Lithium Royalty Corp. Reports Q4 2023 Results
- Royalty revenue up 200% and 228% for the quarter and 2023 respectively
-
Record capital deployed to increase royalty assets by
$65.5 million - LRC acquired 8 royalties in 2023, including 6 following the Initial Public Offering
- Over 87% of capital deployed in 2023 was directed to assets that were either in construction or fully financed by year end 2023
- Four new maiden mineral resource estimates announced in 2023 within portfolio
- LRC set up well for a catalyst-rich 2024 highlighting LRC’s robust organic growth
(in thousands of
LRC is reporting 54 Lithium Carbonate Equivalent Tonnes (LCETs) or 576 Spodumene Concentrate Equivalent Tonnes (SCETs) in the quarter1.
Financial Highlights
3 months ended |
Years ended |
|||||||||
2023 |
2022 |
Variance |
% |
|
2023 |
2022 |
Variance |
% |
||
Royalty Revenue |
1,013 |
337 |
676 |
200% |
5,522 |
1,684 |
3,838 |
228% |
||
Depletion |
(279) |
(192) |
(87) |
45% |
(935) |
(961) |
26 |
(3%) |
||
Gross Profit |
734 |
145 |
589 |
406% |
4,587 |
723 |
3,864 |
535% |
||
Adjusted EBITDA* |
(695) |
(390) |
(305) |
|
(306) |
(100) |
(206) |
|
*Refer to reconciliation table below
Royalty revenue increased from
EBITDA in the year and quarter ended 2023 was negative compared to the same periods in 2022, primarily due to fair value adjustments of financial assets held by the Company prior to the IPO. Those financial assets were extracted as part of the IPO process and are no longer assets of the Company.
Adjusted EBITDA was a loss of
At year end, LRC held
Adjusted EBITDA |
3 months ended |
Years ended |
|||||||||||
2023 |
2022 |
Variance |
2023 |
2022 |
Variance |
||||||||
Net (loss) income |
(826) |
3,812 |
(4,638) |
(4,967) |
13,968 |
(18,935) |
|||||||
Income taxes |
(653) |
57 |
(710) |
2,887 |
1,272 |
1,615 |
|||||||
Finance income |
(54) |
(158) |
104 |
(1,329) |
(197) |
(1,132) |
|||||||
Depletion |
279 |
192 |
87 |
935 |
961 |
(26) |
|||||||
EBITDA |
|
(1,254) |
3,903 |
(5,157) |
|
(2,474) |
16,004 |
(18,478) |
|||||
Foreign exchange gain |
(44) |
(271) |
227 |
(1,161) |
717 |
(1,878) |
|||||||
One time IPO share-based compensation (SBC) |
603 |
- |
603 |
2,009 |
- |
2,009 |
|||||||
One-time IPO costs |
- |
(262) |
262 |
869 |
1,287 |
(418) |
|||||||
Exploration costs |
- |
357 |
(357) |
414 |
880 |
(466) |
|||||||
Impairment recovery |
|
- |
- |
- |
|
- |
(1,895) |
1,895 |
|||||
(Increase) decrease in fair value of financial assets |
- |
(4,117) |
4,117 |
37 |
(17,093) |
17,130 |
|||||||
Adjusted EBITDA |
(695) |
(390) |
(305) |
(306) |
(100) |
(206) |
|||||||
LRC Royalty Activity Updates
Sigma Lithium Grota do
Grid Metals
Atlas Lithium
Arcadium Lithium
In addition, Green Technology Metals released an integrated preliminary economic assessment (PEA) for its Seymour and Root projects in
Delta Lithium Yinnetharra Royalty: In
Winsome Resources
Core Lithium Finniss Royalty: In
Sayona Moblan Royalty: In
Zijin Tres Quebradas Royalty: In their 2023 Annual Report, Zijin commented that Phase 1 construction for 20,000 tonnes LCE at Tres Quebradas is near complete. Phase II construction, which will increase the total production to 50,000 tonnes LCE, was initiated in
Orion Resource Partners Litigation Update
In
The
Lithium Market
The dominant growth driver for the lithium sector remains electric vehicle (EV) sales, with approximately 62% of 2023 lithium demand emanating from the automotive sector according to
The growth in EV sales was led by
European electric vehicle registrations grew by 16% y/y, although growth was negatively impacted by the PHEV market, which contracted by 2.4%. BEV registrations in
LRC estimates that the global lithium market grew by approximately 28% in 2023, with the lithium market approaching almost 1Mt of lithium carbonate equivalent (LCE).
In addition to lithium demand from EVs, lithium has applications in batteries for energy storage system (ESS) installations. ESS allows generated power to be stored and consumed at a later time, during periods of higher or peak energy demand. According to Shanghai Metals Market (SMM), global production of LFP battery cells for ESS installations reached 190GWh in 2023, a year-over-year increase of 48% as compared to 2022. BloombergNEF estimates that the global average cost of operating a 4-hour duration ESS installation fell 24% in 2023 to
Prices for lithium were volatile in 2023, with a significant decline throughout the year. SMM reports that spodumene concentrate prices in 2023 averaged
Acquisition Activity in 2023 and 2024
Operator |
Project |
% |
Acquisition Date |
M4E Lithium |
Whitebushes, Mt. Elephant – |
1.5% GOR |
|
Q2 Metals |
Mia – |
1.0% NSR |
|
Pinnacle Minerals1 |
|
2.0% GOR |
|
Zijin Mining |
Tres Quebradas – Catamarca, |
0.5% GOR2 |
|
Power Metals Corp. |
|
2.0% GOR3 |
|
Atlas Lithium |
Das Neves – |
3.0% GOR |
|
Allkem Limited |
|
1.5% NSR4 |
|
Ganfeng Lithium Co. Ltd. |
Mariana – |
0.45% NSR |
|
Winsome Resources Ltd. |
Adina – |
2.0% NSR |
|
Important Dates and Events
-
April 29-30, 2024 – LRC at 2024 Energy Transition Metals Summit -
May 07, 2024 – LRC at Canaccord Genuity 3rd AnnualGlobal Metals & Mining Conference -
May 13, 2024 – LRC Q1 2024 Earnings Release -
May 14, 2024 – LRC Q1 2024 Earnings Call. Click here for call details -
June 4-6, 2024 – LRC at The Mining Investment Event of the North -
June 12, 2024 – LRC Annual General Meeting of Shareholders -
June 12-13, 2024 – LRC at Brazil Lithium Summit -
June 24 – 27, 2024 – LRC atFastmarkets Lithium Supply and Battery Materials Conference
Shareholder Information
The Consolidated Financial Statements and Management’s Discussion will be available on our website and SEDAR+.
Lithium Royalty Corp’s Investor Presentation is available here.
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 with a globally diversified portfolio of 35 revenue royalties on mineral properties around the world that supply and are expected to supply raw materials to support the electrification of transportation and decarbonization of the global economy. Our portfolio is focused on high-grade and low-cost mineral projects that are primarily located 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.
Adjusted EBITDA
Adjusted EBITDA is a non-IFRS financial measure, which excludes the following from net earnings:
- income tax expense
- finance costs, netted against finance income
- depletion and amortization
- impairment charges
- gain/loss on sale / disposition of assets/mineral interests
- foreign currency translation gains/losses
- increase/decrease in fair value of financial assets
- non-recurring charges
Management believes that Adjusted EBITDA is a valuable indicator of our ability to generate liquidity by producing operating cash flow to fund working capital needs and fund acquisitions. Management uses Adjusted EBITDA for this purpose. Adjusted EBITDA is also frequently used by investors and analysts for valuation purposes whereby Adjusted EBITDA is 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 it assists analysts, investors 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.
Adjusted EBITDA |
3 months ended |
Years ended |
||||||||||||
2023 |
2022 |
Variance |
2023 |
2022 |
Variance |
|||||||||
Net income |
(826) |
3,812 |
(4,638) |
(4,967) |
13,968 |
(18,935) |
||||||||
Income taxes |
(653) |
57 |
(710) |
2,887 |
1,272 |
1,615 |
||||||||
Finance income |
(54) |
(158) |
104 |
(1,329) |
(197) |
(1,132) |
||||||||
Depletion |
279 |
192 |
87 |
935 |
961 |
(26) |
||||||||
EBITDA |
(1,254) |
3,903 |
(5,157) |
(2,474) |
16,004 |
(18,478) |
||||||||
Foreign exchange (gain) loss |
(44) |
(271) |
227 |
(1,161) |
717 |
(1,878) |
||||||||
One time IPO share-based compensation (SBC) |
603 |
- |
603 |
2,009 |
- |
2,009 |
||||||||
One-time IPO costs |
- |
(262) |
262 |
869 |
1,287 |
(418) |
||||||||
Exploration costs |
- |
357 |
(357) |
414 |
880 |
(466) |
||||||||
Impairment recovery |
|
- |
- |
- |
|
- |
(1,895) |
1,895 |
||||||
(Increase) decrease in fair value of financial assets |
- |
(4,117) |
4,117 |
37 |
(17,093) |
17,130 |
||||||||
Adjusted EBITDA |
(695) |
(390) |
(305) |
(306) |
(100) |
(206) |
||||||||
Consolidated Statement of Financial Position
As at |
|||
|
|
|
|
|
$ |
$ |
|
Assets |
|||
Current assets |
|||
Cash |
11,757 |
35,877 |
|
Trade receivables |
1,250 |
458 |
|
Income taxes receivable |
558 |
477 |
|
Other assets |
807 |
1,858 |
|
Total current assets |
14,372 |
38,670 |
|
Non-current assets |
|
||
Royalty and working interests |
140,661 |
78,204 |
|
Investments |
- |
24,281 |
|
Prepaid non-current assets |
- |
9,164 |
|
Total assets |
155,033 |
150,319 |
|
Liabilities |
|
||
Current liabilities |
|
||
Accounts payable and accrued liabilities |
1,473 |
6,775 |
|
Income taxes payables |
51 |
- |
|
Related party payables |
281 |
224 |
|
Other liabilities |
108 |
- |
|
Total current liabilities |
1,913 |
6,999 |
|
Non-current liabilities |
|
|
|
Deferred tax liabilities |
3,098 |
2,772 |
|
Total liabilities |
5,011 |
9,771 |
|
Equity |
|
||
Share capital |
217,101 |
111,892 |
|
Contributed surplus |
2,939 |
- |
|
(Deficit) retained earnings |
(71,295) |
18,372 |
|
Accumulated other comprehensive (loss) income |
(1,903) |
7,176 |
|
Total equity attributable to equity holders of |
146,842 |
137,440 |
|
Non-controlling interest |
3,180 |
3,108 |
|
Total equity |
150,022 |
140,548 |
|
Total liabilities and equity |
155,033 |
150,319 |
The consolidated financial statements and accompanying notes can be found in our 2023 Annual Report and will be available on our website
.
Consolidated Statements of Income and Comprehensive Income (Loss)
Three months ended
The following table presents consolidated statements of income and comprehensive income (loss) for the three and months ended
For the three months ended |
For the years ended |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Royalty revenue |
1,013 |
337 |
5,522 |
1,684 |
|||
Depletion |
(279) |
(192) |
(935) |
(961) |
|||
Gross profit |
734 |
145 |
4,587 |
723 |
|||
Impairment recovery |
- |
- |
- |
1,895 |
|||
Management services |
(110) |
(170) |
(810) |
(637) |
|||
General and administrative expenses |
(2,201) |
(295) |
(7,896) |
(2,435) |
|||
Exploration expenses |
- |
(357) |
(414) |
(880) |
|||
Loss from operations |
(1,577) |
(677) |
(4,533) |
(1,334) |
|||
Other income (expense) |
|
|
|||||
Finance income |
54 |
158 |
1,329 |
197 |
|||
Gain (loss) on investments at fair value through profit and loss ("FVTPL") |
- |
4,117 |
(37) |
17,093 |
|||
Foreign exchange gain (loss) |
44 |
271 |
1,161 |
(717) |
|||
Income (loss) before income taxes |
(1,479) |
3,869 |
(2,080) |
15,239 |
|||
Current income tax expense |
(99) |
(35) |
(1,141) |
(204) |
|||
Deferred income tax recovery (expense) |
752 |
(22) |
(1,746) |
(1,068) |
|||
Net (loss) income for the period |
(826) |
3,812 |
(4,967) |
13,967 |
|||
Net (loss) income attributable to: |
|
|
|
|
|||
Non-controlling interest |
11 |
- |
72 |
188 |
|||
Equity holders of |
(837) |
3,812 |
(5,039) |
13,779 |
|||
|
(826) |
3,812 |
(4,967) |
13,967 |
|||
(Loss) earnings per share attributable to shareholders of |
|
|
|
|
The consolidated financial statements and accompanying notes can be found in our 2023 Annual Report and will be available on our website .
Consolidated Statements of Cash Flows
For the three months ended |
For the years ended |
||||||
$ |
$ |
$ |
$ |
||||
|
2023 |
2022 |
2023 |
2022 |
|||
Operating activities |
|
|
|||||
Net (loss) income for the period |
(826) |
3,812 |
(4,967) |
13,967 |
|||
Depletion |
279 |
192 |
935 |
961 |
|||
Impairment recovery |
- |
- |
- |
(1,895) |
|||
Non-cash management services |
- |
105 |
65 |
105 |
|||
Share-based compensation expense |
855 |
- |
3,048 |
- |
|||
Current income tax expense |
99 |
35 |
1,141 |
204 |
|||
Deferred income tax (recovery) expense |
(752) |
22 |
1,746 |
1,068 |
|||
(Gain) loss on investments at FVTPL |
- |
(4,117) |
37 |
(17,093) |
|||
Foreign exchange (gain) loss |
(44) |
(270) |
(1,161) |
717 |
|||
Income taxes withheld at source |
(553) |
(101) |
(1,025) |
(505) |
|||
Non-cash finance expense |
31 |
- |
15 |
- |
|||
Changes in non-cash working capital |
1,861 |
1,323 |
(7,527) |
81 |
|||
Income tax refunded |
- |
- |
158 |
274 |
|||
Net cash provided (used in) by operating activities |
950 |
(1,647) |
(7,535) |
(2,116) |
|||
Investing activities |
|
|
|
|
|||
Acquisition of royalty and working interests |
(2,630) |
(1,650) |
(53,689) |
(15,500) |
|||
Acquisition of prepaid non-current assets |
- |
(43) |
- |
(9,164) |
|||
Acquisition of investments |
- |
(352) |
(30) |
(4,202) |
|||
Proceeds from sale of investments |
109 |
16,735 |
110 |
32,032 |
|||
Net cash (used in) provided by investing activities |
(2,521) |
14,690 |
(53,609) |
3,166 |
|||
Financing activities |
|
|
|
|
|||
Proceeds from issuance of common shares, net of issuance |
- |
- |
102,359 |
19,290 |
|||
Proceeds from contribution to existing common shares |
- |
210 |
86 |
774 |
|||
Repurchase of common shares |
(301) |
- |
(1,296) |
- |
|||
Proceeds from non-controlling interest |
- |
- |
- |
913 |
|||
Pre-IPO distribution to shareholders |
- |
- |
(65,235) |
- |
|||
Repayment of related party loan |
- |
- |
(86) |
(56) |
|||
Net cash (used in) provided by financing activities |
(301) |
210 |
35,828 |
20,921 |
|||
Effect of exchange rate changes on cash |
153 |
886 |
1,196 |
(1,116) |
|||
(Decrease) Increase in cash |
(1,719) |
14,139 |
(24,120) |
20,855 |
|||
Cash at the beginning of the period |
13,476 |
21,738 |
35,877 |
15,022 |
|||
Cash at the end of the period |
11,757 |
35,877 |
11,757 |
35,877 |
The consolidated financial statements and accompanying notes can be found in our 2023 Annual Report and will be available on our website
1LRC calculates LCETs by dividing royalty income for the quarter by the average spot market price of
2Pinnacle Minerals’ acquisition of the underlying mineral claims closed in
3Altius Minerals Corporation has an indirect 10% interest in the original 1.0% Tres Quebradas lithium royalty through its 10% limited partnership interest in
4Gross Overriding Revenue (GOR) royalties are based on the total revenue stream from the sale of production from a property with few, if any, deductions.
5Net 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240327367545/en/
Contact Information for Inquiries:
Investor Relations
(647) 792-1100
jonida@lithiumroyaltycorp.com
Source: