The portfolio contribution from the EVBC royalty increased by 5% to $3.0m in the year (2020: $3.0m), despite operational performance at the mine being at the lower end of Orvana’s revised guidance. The lower production volumes in the year reflect a 10% reduction in head grade; as in previous years, Orvana had targeted higher grade ore which is usually unsustainable over a longer period. Production was also impacted by a plant stoppage in Q3 2021 for maintenance work to the tailings pumping circuit. As a result of the lower production volumes, total gold sales for the year reduced by 11% to 46.0koz (2020: 51.5koz) and copper reduced by 8% to 6.21Mlbs (2020: 6.76Mlbs).The increase in the underlying gold and copper price during the year, however, compensated for the lower volumes resulting in record revenue from the royalty.
Taking into account the $3.2m received in 2021, the Group has received $30m from this royalty since it was acquired for C$7.5m in March 2008 and with at least five years of mine life remaining and the potential for expansion on top of that, it is a very good example of how the royalty model can work well through evolving resource and exploration expansion, common at many mines.