Elemental Royalty Corp (STU:A980)

Q2 2026 Elemental Royalty Corp Earnings Call Transcript

Aug 12, 2026 / 03:00 PM GMT

Release Date Price: €17.7 (+5.36%)

Transcript

Key Points

Positve

Elemental Royalty Corp (ELE) reported its second-highest quarterly revenue in company history, with a 127% year-over-year increase to nearly $24 million in Q2 2026.
The company achieved a record number of gold equivalent ounces (GEOs) sold in the quarter, totaling 5,250, a 65% increase over the prior year period.
Elemental Royalty Corp (ELE) is tracking ahead of the midpoint of its 2026 guidance, with 10,000 GEOs sold in the first half and expectations to finish at the upper end of the 17,000-21,000 GEO range.
The company maintains a strong balance sheet with $74 million in cash and an undrawn credit facility, positioning it well to close the Visa Royalty acquisition and fund future growth.
Elemental Royalty Corp (ELE) has a robust organic growth profile, forecasting an increase to 25,000 GEOs by 2028 and 30,000-35,000 GEOs by 2030, driven by expansions at key assets like Carlawinda and Casarones.
The company has successfully completed several corporate milestones, including a TSX uplisting, NASDAQ listing, index inclusions (S&P TSX Global Gold, Russell 2000), and the initiation of a maiden dividend.
Elemental Royalty Corp (ELE) is actively returning capital to shareholders through both a dividend and a normal course issuer bid (NCIB), having repurchased $2 million in shares during the quarter.
The pending acquisition of Visa Royalty adds an uncapped 2%-3.5% NSR on the high-quality Panuco silver project, which is expected to be a material contributor and is on track to close in Q3 2026.
The company's portfolio is well-diversified across commodities (2/3 gold, 1/3 copper) and jurisdictions, with a strong pipeline of development projects backed by operators investing over $800 million.
Management expects G&A costs to decline in the second half of the year, with a targeted run rate of $4-$4.5 million per quarter, improving adjusted EBITDA margins to over 80% by 2027.
Elemental Royalty Corp (ELE) has a strong track record of value creation, with its top six cornerstone assets' average value increasing from $40 million to $170 million following the EMX merger and Visa acquisition.
The company is benefiting from higher copper prices, which are outperforming guidance assumptions and contributing positively to revenue and GEO calculations.
Elemental Royalty Corp (ELE) has a supportive shareholder base, including major shareholder Tether, and has added new analyst coverage from CIBC, improving its visibility in the market.
The company is actively managing its portfolio, having expanded its royalty at Western Queen and made a strategic investment in Chappie, which commissioned in H1 and has expansion potential.
Management has a clear strategy to reduce corporate complexity, targeting a 50% reduction in the number of entities within the group, which will lower costs and improve operational efficiency.

Negative

The closing of the Visa Royalty acquisition is pending approval from the Mexican Antitrust Commission, which has caused delays and introduces uncertainty regarding the exact timing of the transaction.
Elemental Royalty Corp (ELE) expects to use approximately $60 million in cash to close the Visa transaction, which will significantly reduce its cash position and may require drawing on its credit facility.
Gold prices have been slightly below the company's guidance assumptions, which could pressure revenue and GEO calculations if the trend continues.
The company's G&A expenses were elevated in the first half of 2026 at $5.6 million per quarter due to integration and corporate initiatives, which is higher than the expected future run rate.
The company's operating cash flow growth was only 8% year-over-year despite a 127% increase in revenue, due to one-time payments in the prior year period, indicating a potential slowdown in cash conversion.
The company's portfolio is exposed to geopolitical risks, particularly in Mexico with the Visa asset, which could face permitting delays or other regulatory hurdles despite progress in the region.
The company's growth profile is partly dependent on the successful execution of expansion projects by operators, such as Carlawinda's expansion and Casarones' exploration, which carry execution risks.
The company's NCIB repurchases were relatively small at $2 million, suggesting limited impact on reducing share count or boosting shareholder value in the near term.
The company's reliance on a few key assets is notable, with 80% of revenue coming from its top five royalties, creating concentration risk if any of these assets underperform.
The company's ability to maintain its high cadence of transactions and growth may be challenged by the need to integrate the Visa acquisition and manage its increased portfolio complexity.
The company's equity investments, such as the recent Chappie investment, introduce additional risk compared to its traditional royalty model, as they are subject to equity market volatility.
The company's guidance for future GEO growth assumes successful development of projects like Viscaria and Bay, which are still in early stages and may face financing or construction delays.
The company's dividend and NCIB, while positive, may be viewed as modest relative to its cash position, potentially signaling a lack of larger immediate investment opportunities.
The company's increased size and scale may make it harder to find accretive deals that can meaningfully move the needle, potentially leading to capital deployment challenges.
The company's exposure to copper, while beneficial now, could become a drag if copper prices decline, given that a third of the portfolio is focused on the metal.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

ELE.TO - Elemental Royalty Corp
Q2 2026 Elemental Royalty Corp Earnings Call
Aug 12, 2026 / 03:00PM GMT

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Presentation
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Unidentified_1 [1]
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Good day everyone and thank you all for joining this Elemental Royalty Corporation second quarter 2026 conference call. As a reminder, all lines are in a muted or listen-only mode to prevent background noise and later you will have the opportunity to ask questions during our question-and-answer session. As a reminder, today's session is being recorded. It is my pleasure to turn the floor over to President and COO, Mr. Frederick Bell. Welcome, sir. The floor is yours.

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Unidentified_2 [2]
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Thank you very much and thank you everyone for joining us. Today

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