Ecora Royalties PLC (ECOR) Earnings Call Transcript & Summary

Welcome to the Anglo Pacific Full Year Results. I will now hand over to Julian Treger to begin. Julian, please go ahead.

Thank you, Rosie, and thank you all for taking the time and interest today to listen to the annual results presentation. Also, as this is my final one of these, I wanted to thank you all for your interest in the company and support over the past couple of years. Running through the schedule, I will handle first the highlights overview. I'll then hand over to Kevin Flynn, our CFO, to cover the financial review. Then Marc Lafleche, who becomes CEO on Friday, will cover the company update and outlook as he is the future, before we take questions. So on Page 3, turning to the highlights. We're very pleased to report a record annual portfolio contribution of over $85 million in 2021, a significant increase on the 2020 number, with 45% of this generated in Q4. These results were driven by strong performances at Kestrel and Voisey's Bay, with the former producing $26 million alone in the last quarter of last year. 2021 also represented a very successful rebalancing of our portfolio with 21st century commodities now representing 75% of the Group's assets, more than double that in 2020. As you all probably know, we exited Thermal coal at a favorable price. But we didn't compromise our geographic exposure as we made this transition, and we remain heavily weighted to OECD countries. Good news announced today was that a new longwall has been added at Kestrel to smooth production volumes, and this is expected to increase the volumes within the Group's private royalty lands by 10% and smooth expected volume step-downs over the remaining life of the royalty. Given the strong performance in 2021, we ended the year in a robust financial position with net debt of $90 million, reflecting, of course, the Voisey's Bay acquisition, which was over $200 million, and also the fact that the record Q4 revenue wasn't received until January 2022. But since then, we've had a rapid deleveraging. The current net debt is around $80 million with results from Q1 yet to be received. It's worth noting that based upon the Q4 run rate, our income would be around $150 million. So we expect rapid deleveraging during the course of this year. And that brings us to point 5, which is that we are very strongly positioned for continued growth. We have $120 million of available liquidity to finance further growth initiatives. And as I will show on the following pages, we are facing a market with very strong commodity prices in the commodities which we are exposed to, which should assist this deleveraging process. And so we are looking at a diverse pipeline of strategic opportunities to grow the company in line with our stated strategy. Just turning back to the record contributions, that has led to strong adjusted earnings per share growth. And we are delighted to announce a significant increase from $0.157 to over $0.25 in 2021. The final dividend has been maintained at 1.75p per share, which gives a full year dividend of 7p per share as the focus continues to be on paying down our debt. Rosie, if we could turn to Slide 4, which really focuses on how the commodities underlying our portfolio continue to perform very strongly into 2022. You can see the striking disparity on the left of the page between the basket of commodities we're exposed to and our share price, which whilst it has gone up slightly, hasn't risen by anything like the weighted commodity basket over the last 21 months. And whilst there was obviously some growth in the second half of 2021, and you can see that on the right side of the page, at the bottom, I think what's really striking is how much growth we've seen in commodity prices year-to-date in 2022. And so that really suggests a very strong performance at least through Q2 and, hopefully, throughout the year, which should result in another record year of income. Turning to Slide 5. We thought we would highlight in this hyperinflationary environment that we are entering, and you can see on the left side of the page, the way that U.S. consumer price inflation has really rocketed. And this is obviously before we see some of the effects of the war feeding through into inflation figures. We thought we would highlight why the royalty model really comes into its own more than ever in this environment. I think people are concerned about cost inflation and -- for normal mining companies, as you can see on the right side of the page, whilst they obviously get the same sort of revenues that we do on the top line from production and commodity prices, they are very exposed to operating cost inflation and capital cost inflation. And so there is generally a concern that some of the commodity price rises we've seen will be eaten up by cost increases. In contrast, the Anglo Pacific royalty model doesn't have that sort of exposure. So we are a pure way of getting exposure to the top line commodity prices. And that, I think, is of major benefit to investors in a very inflationary environment, which we are entering into. So hopefully, the market will appreciate the virtues of the model more than ever. And with that, I'll sign off and hand over to Kevin Flynn to cover the financial review. Kevin?

Thanks, and good morning, everyone. If we could turn to Slide 7 and I'll go through our financial highlights from what was a record year of portfolio contribution from Anglo Pacific. Total portfolio contribution was $85.6 million, significantly in advance of $47.5 million in 2020. And this, in its own right, while very impressive, it doesn't really tell the whole story because coking coal and thermal coal prices really only started to move in the second half of 2021. So to kind of contextualize this, 45% of our overall contribution came in the final quarter of them. And indeed, if you annualize that level of portfolio contribution, that would result in $150 million. So with pricing currently already significantly in advance of what was a record fourth quarter, we could see some significant organic growth for the portfolio to come in financial year 2022. We've included a bullet here to say that coal price is above $400 a tonne at the current kind of volumes produced from Kestrel. We think every $50 a tonne increase adds about $3.5 million a quarter to the Kestrel contribution. So that kind of gives you a flavor for the real impact these record levels of coking coal could have on our business going forward. Given the royalty model, the portfolio contribution drops to adjusted earnings, and those increased by 60% in the year to $0.252. We'll look at the individual components of this in a couple of slides time. And at the final dividend of 1.75p, which brings total dividend for the year to 7p, this produces dividend cover of 2.6x, which is very healthy. And in the fourth term, we will be looking to prioritize our debt repayment and growth initiatives as we go through the year. If we turn to the next slide, this is our portfolio contribution. So just drilling down into some of these numbers, and I'll touch on some of the royalties as I go through. A record level of contribution from Kestrel in the year. And I think just to take a step back, if we think when I was presenting these results this time last year, coking coal was at $120 a tonne, and the consensus price outlook for the remainder of FY '21 at that time was $135 a tonne. The actual [ line of churn ] was $221 a tonne, so 63% uplift on what we would have been expecting this time last year. And clearly, that's dropped straight through to our royalty revenue. But it's also benefited through the ratchet structure whereby in a higher price environment, the weighted average royalty rate increases as well. And as I said, most of this revenue came through in the fourth quarter [indiscernible]. And the average daily spot coking coal price for Q4 was about $308 a tonne. The current spot price is just under $600. So already this year we're at 2x the level that our record Q4 from Kestrel was [ generated on. ] And looking ahead to FY '22, we're expecting similar levels of volume from Kestrel. Adaro published their guidance in relation to that. So clearly, in a higher price environment, there's a genuine prospect for good growth to come from Kestrel. Narrabri, well-documented production and operational issues over the last couple of years here as they've navigated through a localized fault area. So our volumes actually year-on-year were down 50%, but the price increase was at 62%. And thermal coal kind of followed a similar path to coking coal in many respects during 2021. However, going forward, we obviously have divested our interest in this royalty. And we think we took advantage of a good pricing environment in the second half of last year to do that. And that's looking like a reasonable bet at this juncture. Voisey's Bay, I think we're very pleased with the performance of the stream. This is our one stream in the portfolio. Streams differ slightly to royalties in so much that we actually receive physical product. And to that extent, we received 21 deliveries attributable to us in calendar year 2021. And the mechanism which we have in place to monetize these deliveries worked seamlessly through the year, very quick monetization to cash from receipt of the product. I think to look at this, this is 9 months, obviously, of contribution from April to December. But again, kind of similarly to coking coal and Kestrel, the price really started to move in the fourth quarter of the year. And I think if we look at the average cobalt price in Q4 of just under $30, I think we're at about $38 or $39 per pound today. So again, genuine prospect of good growth to come from Voisey's Bay in the year ahead. Mantos Blancos, volumes were up just short of 10% in the year as they kind of achieved some of their debottlenecking ambitions. And there's more to come from that, as Marc will discuss later on in the presentation. But the price for copper was up about 38% average realized in the period. Mantos Blancos is probably the one asset in our portfolio -- this we acquired in 2019 for $50 million. Corporate price environment has moved on considerably from then. And the value of this royalty, we believe, has gone up considerably. Maracás Menchen, a very good year from them also, the 2020 number was skewed slightly due to $1.5 million offtake termination charge. So not quite with apples to apples when you look year-on-year. Volumes were in line but probably at the lower end of Maracás' guidance through the year. But price was up considerably. And I think whilst we need to see a few more quarters as to how they are selling their product, it does seem like they are producing and selling more to the battery market. And over time, we probably expect to see this achieving a premium to what was previously the benchmark V205 price. So again, we're very well placed with this royalty in terms of battery metal exposure. LIORC, again, similar to Mantos, not quite apples for apples on this one because we divested 77% of our holding to part-finance and recycle into the Voisey's Bay acquisition. But notwithstanding that, the dividend for the year increased by almost 2x to $6 a share, reflecting obviously a very strong and healthy iron ore pellet premium market during the year. McClean Lake was up in the period. This reflects the planned shutdowns in 2020 as part of the -- as part of COVID care and maintenance. But we're pleased to see that this is running back to CAD 500,000 to CAD 600,000 a month level. Four Mile, I won't say too much on where it's subjected to ongoing legal dispute. We went to trial at the end of last year, and we're awaiting judgment in respect of that case. EVBC, although it was in line, I think there was a lower volume here as there's lower grade feeds into the processing plants. But offset by a higher gold price environment during the year. So overall, portfolio contribution, record levels of $85.6 million with obviously similar volumes expected in FY '22, and we're in a much higher price environment currently. So turning over the page to Slide 9, and we'll just see how these adjusted earnings dropped down -- sorry, how this portfolio contribution drops down to the adjusted earnings. Looking at our operating expenses, these increased during the year to $10.7 million, reflecting higher staff costs associated with our record year of contribution of investments and also some costs associated with Four Mile legal dispute. Hopefully, if we are successful at trial, it will cover some of these costs, so not to suggest that, that's a normal run rate. Finance costs increased significantly during the year again. This reflects the write-off of the previous capitalized costs, which were released to the P&Ls upon the refinance of the facility associated with Voisey's Bay. And obviously, our average borrowings during the year were higher than 2020 as well. But given the speed of deleveraging thus far in FY '22, we should see a reduction in our finance costs in the year ahead. And tax of $14.1 million. This doesn't reflect the true cash cost or the headline cost because the disposal of Narrabri provided a tax shield against our Australian income. But because we don't take into account the loss on disposal in adjusted earnings, we can't take credit for the tax. So the actual kind of headline tax number is lower. But taking all this into account, adjusted earnings for the year of $52.3 million, significantly in advance of 2020. And that kind of drops down to a 61% margin on portfolio contribution, which is very, very healthy. And as Julian said, and noted, a very good inflation story -- inflation hedge kind of story through the virtue of the royalty and streaming business model. Turning to Slide 10, which is a summary of our balance sheet. Increase in net assets in the period from $293 million to $356 million. This largely reflects the adjusted earnings from the record contribution we had during the year, and also the equity raise associated with Voisey's Bay metal stream. That is included in the balance sheet of $203 million at the end of the year. And that, along with $69.5 million of intangible assets, these 2 asset classes are held at amortized costs, and they are not revalued on our balance sheet like Kestrel is. And given the increase in the future price of cobalt, copper, vanadium, et cetera, we think there's significant upside to some of these asset values on our balance sheet. The Kestrel one is quite interesting. It actually increased in the year despite record levels of income, which you would normally associate with depletion. Two factors at play here. First of all, the 4 [ NPVs ] at a higher coking coal price input. But also the impact of this new longwall panel is coming through in terms of future volumes that we estimate that, that's added about 10% to the total volumes we expect to receive from the portfolio within our private royalty land. And I'll discuss cash and markets on the next slide, if we turn to that, 11. So this bridge chart shows the change in net debt during the year, and there's a very similar trend here to the adjusted earnings, the record -- in terms of the portfolio contribution. But what I would note here is that the record Q4 portfolio contribution was only received in January 2022. And that's why our net debt of $90 million as reported at 31st December, from 1st of April, that number will be $60 million. So that really shows the speed of deleveraging that we've achieved in the first quarter of this year and with higher commodity prices expected for Q2, that speed of deleveraging is set to continue. We paid dividends of $25.4 million in the period, which implies a capital allocation ratio of 8:1 towards growth and that very much aligns with where we are strategically at the moment. In terms of building on the momentum of the Voisey's Bay acquisition to add further growth to the portfolio. And with $60 million of net debt, leaving $80 million of undrawn borrowings in addition to our residual stake in LIORC and treasury shares, we have well over $120 million as of today to deploy into future growth opportunities. And that number is going to increase as we go through the second quarter of the year and continue to receive monthly cash flow from Kestrel. So with that, I'll hand over to Marc, who will go through the portfolio in more detail.

Thank you, Kevin, and good morning, everyone. Thank you for joining us today. As mentioned, 2021 was a transformational year, not only in terms of revenue record, but also in terms of our portfolio. And you can see on Slide 14, the cumulative impact of all of the acquisitions that have been completed since 2014, where at the time, our exposure to 21st century commodities was almost 0 to 75% currently. And as Julian mentioned as well, this has all been achieved without sacrificing or without compromising either the group's exposure to Tier 1 geographies. On Page 15, cantering through the portfolio, the Voisey's Bay underground expansion is progressing in line with our expectations, and we're absolutely delighted with the exceptional cobalt price environment, which I'll discuss in more detail shortly. Earlier this year, Mantos and Capstone completed a combination to create a leading pure-play copper producer, and Capstone has recently identified further upside potentials at Mantos. Absolutely fantastic, and it's something that we identified as a potential source of upside at the time of the acquisition. Later this year, we expect a feasibility study evaluating the Phase II mill expansion, which would see annual ore throughput increasing from 7.3 million tonnes per annum to 10 million. And that's expected later this year. And Mantos also continues to evaluate the extension of oxide ore processing. So more to come, some interesting catalysts on that asset later this year. We've discussed earlier on this call, the new longwall at Kestrel. And turning to IOC and LIORC, the demand environment for pellets and high-quality iron ore remains exceptionally strong, with pellet premiums continuing to trade at all-time record levels. At Maracas, during the year, we saw some very good news in terms of an approximately 10-year life of mine extension. And furthermore, the plans to construct an ilmenite byproducts circuit, which would be captured by the Anglo Pacific royalty. At EVBC, as always, the company is focused on expanding its reserve life to roll forward a 5-year life, and exploration plans are underway. And turning now to some of our development assets. The INCOA ramp-up continues. The operation is producing products on spec, which is excellent news. The ramp-up has been impacted by COVID. And unfortunately, also by the logistics challenges that are affecting, quite frankly, the global economy more generally. And so at this time, we expect funding of our tranche 2 to occur in H2 or early 2023. At PIAUI, the company is fast approaching the completion of a definitive feasibility study that's expected later this year. And furthermore, at PIAUI as well, the team is currently completing the construction of the small scale plant that's expected to produce first units of nickel and cobalt later this year. Turning now to Page 16. As mentioned by both Julian and Kevin, we've been absolutely delighted by the performance of Voisey's Bay since the acquisition, particularly with the exceptionally strong cobalt price. Cobalt price levels have almost doubled from 2020 year-end to present, and that's been driven by a number of factors. First, we've seen robust EV sales growth as well as a rebound in industrial end market demand. But furthermore, supply chain disruption has really impacted the ability of cobalt products to get to market. First in the Democratic Republic of Congo, where 75% of the world's cobalt is produced, there have been some major logistical challenges, in part, we understand, driven as a result of the Kamoa mine construction, which is absorbing local logistics and it's creating bottlenecks in terms of getting coal out of the DRC and south to South Africa, where cobalt is typically exported to the world, but furthermore, as a result of the Ukraine and Russia conflict. Looking ahead in terms of the cobalt battery chemistry market share forecast, things have been relatively constant over the past year, which is pleasing. And furthermore, the game is changing in terms of substituting in cobalt bearing battery chemistries, in large part driven by almost a 7x increase in lithium prices, which is really changing the economic calculus in terms of the cost of no cobalt, lithium, iron, phosphate batteries to nickel, cobalt chemistries. On Page 17, as mentioned earlier this year, Largo published an updated NI 43-101 report, which sees the mine plan extended from 2031 roughly to 2041 roughly. That mine plan, post 2032, covers in part the Anglo Pacific area. Up to 2031, we anticipate all operations to be fully covered by our royalty, and that's outlined on the bottom half of the page. And we think this is a good opportunity just to reemphasize how great of an asset Maracás Menchen is within the context of the vanadium industry. And you can see this on the top right corner of the slide. From a cost perspective, Maracas Menchen is the lowest cost producer of vanadium globally. In terms of our royalty exposure to that asset, we could not be more pleased. On Page 18, you can see our current ESG diligence risk assessment framework, which is fundamental to our investment process. During the year, we've even updated this framework, and that's simply to ensure that we keep apace with fast evolving best practices. On Page 19, please, Rosie. We've made very significant progress in terms of our sustainability profile as well as disclosure of 2021. First of all, in terms of our portfolio exposure, which has been absolutely transformed by the Voisey's Bay acquisition in terms of our portfolio carbon footprint. And it's important to keep in mind that per unit of nickel produced at Voisey's Bay, that the carbon to nickel ratio is amongst the lowest of all global nickel operations. Second, we've exited thermal coal. Third, we've been certified at the corporate level by climate partners as Scope 1, 2 and 3 carbon neutral. We've committed to adhering to UN Global Compact principles. And furthermore, we've improved our disclosure of our ESG policies but also our framework, which is involved in -- with our framework, which has been developed in line with Anglo Pacific being as a royalty company and not a mining operator. And looking ahead to 2026, we are very firmly on path to continue our transition on our journey away from our legacy of coal, such that by 2026, we expect to be almost 100% 21st century commodities. Turning to Page 20, please. In terms of our pipeline update, we continue very much to target 1 to 3 acquisitions per year. And in terms of the opportunity set at the moment, many of the opportunities tend to be at the construction stage or medium-term production so slightly earlier, perhaps given relative to the past 5 years, and that's really driven by a function of what's expected to be very strong commodity demand in order to achieve the energy transition. And therefore, in that context, what we're seeing is a significantly [ lighter ] absolute pool of capital required, which again bodes very well for our opportunity sets and our ability to deploy capital. We're also seeing increased availability of debt and equity alongside our royalty piece, which is, therefore, positioning a lot of projects to come into production and to finance construction since Anglo Pacific, as a royalty provider alone, our capital and our product isn't sufficient to get projects off the ground. And last, the majority of our discussions and our opportunity set continues to be on a bilateral basis. And this really underscores the far less competitive environment in the nonprecious space relative to precious metals royalty sector. So turning to 2021. To recap, 2021 was a record year of portfolio contribution, driven by exceptionally strong met coal and cobalt prices in the second half of the year. We completed the transformational Voisey's Bay acquisition, which continues to perform very strongly, and we exited thermal coal. 21st Century commodities have moved significantly even in the past year to at year-end being 75% of our Group's assets. And then looking into the future into the next year, our commodity basket, which delivered record results in the fourth quarter, is now produced -- performing even more strongly in Q1. So as mentioned at the top of the call by Kevin as well, we very much expect a strong Q1, a strong H1. And we're positioned for another record year. And that cash flow is really going to allow us to delever our balance sheet. We see a very rapid deleveraging profile, as mentioned. And should commodity prices stay where they are, the business could be debt free by the end of 2022. And from there, in terms of capital allocation, our first priority very much remains repaying debt incurred in part to fund the Voisey's Bay acquisition. And from there to finance growth. Anglo Pacific in the last 8 years has never had a better balance sheet or been in a better position to deploy capital and acquire royalties that will ensure that the business has a sustainable base of cash flow and income in the future as we see the Kestrel royalty wind down over the next 4 years. So from there, I would really also like to take the moment to -- well, thank Julian and congratulate Julian for having led the successful transformation of Anglo Pacific over the last 8 years, but also for putting into place such a talented and experienced team that ensures that as we look into the future, the company is positioned in absolute strength for the next phase of growth. So thank you very much, Julian, from the team at APG. From here, we'd be happy to take questions.

[Operator Instructions] Our first question is, can you talk a bit more about your deal pipeline and priorities for the year? With the banks strengthening, what deal size would you be comfortable with at the moment? And as an extension of that, what commodities do you see most attractive at the moment?

Well, thank you very much for the question. Rosie, please can you move up to Page 20. So taking first the commodity focus, our strategy very much remains those commodities directly requiring to achieve the energy transition and global climate change objectives or two projects or mining operations that themselves, while not directly feeding into the energy transition end markets, will have relative environmental or relatively better sustainability profiles. So for example, a potash project, which has significantly lower carbon units per unit of potash relative to the industry producers. Our vision for Anglo Pacific continues to be -- to provide investors with derisked commodity price exposure to those basket of commodities required for the global net zero targets. And therefore, on the left side of this page, you can see those commodities which we have in our portfolio and those which we will continue to target. In terms of balance sheet capacity, over the course of the year, we think we have balance sheet firepower which could range $150 million to $200 million.

Our next question. How has the share price matched commodity basket performance in the years prior to 2021?

We don't have the exact figures to hand. However, historically, it would probably be fair to say that the Anglo Pacific share price has traded with a closer correlation to its underlying commodity basket.

The next question. You indicate that Kestrel is expected to produce an average of 2 MPTA between 2023 and 2025. What was the production volume in 2021?

Volumes within our land was about 5.3 million tonnes from overall volumes of about 5.7 million. We're expecting similar levels in 2022.

Our next question. Could you talk about your shareholder return policy, both how do you expect record cash flow to show in the dividends and what to expect from your share repurchase policy, especially when the stock price is attractive?

Our priority at the moment continues to be deleveraging the balance sheet. At year-end 2020, the business had approximately $90 million of debt, which in absolute levels is higher than where we would like that to be through the cycle. And so for the short term, we see these record cash flows really as a way to rapidly improve our balance sheet profile. And secondly, we see these strong cash flows as a way to recycle met coal into other green commodities such as cobalt, copper, nickel and other. Because ultimately Anglo Pacific as a business, all its underlying assets are depleting. And therefore, it's very important to also replace the sources of cash flow. And a perfect example is the Kestrel step-down in terms of cash contribution that's expected between today and 2026. And so therefore, our priorities in the near term continue to be deleveraging the balance sheet, growth, all the while continuing at a dividend at a very attractive dividend level of 7p per share and a healthy dividend yield.

We've got a number of questions coming from this person. Firstly, any plans to capture additional shareholder value, e.g. a merger with Altius Minerals and uplisting to the New York Stock Exchange? Secondly, what transactions are in the pipeline to replace lost Kestrel revenue?

So I'll take the first question. We're currently not exploring any corporate combinations. That being said, the team and the Board are fully committed to delivering shareholder value and should that make sense in the future, it's something that we would consider carefully. In terms of the second question where it had been in relation to the pipeline. As always, we'd seek to target 1 to 3 transactions per year. And as we mentioned earlier, the company currently has -- over the course of this year, we expect $150 million to $200 million of firepower to complete further acquisitions. Fundamentally, the business, in our view, has been successful because of its very disciplined approach to capital allocation, particularly in growth, and we very much plan to maintain a disciplined and rigorous due diligence process and investment framework.

They also had a third follow-up question. Any lessons for future capital allocation from the loss on sale of the Narrabri royalty?

We do believe that, that transaction was structured to include a number of contingent payments, both linked to future performance of thermal coal prices, but also the permitting event linked to Narrabri South. And therefore, in time, that loss could be substantially unwound as those contingents come through. Generally speaking, in terms of our growth policy, looking ahead, we've committed as Anglo Pacific Group to no longer invest in coal or carbon-based energy. And our strategy is to reinvest record levels of cash flow generated by Kestrel into 21st century commodities in line with our stated strategy.

Our next question. Once Voisey's Bay underground transition is complete, what annualized cobalt volume is expected compared to 2021 levels?

Vale is forecasting run rate levels of approximately 2,600 tonnes per year, of which Anglo Pacific is really entitled to approximately 23% prior to the speedy stepdown expected towards the end of the reserve life.

Our next question. On the opportunities you're seeing, are they mainly royalties or streams? It's now the time to think about longer-dated preproduction royalties, which are cheaper, while your near-term pipeline is strengthened by coal?

As a company, we're open-minded to both royalties and streams and our fundamental risk/reward profile between a royalty and a stream is very similar. In terms of our allocation to development stage versus producing, at this time, we see a number of attractive opportunities at the construction stage or opportunities that are likely to come into production in the medium term. And therefore, we do think it's an opportunity to acquire royalties and streams that would add significantly more cash and cash flow into the business over the longer term relative to our producing assets. We do see generally, and as mentioned before, these strong cash flows really put Anglo Pacific in the position to pivot from -- to pivot to growth in the future, and to really pivot its strategy to becoming more of a growth play.

We have a follow-up question from Richard Hatch at Berenberg. Do you see any scope for further panels to be added at Kestrel?

At this time, we're not aware of any possibility to further expand the panels within the Anglo Pacific royalty area. And Richard, if you flip to Slide 33 of -- in the appendix, you can see the Anglo Pacific royalty overlay demand plan as well as the new panel. And given the royalty area -- the private royalty area, it seems unlikely that new panels would be added to our royalty area and importantly to be expanded, it's unlikely that they would be captured by the Anglo Pacific royalty area.

Our next question. To what extent do you expect the fall in revenue from Kestrel to be offset by revenues from current nonproducing assets over the remaining life of Kestrel?

If you take a through the cycle view on Kestrel income, from -- ignoring record levels that are almost 6x where met coal prices were 12 to 24 months ago -- the acquisitions that we've completed over the past 8 years put the business in a position to have -- replace that Kestrel income in terms of the baseline revenue profile. Now on a year-on-year basis, obviously, the decline in income and revenue profile will be accentuated by record met coal prices. On balance, of course, that's an extremely helpful thing as we always take those cash flows to really accelerate our growth profile, but also our ability to recycle those core cash flows into green commodities.

We have one more question come through. Is there a plan to move into tin space in lieu of very low overall investor awareness on this commodity?

The tin is a very interesting commodity. It's absolutely fundamental to the energy transition, particularly in circuit boards. Tin, as a commodity, is relatively less well tracked and less well followed, and therefore, it does present bilateral opportunities for the Group. One consideration in relation to tin is it relates to the general geographic footprint of most tin supply, which we would consider to be slightly outside of our geographic targets. That being said, tin, as a commodity, is very much on our radar. And in the medium term, we think is really important to be -- to provide investors to the full suite of commodities required to achieve the energy transition.

We have no further questions. So unless a question is submitted in the next few seconds, I'm going to hand back to you for any additional or closing remarks.

Well, thank you very much all for joining us today. We very much looking forward to updating the market in the matter of a few weeks in relation to our Q1 trading update, which we expect to be even stronger than our Q4 of last year. So stay tuned.