We have a clearly defined set of investment criteria and screen all assets against these prior to making an investment decision. These are:
Our focus is on providing investors exposure to commodities that will support a sustainable future.
What it means?
- We focus on commodities that are required to complete the energy transition
- Our current commodity exposure includes copper, nickel, cobalt, steelmaking coal, vanadium and uranium
2023 performance
- We increased the portfolio exposure to future facing commodities to 85% of book value compared to 85% at year end 2022
- We completed the acquisition of a royalty over the Vizcachitas copper project in Chile
- We provided Brazilian Nickel with $7.5m to complete FEED studies at the Piauí nickel project
Future focus
We would like to round out our commodity mix through adding exposure to commodities such as lithium, rare earths, high purity manganese, zinc, tin and graphite.
We use a rigorous screening and due diligence process to inform our investment decisions.
What it means?
We focus the majority of our investment in projects that:
- are relatively low cost;
- are in established mining jurisdictions;
- have strong management teams;
- achieve clear IRR targets;
- focus on commodities within our basket; and
- meet our ESG investment criteria.
Read more in our Sustainability Report
2023 performance
The assets added to the portfolio are:
- focused on copper and nickel;
- expected to be in the lower quartile in the industry cost curve;
- located in Chile and Brazil– proven mining jurisdictions;
- anticipated to hit mid-teens IRRs; and
- projected to have strong sustainability credentials.
Future focus
Focus will remain on investing in projects that meet our investment framework.
We seek diversity of commodities, jurisdiction and asset maturity to balance portfolio risk.
What it means?
As we grow the portfolio we will seek to:
- reduce asset concentration;
- increase the commodity exposure;
- strike a balance between income generating and growth acquisitions; and
- deploy majority of capital into lower risk opportunities.
2023 performance
The assets added to the portfolio are:
- Entered the year with 63% of value in income producing assets
- Added a royalty over an early stage, large scale copper project in Vizcachitas
Future focus
We will seek to continue to diversify the portfolio in terms of commodity, asset maturity and jurisdiction.
We focus on maintaining a strong balance sheet with a sensible approach to deleveraging.
What it means?
- Our balance sheet is structured to support our growth
- We have focused on reducing debt and maintaining comfortable headroom against financial covenants
- We retain strong banking relationships to maintain or expand our borrowing facilities
- We have a track record of returning capital to shareholders
2023 performance
- Deployed $27.5m into new royalty acquisitions
- Company which was used to pay down debt
- Net debt increased to $75m
- Paid shareholders a dividend equal to 8.5c for the year.
Future focus
A new capital allocation policy has been announced that will focus on maintaining a strong balance sheet that will enable the Group to complete a number of small royalty acquisitions whilst we navigate the transition of the portfolio away from the Kestrel coal royalty.