Ecora Royalties PLC (ECOR) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Ecora Resources PLC Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand over to Marc Bishop Lafleche, CEO. Good afternoon, sir.

Good afternoon, all. Thank you so much for joining us here today. As mentioned just now, my name, I'm Marc Bishop Lafleche, CEO at Ecora and joined by Kevin Flynn, CFO. The Ecora Resources, as some of you may already know, is a royalty business that's really transformed itself over the last 10 years. And today, where we sit in the company, we're very much in a period of time whereby we'll see all the hard work we've done in the past almost decade translate to a very substantial change in terms of the revenue profile going forward. We've built this royalty portfolio over the past years to maintain exceptional quality in both in terms of counterparty and assets. And we've designed this portfolio to offer substantial growth potential in the short, medium and longer term. Through it all, we've also managed to maintain a high bar in terms of sustainability profile. And today, relative to peers, the equity certainly offers a very attractive mix of risk and reward. So on that note, I'll turn it over to Kevin to talk through our results from the first half of the year.

Thanks, Marc. And hi, everyone. Trading and performance for the first half of the year are very much in line with the trading updates that we put out during July. As Marc has touched upon, we've now entered a transition phase at Ecora, where we expect the revenue profile from our [ Heather 2 ] cornerstone asset Kestrel to start reducing, whilst at the same time, we wait for ramp-up from Voisey's Bay and for our development royalties to come on board. So this should lead to a period of volatility in the short-term as we transcend the next 18 to 24 months before the revenue profile of the business really begins to accelerate. And there's a slide later on in the deck, which shows this. But despite that, portfolio contribution is still very healthy in the first half of the year, just under $45 million, resulting in adjusted earnings per share of $0.09. Our net debt at the half year was reasonably modest at $43 million. We have a $200 million borrowing facility available to us to fund our further growth. Subsequent to the half year, our net debt profile has increased with the $20 million acquisition of the Vizcachitas copper royalty, which I know Marc is going to touch on it a little bit. And for our income-focused investors, our dividend was very well covered at the half year at over 2x. Looking to the portfolio and where we're going in the future. We are transitioning to a period where we'll see coal revenue from Kestrel declining meaningfully, whilst we wait for revenue from our copper, nickel and cobalt royalties to increase significantly. So we're very pleased to see this profile and some of these catalysts already beginning to take hold. BHP are now the custodians and operators of the West Musgrave project in Australia. This was a royalty we acquired around about this time last year from South 32 and BHP have indicated that construction remains on track with first production expected in the second half of 2025. In terms of further growth, we recently announced the acquisition of a 0.25% NSR Royalty of the Vizcachitas copper project in Chile. Very pleased to add more meaningful copper growth to the portfolio. And actually, as we'll show later on, we now have a very significant copper growth profile in our business over the next 2 decades. The Kestrel royalty, as planned, has started to run off with volumes kind of migrating out of our private royalty area. The first half of the year has probably seen the majority of our volumes to the group. We expect minimal deliveries in the second half of the year. And Voisey's Bay continues a pace with its transition from open pit to underground mining. And we're currently in a period now where this calendar year will probably be the lowest in terms of volumes and deliveries, very much in line with our investment case when we acquired the royalty in 2021, but we will expect to see some significant growth coming through from next year and onwards. Moving to this slide, which shows the breakdown of the $45 million of portfolio contribution. And whilst this was a 52% decline from the similar period in 2022, it doesn't really reflect apples and apples. This is largely due to Kestrel, where the vast majority of volumes in the first half of last year was within our private royalty land. And in addition to that, that coincided with a period of exceptionally high coking coal prices, which were always short term and unsustainable. Looking at the core portfolio, as we described it, which is now very much those minerals and commodities, which are future facing in nature. Voisey's Bay had a large decline. Again, this reflects this transition that we have been expecting from open pit to underground. In terms of volumes, we had 6 deliveries in the first half of this year, and we expect probably another 5 to 6 to come in the second half of the year. But in a similar kind of trend to Kestrel, a large part of this variance also kind of comes down to cobalt prices, which kind of came off from a $40 per pound high in the first half of 2022 to around about $15 or $16 a pound in 2023. Those prices have nudged up a bit since the half year. We're very pleased with the performance in Mantos Blancos, this was the first copper royalty we put into the business in 2019. The investment at the time was designed to part finance the debottlenecking program at the operation. This is now largely complete, and we've now seen some considerable volume upside in the first half of this year on the back of that, taking some of this away has been the copper price, which has traded pretty softly in the year-to-date, and this is largely a function of more general macro sentiment around the Chinese economy. The copper price is quite sensitive to the Chinese market in general, and we've seen a bit of softness in the copper prices as we've gone through. Marc has mentioned is our vanadium royalty. This reduced by about 15% in the period. This is largely volume driven with the operator there, guiding slightly lower volumes for calendar year 2023 on the back of some adverse weather conditions in the first half of the year. But fundamentally, this is still a very sound investment for Ecora with the current vanadium price far exceeding our investment case when we acquired the royalty in 2014. LIORC is our high purity iron ore pellet exposure from the iron ore corporation mine in Canada, operated by Rio Tinto. The decrease in volume and contribution here largely reflects, again, the softening of iron ore prices in the first half of the year, although fundamentally, this has been a very solid contributor for the group since we acquired it. And as this exposure is by way of a listed investment in the Canadian market. Our residual stake here of $24 million, provides good financing flexibility for us should we choose to recycle. McCLean Lake's, Cameco's uranium project, Cigar Lake. This is a toll milling exposure. And this generally speaking, kind of provides about CAD 500, 000 to CAD 600,000 of revenue through us via a toll mechanism on a monthly basis. The reduction here largely is a result of FX movements, this is received in Canadian dollars, and these numbers are presented in U.S. dollars. Four Mile produced slightly lower volumes in the second quarter of the year, against a very strong uranium pricing environment. Suburanium price has been one of the highlights for our portfolio in the first half of the year. The outlook here remains very positive for the second half of the year. This operation, some of you may recall, has been subject to an ongoing dispute in relation to some deductions and interpretations of the royalty contract. The appeal for this process was heard a month or so ago, and we're hoping to receive the verdict of that appeal very shortly. So we'll have more certainty by the second half of the year in relation to our position for previously accrued revenue. So looking at our total Ecora portfolio, $12.7 million in the period, down from $22 million in the previous period, largely as a function of volumes and pricing at Voisey's Bay. And then to round out, Kestrel obviously has been our previous cornerstone asset, a significant reduction in the period, largely as a combination of volumes transcending outside of our private royalty area in the first half of this year at a period where prices kind of normalized to levels, which were far exceeded in the first half of last year. Overall, contribution of $44.5 million, 52% lower than the $92.8 million in the first half of the year. We're still very pleased with this contribution from the portfolio. And especially as we look further out, the organic growth in our portfolio, which should see significant earnings growth for this business in the next 24 to 36 months. Marc, I'll hand back to you maybe to look at the next few slides.

Thanks, Kevin. Turning back to our strategic direction and our track record over the past years. We always encourage prospective investors or shareholders to think back as to where Ecora has been in the context of informing our strategy to take the business forward. And the first clear strategic imperative for this company has been to replace Kestrel from a producing income perspective. And while commodity prices are volatile and while asset mining operation can fluctuate year-to-year. It's been very clearly known to us that beyond 2026, the Kestrel royalty are no longer reproducing material income from the group. And over the past years, the first step was to replace that income line, not necessarily 1 plus 1 is 2, but on a ratio basis, again, assuming some fluctuations as a result of typical training factors. And having done that, the next strategic imperative was very much to pivot this company towards growth. And that was accomplished by virtue of a number of acquisitions. And furthermore, those acquisitions really cemented Ecora's growth profile and asset base in copper and nickel and base metals effectively. So where we sit today, we see the next strategic imperative for Ecora to be twofold. Number one, to further grow the asset base and such that we can enhance the overall nature of our portfolio; and number two, to further diversify the commodity complex such that Ecora can increasingly appeal to investors looking for low volatility, and a relatively derisked way to play the energy transition thematic relative to investing in underlying mining equities, for example. Our most recent acquisition, the Vizcachitas royalty really ticks all the boxes in terms of what we look for in terms of projects. First of all, this asset has a very long expected mine life at 26 years with potential to be even to run pretty much longer, is expected to be very well positioned on the cost curve at a cost estimated today at GBP 125, which would be, as I mentioned, the lower half of the industry cost curve. The resource is very large, the -- at 183,000 tonnes. The copper production over the first 10 years, this project ranks both in terms of production and in terms of reserve and resource base as one of the largest undeveloped copper projects in the world. And so from our investment criteria, this asset really ticks all the boxes in terms of a really high-quality deposit and underlying with unsubstantial growth potential beyond the base case. We structured the royalty in such a way that in the event first production doesn't occur according to the plan, which we, of course, would hope would be the case. But if that indeed does not materialize, the royalty structure with certain protections to compensate Ecora for delay in that production start date. And this royalty highlighted on this slide, really complements what is an otherwise industry-leading copper growth pipeline. Our copper growth pipeline, both in the short term, medium and long-term provides investors with exposure to copper and aggregate volumes while, of course, the royalty rates will be different for project, but in aggregate volumes from 50,000 tonnes per year with the potential to be hitting slightly over 0.5 million tons per year over the next decade. So today, where we sit at its core, Ecora is very much a business tied to copper first and foremost, second and in time increase of cobalt. We often get the question, well, what does the revenue portfolio and composition look like in the short to medium term? This slide illustrates on the solid blue line the contributions and expected contributions based on broker forecasts from our -- our portfolio of producing future-facing commodities today. And the light blue line represents other commodities, which is primarily nickel. And so the light blue line from Kestrel as we know, is not sustainable into the future, but it's a material potential contributor to our income line or certainly expected to be a material contributor to our income line in the short-term. And beyond that, in the medium term, however, Ecora very much is -- as both Kevin and I have already mentioned base metals type business, where the vast majority of this potential income, the income with the potential to exceed $100 million derived from copper and nickel. The first project that's in the line expected to contribute is West Musgrave, as Kevin mentioned, is a project owned by BHP currently in construction with first production targeted in '24 onwards. And shortly off the racks thereafter, Santo Domingo, POE and Nifty all expected sometime between 2026 and 2028. What's quite interesting about the business as we sit here today in terms of where the equity trades and the sum of the parts valuation according to the brokers is that the equity appears to be trading at a discount to the net present value of its producing asset base. And therefore, what the opportunity today exists for investors who are interested in the capital growth potential in the short to medium term. It's quite compelling, we think, whereby an investor is able to acquire a share and theoretically acquire the business for less than the value of the producing royalty with the development portfolio arguably for free. In the near-term, this development work portfolio is expected to be significantly derisked should these catalysts occur as expected. And the key catalysts across the portfolio are, number one, just continued construction at West Musgrave; number 2, further completion and ramp-up of operations at Voisey's Bay from 2024 onwards. An expected feasibility study to be released at Mantos Blancos in relation to brownfield expansion. And of course, a feasibility study at Santo Domingo expected in the second half of this year. And so what we anticipate is that as these derisk and catalyst events occur, as I mentioned on the prior slide, the assets that are currently appeared to be getting no value in our equity share price should come through. And increasingly, over time, as we approach first production, we would expect that the value of producing assets would be reflected close to NAV as has been the case historically at Ecora. So with that, we're happy to turn to some Q&A.

[Operator Instructions] As you can see, we have received a number of questions throughout today's presentation, and thank you to all investors for submitting their questions. Kevin, could I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

Absolutely. Thanks, and thanks to everyone for the interest in submitting questions as well. Marc, one for you, first up, does the management plan to keep coal in the business?

So the plan is very much to keep the current metallurgical coal exposure, which is expected to run beyond 2026 -- excuse me, to run until 2026. As I said beyond 2026 met coal or coal in general, have no material exposure within the Ecora portfolio. Beyond that, we're not looking to add our coal exposure to the business at the moment, and it's very unlikely that we would do so in the future.

Great. Next question. Excellent work on building growth profile. One question in relation to that. Are we expecting a gap between cash flows from Kestrel lending and these new projects coming online? And if so, what are the consequences for our ability to roll over the debt and make interest payments? I guess I'll pick that one up, maybe. Yes, the transition from Kestrel to the new development assets was always very much envisaged. The acquisitions that we've done and the way in which we've financed those acquisitions has always been with full visibility really in relation to the revenue profile and that gap between kind of Kestrel rolling off and the ramp-up at Voisey's Bay first and now the contribution from West Musgrave. We still remain quite low levered in terms of our key covenants under our facility. We wouldn't expect this to impact on our ability to refinance our facility. Those discussions and they're currently taking place. And in terms of interest payments, et cetera, even at present, we've got a path probably towards peak net debt of $100 million on top of a facility of $200 million. So we think we've got very good headroom and ability to continue not only just financing the gap between Kestrel and new revenue, but also to continue growing our business and making further investments. Next one is for you, Marc. Are we too focused on energy transition minerals, which are running hot for the next 10 years or so? Is it not better to be agnostic about other kinds of mineral demand like lead, mercury, anthracite, et cetera?

Our strategy is to build a portfolio of commodities, which provides investors with exposure to, number 1, renewable energy production; number 2, the transmission of that renewable energy; and number 3, storage and consumption renewable energy, specifically on these critical minerals. Now within that complex, there are a lot of commodities that have an overlay into the energy transition thematic, but of course, as well underpinned and very well-established end markets that are underpinned by conventional industries. And at the Ecora, our net asset value, for example, is copper. And copper, of course, is an energy transition metal, which is fundamental to our modern world, similarly for nickel. Nickel is fundamental again to our modern world. And yes, a role in the energy transition, but not uniquely commodities that are either we'll make it or not depending on whether or not the world decides and the pace at which the world decarbonize. And I think the other point to make is we're not looking to build a portfolio of commodities, which is highly correlated to a single battery technology. We're looking to build a robust, diversified portfolio that's both diversified in terms of counterparties and mining operations, furthermore against to any possible technology, which may or may not develop and gained mainstream adoption in the future. So a great example is our cobalt exposure. Our cobalt exposure currently materially runs another decade on the base case. And of course, there's potential for life of mine expansion, but within the horizon of most forecasts currently. Cobalt is very much expected to be the key battery metals during that period. And therefore, when we make investments into commodities, one of the key pieces of diligence really reflects the life cycle that's anticipated for that commodity and whether or not that horizon aligns with the investment horizon for the mine itself.

Thanks, Marc. I might take these next 2 together. What are we doing to address the demise of the share price, something you and I obviously kind of look at every day? No accretive deal has been done and income from dividends below the risk-free rate. Should investors be concerned that the dividend will become uncovered in H2 going forward?

Okay. Do you want -- I will take, yes. So I think taking that in sort of reverse order, specifically in relation to the fact that the dividend is below the risk-free rate, effectively, what that implies is 2 things. Number one, the dividend yield at Ecora currently at 6% to 7%. Historically, it's not too far off of this company has traded when the risk fee rate was close to 0%. And so effectively, what's happening is that the growth profile of the business is being priced into the equity of the stock such that the dividend yield is not the only determinant to pricing the equity. That appears to be -- I mean certainly, there are other factors, but that certainly would explain potentially why the equity is trading where it is. And even then, the equity today trades at a level which appears to be below the sort of net present value of the producing portfolio. In terms of the equity, I think Kevin and I, of course, monitor the equity. Of course, the Board is something that we're thinking about very carefully. And our strategy in terms of growing our portfolio, fundamentally is to grow earnings per share and NAV per share and not growth for the sake of growth. The equity trading levels are beyond our control to some degree. And so our focus fundamentally is to grow the company in an accretive way. And we feel that over time, our efforts will be rewarded for all shareholders in terms of a higher equity valuation.

Next question, Marc, has our thinking on geopolitical risk changed in the last 18 months?

Currently, our portfolio is almost 100% OECD exposure. We, of course, consider other opportunities opportunistically. But generally speaking, within the context of our portfolio, we don't anticipate materially changing the asset base -- the asset base -- the asset bases jurisdiction footprint.

Great question here about what price the Voisey's Bay acquisition is based on in terms of cobalt and what do we expect in 2024?

Over the horizon of the Voisey's Bay investment in real terms, we say the price assumption amongst many cases, range in terms of the base case of probably from $22 to $23. The 2024 price as forecast by research analysts is just -- is around $24 per pound.

Next question on Vizcachitas. Why do we think Vizcachitas will be developed? How do we model the IRR return on investments on the project? And some concerns about local opposition to the project in the past?

Ultimately, with mining projects, our view is that as a royalty holder as one, it takes a longer and longer horizon, what's fundamental to the investment case is the quality of the underlying mineral deposits. It's scale, expected cost profile, longevity, production units, ease of access. And Vizcachitas really ticks all these boxes. It's an interesting point because an IRR over such a long horizon, can yield say, a figure that does not really capture the sizable cash contributions in undiscounted terms. And while, of course, this investment meets our IRR targets. What we really think is interesting about the specific royalty, there's a potential from a cash-on-cash basis over the life of the investment to really underpin a portion of the royalty contribution in our portfolio for multiple decades, potentially beyond that even.

Next question, how much visibility do we get from Vale about future production schedules? And the risks to some of these schedules?

We have monthly forecast from Vale, and we visit the mine annually. Beyond that, we also speak with the Vale team on a monthly basis, if not more. So we have a great amount of visibility. But beyond that, we are not mining the deposit and we don't have operational control. And so we might have insight into what Vale is planning to do. We had as a royalty company, which is the norm for royalty companies don't have operational control.

Next question, Marc, we were expecting to make significant investments into Piauí this half year. Is this likely to materialize?

At this time, what's likely is that over the next H2 -- the remainder of the H2 period and early next year, Brazilian Nickel will be looking to finance -- to complete its financing process. And so no, it's not likely that Ecora invest this probably $1 million range to part fund the construction of that project in this calendar year. In terms of whether or not it's likely to materialize, I mean, that's not something where we have a huge amount of visibility. Ultimately, it will come down to whether or not financing can be secured for this project. I think the one comment we would make is that in the world today, nickel hydroxide products. So in other words, nickel products, which can flow directly into battery material supply chains in the United States are exceptionally scarce. The vast majority of nickel supply growth is coming from Indonesia. And most of these projects have very sizable carbon footprint, relatively speaking, but also you don't -- are not entirely free in terms of the subsequent supply chain to ultimately end up in the U.S., specifically in U.S. electric vehicles or battery or energy storage applications. And so therefore, today's world appears to be very favorable for the financing of a product producing these mineral products, but we shall see. We hope that further information and further updates will be made available by Brazilian Nickel in the coming months.

Thanks, Marc. I think this question is kind of in relation to the market for new royalties. What's the procedure for new mines, for example, do we contact them? Or do they contact us?

Both actually. I think in our experience anyways, having been at Ecora, as I mentioned earlier, for almost a decade, we have been able to secure most of our royalties, if not all, by virtue of strong relationships with sellers, whether they be mining companies or whether they be individuals or groups who own existing royalties.

Next question, maybe I can take this one. What are the remaining deferred payments from the Narrabri sale? I think we have got around about $10 million or so to come between now and the end of 2026, in terms of fixed staged payments. At present, we also have our price-linked contingent consideration, which remains in the money above $95 a tonne thermal coal price that adds about $500,000 or $600, 000, I think, per annum to our cash flow. In addition, there is also a structure whereby should the Southern area of the deposit be permitted. There would be a further $5 million payments in equal annual installments of $1 million. So the disposal is still very much tracking our base case in terms of our expectation for total consideration. And the price linked consideration structure remains in the money. I think current thermal coal prices today are around about $150 a tonne. So still quite a lot of headroom on the price linked consideration. The next question, in terms of the acquisitions, are they replacing Kestrel income at the rate you expected or hoped for? Maybe I can take that as well, Marc. I think to look at any one 6-month period in isolation is probably not the appropriate measure to do so. I think the Kestrel revenue on average, over the last 8 or 9 years, generated around $38 million to $40 million per annum, and we think the current producing portfolio. Certainly, once next year comes and we ramp up more at Voisey's Bay is definitely going to be capable of generating that. And as our previous slide pointed to once we see some contributions come through from West Musgrave and Piauí, we expect that path to increase organically towards the $100 million mark and above. So I think the answer is yes, it is. The portfolio is producing as expected. Albeit there will be some short-term volatility around commodity prices as that comes through. Next question, Marc, having been very conscious of jurisdiction. Could we comment on the -- on our increased exposure to Chile?

Chile has been an interesting jurisdiction to watch over the last 24 to 36 months. I think what we've seen in the last 6 months has certainly confirmed what we always thought in comes of Chile being a great jurisdiction to invest, firstly, in terms of the royalty regime and a fiscal framework, which ultimately results and a mineral taxation regime, which is very much aligned with OECD jurisdictions. And number 2, from a political perspective, a constitutional process, which has been exceptionally democratic. And therefore, in our view, Chile remains what has always been a very attractive jurisdictions.

Excellent. One you're asked frequently, Marc, are there any plans to gain exposure to lithium?

Yes, there are a number of commodities in our portfolio, which we would love to round out and those include -- so that certainly includes lithium. It also includes other commodities such as graphite, tin, high purity manganese, rare earths, amongst others. In the past 12 to 24 months, lithium prices have been exceptionally high, having gone from around plus or minus $10,000 per tonne of hydroxide a few years ago to peaking out at $70,000, $80,000 per tonne. Lithium prices have pulled back recently, which would suggest a much more attractive through cycle price for a royalty transaction. We -- always, in any acquisition, seek to avoid pricing our royalties at really high cyclical prices. I think that's just prudent behavior. We've been reluctant to take too much price risk out of the world and the pricing environment has changed amongst other commodities, though, lithium is an interesting one, particularly given the growth prospects over the next decades. It's a commodity that would we think fit well within our portfolio exposure.

Next question. What are the remaining payments for the purchase of Voisey's Bay, if any, and the remaining payments to South 32? How would we fund these payments? I think in terms of Voisey's Bay, there are some contingent payments due on certain production metrics and pricing metrics. I think at present, those remain out of the money. And I guess, on our base case, we probably wouldn't expect to have to finance much further under that structure going forward.

Yes. Will they would be some financing, right, Kevin?

Yes, I was just going to say, obviously, we would love to do, be in a position to do that because it would mean production and pricing is going very much higher than from the current position. So that will be a good self-funding problem to have. The South 32 payments are very much kind of baked into our base case leverage analysis. We have 2 further payments to make of $9.16 million each. That will be made in -- those will be made, sorry, in October and January, and that will complete the deferred payments to South 32. Next question, Marc. There's great emphasis nowadays on recycling as a royalty business. Is there any way of accessing these businesses?

We see opportunities in this sector. What I'd say is the technologies today to some degree, are still in their infancy, both in terms of scale, but also the market itself in terms of total supply of feedstock. But actually, what's interesting is one of the largest sources of recycling is not actually use batteries today. It is the leftovers or quality control rejects of producing batteries. So the market isn't enormous as we sit here today. But in time, that is certainly something that we would consider, and we have considered in the past.

Next question, looking at EPS and NAV per share. What is our cost of debt for additional drawdown, given a 6% to 7% dividend yield, taking debt to buy stock as presumably an attractive option? So the cost of debt currently, we've got a facility that operates SOFR, which is the new U.S. LIBOR standard plus a ratchet of 275 to 400 bps. On our current leverage profile, we're currently at 275 basis points. So cost of debt currently is just under 8%, given the increase in the risk-free rate and the associated intergroup banking rates recently. So that is our cost of debt in terms of using that debt to buy back shares. That's a different discussion. It's not necessarily associated with the financial arbitrage on it. Marc, do you want to pick up on that point?

I think you've touched on it, Kevin. In a nutshell today, from a pure EPS perspective, financing share buyback just with debt versus a cash and yield and the dividend is roughly neutral. And furthermore, I would say that the market opportunity today to buy royalties is a good one. Market conditions are exceptionally challenging across the net, the mining sector. I mean, obviously, the Ecora's share price itself has been under pressure, but not nearly as much has been the case for many mining companies. And therefore, the royalty product in that context is a really interesting one for mining companies who otherwise face exceptionally dilutive equity issuances to fund further development, if those companies are even able to issue equity at all given the absolute -- what has been an oasis in terms of equity capital mark issuance year-to-date. And so we're very cognizant that there is a potential sizable opportunity cost in terms of deploying our capital to royalty opportunities, which may otherwise never come up again. if those royalty opportunities, for example, are acquired by other royalty companies or if they're never created in these types of market conditions, we are very keen to be ready to deploy and build our portfolio for high-quality opportunities which may present themselves.

And I think the last question as far as I can see it here, Marc, do we plan on the acquisition of producing versus development assets, especially in terms of the earnings gap between 2024 and 2026?

I think ultimately, it will come down to on a relative basis, what is the investment that delivers over the long-term, the most shareholder value creation. And producing royalty, while I might add income over the next couple of years, theoretically relative to a royalty that could pay off 10 and 20x the invested amount as opposed to twice potentially on a producing royalty is something to be considered very, very carefully. I think other royalty companies relative to Ecora, especially in the precious space tend to have very deep development pipelines. And therefore, as time goes by, the royalty businesses benefit from what is a bit of a treadmill actually, where assets are in the near-term rolling forward towards production and the longer term moving forward towards the medium term. And we've built that into our portfolio today, and we discussed the copper pipeline, but Ecora has growth beyond that over the next decade. And so to answer that question in different words, what we're looking to do is not necessarily do deals to drive earnings per share growth in year 1 or 2 and evaluating all investments on those that singular data point. Hopefully, what we're looking to do is by really high-quality royalties, that have the potential to generate income and really drive maximum shareholder returns as measured over the medium- to long-term period. So to some -- that's not to say we wouldn't consider producing royalties. We, of course, review them. But our basket, of course, is much broader than just solely focusing on acquiring royalties that could add some income in the next couple of years at the cost of substantial income beyond.

Marc, Kevin, thank you. And I think you addressed all those questions you have from investors. And of course, the company can review your questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Before redirecting investors to provide you with their feedback, which I know is particularly important to yourself and the company. Marc Lafleche ask you for a few closing comments.

Well, in short, as we mentioned already today, Ecora is really at the cusp of transforming itself. First of all, we've seen the company transform itself in terms of its asset base. And in the next few years, what we'll see is a catch-up in terms of the revenue mix, where that revenue mix today, which is very heavily weighted towards met coals is expected to, therefore, shift fairly quickly to a basket of commodities that have very strong and what appear to be an exceptionally attractive fundamental outlook. Thanks for your interest and support, as always. And if you have any other questions that haven't been answered, please get in touch.

Marc, Kevin, thanks for updating Investors Day. I please ask investors not to close this session, as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This maybe take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of Ecora Resources PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.