Lithium Royalty Corp. Reports Q1 2024 Results
- First quarter revenue declined by 11% year-on-year as portfolio volume growth helped offset an 81% decline in lithium prices
-
LRC acquired 1.5% GOR royalty on M4E, a private lithium explorer, with 91,000 hectares of prospective spodumene holdings in various jurisdictions in
Brazil . M4E intends to commence drilling imminently -
LRC portfolio grows to 35 royalties globally and 3 in
Brazil following 1Q portfolio addition - 2024 on track for robust organic growth as portfolio companies continue to derisk their respective operations, with several new mine openings, resource expansions, and mine studies expected in 2024
(in thousands of
Going forward, we expect the improving pricing environment, coupled with the expected start-up of additional lithium projects in the LRC portfolio, to provide positive tailwinds to the Company for the balance of the year. The demand outlook for lithium remains strong, with an upward bias to prices given the demand trajectory, rising cost intensity for the industry, and improved inventory positioning for battery materials,” stated LRC’s CEO,
LRC is reporting 45 Lithium Carbonate Equivalent Tonnes (LCETs) or 597 Spodumene Concentrate Equivalent Tonnes (SCETs) in the quarter1 compared to 54 LCETs or 576 SCETs last quarter.
Financial Highlights
3 months ended |
|||||
2024 |
2023 |
Variance |
% |
||
Royalty Revenue |
631 |
708 |
(77) |
(11)% |
|
Depletion |
(142) |
(238) |
(96) |
40% |
|
Gross Profit |
489 |
470 |
19 |
4% |
|
Net loss |
|
(1,045) |
(1,738) |
693 |
|
|
|
|
|
|
|
Income taxes |
|
(163) |
838 |
(1,001) |
|
Finance income |
|
(62) |
(277) |
215 |
|
Depletion |
|
142 |
238 |
(96) |
|
EBITDA |
|
(1,128) |
(939) |
(189) |
|
Foreign exchange loss (gain) |
|
30 |
(803) |
833 |
|
One time IPO share-based compensation (SBC) |
|
436 |
201 |
235 |
|
One-time IPO costs |
|
- |
869 |
(869) |
|
Exploration costs |
|
- |
414 |
(414) |
|
Decrease in fair value of financial assets |
|
- |
37 |
(37) |
|
Adjusted EBITDA |
(662) |
(221) |
(441) |
|
Royalty revenue decreased from
On
Adjusted EBITDA was a loss of
At quarter-end, LRC held
LRC Royalty Activity Updates
Core Lithium Finniss Royalty: In
Sigma Lithium Grota do
Atlas Lithium
Delta Lithium Yinnetharra Royalty: After releasing its maiden resource in December, Delta Lithium continued to focus its exploration efforts at the
Winsome Resources
Sayona Moblan Royalty: Sayona released a definitive feasibility study (DFS) for the development of a lithium mine and concentrator at Moblan during the quarter, confirming a post-tax net present value (NPV) of
Lithium Market
Electric vehicle sales grew by 25% year-over-year in 1Q24 according to the
In
EV adoption trends diverged among European countries, with broader continent EV registrations growing by approximately 6% year-over-year. Within the battery electric vehicle (BEV) category,
In
The IEA forecasts EV sales to reach approximately 17 million units in 2024, representing growth of approximately 21% year-over-year. EVs represented approximately 18% of all passenger cars sold globally in 2023 and the IEA expects EV sales to surpass 20% in 2024, or one in five of all sales. As the IEA notes, 1Q24 EV sales typically represent 15-20% of total annual global sales, suggesting a strong backdrop for the balance of the year. As new EV models are introduced globally, more models will qualify for the IRA subsidies in the US, and in
The lithium industry is witnessing supply curtailment across different levels of the cost curve. As a result, many leading analysts have reduced their supply growth forecasts for 2024.
Prices for lithium feedstock and chemicals decreased further in 1Q24. SMM reported prices in the quarter of
Lithium prices appear to have bottomed in the first quarter, with spodumene prices increasing by approximately 25% from the lows reached in January and
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 at |
|
LRC at The Mining Investment Event of the North |
|
Annual General Meeting of Shareholders |
|
LRC at Brazil Lithium Summit |
|
LRC at Cormark Annual |
|
LRC at |
|
Q2 2024 Earnings Release and Earnings Call. Click here for call details. |
Shareholder Information
The Consolidated Financial Statements and Management’s Discussion & Analysis for Q1 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.
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 investment research 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 that Adjusted EBITDA 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.
3 months ended |
|||
2024 |
2023 |
Variance |
|
Net loss |
(1,045) |
(1,738) |
693 |
|
|
|
|
Income taxes |
(163) |
838 |
(1,001) |
Finance income |
(62) |
(277) |
215 |
Depletion |
142 |
238 |
(96) |
EBITDA |
(1,128) |
(939) |
(189) |
Foreign exchange loss (gain) |
30 |
(803) |
833 |
One time IPO share-based compensation (SBC) |
436 |
201 |
235 |
One-time IPO costs |
- |
869 |
(869) |
Exploration costs |
- |
414 |
(414) |
Decrease in fair value of financial assets |
- |
37 |
(37) |
Adjusted EBITDA |
(662) |
(221) |
(441) |
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/20240513203604/en/
Contact Information for Inquiries:
Investor Relations
(647) 792-1100
jonida@lithiumroyaltycorp.com
Source: