver for this was the royalty on the Mactung tungsten project, which is recognised as one of the largest, highest-grade tungsten deposits in the world.
Arizona: Recently.
Frederick Bell: Recently other than other updates from the portfolio we've recently completed the acquisition of two royalties that really the driver for this was the royalty on the Mactung tungsten project which is recognized as one of the largest highest grade tungsten deposits in the world.
Arizona: On some other assets from the portfolio. We have recently completed the acquisition of two royalties.
Arizona: Really the driver so they switched the royalty on the Mack Tung tungsten project.
Arizona: Which is recognized as one of the largest highest grade Hudson deposits.
Frederick Bell: It's help rated by Farweed Metals, a company that we know and follow for a number of years and I'm very, pleased to have that, asset into the portfolio and following that we also had a few updates with existing royalties in the portfolio and you can see there that we mentioned the royalty we have in Rwanda which is currently being explored under a JV by Rio Tinto and I think they have just announced yesterday that they're expecting to start drilling on the project later this year which will be maiden drilling and exploration there and in Egypt we continue to hold a royalty and equity interest through Intimetals on one of the largest land packages in Egypt.
Arizona: Hello.
Frederick Bell: It's help rated by Fireweed Metals, a company that we know and follow for a number of years.
Arizona: It's helped created by far we'd metals.
Speaker Change: A company that we know are followed for.
Arizona: A number of a number of years.
Frederick Bell: I'm very pleased to add that, asset into the portfolio and, Following that, we also had a few updates with existing royalties in the portfolio. You can see there that we mentioned the royalty we have in Rwanda, which is currently being explored under a JV by Rio Tinto.
Arizona: And I think very pleased to have that.
Arizona: Assets into the portfolio.
Arizona: And.
Arizona: Following that.
Arizona: We also had a few updates with existing royalties in the portfolio.
Arizona: And you can see that.
Arizona: We mentioned the royalty we have in Rwanda.
Frederick Bell: I think they have just announced yesterday that they're expecting to start drilling on the project later this year, which will be Maiden Drilling and Exploration there.
Arizona: Which is currently being explored after a JV by Rio Tinto.
Arizona: And I think they have just announced yesterday that they are expecting to start drilling on the project later this year.
Arizona: Which will be made in drilling and exploration.
Frederick Bell: In Egypt, we continue to hold a royalty and equity interest through Intimetals on one of the largest land packages in Egypt. There was a Maiden drill program completed on the project with encouraging results and we're looking forward to a second drill program, which is timed for Q3 this year. We're well positioned to benefit through any discovery success there with uncapped royalty interest, continuing equity exposure and milestone payment on success.
Arizona: And.
Arizona: In Egypt, we continue to hold a royalty and equity interests through into metals on one of the largest land packages in Egypt that was.
Frederick Bell: There was a maiden drill program completed on the project with encouraging results and we're looking forward to a second program which is timed for Q3 this year.
Arizona: A major drill program completed on the project with encouraging results.
Arizona: We're looking forward to the second drill program, which is time for Q3 this year.
Frederick Bell: We're well positioned to benefit through any discovery success there with uncapped royalty interest, continuing equity exposure and milestone payment on success.
Arizona: We are well positioned to benefit for any discovery success lag with uncapped royalty interests, continuing next exposure and milestone payments on success.
Frederick Bell: And then lastly we received an additional payment from the Ming stream that we had and so that takes the total consideration we're expecting from the asset to about 12.4 million US compared to the just over 11 million carrying value at the date of disposal.
Frederick Bell: And then lastly we received an additional payment from the main stream that we have. And so that takes the total consideration we're expecting from the asset to about 12.4 million US compared to the just over 11 million current value at the date of disposal.
Arizona: And then lastly, we received an additional payment.
Arizona: The main stream that we have.
Arizona: And so that takes the total consideration we're expecting from from the outset to about $12 4 million U S.
Arizona: Compared to just over 11 million carrying value of the data the cycle. So that's been a few updates in the portfolio.
Frederick Bell: So there's been a few updates in the portfolio and I think we're anticipating a few new additions to the portfolio moving forwards as well.
Frederick Bell: So there's been a few updates in the portfolio and I think we're anticipating a few new additions to the portfolio moving forward.
Arizona: And I think we're anticipating a few new additions to the portfolio moving forward as well.
Frederick Bell: In terms of the portfolio makeup, I will just very quickly run through this and then I think I'll hand over to Dave to go through the rest. But look, what we have put in place is, I think, a really well diversified portfolio in terms of our assets.
Frederick Bell: In terms of the portfolio makeup, I will just very quickly run through this and, then I think I'll hand over to Dave to go through the rest.
Arizona: In terms of in terms of the portfolio makeup.
Speaker Change: Just very quickly run through that.
Frederick Bell: But look, what we have put in place is I think a really well diversified portfolio in terms of our assets. It also our commodity mix, we're remaining precious metals focused but with a significant exposure to Copper.
Speaker Change: I think I'll hand over to Dave to go through the rest, but look what we have put in place I think we're really well by bus I portfolio in terms of.
Frederick Bell: It also, our commodity mix, we're remaining precious metals focused, but with a significant exposure to copper.
Dave: Our assets.
Dave: Also our commodity mix, we are remaining precious metals focused.
Dave: Significant exposure to copper.
Frederick Bell: And in terms of jurisdictions, we're really anchored by Australia and Chile as our two biggest jurisdictions. I think it's a portfolio that has a very good blend in terms of diversified revenue, also a clear focus on gold and copper as the two primary commodities.
Frederick Bell: And in terms of jurisdictions, we're really anchored by Australia and Chile as our two, biggest jurisdictions.
Dave: In terms of jurisdictions, we really anchored by Australia.
Dave: Chile.
Dave: As our two biggest jurisdictions.
Speaker Change: So he gets up.
Speaker Change: Portfolio, that's a very good blend in terms of diversifying revenue.
Frederick Bell: So I think it's a portfolio that has a very good blend in terms of diversified revenue, also a clear focus on Gold and Copper as the two primary commodities.
Speaker Change: So.
Speaker Change: A clear focus on gold and copper has two primary commodities.
Frederick Bell: So with that I will hand over to Dave to take you through the next couple of slides.
Frederick Bell: So with that, I will hand over to Dave to take you through the next couple of slides.
Speaker Change: So with that I will hand over to Dave to take you through the next couple of slides.
David Baker: Perfect, thanks Fred.
David Baker: Perfect, thanks Fred.
Dave: Perfect. Thanks, Brad.
David Baker: Just in terms of the financial overview, GEOs for the quarter came in at $2,211 oz translating to $5.2 million of adjusted revenue. That's up 10% year-on-year.
Fredric Bell: The second quarter, look, the real highlight here is we had a strong relative revenue of 2.8 million and adjusted revenue, so that is a term to incorporate cash runes, but a adjusted revenue of 5.2 million US, which is about a 10% increase on Q2 2023.
Dave: Just in terms of the financial over here.
David Baker: Just in terms of the financial overview, GEOs for the quarter came in at $2,211 ounces, translating to $5.2 million of adjusted revenue. That's up 10% year-on-year. Revenue for H1 was $9.9 million and that's up 16% year-on-year.
Dave: For the quarter came in at 2211.
I'm, just translating to $5 $2 million of adjusted revenue up 10% year on year.
Dave: Revenue to H one.
Speaker Change: We spent 9 million U S dollars and that's up ticketing.
David Baker: I think we're a little bit unlucky just in terms of the timing of production versus sales at some, of our key royalties, but we'd expect that to pick up in Q3. This translated into a moderate increase in EBITDA for the quarter, but clearly a material increase in EBITDA compared with H1 2023.
Speaker Change: Year on year, I think we're a little bit unlucky just in terms of the timing of production versus the health of some of our key royalties but.
Speaker Change: But we would expect that to pick up in Q3.
Speaker Change: This translated into a modest increase in EBITDA for the quarter, but clearly a material increase in EBITDA compared with the H, one and 2023.
David Baker: The reason for that modest increase in Q2 is we've tidied up some of the non-cash accruals in the period and then we're going to release those over the remainder of 2024 and 2025.
Speaker Change: The reason for that with a modest increase in Q2 is that tied it up some of the noncash accruals in the period.
Speaker Change: And then we're going to release those at the remainder of 2012 2025.
David Baker: And then also we've had some changes within the management team and some one-off costs associated, with the disposal of the exploration business.
Speaker Change: And then also we've had some changes within the management team.
David Baker: So we'd expect to get those margins to improve over time and we'll talk to that later.
Speaker Change: One off costs associated with the disposal of the exploration business. So I would expect to get those margins to improve over time.
David Baker: Operating cash flow likewise affected by one-off costs around departure costs of CD management and also the timing of audit accounting and tax invoices that we go through. I'd expect that to normalise significantly through H2.
Speaker Change: And we'll talk to that later.
Speaker Change: Operating cash flow likewise affected by one off costs around departure causes of senior management.
Speaker Change: I will say the timing of audit accounting and tax invoices that we go through.
Speaker Change: I expect that to normalize significantly through H two.
David Baker: As a result of the growth in the business and optimisations post merger and disposal, of the exploration business, net loss for the quarter is over 90% lower than this time last year.
Speaker Change: I would note that as a result of the growth in the business and the optimization post merger and disposal of the exploration business that net loss for the quarter is over 90% lower than this time last year.
David Baker: I look forward to that improving in the future.
Speaker Change: And I look forward to that improving in the future.
Speaker Change: Yeah.
David Baker: An underestimated asset to the company is the expected $19.2 million of milestone payments, that we are expecting to come through 2024 and early 2025, and that will significantly bolster our financial position. In H1 2024, we've already received $0.3 million in cash and $2.3 million in Firefly equity, that we have realised.
Speaker Change: Thinking underestimated asset to the company is the expected $19 $10 million of milestone payments.
Speaker Change: We're expecting to come through 2020 for nearly 25.
Speaker Change: That will significantly bolster our financial position.
Speaker Change: In April 2024, we've already received.
Speaker Change: $1.3 million in cash and $2.
Speaker Change: Q3 million U S dollars and Firefly equity that we have we have realized.
David Baker: We've also received significant cash as part of the sale of Canyon Resources shares and, our first discovery bonus this year from SKO.
Speaker Change: Both of those states.
Speaker Change: Significant cash as part of the sale of Canyon results suggest.
Speaker Change: And at first.
Speaker Change: Discovery benefits here from S K.
David Baker: Looking forward to H2, we would expect to receive $1 million upon reaching first production, at Deba that Allied has recently announced that first production has taken place, so we expect that to occur in H2 2024.
Speaker Change: Looking forward to H two.
Speaker Change: We would expect to save $1 million on reaching first social Roxanne gave up the allied and the recently announced the first production.
Speaker Change: Taking place I would expect that TIK Tok and H H.
Speaker Change: <unk> hundred 20024.
David Baker: And we're expecting a deferred $400,000 from the sale of the Egyptian licences.
Speaker Change: And we're expecting a dip.
Speaker Change: About $400000 from the sale of the Egyptian licenses.
David Baker: But in H1 2025, we see material further payments, including nearly $10 million in cash and Firefly, equity for the final payment of the Ming Stream settlement.
Speaker Change: But an H, one and 2025, we see material further payments, including a $10 million in cash and fly Fi in equity.
The payment of the mainstream settlement there is a small residual amount there that we could possibly be entitled to that's where.
David Baker: There is a small residual amount there that we could possibly be entitled to, so that, number could get a little bit larger.
Speaker Change: That number could get a little bit larger.
David Baker: We also see $10 million of production from contingent payments from Deba upon reaching, 100,000 ounces of production, and nearly $10 million for the buy-down, that partial buy-down of the Cactus royalty, all in all, $19.2 million of water payments to the middle of next year.
Speaker Change: We also see $10 million of production from contingent.
Speaker Change: Contingent payments from data upon reaching 100000 ounce production.
Any like $2 million for the buy down that partial bite out of the cactus royalty.
Speaker Change: All in all $19 $10 million of one off payments out to.
Speaker Change: In the middle of next year.
Speaker Change: [noise] tends to trend for the business.
David Baker: In terms of trends for the business, GEOs are relatively flat, but that's built into, the relative performance of copper versus gold, so that means similar or even higher copper-based revenue from Casa Ronas results in fewer GEOs as the gold price rises.
Speaker Change: T is relatively flat.
Speaker Change: That's built into the relative performance of copper versus gold.
Speaker Change: So that means similar or even higher copper base revenue from Catharina, resulting <unk> as the gold price rises obviously that and if it's the other 70% of our royalties.
David Baker: Obviously, that benefits the other 70% of our royalties.
David Baker: Revenue for H1 was $9.9 million and that's up 16% year-on-year.
David Baker: We are, in terms of guidance, as Fred said earlier, with $9.9 million for the half-year. We're expecting revenue towards the top end of our adjusted revenue guidance of $20 to, $23.3 million, and that's driven by first royalty revenue from Deba and continued strong gold prices.
Speaker Change: We off in terms of guidance as Fred said earlier.
Speaker Change: $909 million for the half year, we're expecting revenue towards the top end of our adjusted revenue guidance of 20% to 20.
David Baker: I think we're a little bit unlucky just in terms of the timing of production versus sales at some of our key royalties, but we'd expect that to pick up in Q3.
Fredric Bell: I believe the second highest adjusted revenue number quarterly in the company history and as we continue to grow from 2023, 2024, going into 2025, we expect to continue to get really solid courses growing along that period.
David Baker: This translated into a moderate increase in EBITDA for the quarter, but clearly a material increase in EBITDA compared with H1 2023, would note that as a result of the growth in the business and optimizations post merger and disposal of the exploration business that net loss for the quarter is over 90% lower than this time last year and I look forward to that improving in the future.
David Baker: I think an underestimated asset to the company is the expected $19.2 million of milestone payments that we are expecting to come through 2024 and early 2025, and that will significantly bolster our financial position. In H1 2024, we've already received, of $0.3 million in cash and $2.3 million in Firefly Equity that we have realised.
Speaker Change: $23 $3 million.
Speaker Change: And that's driven by first royalty revenue from <unk> and continued strong gold prices.
Fredric Bell: In terms of adjusted, EBITDA stands at 3.4 million US dollars, which is about 4% from Q2 2023, and margins improving towards pre-mage levels.
David Baker: In terms of margins, as I said, they're definitely on the right track following the merger and, the monetisation of the exploration business over the last 12 months, and I think we'd look to get that back towards pre-merger levels of between 70% and 80%.
Speaker Change: In terms of margins.
Speaker Change: I said theyre definitely on the right track following the merger.
Speaker Change: Monetization of the exploration business over the last 12 months.
Fredric Bell: In terms of gold equivalent ounces, that was Geo's, we had 2,211 ounces and for the half year, at the end of June, that is 4,415 ounces. We expect to meet the lower end of our guidance on a Geo basis of 10,000 to 11,700 gold equivalent ounces and that is driven in second half of the year by first royalty revenue, we are anticipating for diva in Q3 and partially offset by lower copper prices compared to gold prices at cash runes. I think worth mentioning for that, that is for a gold equivalent ounce term.
Speaker Change: And I think we'd look to get that back towards pre merger levels of between 70 and 80%.
Fredric Bell: In terms of revenue, we get the same, it is just a lower end of gold equivalent ounce basis when we are looking at copper from cash runes.
Speaker Change: Yeah.
David Baker: I think, as well, I just would like to draw attention to our attractive valuation versus, peers for a pure-play gold and royalty, gold and copper investment, and also draw attention to the ongoing theme in the royalty space around M&A and consolidation.
Speaker Change: I think as well, but just would like to draw attention to our attractive valuation versus peers for pure play Golden royalty copper copper and gold and copper and attachment.
Speaker Change: And also draw attention to the ongoing theme in the royalty say around M&A and consolidation.
David Baker: We've seen significant consolidation since 2021.
David Baker: We've also received significant cash as part of the sale of Canyon Resources shares, and a first discovery bonus this year from SKO.
David Baker: Looking forward to H2, we would expect to receive a million dollars upon reaching first production debuff that Allied have recently announced that first production, has taken place. We expect that to occur in H2 2024.
Speaker Change: Think of significant consolidation in 2021, I've got to put it feels that the names that.
David Baker: We've put a few of the names that have been acquired by mid-tier royalty names on the, right-hand side, and I think the next time we'll have to put this slide together, we'll put Trident from the left-hand box into the right-hand box, as they've just been acquired by Deterra.
Speaker Change: <unk> had been acquired by by mid tier royalty names on the right side and I think the next time, we'll have to put this slide together will put tried it.
Speaker Change: From the from the left hand box to the right hand box is that just being acquired by Tara I.
David Baker: I guess, whilst that reduced competition helps us deal flows, it also shows that larger royalty, companies are willing to pay real premiums for high-quality gold.
Speaker Change: I guess, what's that reduced competition helps us the deal close. It also shows the larger royalty companies are willing to play a real premium for high quality royalty companies.
Operator: Thank you very much, gentlemen, for a great update.
Speaker Change: Yeah.
Speaker Change: And with that I'm going to pass it back to Fred for for Q&A.
Fred: Yes, Thank you, Dave and John if there's any questions yeah.
Fred: Well. Thank you very much yes. Thank you very much gentlemen for a great update we certainly have a full international helps with US. This morning. So thank you to the audience for taking the time to participate on this call.
Operator: We certainly have a full international house with us this morning, so thank you to the audience for taking the time to participate on this call.
Operator: Now before we take questions, just a reminder to please place the questions that you do have into the Q&A tab located at the top of your screen.
Fred: Before we take questions.
Speaker Change: Just a reminder to please place the question that you do have into the Q&A tab located at the top of your screen.
Operator: And the first question for today is, given the low stock price, sorry to have such a difficult question for the first one, we're going to start.
Speaker Change: And the first question for today.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Given the low stock price.
Dan: Sorry, Dan.
Speaker Change: Such a difficult question for the stock for the first what we're gonna we're gonna start given the low stock price when can we expect management to purchase some shares great question.
David Baker: And we're expecting a deferred $400,000 from the sale of the Egyptian.
Operator: Given the low stock price, when can we expect management to purchase some shares?
David Baker: But in H1 2025, we see material further payments including nearly $10 million in cash and fly-fired equity for the final payment of the Ming stream settlement.
David Baker: Obviously that benefits the other 70% of our revenue.
David Baker: There is a small residual amount there that we could possibly be entitled to, so that number could get a little bit larger.
David Baker: We are, in terms of guidance, as Fred said earlier, with $9.9 million for the half year. We're expecting revenue towards the top end of our adjusted revenue guidance of $20 to $23.3 million, and that's driven by first royalty revenue from DIVA and continued strong gold.
David Baker: We also see $10 million of production from contingent payments from DeVA upon reaching 100,000 ounces of production, and nearly two million dollars for the buy-down, that partial buy-down of the Cactus Royalty, all-in-all $19.2 million of wire up payments to the middle of next year.
David Baker: In terms of trends for the business, GEOs are relatively flat, but that's built into the relative performance of copper versus gold.
David Baker: So that means similar, or even higher, copper-based revenue from caserones results in fewer GEOs as the gold price rises.
Frederick Bell: Great question.
David Baker: In terms of margins, as I've said, they're definitely on the right track following the merger and the monetisation of the exploration business over the last 12 months.
Frederick Bell: Yeah, look, a very good question.
Speaker Change: Yes, very good question I think unfortunately.
Speaker Change: We often.
Speaker Change: Deemed inside for various reasons and sometimes that is as it is currently due to the accounts. So there was a two week period before the accounts are out.
Speaker Change: We're not allowed to trade and often before that.
Speaker Change: It is due to.
Speaker Change: Potential transactions, we're working on so we've actually been in a pretty prolonged period.
David Baker: And I think we'd look to get that back towards pre-merger levels of between 70 and 80.
Frederick Bell: I think, unfortunately, we often are deemed inside, for various reasons, and sometimes that is as it is currently due to the accounts.
Speaker Change: Restricting our ability to buy shares I think all else being equal.
Speaker Change: In theory, we should be in the clear.
Speaker Change: From 24 hours from today, so I think effectively from tomorrow.
Speaker Change: Obviously.
Speaker Change: And I thought is that it's often subject I think.
Speaker Change: Where we sit today look I would on a personal level I think.
Speaker Change: We're extremely well.
David Baker: I think as well, I just would like to draw attention to our attractive valuation versus peers for a pure play gold and royalty copper and gold and copper investment.
David Baker: And also draw attention to the ongoing theme in the royalty space around M&A and consolidation. We've seen significant consolidation since 2021.
We're extremely undervalued and I think that Tom.
Frederick Bell: So there is a two-week period before the accounts are out where we're not allowed to trade, and often before that it is due to potential transactions we're working on.
Speaker Change: Without the restrictions of insider period, and trading regulations I think.
Frederick Bell: So we've actually been in a pretty prolonged period restricting our ability to buy shares. I think all else being equal, you know, in theory, we should be in the clear from 24 hours from today, so I think effectively from tomorrow.
Frederick Bell: But obviously, you know, that is often subject, I think, where we sit today.
Frederick Bell: Look, I would, on a personal level, you know, I think we're extremely well, we're extremely undervalued.
Speaker Change: Definitely it could be an attractive time to acquire.
Frederick Bell: And I think that, you know, without the restrictions of insider period and trading, relations, I think definitely it would be an attractive time to acquire shares, you know, both for individuals and on a personal level.
Speaker Change: <unk> shops.
Speaker Change: For individuals.
Speaker Change: Some level.
Frederick Bell: Thank you.
David Baker: We've put a few of the names that have been acquired by mid-tier royalty names on the right-hand side.
Speaker Change: Thank you.
David Baker: And I think the next time we'll have to put this slide together, we'll put Trident from the left-hand box into the right-hand box as they've just been acquired by doTERRA.
David Baker: And with that, I might pass it back to Fred for Q&A.
Fredric Bell: In terms of the balance sheet, we have continued the strength of the balance sheet over the course of the year. This is something we said we would do last year, and we repayed 5 million in Q1, and we repayed another 5 million in Q2, taking a total repayment to 2024 year-to-date to 10 million US dollars, and the quarter end we held approximately 6.5 million in cash, and we retained approximately 20 million of undrawn debt that is available for transactions, which along with free cash flow generation and expected milestone payments, giving us a lot of capacity for future acquisitions.
David Baker: I guess whilst that reduced competition helps us to deal close, it also shows that larger royalty companies are willing to pay real premiums for high quality.
Speaker Change: Have you considered paying a dividend.
Frederick Bell: Have you considered paying a dividend? So the short answer is yes, and I think we actually said earlier this year that we were, looking, we are continuing to look internally at a number of different options, and they incorporated paying down the debt, which we've paid down $10 million all so far this year, and also initiating a dividend, and also potentially a normal course issuer bid. So putting in place the ability to buy back shares in the market.
Fredric Bell: And those milestone payments across 2024 and 2025 would start to be approximately $19 million US dollars to come in over that period.
Speaker Change: So short answer is yes, and I think we actually said.
Speaker Change: This year that we were looking.
Speaker Change: Continuing to look in time, there are a number of different options.
Speaker Change: They incorporated paying down the debt, which we paid down 10 million or so for all of us here.
Speaker Change: And also initiating a dividend and also potentially a normal course issuer bid.
So putting in place the ability to buy back shares in the market. So we have been.
Frederick Bell: So we have been evaluating, internally all of those, and I think our anticipation is, as our expectation is, that as we continue to generate free cash flow and we have more money ability to deploy, if we're not putting that into acquisitions, we will be putting it into paying down the debt or initiating a dividend or doing a buyback. So all three of those have been on the cards, and we've started in a material way on the debt side, which also decreases our cost of debt going forward, improves our margin, and improves our ability to then look at options like dividends and buying back shares in the future.
Speaker Change: Being evaluate change timely all of those and I think our anticipation is as our expectation is that that will be continue to generate free cash flow and we have more money our ability there to the point, if we're not putting that into acquisitions.
Speaker Change: We'll be putting it into paying down the debt.
Speaker Change: Or initiating a dividend or doing a buyback. So all three of those have been on the cards and when I started in a material way on the debt side, which we'll send it decreases our cost of debt can pull which improves our margin and improves our ability.
Speaker Change: To then look options like dividends and buying back shares Wuxi, China, social Thomas or again is it.
Frederick Bell: So short answer again is all of those under consideration, and we've been active on the first one, paying down the debt so far this year.
All of those under consideration.
Speaker Change: We've been active on the <unk>.
Speaker Change: Last one paying down the debt cytology.
Frederick Bell: Can you walk us through some of the opportunities that you're seeing without spilling any state secrets?
Fredric Bell: The two assets that are really going to be driving growth for us in 2024 and continuing in 2025 are Bonico and Deba. Bonico has already started to demonstrate that. We had $1.8 million in revenue in the first half of the year, which is a material increase on the approximately 300,000 we have in the equivalent period in 2023.
Frederick Bell: Yep, thank you Dave and Joanne if there's any questions.
Speaker Change: Thank you the next ones the two part question.
Speaker Change: So can you walk us through some of the opportunities that youre seeing with that spilling any state secrets of course.
Operator: Thank you very much.
Frederick Bell: And are you interested in continuing to branch out into critical metals or base metals as you have recently with tungsten?
Speaker Change: And are you interested in continuing to branch into critical metals or base metal as you have recently with tungsten.
Frederick Bell: I might answer the second part of that question first on the commodity mix and then pass over to Dave to talk to some of the opportunities that we're seeing and looking at.
Operator: Yes.
Speaker Change: So I might answer the second part of that question first on the commodity next and then pass over to Dave to talk to some of the opportunities that we're seeing in Macau.
Operator: Thank you very much, gentlemen, for a great update.
Operator: We certainly have a full international house with us this morning.
Operator: So thank you to the audience for taking the time to participate on this call.
Operator: Now, before we take questions, just a reminder to please place the questions that you do have into the Q&A tab located at the top of your screen.
Operator: And the first question for today is.
Fredric Bell: And at Deba, I like gold.
Speaker Change: I think in terms of the commodity.
Operator: Given the low stock price, Sorry to have such a difficult question for the first one.
Speaker Change: Approximately so call it 75%.
Operator: We're going to start.
Speaker Change: <unk> precious metals and 25% order of magnitude. So we really are focused on maintaining a balance similar to that.
Dave: Sometimes where we have opportunities.
Speaker Change: What.
Speaker Change: Particularly value opportunities such as what we saw with the tungsten.
Speaker Change: Earlier this year, we will take advantage of those and I would remind some of our shareholders and investors who maybe aren't familiar.
Fredric Bell: The operators have announced that they can make comments mining and we're expecting a royalty revenue to start coming in from Q3.
Operator: Given the low stock price, when can we expect management to purchase some shares?
Frederick Bell: Great question.
Frederick Bell: Yeah, look, a very good question.
Frederick Bell: I think, unfortunately, we often are deemed inside for various reasons, and sometimes that is, as it is currently due to the accounts.
Speaker Change: One of the early royalties to be acquired was a minimal signs royalty.
Frederick Bell: So there is a two week period before the accounts are out, where we're not allowed to trade. And often before that, it is due to potential transactions we're working on. So we've actually in a pretty prolonged period, restricting our ability to buy shares.
Frederick Bell: I think all else being equal, in theory, we should be in the clear from 24 hours from today.
Speaker Change: The commodity wise wasn't necessarily what we're looking for but it delivered a 40% IRR.
Speaker Change: On an asset that went into production and that was really good quality. So I think for US focuses on gold and copper as a primary commodities, but where we see exceptional value and where we see a real opportunity to drive generate returns.
Frederick Bell: I think in terms of the commodity, we're approximately still, call it 75% gold, precious metals and 25% copper, order of magnitude.
Frederick Bell: So I think effectively from tomorrow.
Fredric Bell: In terms of the deal pipeline, look at it remains, it remains very robust with a lot of opportunities we're looking at both on an individual acquisition basis, but also in terms of portfolios and consolidation discussions across the junior royalties basis.
Frederick Bell: So we really are focused on maintaining a balance similar to that.
Frederick Bell: But obviously, that is often subject, I think, where we sit today.
Frederick Bell: Sometimes where we have opportunities elsewhere, particularly value opportunities, such as what we saw with the tungsten asset earlier this year, we will take advantage of those.
Frederick Bell: Look, I would, on a personal level, I think we're extremely well.
Frederick Bell: And I would remind some of our shareholders and investors who maybe aren't familiar that one of the early royalties we acquired was a mineral science royalty that commodity wise wasn't necessarily what we're looking for, but it delivered a 40% IRR on an asset that went into production that was really good quality.
Frederick Bell: We're extremely undervalued and I think that, you know, without the restrictions of insider period and trading regulations, I think definitely it would be an attractive time to acquire shares, both for individuals and on a personal level.
Fredric Bell: So in some, you know, it's been a good quarter in terms of revenue with strength and the balance sheet over the course of this year today.
Speaker Change: We're big enough company now that we can do transactions like the tungsten <unk>.
Speaker Change: Acquisition, very recently that won't change significantly the weighting of the portfolio.
Speaker Change: We think we'll deliver a really different times going forward and maybe with that I'll pass over to Dave to talk about some of the deals that were being account.
Frederick Bell: Thank you.
Frederick Bell: Have you considered paying a dividend? So, the short answer is yes, and I think we actually said earlier this year that we were looking, we are continuing to look internally at a number of different options that they incorporated paying down the debt, which we've paid down 10 million all so far this year, and also initiating a dividend, and also potentially a normal course issuer bid. So putting in place the ability to buy back shares in the market.
Frederick Bell: So we have been evaluating internally all of those, and I think our anticipation is, as our expectation is, that as we continue to generate, free cash flow and we have more money ability to deploy if we're not putting that into acquisitions, we will be putting it into paying down the debt or initiating a dividend or doing a buyback. So all three of those have been on the cards and we've started in a material way on the debt side which also decreases our cost of debt going forward, improves our margin and improves our ability to then look at options like dividends and buying back shares in the future.
Dave: And I'm looking at currently.
Fredric Bell: And we expect to continue to do that where the opportunity is there.
Dave: Thanks, Brad Yeah, I'd say, just reading, what Fred said I think Gulf Gulf is very important to us. It's important that adult focused how do we also very very strong beliefs and copper in the long term fundamentals of that.
Dave: But we will go outside those parameters are very much on our tons basis, although it could be we look at everything sorry, whether that individual royalties, whether thats a package of royalties as part of a larger or smaller portfolio.
Frederick Bell: So short answer again is all of those under consideration and we've been active on the first one paying down the debt so far this year.
Frederick Bell: Thank you.
Frederick Bell: Now the next one's a two-part question.
Dave: That's corporate corporate deals as well.
Frederick Bell: So I think for us, the focus is on gold and copper as the primary commodities.
Frederick Bell: But where we see exceptional value and where we see a real opportunity to generate returns, we're a big enough company now that we can do transactions like the tungsten acquisition very recently that won't change significantly the weighting of the portfolio, but we think will deliver really good returns going forwards.
Dave: And again, just really trying to target the best the best quality.
Dave: Assets with best quality operators and the best quality jurisdictions.
Frederick Bell: So can you walk us through some of the opportunities that you're seeing, without spilling any state secrets of course, and are you interested in continuing to branch out into critical metals or base metals as you have recently with tungsten?
Dave: It will go very very well.
Frederick Bell: So I might answer the second part of that question first, on the commodity mix, and then pass over to Dave to talk to some of the opportunities that we're seeing and looking at. I think in terms of the commodity, look, we're approximately still, call it 75% gold, precious metals, and 25% copper, order of magnitude.
Dave: <unk> that I think still the focus is definitely on gold.
Frederick Bell: So we really are focused on maintaining a balance similar to that.
Frederick Bell: Sometimes where we have opportunities elsewhere, particularly value opportunities, such as what we saw with the tungsten asset earlier this year, we will take advantage of those.
Frederick Bell: And I would remind some of our shareholders and investors who maybe aren't familiar, that one of the early royalties we acquired was a mineral science royalty, that commodity-wise wasn't necessarily what we're looking for, but it delivered a 40% IRR on an asset that went into production that was really good quality.
Dave: Near term production as possible.
Dave: Obviously looking at copper and.
Dave: Maybe on the metals on very much on the combined.
Dave: Kind of basis.
Dave: Okay.
Frederick Bell: But we will go outside those parameters very much on a returns basis.
Dave: Excellent.
Speaker Change: Next question what are your expectations for LIBOR.
Speaker Change: And what is focus doing on this project as their disclosure is not the best.
Speaker Change: Yes.
Frederick Bell: Locally, we look at everything.
Frederick Bell: So whether that's individual royalties, whether that's a package of royalties as part of a larger or smaller portfolio, whether that's corporate corporate deals as well.
Speaker Change: Yes, so look maybe a quick background on <unk> for those who aren't familiar it's.
Frederick Bell: And again, just really trying to target the best quality assets for the best quality operators and the best quality jurisdictions.
Frederick Bell: So, yeah, we've got a very, very broad remit, but I think still the focus is definitely on gold as near term production as possible with obviously looking at copper and maybe other metals very much on a deep discounted basis.
Speaker Change: A significant land.
Speaker Change: Land package that we have in western Australia.
Speaker Change: <unk>.
Speaker Change: Just to the north of Us major Goldfields mine and to the east.
Speaker Change: <unk> not.
Speaker Change: Another gold mine operated by Genesis minerals. So it's it's a historical mining town has been mined historically, we bought royalties that.
Speaker Change: Covering a number of deposits the principal ones being basically creek.
Speaker Change: And Lance field and two slightly different deposits.
Speaker Change: The previous high grade oxide near surface on within trucking distance to know.
Speaker Change: And lunch sales was a top 10.
Speaker Change: The ground gold mine in Western Australia in the 19 nineties 10000 ounces per vertical meter are really significant mine.
Speaker Change: It hasn't had any exploration since 1999.
Speaker Change: So not royalty is not producing at present.
And all of you. The primary reason that it's probably not producing as because the operator aspects focus minerals.
Speaker Change: As a majority owned by Chinese car Statesville with Jumbo and they have recently built and started mining.
Gulfport effect coming out of Western Australia, who got it I'm sorry to labor it hasnt been a focus.
Frederick Bell: So I think for us, focus is on gold and copper as the primary commodities, but where we see exceptional value and where we see a real opportunity to generate returns, we're a big enough company now that we can do transactions like the tungsten acquisition very recently that won't change significantly the weighting of the portfolio, but we think will deliver really good returns going forwards.
Speaker Change: I think for US we see that as one of the assets that in due course.
Speaker Change: It's going to be really material and really valuable and I think in the homes, particularly if the right operator.
Operator: Excellent.
Speaker Change: Lumps failed.
Speaker Change: How has the potential to be.
Speaker Change: Very material.
Speaker Change: Mine going into the future, it's certainly wasn't so for us.
Speaker Change: Youre right limited disclosure from the operator language RSV.
Speaker Change: Okay.
Speaker Change: Mike.
Speaker Change: That said some of the team we're just in.
Speaker Change: In Calgary the recently at a conference and we were able to get some updates that from.
Speaker Change: From operators in the region on the outlook on how they see it and I had coffee with current gold prices.
Speaker Change: That answer is increasingly attractive.
Speaker Change: And in demand from some of the mid tier Australian coal miners.
Speaker Change: Thank you and current gold prices indeed.
Speaker Change: Next question are there additional opportunities to increase your ownership in F. L M, California.
David Baker: And maybe with that, I'll pass over to Dave to talk about some of the deals that we've been looking at.
Speaker Change: And maybe I can pass this question over to Dave as well just to run through them.
David Baker: Gold is very important to us, it's important to the gold folks.
David Baker: We also have very, very strong beliefs in copper and the long-term fundamentals there.
Speaker Change: Absolutely great question.
Dave: You know we hold.
We hold our shares in southern California, but directly and then also with our joint venture with out with our friends at Amex.
Amex: Amex also have have.
Amex: <unk> done a deal on some of those shares with Franco Nevada.
Amex: Clearly a royalty that's in great demand and we see now under Greg New ownership with the London.
Amex: London mining, taking a telstra to 70% there is a small amount of SLM.
California railroad's still.
David Baker: But we will go outside those parameters very much on a returns basis.
David Baker: A little glibly, we look at everything. So whether that's individual royalties, whether that's a package of royalties as part of a larger or smaller portfolio, whether that's corporate deals as well.
Speaker Change: But yeah, we're not we're not haven't been able to get there on a valuation that we're comfortable with but certainly something that we are always with you.
David Baker: It's, and again, just really trying to target the best quality assets for the best quality operators and the best quality.
David Baker: So yeah, we've got a very, very broad remit, but I think still the focus is definitely on gold, as near-term production as possible, with obviously looking at copper and maybe other metals very much on this to combine them on a deeper scale.
Operator: Excellent.
Operator: Next question.
Speaker Change: Thank you David.
Speaker Change: Next question.
Fredric Bell: Bonico has really started to deliver growth versus 2023 and Deba coming on in the second half of this year.
Speaker Change: 100% of the expected 2025, and 2026 production at <unk>.
Operator: What are your expectations for Laverton and what is FOCUS doing on this project as their disclosure is not the best?
Frederick Bell: Yeah, so look, maybe a quick background on Laverton for those who aren't familiar. It's a significant land package that we have in Western Australia and it is just to the north of a major gold fields mine and to the east of another gold mine operated by Genesis Minerals.
Speaker Change: <unk> be on your royalty lands.
Frederick Bell: And I think in the hands particularly of the right operator, Lancefield has the potential to be a very material mine going into the future.
Fredric Bell: And we continue to the fact that conditions are severe.
Speaker Change: Yeah, Yeah, absolutely yeah, so the rail the rail.
Fredric Bell: So if we then turn to slide five.
Speaker Change: Change in <unk> is that Allied has moved from a mining the satellite pits, mostly key right outside of outside of the area. Our royalty is a an area geographic area around five which is in the in the main pit and then before you saw that material uplift in Q4 of 2020.
Fredric Bell: Two key roles to thrust our color window in Australia and Catherine and Chile.
Fredric Bell: Color window operated by.
Fredric Bell: Capricorn metals and it was a record revenue and a record quarter in terms of revenue at color window partly driven by really the gold price to that.
Speaker Change: Three we've only really been getting material.
Speaker Change: Development ore from scenarios they were pushing back the open pit now they are.
Fredric Bell: Capricorn the operator are guiding to 110 to 120,000 ounces in the next 12 months and really importantly for us is Capricorn also announced the commencement this month or the study on a major expansion.
Speaker Change: Nearly entirely into the main pit yesterday, we're expecting to see.
Fredric Bell: Two to two and a half million times premium at the line, and that's approximate 50% increase in throughput.
Speaker Change: Most of most of <unk> production coming from the royalty area and I think encouragingly the commentary that we've seen from ally.
Fredric Bell: So they're looking to make that study completed by the end of this calendar year.
Speaker Change: As they pushed back they're getting they're uncovering increasingly high grade material, so there's going to be a material.
Fredric Bell: And we should have further news on that, but that's one of our largest royalties.
Speaker Change: Contributed to our earnings for the next couple of years.
Speaker Change: Excellent.
Operator: Next question, what are your expectations for Laverton?
Speaker Change: Next question regarding prospect generation and is it part of the strategy going forward or is that something that is now in the past.
Frederick Bell: It certainly was in the past.
Frederick Bell: And what is FOCUS doing on this project as their disclosure is not the best?
David Baker: Are there additional opportunities to increase your ownership in SLM California?
Speaker Change: Yeah.
David Baker: Join venture with our friends at EMX, EMX also have done a deal on some of those shares with, Franco Nevada.
Speaker Change: It's a good question again for context for everyone element fault us we must at the end of 2022, and we had what was then quite a significant effectively prospect generation all in the business and.
Fredric Bell: They're looking at a 50% increase in throughput and I think important to notes as well that the management team at Capricorn. This is a management team that in their previous company built three mines in Australia in a five year period and had throughput increases expansion to all of those mines over that same period of 30 to 50% at each. So it's a management team that in Australia are exceptionally well known and have a really strong track record not just building mines on time or budget, but actually then taking expansion studies through successfully and implementing them.
David Baker: So it's clearly a royalty that's in great demand and obviously now under great new ownership with the London Mining taking themselves to 70%.
David Baker: There is a small amount of SLM California available still.
David Baker: But yeah, we haven't been able to get there on a valuation, that we're comfortable with.
David Baker: It's certainly something that we are always reviewing.
Fredric Bell: So really pleased to see that news come out and look forward to further updates from Capricorn that at the same time as the throughput expansion.
Operator: Thank you, David.
Operator: Next question.
Operator: Would 100% of the expected 2025 and 2026 production, at Bonnecrow be on your royalty lands?
Frederick Bell: Yeah, I can jump in.
Frederick Bell: Yeah, absolutely.
Frederick Bell: Yes.
Fredric Bell: They also announced 15% increase to the reserves just over 1.4 million answers of gold and that supports current mine life or approximately 13 years.
Speaker Change: Some of the transactions we've done over the last 18 months partnering on ground in Egypt with into that pool. So we referenced that during the presentation.
Speaker Change: Selling the DBO project, which we refer to a number of times to ally goal to operate at the adjacent mine and bringing on to production selling the aircraft portfolio.
Speaker Change: Putting the Moroccan assets into material.
Fredric Bell: The second real cornstone asset in the portfolio is Catherine is with Mindy and Chile, and this accrued adjusted royalty revenue at 1.4 million dollars based on reported production.
Speaker Change: The focus on a lot.
Speaker Change: What are those trauma.
Speaker Change: Really to realize the value and the underlying assets and in some cases to take them to the next stage of production and in other cases to put them in the hands of well finance partners, who could commit more capital unexpected just for them.
Speaker Change: Then we could.
Speaker Change: So look that was the real.
Speaker Change: Rationale in terms of in terms of those transactions and one of the benefits.
Speaker Change: Alluded to earlier in this presentation was also.
Speaker Change: Parallel reduction in corporate costs and G&A.
Speaker Change: We're increasingly have as a result of partnering those offset some projects so from our perspective.
Speaker Change: Active.
Frederick Bell: Yes, so maybe a quick background on Laviton for those who aren't familiar. It's a significant land package that we have in Western Australia and it is just to the north of a major goldfields mine and to the east of another gold mine operated by Genesis Minerals. So it's a historical mining town. It has been mined historically. We bought royalties there covering a number of deposits, the principal ones being Beazley Creek and Lancefield, and two slightly different deposits.
Frederick Bell: Beazley Creek is high-grade oxide near-surface within tracking distance of 2mm and Lancefield was a top 10 underground gold mine in West Australia in the 1990s, 10,000oz per vertical metre.
Speaker Change: The real focus has been on royalties.
Frederick Bell: So a really significant mine and it hasn't had any exploration since 1999.
Speaker Change: And continuing to add to the portfolio that we have kept an eye on opportunities.
Speaker Change: Probably partly to work with prospect generators as well.
Speaker Change: Densify teams, who have got core skill set.
Speaker Change: Or a specific knowledge in a region or location, where they can have a competitive advantage and drive holiday. So we've spoken to some groups in terms of helping them stopped that.
Speaker Change: And I was taking a royalty on it.
And all of those lessons together longer time, so continuing to have discussions on that.
Speaker Change: And looking for opportunities both.
Speaker Change: And with Counterparties.
Speaker Change: Two two to partner on opportunities out, but in the short term the immediate focus is on the royalty side.
Frederick Bell: So, that Royalty is not producing at present.
Frederick Bell: In our view, the primary reason it's probably not producing is because the operator, ASX Focus Minerals, is majority owned by Chinese Parastatal in Shandong.
Frederick Bell: And they have recently built and started mining the other Gold project they have in Western Australia at Kulgadi.
Frederick Bell: And so Labour 10 hasn't been a focus.
Frederick Bell: I think for us, we see that as one of the assets that in due course is going to be really material and really valuable.
Frederick Bell: So, for us, you're right, limited disclosure from the operator being majority Chinese owned, and we don't get as much visibility as we like.
Thank you we've been getting a lot of questions about the share price. So I'm just going to ask a general question can you. Please comment on your share price performance compared to your peers.
Frederick Bell: And I think in the hands, particularly, of the right operator, L'Anse Field has the potential to be a very material mine going into the future.
Fredric Bell: On copper and aluminum, and at the same time, Mindy actually increased that guidance here for the 2024 yet to 124 to 135,000 times copper.
Frederick Bell: That said, some of the team were just in Perth and Kalgoorlie recently at a conference, and we were able to get some updates there from operators in the region on the outlook and how they see it.
Frederick Bell: It certainly was in the past.
Fredric Bell: And you can see it was previously 120 to 130,000 tons.
Fredric Bell: So it has continued the pattern since, indeed, acquired majority ownership in this mine.
Speaker Change: Yes, I think our share price has come.
Fredric Bell: So by hink we've seen for a royalty-holders perspective, we've seen really good consistent production.
Come off of it in terms of the junior gold royalty companies I think with come off broadly in line.
Speaker Change: With those.
Fredric Bell: And we've actually seen really positive trends, both in terms of the direction they're taking in mind, in terms of the outlook of cost improvements and also exploration drilling, which is an excellent point here, and which they have started for the first time since the mine was constructed approximately 10 years ago.
Speaker Change: Secondly in terms of if you look at our underlying performance from a financial perspective. This was our second highest quarter of revenue the company's hat.
Fredric Bell: So one of the things that align with a lot of my life is you don't always prioritize exploration when you built it and I think it's great to see that we're indeed coming in as operators.
And in actual in terms of operational performance it wasn't the strongest quarter that would happen.
Fredric Bell: They've started exploration that and a very good outlook in terms of some of the targets that they're looking at which I should emphasize a rule as a rule to hold a done at no cost to us.
So I think that's really encouraging because from an operator perspective, maintaining guidance, we're actually expecting to see better quarters in the one we've just had into an increasingly.
Speaker Change: Gold price environment.
Speaker Change: At the same time is.
Speaker Change: Again, we've got it to you before we're going to have lower costs on the G&A Trump so.
From a from a revenue perspective.
Speaker Change: Our financial position.
Speaker Change: Were the strongest with beam.
Speaker Change: <unk>.
Speaker Change: In many years, which is paying down $10 million of debt in the first half of this year and making an acquisition recently that was fully finance from cash on hand.
Speaker Change: Let's go to the market so.
Speaker Change: From that perspective.
Speaker Change: Think the share price today is not at all reflective of the underlying fundamentals of the business.
Speaker Change: And look I think we recognize that there is limited liquidity in the market.
Speaker Change: In an environment, where there's limited liquidity.
Speaker Change: Often you see that.
Speaker Change: Share price weakness it doesn't take them up.
Speaker Change: The impact of down, but I think that's driven by the fundamentals of the business. If you. If you look at it on a revenue share basis I think we're almost there.
Speaker Change: We're almost at the highest on a revenue share basis for the company as being in seismic for number of years.
Speaker Change: But in addition to that we have more exposure through our pipeline and through our wider portfolio than we have ever had.
Speaker Change: Are you seeing as commander and tons.
Speaker Change: In terms of.
Speaker Change: So on a per share basis on an overall company perspective financial benefit.
Speaker Change: We're taking a lot of the boxes in terms of strength.
Speaker Change: It's frustrating when the share price doesn't match up to that.
Speaker Change: And to the earlier question from.
Speaker Change: From somebody around management and insiders buying.
Speaker Change: Again, I think at where and when we are able to.
Speaker Change: Especially at the current price I would love to take advantage of it and we've just got to find a window.
Speaker Change: Where we are able to do that.
Speaker Change: And in terms of.
Speaker Change: Proto portfolio.
Speaker Change: And and.
Speaker Change: That's why we all share price I think that's also why one of the topics under discussion internally is putting in place the normal course issuer bid.
Speaker Change: <unk>.
Speaker Change: <unk> with the opportunity to buy back shares.
Speaker Change: When it does.
Speaker Change: Opinion, Rachel valuation that is sufficiently attractive for us to go out there and you know it works.
Speaker Change: Delivering really good returns by buying back shares.
Speaker Change: So.
Speaker Change: I hope that addresses the question.
Speaker Change: Excellent.
Fredric Bell: So if we turn on to the next slide, there's a number of opportunities to see growth in the portfolio most notably and you mentioned Diva Firthet and this is first production in June and we're expecting Made in Gold Sales in 2-3 2024 subject to receipt of authorizations for processing at Stavilla which is the mine they they currently operate immediately adjacent to the Diva depot it.
And you mentioned this.
Speaker Change: Unprecedented revenue growth in the first half of the year do you expect to see that to continue.
Fredric Bell: So where I think we've seen a lot of work that a lot have completed since that transaction was announced at the end of last year and they built a whole row to site.
Fredric Bell: They declared Made in Reserves and then they announced that in Q2 they they started first mining that so very encouraging to see how fast a light had been progressing it and they also announced an eight million dollar exploration program really focused on Diva.
Speaker Change: Maybe Dave can probably talk to that quite well.
Dave: Yeah, absolutely so I mean aside from aside from a.
Fredric Bell: So that's again very encouraging threats to see resource growth that's already happened.
Dave: The gold price performance.
Frederick Bell: And I think our view is that current Gold prices of that asset is increasingly attractive and in demand from some of the mid-tier Australian Gold miners.
Frederick Bell: Thank you.
Fredric Bell: The mining being put into production and the future exploration potential that we're going to see from the drilling there doing that.
Dave: Through the year. So I think in the study that we were talking 2000 dollar gold.
Operator: And current gold prices indeed.
Dave: And it looks like it's powered passed a $25 $50, which is which is definitely helping all of us.
Speaker Change: We've had a couple of new royalties.
Come online the key one that being born across.
Fredric Bell: The second asset here Bonacrobe it's also operated by a light gold and as mentioned provided soon you can roll through revenue you can you can see on that chart there from Q3 last year that it's it's materially increased and been averaging approximately a million dollars a quarter for the last three quarters as production moved into the royalty area which we expect to continue in the coming years and allied have also guided that they're expecting to access higher grade or in 2025 and 2026 which should further drive production from the royalty area and the last royalty we're talking about here is an asset that is it's not in production but a really material PEA announced by our reserve in Sonoran on the cactus copper project and that's moving it from moving it to a larger open pet operation from previously envisaged underground project.
Fredric Bell: The full technical report should be put out soon by the operator Arizona Sonoran but the first indications for us are that we expect the royalty to have a significantly higher tons which ultimately will drive in the future more revenue for us as a royalty holder and we should also impact that story we should also note that this is prior to the Newton studies that are expected to come out later in the year that Arizona Sonoran is doing in conjunction with the Rear Twin Toda.
Sam: Sam had three full quarters in the royalty area. So we'd expect as you're paying is over.
Fredric Bell: Moving on to slide seven here.
Sam: Over around $1 million a quarter, yes.
Frederick Bell: So the real change in Bonnecrow is that Allied have, moved from mining the satellite pits mostly here outside of the area.
Frederick Bell: Our royalty is an area, geographic area around pushback five, which is in the main pit.
Fredric Bell: Recently other than other updates from the portfolio we've recently completed the acquisition of two royalties the really the driver for this was the royalty on the Macton tungsten project which is recognised as one of the largest high-scary tungsten deposits in the world.
Frederick Bell: And then before you saw that material uplift in Q4 2023, we'd only really been getting material in small development or from there as they were pushing back the open pit.
Sam: The real the real uplift that we would expect in the second half of the year is also an allied mine.
Frederick Bell: Now they are nearly entirely into the main pit.
Fredric Bell: It's it's operated by far-weeds metals and how many that we know and follow for a number of years and I think very pleased to add that.
Speaker Change: That Steve Alex as a satellite deposit to sandy.
Sam: Ill.
Sam: Again, we're still waiting for.
Sam: Exact guidance from from.
Sam: From Allied dead, but they're talking to material contributions to <unk>.
Speaker Change: To cellular was revenue that so yes, we would expect significant growth in the second half of the year and we talked to we talked drug I'd say weighted to the second half of the year. So looking forward to that to continue.
Both in terms of ounces and in terms of dollars.
Speaker Change: Excellent and let's talk about paying down debt as you alluded.
Speaker Change: I alluded to before do you intend to keep paying down the debt.
Speaker Change: Same rate that you help them or accelerating it.
Yes, it's a very very very pleased that we were able to repay $10 million in the first and the first half of the year five in each quarter.
Speaker Change: I think we certainly look to the facility, which is extremely low cost from an actual banking CIBC suffice.
Speaker Change: Great.
Speaker Change: Apparently the amendment side, it's one of the.
Speaker Change: Advantage that we have without without revenue back asset portfolios that we are able to access these low cost non dilutive sources of finance from from.
Speaker Change: In commercial.
Speaker Change: Gideon banks, but yeah, I think definitely the view is too to use it as a true revolving facility and so additional cash will be pay down into.
Speaker Change: Into the revolver and then and then we would take it out as if we need if the transaction.
Speaker Change: Excellent.
Speaker Change: And there's been a few comments on your G&A costs and future expected expectations can you comment on that.
Speaker Change #100: Yeah, absolutely. So we've had that we've had a couple of one off costs and that's really mostly around departure cost of senior management and.
Speaker Change #100: The disposal, the exploration business and monetization of the exploration business.
Speaker Change #100: And now we're really through the majority of that.
Speaker Change #101: I'm, sorry, I think what we'll see going forward is a much a much much lower G&A than than we historically recorded it's now.
Speaker Change #101: Now it's just the team now very stable of credit in place to grow the business.
Speaker Change #101: I think year on year or say it lower and then I would expect to see lower again through 2020.
Operator: Next question.
Speaker Change #101: Excellent.
Speaker Change #102: Next question are there any lithium minerals documented in the acquired tungsten project.
Speaker Change #103: Look as far as not something.
Speaker Change #104: We're focused on I Didnt look we really.
Speaker Change #105: Thompson asset we bought landmark tongue.
Speaker Change #105: We've really pulled back for that Thomas from deposit historically has been explored anvil soybean through six seven years of permitting.
Speaker Change #106: So that will start with subprime drive up and <unk>.
Speaker Change #107: We havent focused on are there any other commodity shocks.
Frederick Bell: Yeah, so we're expecting to see most of Bonnecrow's production coming from the royalty area.
Frederick Bell: And I think encouragingly that the commentary that we've seen from Allied is as they push back, they're uncovering increasingly higher grade material.
Frederick Bell: So there's going to be a material contributed to our earnings for the next couple of years.
Operator: Are there additional opportunities to increase your ownership in SLM California?
Speaker Change #107: Okay.
David Baker: And maybe I can pass this question over to Dave as well, run through that?
Speaker Change #108: The next question has to do again with royalty generation, which you have.
Speaker Change #108: Answered but.
Speaker Change #109: The bulk of the question is some of your peers have royalties on significant discoveries.
Speaker Change #110: Silicon do any of your assets have significant exploration potential.
David Baker: Yeah, absolutely.
Operator: Excellent.
Look the short answer to that is.
David Baker: Great question.
David Baker: As you know, we hold our shares in SOM California, both directly and then also with a joint venture with our friends at EMX.
David Baker: EMX also have done a deal on some of those shares with Franco Nevada, so it's clearly a royalty that's in great demand and obviously now under great new ownership with the Lundin.
Speaker Change #110: Absolutely.
David Baker: London Mining are taking themselves to 70%.
Speaker Change #110: Pink.
David Baker: There is a small amount of SLM California available still But yeah, we're not we're not haven't been able to get there on on a valuation that, certainly something that we are always reviewing.
Speaker Change #110: <unk>.
David Baker: Thank you, David.
Speaker Change #110: Probably to two that we mentioned that are at a.
Operator: Next question.
Operator: Next question regarding prospect generation.
Operator: Would 100% of the expected 2025 and 2026 production at Bonnecourt be on your royalty land?
David Baker: The real change in Bonacro is that Allied have moved from mining the satellite pits mostly at Heeray, outside of the area.
David Baker: Our royalty is an area, a geographic area around pushback 5, which is in the main pit.
Speaker Change #110: Very early stage, but really our discovery potential.
Fredric Bell: Asset into the portfolio, and following that, we also had a few updates with existing royalties in the portfolio, and you can see there that we mentioned the royalty we have in Rolanda, which is currently being explored under a JB by Rio Tinto, and I think they have just announced yesterday that they are expecting to start drilling on the project later this year, which will be made in drilling and exploration there.
Speaker Change #110: The royalty we have on the H C. H C K project in Rwanda.
Operator: And is it part of the strategy, going forward?
Frederick Bell: Or is that something that is now in the past?
That is a project that Rio Tinto recently did come transferee in Rio Tinto second offline wells recently, just country entry into Rwanda, two JV. This project specifically.
Frederick Bell: Yeah, it's a good question again.
Frederick Bell: And for context for everyone, Elemental Altus, we merged at the end of 2022.
Frederick Bell: And we had what was then quite a significant, effectively prospect generation in the business.
Speaker Change #110: And you saw the chairman of Rio Tinto going through Orlando meeting the president.
So that is a.
Speaker Change #110: Unusual step for one of the majors to take.
Speaker Change #110: In regards to into a brand new unexplored project.
Speaker Change #111: Alrighty perspective, that's impacting the types never explore especially in roundup.
Speaker Change #111: So that that really helps discovery potential and I think our understanding is that going to be drilling late.
Speaker Change #111: Later this year.
Speaker Change #111: Which would which for us is pretty material.
Speaker Change #111: In terms of seeing what the upside in discovery potentially on that royalty and then the second one we did reference it as well as in Egypt.
David Baker: And then before you saw that material uplift in Q4 2020.
Fredric Bell: In Egypt, we continue to hold a royalty and equity interest through into metals on one of the largest fund packages in Egypt.
David Baker: We'd only really been getting material in small development or from there as they were pushing back the open pit.
David Baker: Now they are nearly entirely into the main pit.
Frederick Bell: And some of the transactions we've done over the last 18 months, partnering our ground in Egypt with Intimetals, who we referenced earlier during the presentation, selling the Diva project, which was referred to a number of times to Allied Gold who operated the adjacent mine and bringing that into production, selling the Ethiopian portfolio to ANS and putting the Moroccan assets into Ethereum.
David Baker: Yeah, so we're expecting to see most of Bonacres production coming from the royalty area.
David Baker: And I think encouragingly that the commentary that we've seen from Allied is as they push back, they're uncovering increasingly higher grade material.
Speaker Change #111: And at the time, we did the deal with into metals on a rejection portfolio.
David Baker: So there's going to be a material contributed to our earnings.
Frederick Bell: The purpose on a lot of those transactions is really to realise the value in the underlying assets.
Speaker Change #112: The 2000 square kilometers of ground in Egypt inquiry or the third or fourth biggest license holder in Egypt. After sentiment is a major operator, there and something I. Just said that is a very material landholding in a region that is yes.
Frederick Bell: And in some cases, to take them to the next stage of production.
Speaker Change #112: Exceeding the under explored historically.
Frederick Bell: And in other cases, to put them in the hands of well-financed partners who could commit more, capital and expenditure to them than we could.
Speaker Change #112: What we have as a partner and into muscles. If we have a group that is private pay.
Frederick Bell: And so, look, that was the real rationale in terms of those transactions.
Speaker Change #112: Funded.
Speaker Change #113: They completed their first real program I believe before they had a full website up and running so the emphasis and the money is really being spent in the ground with a really strong technical team.
Speaker Change #114: And they don't need to go out marketing and they don't need to list. The company. So they can just focus on the exploration work and again, our understanding is that the second drill program that got his upcoming and I think that.
Fredric Bell: There was a major drill program completed on the project with the encouraging results, and we're looking forward to the second drill program, which is time for two-three this year.
Speaker Change #114: We will be able to put out some results.
Speaker Change #114: Following that second drill program.
Speaker Change #114: Which will be coming up in Q3, but we haven't tried anything to date and I think once they have that second drug program completed.
Speaker Change #114: And I will be in a position, where we can put out some news regarding the work that's done there and that is ground thats never been explored before.
Speaker Change #114: And it's really that the pit.
Speaker Change #115: All of the Eiffel tower is a friction on momentum stocks two examples from our portfolio.
Speaker Change #115: We've got ready.
Speaker Change #115: Really good discovery potential.
Speaker Change #115: If you look across us today, we've got approximately 10 producing royalties.
Speaker Change #115: Of our portfolio.
Speaker Change #116: Call. It <unk> two <unk> in total so that's clearly a very large number across the rest of the portfolio that we don't often talk to.
But a lot of exploration going on that from our partners and Counterparties and the great thing with the royalty model is that we are not paying for that optionality. So the more optionality, we can layer into our portfolio. The more projects. We can have with our good well regarded well finance tactically competent.
Speaker Change #116: <unk> teams progressing those projects no cost to us.
Speaker Change #116: The more luxury tickets, we have in our portfolio and if we keep doing that and we keep.
Speaker Change #116: Bringing those assets at reasonable cost into the into the portfolio.
Fredric Bell: We're well positioned to benefit through any discovery success there, with uncut royalty interest continuing next to exposure and last same payment on success.
Speaker Change #117: Sooner or later, we're going to benefit from increasing discovery success as you say that.
Fredric Bell: And then lastly, we received an additional payment from the min stream that we have, and so that takes a total consideration we're expecting from the asset to about 12.4 million US compared to the just over 11 million current value of the data disposal.
Speaker Change #118: Some of our peers have had on some of the projects I hope.
David Baker: Excellent.
Speaker Change #118: Excellent.
Speaker Change #119: Would you consider alternative financing structures, such as convertible debt that provide optionality for both the company and the investors.
Speaker Change #119: Okay, maybe a quick one for Dave Yeah go ahead, Yeah, I think I think glad we're certainly well supported.
With the financing that we've used to date.
Dave: Whether that was in the early days of the company.
Speaker Change #120: Two facilities with spot results lending, which was incredibly flexible and got us to a point to quite some incredible assets.
Speaker Change #120: Reducing dilution to our shareholders at the time, then graduating to senior bank debt with like I said with National Bank in CIBC that'd been incredibly supportive and I think a very very low cost of capital I would say that that type of plus 3% sorry.
Speaker Change #120: Suddenly be.
Much lower than cost of capital too.
Speaker Change #120: To the company than other sort of more mezzanine mezzanine products I think we've also been strongly eating out our equity at the right point in time as well. So that for example, the cactus royalty that we acquired from a CSI the Arizona Florence project in Arizona.
Speaker Change #120: The other half were very keen to participate as shareholders of the company and have been very supportive since sorry, I think thankfully because of the quality of the portfolio and the way well beyond $20 million of revenue now and generating should be generating material cash flows going forward.
Speaker Change #121: We don't have to we don't have time to look at alternative options. You know you can speed the lowest possible cost of capital at least dilution to existing shareholders.
Speaker Change #120: Tomorrow.
Operator: Next question regarding prospect generation and is it part of the strategy going forward or is that something that is now in the past?
Speaker Change #122: Excellent and the last question of the day as we are at the top of the hour.
Frederick Bell: Yeah, okay, it's a good question again.
Fredric Bell: So there's been a few updates in the portfolio, and I think we're anticipating a few new additions to the portfolio moving forwards as well.
Speaker Change #123: What do you feel is missing or locking in the current portfolio in other words, what are you looking for in your next to transaction or transactions.
Frederick Bell: And for context for everyone, Elemental Altus, we merged at the end of 2022.
Frederick Bell: And we had what was then quite a significant, effectively prospect generational in the business.
Frederick Bell: And some of the transactions we've done over the last 18 months, partnering our ground in Egypt with Intimetals, who we referenced earlier during the presentation, you know, selling the Diva project, which was referred to a number of times to Allied Gold, who operated the adjacent mine and bringing it down to production, selling the Ethiopian portfolio to ANS, and putting the Moroccan assets into Ethereum.
Frederick Bell: The purpose on a lot of those transactions is really to realize the value in the underlying assets, and in some cases, to take them to the next stage of production.
Look we have all got we've all got a lot of a lot of strong views on the opportunity from ideas out there.
Fredric Bell: In terms of the portfolio makeup, I will just very quickly run through this, and now I think I'll hand over to Dave to go through the rest, but look what we have put in place is, I think, really well-diped us by thought video in terms of our assets.
Frederick Bell: And in other cases, to put them in the hands of well-financed partners who could commit more capital and expenditure to them than we could.
We have I think what we regard internally as to cornerstone assets at this stage that are in production in <unk> in Colorado.
Fredric Bell: It also our commodity mix, we're remaining precious metals focused, but with significant exposure to copper, and in terms of jurisdictions, we're really anchored by Australia and Chile as our two biggest jurisdictions.
Speaker Change #123: So I think we're always looking to add.
Another material really high quality.
Speaker Change #123: Asset and not as a cornerstone.
Fredric Bell: So I think it's a portfolio that has a very good blend in terms of diversified revenue, so focus, clear focus on gold and copper as two primary commodities.
Speaker Change #123: And alongside that.
Speaker Change #123: With with started really in the last 18 months to bring in some high quality development advanced exploration projects into that pipeline as well.
Fredric Bell: So with that, I will hand over to Dave to take you through the next couple slides.
Speaker Change #123: That's a few of those we've spoken to over the course of today.
Frederick Bell: And so look, that was the real rationale in terms of those transactions.
Frederick Bell: And one of the benefits they alluded to earlier in this presentation was also the parallel reduction in corporate costs and G&A that we increasingly have as a result of partnering those assets and projects.
David Baker: Perfect, thanks Fred.
Speaker Change #123: But I think for us being able to continue trying to revenue into the portfolio.
Frederick Bell: So from our perspective, the real focus has been on royalties and continuing to add to the portfolio there.
At the same time, it's bringing in development asset and strengthening our pipeline.
Frederick Bell: We have kept an eye on opportunities, probably partly to work with prospect generators as well and identifying teams who have that core skillset or a specific knowledge in a region or location where they can have a competitive advantage and drive value.
David Baker: Just in terms of financial overview, GEO, so the quarter came in at 2211.
Speaker Change #123: And always keeping an eye out for something that we would probably cost us.
Frederick Bell: So we've spoken to some groups in terms of helping them start that and us taking a royalty on it and others working together longer term.
Speaker Change #123: Really cornerstone longtime cornerstone asset for the company.
David Baker: Houses translating to $5.2 million of adjusted revenue, that's up 10% year-on-year. Revenue for H1 was $9.9 million US dollars, and that's up 16% year-on-year.
Frederick Bell: So continue to have discussions on that and look at opportunities both and working with counterparties to partner on opportunities there.
Speaker Change #123: And those criteria or some of the key things we look for in <unk>.
Frederick Bell: But in the short term, the immediate focus is on the royalty side.
Dave: Dave if you without anything from from absolutely I think that covers it.
David Baker: I think we're a little bit unlucky, just in terms of the timing of production versus the hills, some of our key royalties, but we'd expect that to pick up and increase three.
Dave: <unk>, it's exactly exactly where I afraid I think as.
Dave: We don't need we don't need to go out and 10 Chase revenue, we don't need to go out into the pay the revenue we've got an excellent.
Dave: Base of asset headset.
Dave: Headset.
Speaker Change #124: Very heavily weighted to two excellent assets in tier one jurisdiction is operated by by absolutely World class mining companies.
Speaker Change #124: What we are looking to do is leverage leverage that base.
Speaker Change #124: It was probably in looking to build out that pipeline a little bit more wins.
Speaker Change #124: Thanks.
Speaker Change #124: But then obviously looking to get surprised.
Speaker Change #124: On the upside for example, with the Cactus and the recent payout, which we think has materially improved the economics of the project.
Speaker Change #124: I think that's that's really the.
Speaker Change #124: Looking forward. This is how we can use the base that we have to grow the company and go after.
Speaker Change #124: Anthony.
Anthony: I understand that.
Anthony: Thank you thank you gentlemen.
As we are at the top of the hour, we will now end the Q&A session.
Anthony: If you have any other questions. Please forward them directly to management.
Anthony: Brad would you like to say a few words to your viewers before we sign off today.
Operator: Thank you.
Frederick Bell: And one of the benefits they alluded to earlier in this presentation was also the parallel reduction in corporate costs and G&A that we increasingly have as a result of partnering those assets and projects.
Brad: Well. Thank you very much first of all for everyone, taking the time to attend.
Operator: We've been getting a lot of questions about the share price, so I'm just going to ask a general question.
Frederick Bell: So, look, from our perspective, the real focus has been on royalties and continuing to add to the portfolio there.
Frederick Bell: Can you please comment on your share price performance compared to your peers?
Frederick Bell: We have kept an eye on opportunities, probably partly to work with prospect generators as well and identifying teams who have that core skill set or a specific knowledge in a region or location where they can have a competitive advantage and drive value.
Frederick Bell: Yes, I think our share price has come off.
Frederick Bell: So, we've spoken to some groups in terms of helping them start that and us taking a royalty on it and others working together longer term.
Frederick Bell: So, continue to have discussions on that and look at opportunities both and working with counterparties to partner on opportunities there.
Frederick Bell: It's in terms of the junior gold royalty companies, I think we've come up broadly in line with those.
Operator: We've been getting a lot of questions about the share price, so I'm just going to ask, a general question.
Frederick Bell: But in the short term, the immediate focus is on the royalty side.
David Baker: This translated into a modest increase in EBITDA for the quarter, but clearly a material increase in EBITDA for compared with H1 2023.
Frederick Bell: Can you please comment on your share price performance compared to your peers?
Brad: Look we will continue doing quarterly calls going forward and hopefully set.
Frederick Bell: Yes, I think our share price has come off.
Frederick Bell: In terms of the junior gold royalty companies, I think we've come off broadly in line with those.
Frederick Bell: Certainly in terms of, if you look at our underlying performance from a financial perspective, this is the second highest quarter of revenue the companies have.
Frederick Bell: And in actual, in terms of operational performance, it wasn't the strongest quarter that we've had.
Frederick Bell: So I think that's really encouraging because from an operator perspective, maintaining guidance, we're actually expecting to see better quarters than the one we've just had into an increasingly high gold price environment.
Speaker Change #127: Regiment consistent cadence.
Frederick Bell: At the same time as, again, we've guided to before, we're going to have lower costs on the G&A front.
Speaker Change #127: And as part of our initiative to I think coming into September unless people are coming back office off with some holidays, I think really try and get the story out there.
Speaker Change #127: Market the story the stock.
Frederick Bell: Certainly in terms of, if you look at our underlying performance from a financial perspective, this is the second highest quarter of revenue the company's had.
Frederick Bell: And in actual, in terms of operational performance, it wasn't the strongest quarter that we've had.
Speaker Change #128: But because of what we've got it.
Frederick Bell: So I think that's really encouraging, because from an operator perspective, maintaining guidance, we're actually expecting to see better quarters than the one we've just had into an increasingly high gold price environment.
Frederick Bell: At the same time, as again, we've guided to before, we're going to have lower costs on the G&A front.
Speaker Change #128: <unk> fundamental business is really strong it continues to be getting stronger with every month every quarter that goes by.
Frederick Bell: So from a revenue perspective, from a financial position perspective, we're the strongest we've I think, in many years, which is paying down $10 million of debt in the first half of this year, and making an acquisition recently that was fully financed from cash on hand, not needing to go to the market.
Frederick Bell: So from that perspective, I think the share price today is not at all reflective of the underlying fundamentals of the business.
David Baker: The reason for that is modest increase in Q2, is we've tied it up some of the non-castured cruels in the period, and then we're going to release those over the remainder of 2020-25, and then also we've had some changes within the management team, and some one of the costs associated with the disposal of the exploration business, so we'd expect to get those margins to improve over time, and we'll talk to that later.
Frederick Bell: I think we recognise that there is limited liquidity in the market and in an environment where there's limited liquidity, you know, Austin.., share price weakness, it doesn't take a lot to impact it down.
Frederick Bell: But I don't think that's driven by the fundamentals of the business.
Frederick Bell: If you look at it on a revenue per share basis, I think we're almost at the highest on a revenue per share basis that the company's been in certainly for a number of years.
Frederick Bell: So from a revenue perspective, from a financial position perspective, we're the strongest we've been, I think, in many years, which is paying down $10 million of debt in the first half of this, year and making an acquisition recently that was fully financed from cash on hand, not needing to go to the market.
Frederick Bell: But in addition to that, we have more exposure to our pipeline and through our wider portfolio than we've ever had by a very significant margin in terms of the broader portfolio.
Frederick Bell: So from that perspective, I think the share price today is not at all reflective of the underlying fundamentals of the business.
David Baker: Operating cash flow, likewise affected by one-off costs around the parts of costs of senior management, and also the timing of order accounting and tax invoices that we go through.
Frederick Bell: So on a per share basis, on an overall company perspective, financial benefit, we're ticking a lot of boxes in terms of strength.
Yeah.
Frederick Bell: And look, I think we recognize that there is limited liquidity in the market. And in an environment where there's limited liquidity, often you see that share price weakness, it doesn't take a lot to impact it down.
David Baker: I'd expect that to normalise significantly through H2, would note that as a result of the growth in the business and optimizations post-merger and disposal of the exploration business, that net loss for the quarter is over 90% lower than this time last year and I look forward to that improving in the future.
Frederick Bell: I know it's frustrating when the share price doesn't match up to that.
Speaker Change #129: He was in a really good position to be able to make good choices between new acquisitions paying down debt dividends buying back shares or let's say about so I think.
Frederick Bell: But I don't think that's driven by the fundamentals of the business. If you look at it on a revenue per share basis, I think we're almost at the highest on a revenue, per share basis that the company's been in certainly for a number of years.
David Baker: I think an underestimated asset to the company is the expected 19.2 million dollars of milestone payments that we are expecting to come through 2024 and early 2025 and that will significantly bolster off financial position. In H1 2024, we've already received $0.3 million in cash and $2.3 million in five likely that we have realized.
Frederick Bell: And to the earlier question from somebody around management and insiders buying, again, I think where and when we are able to, more especially than ever at the current price, I think we'd love to take advantage of it.
Frederick Bell: But in addition to that, we have more exposure to our pipeline and through our wider portfolio than we've ever had by a very significant margin in terms of the broader portfolio.
David Baker: We've also received significant cash as part of the sale of resources shares and first discovery bonus this year from SKO.
Frederick Bell: And we've just got to find a window where we are able to do that, and look in terms of the broader portfolio and where we are with the share price.
Frederick Bell: So on a per share basis, on an overall company perspective, financial benefit, we're ticking a lot of the boxes in terms of strength.
Frederick Bell: I think that's also why one of the topics under discussion internally is putting in place a normal course issue a bit, potentially with the opportunity to buy back shares when it does, in our opinion, reach a valuation that is sufficiently attractive for us to go out there and we're actually delivering really good returns by buying back shares.
Frederick Bell: I know it's frustrating when the share price doesn't match up to that.
Frederick Bell: So I hope that addresses the question.
Frederick Bell: And to the earlier question from somebody around management and insiders buying, again, I think where and when we are able to, more especially than ever at the current price, I think we'd love to take advantage of it.
Frederick Bell: And we've just got to find a window, where we are able to do that.
Frederick Bell: And look, in terms of the broader portfolio and then where we are with the share price, I think that's also why one of the topics under discussion internally is putting in place a normal course issue a bit, potentially with the opportunity to buy back shares when it does, in our opinion, reach a valuation that is sufficiently attractive for us to go out there and we're actually delivering really good returns by buying back shares.
Frederick Bell: So I hope that addresses the question.
David Baker: Looking forward to H2, we would expect to receive a million dollars on reaching first first reduction in Deba that our item and recently announced that first production has taken place so we expect that to occur on H2 2022, 2024 and we're expecting the third $400,000 from the sale of the Egyptian licenses.
Frederick Bell: You mentioned this unprecedented revenue growth in the first half of the year.
Frederick Bell: Do you expect, to see that to continue?
Speaker Change #130: Thank you all for your time and patience and look forward to staying in touch and please do feel free to email us. If you have any questions. We always say at the end of.
Frederick Bell: Yeah, absolutely.
Frederick Bell: Aside from a fantastic gold price performance through the year, so I think at the start of the year we were talking $2,000 gold, and it looks like it's powered past $2550 gold, which is definitely helping all of us.
Frederick Bell: We've had a couple of new royalties come online, the key one there being Bonacro, and that's now had three full quarters in the royalty area, so we'd expect actually paying us over around $1 million a quarter.
Frederick Bell: Yeah, the real uplift that we'd expect in the second half of the year is also an Allied mine, and that's Diva, which is a satellite deposit to Satiola.
Frederick Bell: And again, we're still waiting for exact guidance from Allied there, but they're talking to material contributions to Satiola's revenue there.
Frederick Bell: So yeah, we'd expect significant growth in the second half of the year, and we talked to our guidance and waited to the second half of the year, so looking forward to that to continue, both in terms of ounces and in terms of dollars.
David Baker: But in H1 2025, we see material for the payments including nearly $10 million in cash and fly-fi equity for final payment of the mainstream settlement.
Speaker Change #131: Calls and meetings and meet.
Speaker Change #131: We were really sincere and saying that we'd like to have some shareholders.
Speaker Change #131: Any feedback you can give us always welcome. So please feel free to reach out if you. If you do have anything if I Express my thanks again.
David Baker: There is a small residual amount there that we could possibly be entitled to so that number could get a little bit larger.
David Baker: We also see $10 million of production from contingent payments from Deba upon reaching $100,000 for the production annually $2 million for the buy down, that partial buy down of the cashless royalty.
Operator: Excellent.
David Baker: All in all $19.2 million of what payments to the middle of next year.
Speaker Change #132: Thank you very much gentlemen, and just a reminder, that this town hall will be available on the company's website for replay and across all of our social within the next 24 hours before we sign off please ensure that you fill in the short questionnaire at the end of the presentation. This helps us and the <unk>.
Operator: And, you know, you mentioned this unprecedented revenue growth in the first half of the year.
Operator: Do you expect to see that continue?
David Baker: Yeah, maybe Dave can probably talk to that quite well.
David Baker: Yeah, absolutely.
David Baker: So I mean, aside from aside from, fantastic go through the year.
David Baker: So I think at the start of the year, we were talking $2,000 gold, and it looks like it's powered past 2550 gold, which is definitely helping all of us.
David Baker: We've had a couple of new royalties come online.
David Baker: The key one there being Bonacro, and that's now had three full quarters in the royalty area.
David Baker: So we'd expect that you're paying us over around a million dollars a quarter.
David Baker: Yeah, the real uplift that we'd expect in the second half of the year is also an allied mine, and that's Diva, which is a satellite deposit to Sadiola.
David Baker: And again, we're still waiting for.., exact guidance from from Allied there, but they're talking to material contributions to Sadio's, Sadiola's revenue there so yeah we'd expect significant growth in the second half of the year and we talked to we talked to our guides and waited to the second half of the year so looking forward to that to continue on both in terms of ounces and in terms of dollars.
David Baker: Excellent.
David Baker: Terms of trends for the business.
Operator: And let's talk about paying down debt.
Operator: Please ensure that you fill in the short questionnaire at the end of the presentation. This helps us and the company communicate more effectively with you in the future.
Operator: As you alluded to before, do you intend to keep paying down the debt at the same rate that you have been for accelerating it?
Operator: Thank you for joining us and we will see you on the next town hall forum.
David Baker: Yes, we're very, very, very pleased that we've been able to repay $10 million in the first half of the year, five in each quarter.
Operator: Goodbye for now.
David Baker: I think we certainly look to the facility, which is an extremely local facility.
David Baker: National Bank of the IBC, so SOFA plus three, currently at the moment.
David Baker: So it's one of the advantages we have with our revenue-backed asset portfolios that we are able to access these low-cost non-diluted sources of finance.
David Baker: Geos are relatively flat but that's built into the relative performance of copper versus gold.
David Baker: Canadian banks.
David Baker: So that means similar or even higher copper-based revenues from cash-arrowing as results in COG as the gold price rises.
Operator: And there's been a few comments on your GNA costs and future expectations.
David Baker: Can you comment on that?
Speaker Change #132: Communicate more effectively with you in the future. Thank you for joining us and we will see you on the next Townhall forums Goodbye for now.
David Baker: Yeah, absolutely.
David Baker: So we've had a couple of one-off costs and that's really mostly around a departure cost of senior management and the disposal of the exploration business and the monetization of the exploration business.
David Baker: Obviously that benefits the other 70% of our rupees.
David Baker: I think now we're really through the majority of that.
Operator: Excellent.
David Baker: We are in terms of guidance as Fred said earlier with $9.9 million for the half year.
David Baker: And so I think what we'll see going forward is a much lower G&A than was historically recorded.
Operator: And let's talk about paying down debt, as you alluded to before.
David Baker: We're expecting revenue towards the top end of our adjusted revenue guidance of 20 to 23.3 million dollars and that's driven by first royalty revenue from Deba and continued strong gold prices.
David Baker: Now it's just the team is now very stable, I've got it in place to grow the business.
David Baker: Do you intend to keep paying down the debt at the same rate that you have been, or accelerating it? Yeah, so very, very, very pleased that we've been able to repay $10 million in the first half of the year, five in each quarter.
David Baker: In terms of margins, as I said, they're definitely on the right track following the merger and the monetization of the exploration business over the last 12 months.
David Baker: I think year-on-year we'll see it lower and then I'd expect it to be lower again through 2020.
David Baker: I think we certainly look to the facility, which is at extremely low cost from National Bank of the IBC, so it's at 3% currently at the moment.
David Baker: I think we'd look to get that back towards pre-merger levels of between 70 and 80%.
Operator: Excellent.
David Baker: So it's one of the advantages we have with our revenue-backed asset portfolios, that we are able to access these low-cost, non-diluted sources of finance from mainstream commercial Canadian banks.
David Baker: I think as well it just would like to draw attention to our attractive valuation versus peers for a pure-flake gold and royalty copper copper and golden copper investment and also draw attention to the ongoing theme in the royalty space around M&A and consolidation.
Operator: Next question.
David Baker: But yeah, I think definitely the view is to use it as a true revolving facility, and so additional cash will be paid down into the revolver, and then we take it out as we need it for transactions.
Operator: Goodbye for now.
David Baker: We've seen significant consolidation since 2021.
Frederick Bell: Are there any lithium minerals documented in the acquired tungsten project?
David Baker: Excellent.
David Baker: We've put a few of the names that have been acquired by mid-tier royalty names on the right-hand side and I think the next time we'll have to put this slide together, we'll put Trident from the left hand box into the right hand box as they've just been acquired by the Tara.
Frederick Bell: Look, as far as, it's not something we're focused on.
Operator: And there's been a few comments on your G&A costs and future expectations.
David Baker: I guess whilst that reduced competition helps us to deal close, it also shows that larger royalty companies are willing to play real premium five.
Frederick Bell: I think, look, we really, the key tungsten asset we bought there in Naktung, we really bought that for the tungsten deposit that historically has been explored and also been through six, seven years of permitting.
David Baker: Can you comment on that, please?
Fredric Bell: and with that I might pass it back to Fred for Q and A.
Frederick Bell: So that was the prime driver and we haven't focused on any other quantities.
David Baker: Yeah, absolutely.
Joanne: Thank you Dave and Joanne if there's any questions.
Operator: Okay, the next question has to do again with royalty generation, which you have answered, but the bulk of the question is, some of your peers have royalties on significant discoveries, like silicon.
David Baker: So we've had a couple of one-off costs, and that's really mostly around departure costs of senior management and the disposal of the exploration business and the monetisation of the exploration business.
Joanne: Thank you very much.
Operator: Do any of your assets have significant exploration potential?
David Baker: I think now we're really through the majority of that, and so I think what we'll see going forward is a much lower G&A than was historically recorded.
Joanne: Thank you very much gentlemen for a great update.
Frederick Bell: The short answer to that is absolutely, probably two that we mentioned that are at a very early stage but really high discovery potential are the royalty we have on the HCK project in Rwanda.
David Baker: Now it's just the team is now very stable.
Joanne: We certainly have a full international house with us this morning so thank you to the audience for taking the time to participate on this call.
Frederick Bell: And that is a project that Rio Tinto recently did country entry, and Rio Tinto is the second largest miner in the world, recently did country entry into Rwanda to JV this project specifically.
David Baker: I've got it in place to grow the business, so I think year on year we'll see it lower, and then I'd expect it to be lower again through 2020.
Joanne: Now before we take questions just to remind you to please place the questions that you do have into the Q and A tab located at the top of your screens.
Frederick Bell: And you saw the chairman of Rio Tinto going to Rwanda, meeting the president.
David Baker: Excellent.
Audience Member: And the first question for today is given the low stock price, sorry to have such a difficult question for the first one we're going to start.
Frederick Bell: So, that is an unusual step for one of the majors to take in regards to a brand new unexplored project.
Operator: Next question.
David Baker: Given the low stock price, when can we expect management to purchase some shares?
Frederick Bell: But it is a highly prospective lithium-ion type never explored previously in Rwanda.
Frederick Bell: Are there any lithium minerals documented in the acquired tungsten projects?
David Baker: Great question.
Frederick Bell: So that really has discovery potential and I think our understanding is they're going to be drilling later this year, which for us is pretty material in terms of seeing what the upside and discovery potential is on that royalty.
Frederick Bell: Look, as far as – it's not something we're focused on.
David Baker: Yeah look a very good question I think unfortunately we often are deemed inside for various reasons and sometimes that is as it is currently due to the accounts.
Frederick Bell: And then the second one, and we did reference it as well, is Egypt. And at the time we did the deal with Intu Metals on our Egyptian portfolio, we held approximately 2,000 square kilometers of ground in Egypt.
Frederick Bell: I think, look, we really – the tungsten asset we bought there in Naktung, we really bought that for the tungsten deposit that historically has been explored and also been through six, seven years of permitting.
David Baker: So there was a two week period before the accounts were out where we're now lost trade and often before that.
Frederick Bell: So I think we were the third or fourth biggest license holder in Egypt after Sentiment is a major operator there and some of the majors. So that is a very material landholding in a region that is exceedingly underexplored historically.
Frederick Bell: So that was the prime driver, and we haven't focused on any other quantities.
David Baker: It is due to potential transactions we're working on so we've actually been in a pretty prolonged period restricting our ability to buy shares.
Frederick Bell: And what we have as a partner in Intu Metals is we have a group that is private. They are funded.
Operator: Q.
David Baker: I think all else being equal in theory we should be in the clear from 24 hours from today so I think often subject I think where we sit today look I would on a personal level I think we're extremely well.
Frederick Bell: They completed their first drill program, I believe, before they had a full website up and running.
Operator: Some of your peers have royalties on significant discoveries like silicon.
David Baker: We're extremely undervalued and I think that without the restrictions of insider period and trading relations I think definitely could be an apparent time to acquire shares both for individuals and other personal levels.
Frederick Bell: So the emphasis and the money is really being spent in the ground with a really strong technical team.
Frederick Bell: Do any of your assets, have significant exploration potential?
David Baker: Thank you.
Frederick Bell: And they don't need to go out marketing and they don't need to list a company. So they can just focus on the exploration work.
Frederick Bell: The short answer to that is absolutely.
Audience Member: Have you considered paying a dividend?
Frederick Bell: And again, our understanding is that the second drill program they've got is upcoming.
Frederick Bell: I think the probably two that we mentioned, that are at a very early stage but really high discovery potential are the royalty we have on the HCK project in Rwanda. That is a project that Rio Tinto recently did country entry, into Rwanda to JV this project specifically. You saw the chairman of Rio Tinto going to Rwanda, meeting the president.
David Baker: So short answer is yes and I think we actually said earlier this year that we were looking we were continuing to look and turn there are a number of different options and they incorporated paying down the debt which we've paid down 10 million all so far with you and also initiating a dividend and also potentially a normal cost issue of bid so putting in place the ability to buy back shares in the market so we have been evaluating internally all of those and I think our anticipation is as our expectation is that as we continue to generate free cash flow and we have all money ability as an employee if we're not putting that into acquisitions we will be putting it into paying down the debt or initiating a dividend or doing a buy back so all three of those have been on the cards and we started in a material way on the debt side which also decreases our cost of debt going forwards improves our margin and improves our ability to then look at options like dividends and buying back shares or future so short answer again is all of those under consideration and we've been active on the first one paying down the debt so far with you, you.
Frederick Bell: And I think that we will be able to put out some results following that second drill program, which will be coming up in 2-3.
Frederick Bell: That is an unusual step for one of the majors to take in regards to a brand-new unexplored project.
David Baker: Thank you.
Frederick Bell: So we haven't shared anything to date, but I think once they have that second drill program completed, I think we'll be in a position where we can put out some news regarding the work they've done there. And that is ground that's never been explored before.
Frederick Bell: It is a highly prospective Lithium-penguin type.
Audience Member: Now the next one is a two-part question.
Frederick Bell: And it's really that the.., all the license areas that they're focusing on at the moment.
Frederick Bell: It's never explored previously in Rwanda.
David Baker: So can you walk us through some of the opportunities that you're seeing without spilling any state secrets of course and are you interested in continuing to branch out into critical metals or base metals as you have recently with tungsten.
Frederick Bell: That's two examples from the portfolio where I think we've got really good discovery potential.
Frederick Bell: That really has discovery potential and our understanding is they're going to be drilling later this year, which for us is pretty material in terms of seeing what the upside and discovery potential is on that royalty.
Fredric Bell: So I might ask the second part of that question first on the commodity next and then past those days to talk to some of the opportunities that we're seeing and looking at.
Frederick Bell: If you look across us today we've got approximately 10 producing royalties, kind of a portfolio of call it 70 to 80 in total.
Frederick Bell: The second one, we did reference it as Egypt.
Fredric Bell: I think in terms of the commodity look where we're approximately still call it 75% gold precious metals and 25% copper order of magnitude.
Frederick Bell: So there's clearly a very large number across the rest of the portfolio that we don't often talk to, but a lot of exploration going on there from our partners and counterparties.
Frederick Bell: At the time we did the deal with Intu Metals on our Egyptian portfolio, we held approximately, 2,000sqm of ground in Egypt.
Fredric Bell: So we really are focused on maintaining a balance similar to that.
Frederick Bell: And the great thing with the royalty model is that we are not paying for that optionality. So the more optionality we can layer into our portfolio, the more projects we can have where there are good, well-regarded, well-financed, competent management teams progressing those projects at no cost to us, the more lottery tickets we have in our portfolio. And if we keep doing that, and we keep bringing those assets at really low cost into the into the portfolio.
Frederick Bell: I think we were the third or fourth biggest license holder in Egypt after Sentiment, who is a major operator there, and some of the majors. That is a very material landholding in a region that is exceedingly underexplored historically.
Fredric Bell: Sometimes where we have opportunities elsewhere particularly value opportunities, such as what we saw with the tungsten asset earlier this year.
Frederick Bell: I think sooner or later, we're going to benefit from, you know, increasing discovery success, as you say that, you know, point out that some of our peers have had on some of the projects they held.
Frederick Bell: What we have as a partner in Intu Metals is we have a group that is private.
Fredric Bell: We will take advantage of those and I would remind some of our shareholders and investors maybe aren't familiar that one of the early royalties we acquired was a mineral science royalty that commodity wise wasn't necessarily what we're looking for but it delivered a 40% IRA on an asset that went into production that was really good quality.
Operator: Excellent.
Frederick Bell: They are funded.
Fredric Bell: So I think for us focusses on gold and copper as a primary commodities but where we see exceptional value and where we see a real opportunity to dry generate returns.
Operator: Would you consider alternative financing structures such as convertible debt that provide optionality for both the company and the investor?
Frederick Bell: They completed their first drill program, I believe, before they had a full website up and running.
David Baker: We're a big enough company now that we can do transactions like the tungsten acquisition very recently that won't change significantly the weighting of the portfolio but we think we'll deliver really different turns going forward and maybe without a path over today to talk about some of the deals that we've been looking at and looking at current.
David Baker: in across London, reducing dilution to our shareholders at the time, then graduating to senior bank debt with, as I said, with National Bank and CIBC.
Frederick Bell: The emphasis and the money is really being spent in the ground with a really strong technical team.
David Baker: Yeah thanks Fred yeah just reading with Fred saying I think gold is very important to us it's important to be all focused.
David Baker: No, they've been incredibly supportive at, I think, a very, very low cost of capital.
Frederick Bell: They don't need to go out marketing and they don't need to list a company. They can just focus on the exploration work.
David Baker: We're also very very strong believe in copper and the long term fundamentals there but we will go outside those parameters are very much in returns basis locally we look at everything so whether that's individual royalties whether that's a package of royalties as part of a larger or smaller portfolio with that's corporate corporate deals as well it's and again just really trying to target those are the best the best quality assets for the best quality operators and the best quality jurisdictions.
David Baker: I would say that's had safer plus three.
Frederick Bell: Again, our understanding is that the second drill program they've got is upcoming.
David Baker: So yeah we've got very very broad remit that I think still the focus is definitely on gold as near term production as possible with obviously looking at copper and maybe other metals on very much on this the combined one a deep biggest kind of basis.
David Baker: So that would certainly be much lower than cost of capital to the company than other sort of more mezzanine products.
Frederick Bell: I think we will be able to put out some results following that second drill program, which will be coming up in Q3.
Audience Member: Excellent next question what are your expectations for Loverton and what is focus doing on this project as their disclosure is not the best.
David Baker: I think we've also been strong at using our equity at the right point in time as well. So for example, the cactus royalty that we acquired.
Frederick Bell: We haven't shared anything to date.
David Baker: Yeah so look maybe a quick background on Loverton for those who aren't familiar it is it's a significant land package that we have in Western Australia and it is just to the north of major goldfields mine and to the east of another gold mine operated by Genesis minerals so it's a historical mining town it has been mine historically we bought royalties there covering a number of deposits the principal ones being beautifully creek and landfill and two slightly different deposits beautifully creek is high grade oxide near surface and within track and distance of two mils and landfill was at top 10 underground gold mine in West Australia in the 1990s 10,000 ounces per vertical meter so a really significant mine and it hasn't had any exploration since 1999 so that royalty is not producing at present in our view the primary reason that it's probably not producing is because the operator ASX focus minerals is majority owned by Chinese parasitical chambal and they have recently built and started mining the other gold project they have Western Australia a cool guide and so Loverton hasn't been a focus I think for us we see that as one of the assets the inducors is going to be a really material and really valuable and I think in the hands particularly of the right operator lambsfield is you know it has potential to be a very material mine yeah going into the future it certainly was in the past so for us you're right limited disclosure from the operator being a majority Chinese owned and we don't get as much visibility as we like that said some of the team were just in Perth and Calcutty recently at a conference and we were able to get some updates there from operators in the region or on the outlook and how they see it and I think our view is the current gold prices that asset is increasingly attractive and in demand from some of the mid-tail Australia and gold mines Thank you.
David Baker: RTF over Arizona, and the RTF were very keen to participate as shareholders of the company and have been very supportive.
Frederick Bell: I think once they have that second drill program completed, I think we'll be in a position where we can put out some news regarding the work, they've done there.
Audience Member: And current gold prices indeed.
David Baker: So I think, thankfully, because of the quality of the portfolio and that we're, you know, well beyond $20 million of revenue now and generating, should be generating material cash flows going forward.
Frederick Bell: That is ground that's never been explored before.
Audience Member: Next question.
David Baker: We don't have to have a look at alternative options, you know, it can just be the lowest possible cost of capital and least dilution to existing shareholders to grow.
Frederick Bell: It's really the pit... ...all the license areas that they're focusing on at the moment.
Audience Member: Are there additional opportunities to increase your ownership in SLM California?
Operator: Excellent.
Frederick Bell: That's two examples from the, portfolio where I think we've got really good discovery potential.
David Baker: And maybe I can pass this question over today as well, just to run through that.
Operator: And the last question of the day, as we are at the top of the hour, what do you feel is missing or lacking in the current portfolio?
Frederick Bell: If you look across us today, we've got approximately 10 producing royalties out of a portfolio of call it 70 to 80 in total. There's clearly a very large number across the rest of the portfolio that we don't often talk to, but a lot of exploration going on there from our partners and counterparties.
David Baker: Yeah, absolutely.
Frederick Bell: In other words, what are you looking for in your next transaction or transactions?
Frederick Bell: The great thing with the royalty model is that we are not paying for that optionality.
David Baker: Great question.
Frederick Bell: Look, we've all got a lot of strong views on the opportunities and ideas out there.
Frederick Bell: The more optionality we can layer into our portfolio, the more projects we can have where there are good, well-regarded, well-financed, technically competent management teams progressing those projects at no cost to us.
David Baker: As you know, we hold we hold our shares in SLM California both directly and then also with joint venture with our friends at EMX.
Frederick Bell: We have, I think, what we regard internally as two cornerstone assets at this stage that are in production in Casa Rones and Kala Winda. So I think we're always looking to add another material, really high quality asset in there as a cornerstone.
Frederick Bell: The more lottery tickets we have in our portfolio.
David Baker: EMX also have done a deal on some of those shares with Franklin Nevada.
Frederick Bell: And alongside that, I think we've started really in the last 18 months to bring in some high quality development, advanced exploration projects into that pipeline as well.
Operator: If we keep doing that and we keep... Would you consider alternative financing structures, such as convertible debt, that provide optionality, for both the company and the investors?
David Baker: So clearly a royalty that's in great demand and obviously now under great new ownership with the London.
Frederick Bell: And there's a few of those we've spoken to over the course of today.
David Baker: Again, maybe a good one for Dave to answer a bit.
David Baker: London mining are taking themselves to 70%.
Frederick Bell: But I think for us, being able to continue to add revenue into the portfolio at the same time as bringing in development assets and strengthening the pipeline, and always keeping an eye out for something that we've probably classed as a really cornerstone, long-term cornerstone asset for the company.
David Baker: Yeah, I think we're certainly well supported with the financing that we've used to date.
David Baker: There is a small amount of SLM California available still.
Frederick Bell: So I think those criteria are some of the key things we look for.
David Baker: So whether that was in the early days of the company, two facilities with spot resource lending, which was incredibly flexible and got us to a point to acquire some incredible assets, reducing dilution to our shareholders at the time, then graduating to senior bank debt with, as I said, with National Bank and CIDC.
David Baker: But yeah, we're not having been able to get there on a valuation that we're comfortable with.
David Baker: And Dave, if you would add anything from that, or you think it covers it?
David Baker: Now, they've been incredibly supportive at, I think, a very, very low cost of capital.
David Baker: It's certainly something that we are always reviewing.
David Baker: Nighting is exactly right Fred, I think as I just said, we don't need to go out and chase revenue, we don't need to go out and overpay for revenue, we've got an excellent base of assets as Fred said, of Australia.
David Baker: I would say that's over plus three percent.
Audience Member: Thank you, David.
David Baker: We have a very heavily weighted to two excellent assets in tier one jurisdictions operated by absolutely world-class mining companies.
David Baker: So that would certainly be much lower than cost of capital to the company than other sort of more mezzanine products.
Audience Member: Next question.
David Baker: I think what we are looking to do is leverage that base and I think we've probably been looking to build out that pipeline a little bit more where valuation is more accurate, but then obviously looking to get surprised on the upside, for example, with Cactus and the recent PEA, which we think has materially improved the economics of the project.
David Baker: I think we've also been strongly using our equity at the right point in time as well.
Audience Member: Would 100% of the expected 2025 and 2026 production at Bonacrobe on your royalty land?
David Baker: So I think that's really what we're looking forward to most is how we can use the base that we have to grow the company and go after the next concept.
David Baker: So, for example, the cactus royalty that we acquired from RCF over Arizona, Sonoran Cactus Project in Arizona, the RCF were very keen to participate as shareholders of the company and have been very supportive since.
David Baker: Yeah, absolutely.
Operator: Thank you.
David Baker: So I think, thankfully, because of the quality of the portfolio and that we're well beyond $20 million of revenue now and should be generating material cash flows going forward, we don't have to have a look at our alternative options.
David Baker: Yeah, so the real change in Bonacrobe is that our light has moved from mining.
Frederick Bell: Thank you, gentlemen.
David Baker: You know, it can just be the lowest possible cost of capital and least dilution to existing shareholders to work.
David Baker: There's a satellite pit, mostly at Hirae, outside of the area.
Frederick Bell: As we are at the top of the hour, we will now end the Q&A session.
Operator: Excellent.
David Baker: Our royalty is an area to grant to Gary around pushback 5, which is in the main pit.
Operator: If you have any other questions, please forward them directly to management.
Operator: And the last question of the day, as we are at the top of the hour, what do you feel is missing or lacking in the current portfolio?
David Baker: And then before you saw that material uplift in 2, 4, 20, 3, we'd only really been getting material in small development or from there as they were pushing back the open pit.
Operator: Fred, would you like to say a few words to your viewers before we sign off today?
Frederick Bell: In other words, what are you looking for in your next transaction or transactions?
David Baker: Now they are nearly entirely into the main pit.
Frederick Bell: Well, thank you very much, first of all, for everyone for taking the time to attend.
Frederick Bell: Look, we've all got a lot of strong views on the opportunities and ideas out there.
David Baker: Yes, we're expecting to see most of Bonacrobe's production coming from the royalty area.
Frederick Bell: I think we will continue doing quarterly calls going forwards and hopefully set a regular, consistent cadence of that.
Frederick Bell: We have, I think, what we regard internally as two cornerstone assets at this stage that are in production in Casarone's and Kalawinda.
David Baker: And I think encouragingly the commentary that we see from our lives is as they push back, they're getting their uncovering increasingly higher grade material.
Frederick Bell: And as part of an initiative to, I think, coming into September and as people are coming back to the office after some holidays, I think really try and get the story out there and market the story, help the stock.
Frederick Bell: So I think we're always looking to add another material, really high quality asset in there as a cornerstone.
David Baker: So this is going to be a material contributed to our earnings the next couple years.
Frederick Bell: Because what we've got is an underlying fundamental business is really strong. It continues to be getting stronger with every month and every quarter that goes by.
Frederick Bell: And alongside that, I think we've started really in the last 18 months to bring in some high quality development, advanced exploration projects into that pipeline as well.
Audience Member: Excellent.
Frederick Bell: And it puts us in a really good position to be able to make good choices between new acquisitions, paying down debt, dividends, buying back shares, all of the above.
Frederick Bell: And there's a few of those we've spoken to over the course of today.
Audience Member: Next question.
Frederick Bell: So I think thank you all for your time and patience and look forward to staying in touch.
Frederick Bell: But I think for us, being able to continue to add revenue into the portfolio at the same time as bringing in development assets and strengthening the pipeline, and always keeping an eye out for something that we've probably passed as a really cornerstone, long term cornerstone asset for the company.
Audience Member: Regarding prospect generation.
Frederick Bell: And please do feel free to email us if you have any questions.
Frederick Bell: So I think those criteria are some of the key things we look for.
Audience Member: And is it part of the strategy going forward?
Frederick Bell: We always say that at the end of calls and meetings.
David Baker: And Dave, if you would add anything from that, or do you think it covers it?
Audience Member: Or is that something that is now in the past?
Frederick Bell: And we were really sincere in saying that we'd like to hear from shareholders and any feedback you can give us always welcome.
David Baker: No, I think it's exactly right, Fred.
David Baker: Yeah, it's a good question again and a context for everyone.
Frederick Bell: So please feel free to reach out if you if you do have anything you'd like to say.
David Baker: I think, as I just said, we don't need to go out and chase revenue.
David Baker: Elements Faltos emerged at the end of 2022.
Frederick Bell: Thanks again.
David Baker: We don't need to go out and overpay the revenue.
David Baker: And we had what was then quite a significant effectively prospect generation are in the business.
Operator: Thank you very much, gentlemen, and just a reminder that this town hall will be available on the company's website for replay and across all of our socials within the next 24 hours before we sign off.
David Baker: We've got an excellent base of assets, as Fred said. It is very heavily weighted to two excellent assets in Tier 1 jurisdictions operated by, absolutely world-class mining companies.
David Baker: And some of the transactions have done over the last 18 months, partnering our ground in Egypt with Intimethals, who we referenced earlier during the presentation, selling the deeper project, which was referred to a number of times allied goals, who operated the adjacent line of reunite production, selling the Ethiopian Port ANS, and putting them a rock assets into Ethereum.
David Baker: I think what we are looking to do is leverage that base, and I think we have probably been, looking to build out that pipeline a little bit more where valuation is more active, but then obviously looking to get surprised on the upside, for example, with Cactus and the recent PEA, which we think has materially improved the economics of the project.
David Baker: The purpose on the load of those trends is really to realize the value in the underlying assets.
David Baker: So I think that is really what we are looking forward to most is how we can use the base, that we have to grow the company and go after the next cornerstone asset.
David Baker: And in some cases to take them to the next stage of production.
Operator: Thank you.
David Baker: And in other cases to put them in the hands of World Finance partners, who could commit more capital and expenditure to them than weaker.
Operator: Thank you, gentlemen.
David Baker: And so look, that was the real rationale in terms of those transactions.
Operator: As we are at the top of the hour, we will now end the Q&A session.
David Baker: And one of the benefits they alluded to earlier in this presentation was also the parallel reduction in corporate costs and GNA that we increasingly have as a result, partnering those assets and projects.
Operator: If you have any other questions, please forward them directly to management.
David Baker: So from our perspective, the real focus is being on roles and continuing to add to the portfolio there.
Frederick Bell: Fred, would you like to say a few words to your viewers before we sign off today?
David Baker: We have kept an eye on opportunities probably partly to work with prospect generators as well, and identifying teams who have that core skill set that were a specific knowledge in a region or location, where they can have a competitive advantage and drive by them.
Frederick Bell: Well, thank you very much, first of all, for everyone for taking the time to attend.
David Baker: So we've spoken to some groups in terms of helping them start that in and us taking a royalty on it and others working together longer term.
Frederick Bell: I think we will continue doing quarterly calls going forwards and hopefully set a regular, consistent cadence of that, and as part of an initiative to, I think, coming into September, and as people are coming back to the office after some holidays, I think really try and get the story out there and market the story, help the stock, because what we have got is an underlying fundamental business. It is really strong. It continues to be getting stronger with every month and every quarter that goes by.
David Baker: So continue to have discussions on that and look at opportunities both and working with counterparties due to partner on opportunities there.
Frederick Bell: It puts us in a really good position to be able to make good choices between new acquisitions, paying down debt, dividends, buying back shares, all of the above.
Audience Member: But in the short term, the immediate focus is on the Thank you.
Frederick Bell: So I think, thank you all for your time and patience, and I look forward to staying in, touch, and please do feel free to email us if you have any questions.
Audience Member: We've been getting a lot of questions about the share price, so I'm just going to ask a general question.
Frederick Bell: We always say that at the end of calls and meetings, and we are really sincere in saying, that we'd like to hear from shareholders, and any feedback you can give us is always welcome. So please feel free to reach out if you do have anything you'd like to say.
Audience Member: Can you please comment on your share price performance compared to your peers.
Frederick Bell: Thanks again.
David Baker: Yes, I think our share price has come off.
Operator: Thank you very much, gentlemen.
David Baker: It's in terms of the junior gold royalty companies, I think we've come up broadly in line with those.
Operator: And just a reminder that this town hall will be available on the company's website for, replay and across all of our socials within the next 24 hours.
David Baker: Certainly in terms of if you look at our underlying performance from a financial perspective, this is a second highest quarter of revenue the companies have.
Operator: Before we sign off, please ensure that you fill in the short questionnaire at the end, of the presentation. This helps us and the company communicate more effectively with you in the future.
David Baker: And in actual in terms of operational performance, it wasn't the strongest quarter that we've had.
Operator: Thank you for joining us, and we will see you on the next town hall forum.
David Baker: So I think that's really encouraging because from an operator perspective, maintaining guidance, we're actually expecting to see better quarters and the one we've just had into an increasingly high gold price environment.
David Baker: At the same time, again, we've guided you before, we're going to have lower costs on the G&A front.
David Baker: So from a revenue perspective, from a financial position perspective, with the strongest we've been in many years, which has paid down $10 million of debt in the first half of this year and making an acquisition recently that was fully financed from cash on hand, not needed to go to the market.
David Baker: So from that perspective, I think the share price today is not at all reflective of the underlying fundamentals of the business.
David Baker: And look, I think we recognize that there is limited liquidity in the market and an environment where there's limited liquidity.
David Baker: You know, often you see that share price weakness, it doesn't take a lot to impact it down, but I don't think that's driven by the fundamentals of the business.
David Baker: If you look at it at us on a revenue per share basis, I think we're almost at the highest on a revenue per share basis for the company's been in certainly a number of years.
David Baker: But in addition to that, we have more exposure through our pipeline and through our wider portfolio than we have ever had by a very significant margin in terms of the broader portfolio.
David Baker: So on a per share basis on an overall company perspective financial benefit, we're taking a lot of boxes in terms of strength.
David Baker: I know it's, you know, frustrating when the share price doesn't match up to that.
David Baker: And to the earlier question from somebody around management inside of buying, you know, again, I think where and when we were able to, you know, more especially than ever at the current price, I think we'd love to take advantage of it.
David Baker: And we've just got to find a window where we are able to do that.
David Baker: And look in terms of the broader portfolio.
David Baker: And and then where we are share price, I think that's also why one of the topics on discussion internally is putting in place a normal course issue of it.
David Baker: You know, potentially with the opportunity to buy back shares when it does, you know, in our opinion, reach evaluation that is sufficiently attractive for us to go out there and, you know, we're actually delivering really good return to buying back shares.
Audience Member: So, yeah, I hope that addresses the question.
Audience Member: Excellent.
Audience Member: And, you know, you mentioned this unprecedented revenue growth in the first half of the year.
Audience Member: Do expect to see that continue.
David Baker: Yeah, maybe Dave.
David Baker: They probably talked about quite a lot.
David Baker: Yeah, absolutely.
David Baker: So, I mean, aside from, aside from a fantastic gold price performance through the year.
David Baker: So, I think at the start of the year, we were talking $2,000 gold. And it looks like it's powered past 2550 gold, which is definitely helping all of us.
David Baker: We've had a couple of new royalties come online.
David Baker: The key one there being Bonacrope.
David Baker: And that's now has three full quarters in the royalty area.
David Baker: So, we expect that you're paying us over over around a million dollars a quarter.
David Baker: Yeah, the real uplifting would expect in second half of the year is also an allied mine.
David Baker: And that's that's Debo, which is a satellite deposit to to Sadio.
David Baker: And again, we're waiting for exact guidance from from our lives there, but they're talking to material contributions to to Sadio's to Sadio's revenue there.
David Baker: So, yeah, we'd expect significant growth in the second half of the year.
David Baker: And we talked to we talked to our guides and we waited to the second half of the year.
David Baker: So, looking forward to that to continue on both in terms of ounces and in terms of dollars.
Audience Member: Excellent.
Audience Member: And let's talk about paying down debt as you alluded to before.
David Baker: I do intend to keep paying down the debt at the same rate that you have been for accelerating it. Yeah, so very, very, very pleased that we're able to repay 10 million dollars in the first half of the year, five and each quarter.
David Baker: I think we certainly look to the facility, which is an extremely low cost from National Bank of Seattle BC.
David Baker: So, so far three percent currently at the moment.
David Baker: So, it's one of the the advantages we have with our with our revenue back asset portfolios that we are able to access these low cost non diluted sources of finance from from mainstream commercial Canadian banks.
David Baker: But yeah, I think I think definitely the view is to to use it as a true revolving facility. And so additional cash will be paid down into into the revolver.
David Baker: And then and then we take it out as we we need it to transactions.
Audience Member: Excellent.
Audience Member: And there's been a few comments on your GNA costs and future expectations.
David Baker: Can you comment on that please?
David Baker: Yeah, absolutely.
David Baker: So we've had a couple of one off costs and that's really mostly around departure costs of senior management and the disposal of the exploration business and the monetization of exploration business.
David Baker: I think now we're really through the majority of that.
David Baker: And so I think what we'll see going forward is is a much much much lower GNA than than we historically recorded.
David Baker: Now it's just the team is now very stable.
David Baker: I've got it in place to to grow the business.
David Baker: So I think year on year will see it lower and then I expect it to be lower again through 2020.
Audience Member: Excellent.
Audience Member: Next question.
Audience Member: Are there any lithium minerals documented in the acquired tungsten projects?
David Baker: Yes.
David Baker: It's not something we're focused on.
David Baker: I think look, we really did the key tungsten asset we bought there in that tongue.
David Baker: We've really bought that for the tungsten deposit that historically has been explored and also been through six, seven years of permitting.
David Baker: So that was that was a prime driver and really haven't focused on other any other.
Audience Member: Okay.
Audience Member: The next question has to do again with royalty generation which you have answered, but the bulk of the question is, some of your peers have royalties on significant discoveries like silicon.
Audience Member: Do any of your assets have significant exploration potential?
David Baker: Look, the short answer to that is, is that certain?
David Baker: Absolutely, I think probably two that we mentioned that are at a very early stage, but really high discovery potential.
David Baker: The rule to we have on the HCK HCK project in Rwanda, and that is a project that Rio Tinto recently did country entry and Rio Tinto second last minor in the world, recently did country entry into Rwanda to JV this project specifically. And you saw the chairman of Rio Tinto going to Rwanda meeting the president.
David Baker: So, you know, that is an unusual step for one of the majors to take in regards to into a brand new unexplored project.
David Baker: This is a highly prospective lithium and the tights never explicitly in Rwanda.
David Baker: So, that really helped discovery potential, and I think our understanding is they're going to be drilling later this year, which for us is pretty material in terms of seeing what the upside and discovery potential is on that wealthy.
David Baker: And then the second one we did reference it as well is Egypt, and at the time we did the deal with in two metals on our Egyptian portfolio, we held the 2000 square ponds as a ground in Egypt, so I think we were the third or fourth biggest license holder in Egypt after sentiment is a major operator there and some from ages.
David Baker: So, that is a very material line told in in a region that is exceedingly under explore historical and what we have as a partner in in two metals is we have a group that is private, they are funded, they completed their first real program I believe before they had a full website up and running.
David Baker: So, the emphasis and the money is really being spent in the ground with a really strong technical team, and they don't need to go out marketing, and they don't need to list a company.
David Baker: So, they can just focus on the exploration work, and again, our understanding is that the second real program that God has come in and I think that we will be able to put out some results following that second real program, which will be coming up in two, three.
David Baker: So, we aren't sharing anything to date, and I think once they have that second real program completed, I think we'll be in a position where we can put out some news regarding the work that's done there, and that is ground that's never been explored before, and it's really the pit.
David Baker: All the licens areas that are focusing on them, that's two examples from the portfolio where I think we've got really, really good discovery potential.
David Baker: If you look across us today, we've got approximately 10 producing royalties, kind of a portfolio of call it 70 to 80 in total.
David Baker: So, there's clearly a very large number across across the portfolio that we don't often talk to, but a lot of exploration going on there from our partners, and counterparties, and the great thing with the royalty model is that we are not paying for our optionality.
David Baker: So, the more optionality we can learn into our portfolio, the more projects we can have, whether we're good or well regarded, well financed, technically competent management teams, progressing those projects at no cost to us.
David Baker: The more luxury tickets we have in our portfolio, and if we keep doing that, and we keep.
David Baker: Yeah, bringing those assets really cost into the into the portfolio.
David Baker: I think single later we're going to benefit from, you know, increasing discovery success.
Audience Member: As you say that, you know, point out that some of our peers have had on some of the project sales.
Audience Member: Excellent.
Audience Member: Would you consider alternative financing structures such as convertible debt that provide optionality for both the company and the investors.
David Baker: Yeah, maybe a good one for those two.
David Baker: Yeah, I think I think we're certainly well supported with with the financing that we've used today.
David Baker: So whether that was in the early days of the company.
David Baker: Two facilities with spot results lending, which was incredibly flexible and got us to a point to acquire some credible assets.
David Baker: Reducing dilution to a shareholder at the time, then graduating to to senior bank debt with as I said with national bank and CIBC.
David Baker: They've been incredibly supportive and I think a very, very low cost of capital, so that said so for cost 3%.
David Baker: So that would certainly be much lower than cost capital to the company than other some more mezzanine, mezzanine products.
David Baker: I think we've also been strongly using our equity at the right point in time as well.
David Baker: So for example, the cactus royalty that we acquired from RCS over Arizona.
David Baker: The RCS was very keen to participate as shareholders of the company and have been very supportive since.
David Baker: So I think thankfully because of the quality of the portfolio and that we're, you know, well beyond $20 million of revenue now and generating should be generating material cash was going forward.
David Baker: So we don't have to, we don't have to have a look at our alternative options, you know, you can just be the lowest possible cost of capital and less dilution to to anything she'll to work.
David Baker: Excellent.
Audience Member: And the last question of the day as we are at the top of the hour.
Audience Member: What do you feel is missing or lacking in the current portfolio?
Audience Member: In other words, what are you looking for in your next transaction or transactions?
David Baker: Look, we've all got, we've all got a lot of, a lot of strong views on the opportunities and ideas out there.
David Baker: We, we have, I think what we regard internally is to cornerstone assets at the stage that are in production in casserole and color window.
David Baker: So I think we're always looking to, to add another material really high quality asset in that as a cornerstone.
David Baker: And alongside that, I think we've, we've started really in the last 18 months to bring in some high quality development advanced exploration projects into that pipeline as well.
David Baker: And there's a few of those with spoken to over the course of today.
David Baker: But I think for us being able to continue to add revenue into the portfolio at the same time as bringing in development assets and strengthening the pipeline.
David Baker: And always keep an eye out for something that we're probably past as a, as a really cornerstone long term cornerstone asset for the company.
David Baker: So I think those criteria are some of the key things we look for and Dave, if you would add anything from, from that, or if you think it covers it.
David Baker: No, I think it's exactly right for it.
David Baker: I think as I said, you know, we don't, we don't need to go out and chase revenue.
David Baker: We don't need to go out and overpay the revenue.
David Baker: We've got an excellent base of assets, is very heavily weighted to two-axis and tier one jurisdictions operated by absolutely well-class mining companies.
David Baker: I think what we are looking to do is leverage that base, and I think we've probably been looking to build out that pipeline a little bit more wet.
David Baker: But then obviously looking to get surprised on the upside, for example, with Cactus and the recent PA, which we think has really improved the economics of the project.
David Baker: I think that's really what we're looking for too much is how we can use the base that we have to grow the company and go after the next phone transfer.
Joanne: Thank you, gentlemen.
Joanne: As we are at the top of the hour, we will now end the Q&A session.
Joanne: If you have any other questions, please forward them directly to management.
Fredric Bell: Fred, would you like to say a few words to your viewers before we sign off today?
Fredric Bell: Well, thank you very much, first of all, for everyone to take the time to attend.
Fredric Bell: I think we will continue doing quarterly calls, going forwards and hopefully set a regular consistent cadence of that and as part of an initiative to come in into September, and as people are coming back to the office after some holidays, I think really try and get the story out there and market the story, help the stock, because what we've got is an underlying fundamental business is really strong. It continues to be getting stronger with every month and every quarter that goes by.
Fredric Bell: It puts us in a really good position to be able to make good choices between new acquisitions paying down that dividend and buying back shares, all of the above.
Fredric Bell: Thank you all for your time, patience, and look forward to staying in touch and please do feel free to email us if you have any questions.
Fredric Bell: We always say that at the end of the course on new things, and we're really sincere in saying that we'd like to have some shareholders and any feedback you can give us all this welcome.
Fredric Bell: So please feel free to reach out if you do have any hand, if you'd like first thanks again.
Joanne: Thank you very much gentlemen, and just a reminder that this town hall will be available on the company's website for replay and across all of our socials within the next 24 hours.
Joanne: Before we sign off, please ensure that you fill in the short questionnaire at the end of the presentation. This helps us and the company communicate more effectively with you in the future.
Joanne: Thank you for joining us, and we will see you on the next town hall forum.
Joanne: Goodbye for now.