Ecora Resources PLC Announces Acquisition of Royalty Over Vizcachitas Project - Seite 2

The Vizcachitas Project¹

Vizcachitas is located approximately 120km north of Santiago, within Chile's prolific copper belt alongside the large scale, producing Los Pelambres (Antofagasta), Los Bronces (Anglo American), Rio Blanco-Andina (Codelco) and El Teniente (Codelco) mines.

A Pre-Feasibility Study, reported in March 2023 is available on the Los Andes website and contains the following project highlights:

· 1.2 billion tonnes of Mineral Reserves at 0.40% CuEq grade, 1.5 billion tonnes of Measured and Indicated Mineral Resources at 0.44% CuEq grade and 1.8 billion tonnes of Inferred Mineral Resources at 0.38% CuEq grade

· 26-year initial life of mine with average copper production of 183 ktpa in the first 8 years and an average of 153 ktpa over the life of the mine

· NPV (8%) of $4 billion on a pre-tax basis with an IRR of 28.5% and a payback of 2.3 years

· NPV (8%) of $2.8 billion on an after-tax basis with an IRR of 24.2% and a payback of 2.5 years

· C1 cash cost of $0.93/lb Cu in the first 8 years and $1.25/lb Cu over the life of the mine

· By-products: molybdenum concentrate and silver in the copper concentrate

Transaction structure and financing

Ecora intends to settle the $20 million consideration through a combination of cash at hand and drawing down on the Group's lending facilities.

The royalty over the open pit operations steps up by 0.1% in the event that production is delayed beyond 30 June 2030. If production is delayed beyond 30 June 2031, Los Andes has the right to elect between awarding Ecora an incremental 0.1% NSR entitlement or making a cash payment of $15 million to Ecora with an additional $5 million if the trailing 6-month copper price averages more than $5/lb. If production is delayed beyond 30 June 2032, then Los Andes has the right to again choose between awarding Ecora a further incremental 0.1% NSR entitlement or making a cash payment of $15 million to Ecora with an additional $5 million if the trailing 6-month copper price averages more than $5/lb.

Ecora is also entitled to a 0.125% NSR royalty on production from any future underground mining operations. In the event that production is delayed beyond 30 June 2030 then the royalty over the underground mining will step up by 0.05%. If production is not achieved by 30 June 2031 or 30 June 2032, then Ecora's royalty entitlement on any future underground mining operations will step-up at increments of 0.05% each year respectively in the event Los Andes does not elect to make the cash payment in lieu of a royalty rate increase described above.