- Ecora Resources (TSX:ECOR), a diversified mining royalty company, ended its most recent stock buyback program having purchased 9,491,317 shares for US$10 million between March 27 and May 30, 2024
- The question of the day is, can we make a reasonable case for Ecora stock being undervalued at the buyback price?
- Ecora Resources is a mining royalty company supporting the supply of commodities essential to environmental sustainability
- Ecora Resources stock has given back 29.52 per cent year-over-year and 54.46 per cent since 2019
Ecora Resources (TSX/LSE:ECOR), a diversified mining royalty company, ended its most recent stock buyback program having purchased 9,491,317 shares for US$10 million between March 27 and May 30, 2024.
The company made purchases at a volume-weighted average price of approximately 83.77 pence or C$1.45 per share, bringing total ECOR shares held in treasury to 13,320,469.
The question of the day is, can we make a reasonable case for Ecora stock being undervalued at C$1.45 per share based on publicly available information?
Profitability and robust growth prospects with no market recognition
The case for owning Ecora stock is a strong one, beginning with the buyback above. According to management’s calculations, the company’s net asset value per share is about £1.82 or C$3.16 (slide 7), representing 118 per cent of upside from the average buyback price.
This consciousness for value is further reflected in Ecora’s efficient operations, including 21 assets across five continents, which produce consistent operating income – US$42.21 million in 2023 – and have generated more than US$145 million in net income since 2019, granting it the flexibility to fund growth initiatives or return capital to shareholders depending on the market environment.
Ecora has grown its portfolio of value-accretive assets by 65 per cent since 2019, and backed by a US$150 million debt facility, a strong pipeline of opportunities, and a globally diversified portfolio in line with the multi-trillion-dollar energy transition, the company expects to continue expanding its presence and creating value through:
- Increased production
- Deleveraging
- High-quality royalty acquisitions
- Numerous other portfolio catalysts detailed in its FY 2023 results
With ample momentum at its back, Ecora stock’s 54.46 per cent drop since 2019 seems harsh at first glance, and will likely continue to seem so upon further due diligence.
About Ecora Resources
Ecora is a mining royalty company supporting the supply of commodities essential to environmental sustainability. It operates a diversified portfolio from exploration (4%) to development (43%) to production (53%) with exposure across copper (33%), cobalt (23%), nickel (19%), vanadium (5%), uranium (4%) and iron ore (3%).
Ecora Resources stock (TSX:ECOR) last traded at C$1.48 per share. The stock has given back 29.52 per cent year-over-year and 54.46 per cent since 2019.
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(Top photo of the Voisey’s Bay cobalt mine in Newfoundland and Labrador, on which Ecora owns a 22.82% production royalty: Ecora Resources.)