Lithium Royalty Corp. Reports Q3 2024 Results
-
Operational permit granted to Atlas Lithium’s
Das Neves project for which LRC holds a 3.0% GOR royalty, with production expected in 2025 -
Winsome Resources released scoping study, projecting a 17+ year mine life, 282,000 tonnes of annual production and nearly
$300 million in cash flow to LRC over life of mine -
Sigma Lithium secured
$85 million in financing for Phase 2 of Grota do Cirilo, which would increase annual production to 520,000 tonnes -
Rio Tinto's
$6.7 billion acquisition of Arcadium Lithium enhances LRC’s positions on the Mt Cattlin and Galaxy projects by upgrading to Rio Tinto as royalty counterparty
(in thousands of
Looking ahead, LRC’s balance sheet remains well-positioned with
LRC is reporting 20 Lithium Carbonate Equivalent Tonnes (LCETs) or 258 Spodumene Concentrate Equivalent Tonnes (SCETs) in the quarter1, compared to 106 LCETs or 1,297 SCETs last quarter and 90 and 887 respectively in the same period last year.
Financial Highlights
3 months ended |
9 months ended |
|||||||||||||||
2024 |
2023 |
Variance |
% |
2024 |
2023 |
Variance |
% |
|||||||||
Royalty Revenue |
224 |
2,963 |
(2,739) |
(93%) |
2,404 |
4,509 |
(2,105) |
(47%) |
||||||||
Depletion |
(94) |
(272) |
178 |
(65%) |
(446) |
(656) |
(210) |
(32%) |
||||||||
Gross Profit |
130 |
2,691 |
2,561 |
(95%) |
1,958 |
3,853 |
(1,895) |
(49%) |
||||||||
Share-based compensation |
(407) |
(856) |
449 |
|
(1,574) |
(2,193) |
619 |
|
||||||||
General and administrative expenses |
(922) |
(1,231) |
309 |
|
(2,798) |
(3,501) |
703 |
|
||||||||
Net loss |
(1,653) |
(1,514) |
(139) |
|
(2,381) |
(4,141) |
1,760 |
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Income taxes |
(713) |
2,403 |
(3,116) |
|
(592) |
3,540 |
(4,132) |
|
||||||||
Finance expense (income) |
1 |
(201) |
202 |
|
(95) |
(1,275) |
1,180 |
|
||||||||
Depletion |
94 |
272 |
(178) |
|
446 |
656 |
(210) |
|
||||||||
EBITDA |
(2,271) |
960 |
(3,231) |
|
(2,622) |
(1,220) |
(1,402) |
|
||||||||
Foreign exchange loss (gain) |
5 |
(253) |
258 |
|
42 |
(1,117) |
1,159 |
|
||||||||
One time IPO share-based compensation (SBC) |
104 |
602 |
(498) |
|
644 |
1,406 |
(762) |
|
||||||||
One time IPO costs |
- |
- |
- |
|
- |
869 |
(869) |
|
||||||||
Impairment expense |
1,063 |
- |
1,063 |
|
1,063 |
- |
1,063 |
|
||||||||
Other non-recurring income |
- |
- |
- |
|
(750) |
- |
(750) |
|
||||||||
Exploration costs |
- |
- |
- |
|
- |
414 |
(414) |
|
||||||||
Decrease in fair value of financial assets |
- |
- |
- |
|
- |
37 |
(37) |
|
||||||||
Adjusted EBITDA |
(1,099) |
1,309 |
(2,408) |
|
(1,623) |
389 |
(2,012) |
|
Royalty revenue for the three months ended
General and administrative expenses were
Adjusted EBITDA was (
At quarter-end, LRC held
LRC Royalty Updates
Atlas Lithium
Zijin Tres Quebradas Royalty: In
Sigma Lithium Grota do
Core Lithium Finniss Royalty: In
Winsome Resources
Sayona Mining Moblan Royalty: In
Arcadium Lithium Transaction: Rio Tinto, one of the world’s largest mining companies, is reinforcing its leadership in the energy transition with the announcement of a
Orion Resource Partners Litigation Update
In
Lithium Market
The lithium sector is witnessing accelerated growth as it enters a seasonally stronger period in the second half of the year, driven by new electric vehicle (EV) launches globally and sustained demand in energy storage. Lithium demand is projected to increase by more than 20% in 2024.
China’s electric vehicle market continued to expand in the third quarter, achieving 33% sales growth, largely driven by an increase in plug-in hybrid sales. On a year-to-date basis (YTD), demand has grown by 32% and the market is picking up momentum entering the seasonally busier period for EV demand, with September sales up 42% compared to the same period last year. The Chinese government approved a trade-in program earlier in 2024 and over 1.3 million applications for these subsidies had been received as of
EV sales in
European EV car registrations have been challenged in 2024, with a 29% YTD decline in battery
Looking ahead, numerous European automakers are launching more affordable EV models in anticipation of the 2025 CO2 emissions standards set to take effect in the region. EV sales penetration in
Growth rates within the energy storage sector (ESS) remain robust. Tesla reported 73% year-on-year growth for energy storage deployments in the third quarter. Tesla estimates that its energy storage deployments in 2024 could more than double compared to 2023. EVE Energy, another important battery provider in the energy storage sector, recorded shipment growth of 85% year-on-year. Analysts expect 70% growth in energy storage installations in
SMM reports that spodumene concentrate prices averaged
Higher cost producers have continued to announce production curtailments, with SMM reporting that September lepidolite production declined by 22% year-on-year. Petalite producers in
Given the current depressed economic conditions and subdued returns for new greenfield projects, we expect supply growth to be more limited in the near term, which we believe will help support an eventual recovery in lithium prices.
Important Dates and Events
Date |
Event |
|
LRC Q3 2024 Earnings Call at |
|
|
|
3rd |
|
26th Annual |
|
Citi 2024 |
|
Deutsche Bank 9th Annual |
|
|
|
BMO 34th Global |
|
LRC Reports Q4 2024 Results |
|
LRC Q4 2024 Earnings Call. Click here for call details |
Shareholder Information
The Consolidated Financial Statements and Management’s Discussion & Analysis for Q3 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 or as substitutes for analysis of the financial information reported under IFRS.
EBITDA and Adjusted EBITDA
EBITDA is a common metric used by investors and analysts to assist in their valuation of the Company. 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.
In addition to EBITDA, we have determined that the following adjustments are necessary to arrive at Adjusted EBITDA, which we believe is a more accurate indicator of the Company’s ongoing operational performance:
- 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 |
9 months ended |
|||
2024 |
2023 |
2024 |
2023 |
|
Net loss |
(1,653) |
(1,514) |
(2,381) |
(4,141) |
Income taxes |
(713) |
2,403 |
(592) |
3,540 |
Finance expense (income) |
1 |
(201) |
(95) |
(1,275) |
Depletion |
94 |
272 |
446 |
656 |
EBITDA |
(2,271) |
960 |
(2,622) |
(1,220) |
Foreign exchange loss (gain) |
5 |
(253) |
42 |
(1,117) |
One time IPO share-based compensation (SBC) |
104 |
602 |
644 |
1,406 |
One-time IPO costs |
- |
- |
- |
869 |
Other non-recurring income |
- |
- |
(750) |
- |
Impairment expense |
1,063 |
- |
1,063 |
- |
Exploration costs |
- |
- |
- |
414 |
Decrease in fair value of financial assets |
- |
- |
- |
37 |
Adjusted EBITDA |
(1,099) |
1,309 |
(1,623) |
389 |
____________________________________
1For Q3 2024, LRC calculates LCETs by dividing royalty revenue for the quarter by the average spot market price of
2Note that the resource estimate provided by Ganfeng was prepared using Chinese mineral estimation guidance and is not compliant with NI 43-101 guidance (including by using Chinese resource classifications that are not comparable to the CIM definitions used in NI 43-101).
View source version on businesswire.com: https://www.businesswire.com/news/home/20241111487582/en/
Contact Information for Inquiries:
Investor Relations
(647) 792-1100
jonida@lithiumroyaltycorp.com
Source: