Lithium Royalty Corp. Reports Q2 2024 Results
- Revenue increased by 85% year-on-year, driven by volume growth despite 72% year-on-year decline in spodumene concentrate prices
- Lower-cost business model contributed to positive Adjusted EBITDA for the quarter
- Public guidance by LRC portfolio partners suggests three new projects expected to start production in 2H24, with Zijin Mining’s Tres Quebradas project start-up imminent, supporting robust organic growth
(in thousands of
LRC is reporting 106 Lithium Carbonate Equivalent Tonnes (LCETs) or 1,297 Spodumene Concentrate Equivalent Tonnes (SCETs) in the quarter1, compared to 45 LCETs or 597 SCETs last quarter and 24 and 201 respectively in the same period last year.
Financial Highlights
3 months ended |
6 months ended |
|||||||||
2024 |
2023 |
Variance |
% |
2024 |
2023 |
Variance |
% |
|||
Royalty Revenue |
1,549 |
838 |
711 |
85% |
2,180 |
1,546 |
634 |
41% |
||
Depletion |
(210) |
(147) |
(63) |
43% |
(352) |
(384) |
32 |
(9)% |
||
Gross Profit |
1,339 |
691 |
648 |
94% |
1,828 |
1,162 |
666 |
57% |
||
Net income (loss) |
317 |
(891) |
1,208 |
|
(728) |
(2,627) |
1,899 |
|
||
|
|
|
|
|
|
|
|
|
||
Income taxes |
284 |
299 |
(15) |
|
121 |
1,137 |
(1,006) |
|
||
Finance income |
(34) |
(797) |
763 |
|
(96) |
(1,074) |
978 |
|
||
Depletion |
210 |
147 |
63 |
|
352 |
384 |
(32) |
|
||
EBITDA |
777 |
(1,242) |
2,019 |
|
(351) |
(2,180) |
1,829 |
|
||
Foreign exchange loss (gain) |
7 |
(61) |
68 |
|
37 |
(864) |
901 |
|
||
One time IPO share-based compensation (SBC) |
104 |
603 |
(499) |
|
540 |
804 |
(264) |
|
||
One-time IPO costs |
- |
- |
- |
|
- |
869 |
(869) |
|
||
Other non-recurring income |
(750) |
- |
(750) |
|
(750) |
- |
(750) |
|
||
Exploration costs |
- |
- |
- |
|
- |
414 |
(414) |
|
||
Decrease in fair value of financial assets |
- |
- |
- |
|
- |
37 |
(37) |
|
||
Adjusted EBITDA |
138 |
(700) |
838 |
|
(524) |
(920) |
396 |
|
Royalty revenue increased from
Adjusted EBITDA was
At quarter-end, LRC held
LRC Royalty Updates
Core Lithium Finniss Royalty: In
Zijin Tres Quebradas Royalty: In
Sigma Lithium Grota do
Atlas Lithium
Winsome Resources
Sayona Mining Moblan Royalty: In
Orion Resource Partners Litigation Update
In
The
Lithium Market
The quarter saw diverging trends across the various end markets driving demand for lithium-ion batteries. Within the mobility sector, electric vehicle (EV) sales in
In
European EV sales have moderated, with variations by region. In the
In the US,
Within the energy storage sector, volumes continue to outperform expectations, driven by economies of scale for battery manufacturing and lower battery costs. BloombergNEF estimates that the cost of lithium-iron-phosphate (LFP) battery cells declined by 44% y/y to
In addition, several large-scale energy projects were announced recently supporting continued momentum for the battery storage sector. Namely, Saudi Arabia’s
The lithium market remains on track to grow by more than 25% in 2024, driven by strength in Chinese EVs and global energy storage markets. Supply is expected to grow in 2024, driven by the ramp up of projects in
SMM reported spodumene concentrate prices in 2Q24 of
LRC Acquisition Activity in 2023 and 2024
Operator |
Project |
% |
Acquisition Date |
M4E Lithium |
Whitebushes, Mt. Elephant – |
1.5% GOR2 |
|
Q2 Metals |
Mia – |
1.0% NSR3 |
|
Pinnacle Minerals4 |
|
2.0% GOR |
|
Zijin Mining |
Tres Quebradas – Catamarca, |
0.5% GOR |
|
Power Metals Corp. |
|
2.0% GOR |
|
Atlas Lithium |
Das Neves – |
3.0% GOR |
|
Allkem Limited |
|
1.5% NSR |
|
Ganfeng Lithium Co. Ltd. |
Mariana – |
0.45% NSR |
|
Winsome Resources Ltd. |
Adina – |
2.0% NSR |
|
Important Dates and Events
Date |
Event |
|
LRC Reports Q3 2024 Results |
|
LRC Q3 2024 Earnings Call. Click here for call details |
|
LRC at |
|
LRC at 3rd |
|
LRC at 26th Annual |
Shareholder Information
The Consolidated Financial Statements and Management’s Discussion & Analysis for Q2 2024 are available on our website and SEDAR+.
Qualified Persons
The technical and scientific information contained in this news release was reviewed and approved in accordance with NI 43-101 by
About
LRC is a lithium-focused royalty company organized in
Forward Looking Statements
This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities laws, which may include, but are not limited to, statements with respect to future events or future performance, management’s expectations regarding LRC’s growth, results of operations, estimated future revenues, performance guidance, carrying value of assets and requirements for additional capital, mineral resource and mineral reserve estimates, production estimates, production costs and revenue, future demand for and prices of commodities, expected mining sequences, business prospects and opportunities, the performance and plans of third party operators and the expected exposure for current and future assessments and available remedies. In addition, statements relating to resources and reserves and mine life are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates and assumptions are accurate and that such resources and reserves or mine life will be realized. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budgets”, “potential for”, “scheduled”, “estimates”, “forecasts”, “predicts”, “projects”, “intends”, “targets”, “aims”, “anticipates” or “believes” or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of LRC to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking information is based on management’s beliefs and assumptions and on information currently available to management. The forward-looking statements herein are made as of the date of this press release only and LRC does not assume any obligation to update or revise them to reflect new information, estimates or opinions, future events or results or otherwise, except as required by applicable law.
A number of factors could cause actual events or results to differ materially from any forward-looking statement, including, without limitation: fluctuations in the prices of the primary commodities that drive royalty revenue (including various lithium products); fluctuations in the value of the Canadian and Australian dollar and any other currency in which revenue is generated, relative to the
For additional information with respect to risks, uncertainties and assumptions, please refer to LRC’s most recent Annual Information Form dated
Non-IFRS Measures
This earnings release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, the non-IFRS measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS.
EBITDA and Adjusted EBITDA
EBITDA is a non-IFRS financial measure, which excludes the following from net earnings:
- income tax expense;
- finance costs, netted against finance income; and
- depletion, depreciation and amortization.
EBITDA is a common metric used by investors and analysts for assist in their valuation of the Company. In addition to EBITDA, we have determined that additional adjustments are necessary to arrive at a more accurate indicator of the Company’s ongoing operational performance – Adjusted EBITDA:
- impairment charges and reversals;
- gain/loss on sale/disposition of assets/mineral interests;
- foreign currency translation gains/losses;
- increase/decrease in fair value of financial assets;
- expenses related to one-time share-based compensation granted at IPO
- other non-recurring income and charges.
Management believes that EBITDA and Adjusted EBITDA are valuable indicators of our ability to generate liquidity by producing operating cash flow to fund working capital needs and fund acquisitions. These metrics are also frequently used by investors and analysts for valuation purposes, whereby the metrics are multiplied by a factor or “multiple” that is based on an observed or inferred relationship between Adjusted EBITDA and market values to determine the approximate total enterprise value of a company. LRC believes these measures assist investors, analysts and our shareholders to better understand our ability to generate liquidity from operating cash flow, as LRC believes that the excluded amounts are not indicative of the performance of our core business and do not necessarily reflect the underlying operating results for the periods presented.
3 months ended |
6 months ended |
|||||||
2024 |
2023 |
Variance |
2024 |
2023 |
Variance |
|||
Net income (loss) |
317 |
(891) |
1,208 |
(728) |
(2,627) |
1,899 |
||
Income taxes |
284 |
299 |
(15) |
121 |
1,137 |
(1,006) |
||
Finance income |
(34) |
(797) |
763 |
(96) |
(1,074) |
978 |
||
Depletion |
210 |
147 |
63 |
352 |
384 |
(32) |
||
EBITDA |
777 |
(1,242) |
2,019 |
(351) |
(2,180) |
1,829 |
||
Foreign exchange loss (gain) |
7 |
(61) |
68 |
37 |
(864) |
901 |
||
One time IPO share-based compensation (SBC) |
104 |
603 |
(499) |
540 |
804 |
(264) |
||
One-time IPO costs |
- |
- |
- |
- |
869 |
(869) |
||
Other non-recurring income |
(750) |
- |
(750) |
(750) |
- |
(750) |
||
Exploration costs |
- |
- |
- |
- |
414 |
(414) |
||
Decrease in fair value of financial assets |
- |
- |
- |
- |
37 |
(37) |
||
Adjusted EBITDA |
138 |
(700) |
838 |
(524) |
(920) |
396 |
_________________________________
1LRC calculates LCETs by dividing royalty revenue for the quarter by the average spot market price of
2Gross Overriding Revenue (GOR) royalties are based on the total revenue stream from the sale of production from a property with few, if any, deductions.
3Net Smelter Return (NSR) royalties are based on the value of production or net proceeds received by the operator from the smelter or refinery that treats the operator’s mineral production. These proceeds are usually subject to deductions or charges for transportation, insurance, smelting and refining costs as set out in the royalty agreement, but may also be subject to other deductions or charges.
4Pinnacle Minerals’ acquisition of the underlying mineral claims closed in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808692847/en/
Contact Information for Inquiries:
Investor Relations
(647) 792-1100
jonida@lithiumroyaltycorp.com
Source: