Elemental Royalty Corporation Common Stock Q1 FY2026 earnings call

• Merger Integration & Corporate Milestones

• The merger between EMS Royalty and Elemental Altus Royalty has closed successfully, with integration of the combined management team progressing as planned.
• The company uplisted from the TSX Venture Exchange to the TSX main board, alongside its existing NASDAQ listing. Trading liquidity is now multiples higher than the pre-merger combined level of the two predecessor firms, increasing the likelihood of inclusion in major precious metals index funds such as GDXJ.
• The revolving credit facility was upsized to $200 million, increasing capital availability and lowering the company's cost of capital as a result of greater scale from the merger.
• The company initiated its inaugural dividend, with a modest payout ratio. Shareholders are given the option to receive dividends as cash or as XAUT, a Tether gold stable coin that is fully convertible to physical gold on demand. Elemental Royalty is the first company to offer this dividend option.

• Portfolio Strategy & Structure

• The company remains gold-focused, but has augmented its silver exposure to align with precious metals index inclusion requirements and strong demand fundamentals for silver (both industrial and investment demand).
• The combined portfolio holds 300 mineral property assets across 20+ countries, 200 of which are royalties. Counterparties are conducting over $100 million annually in exploratory drilling across the portfolio, creating significant long-term discovery optionality, which is a core driver of royalty value.
• The company is pursuing a pipeline of both small incremental acquisitions and large strategic M&A, and remains confident it can outperform competitors even in a competitive market.

• Key Asset Updates

• Carl Winda: The ongoing 150,000 ounce per annum mine expansion is on track for commissioning in Q3 2026, and will add ~30,000 attributable ounces of gold production annually. The asset delivered historically high revenue in Q1.
• Timok: Delivered record revenue in Q1 from the upper zone, which was expanded in December 2025. Development of the much larger lower zone (which will operate in parallel to the upper zone and is covered by the company's royalty) is progressing.
• Multiple late-stage development assets have upcoming catalysts that are expected to drive organic growth: Laverton (Beazley Creek deposit) will be added to the five-year mine plan in Q3 2026; Avrosilver's Diabolos silver project released a resource update recently, with a feasibility study and construction decision expected in 2026; MacTung (the world's highest grade large tungsten deposit) is updating its feasibility study for 2027; Bay project expects a construction decision in H2 2026; Viscaria targets first production in 2027.
• The existing portfolio is expected to deliver 50% organic production growth by 2029 before the newly announced acquisitions, which will increase total organic growth to 75% from current levels.

This is the first full quarter of combined results following the merger of EMS Royalty Corporation and Elemental Altus Royalty. Total quarterly revenue hit a record $24.3 million, an 83% increase year-over-year, putting the company on a ~$100 million annual revenue run rate. Adjusted EBITDA was a record $18 million, a 55% increase year-over-year. Operating cash flow reached nearly $15 million, a substantial year-over-year increase. G&A expenses were $5.5 million for the quarter, above the expected $16 million annualized run rate due to one-time merger, uplisting, and transaction costs. Royalty generation expenses came in on budget for the full year. Top producing cornerstone assets (which drove the majority of revenue) include Casarones, T-Mark, Bonacro, and Carl Winda. The company ended the quarter with $70 million in cash and a $200 million revolving credit facility, $150 million of which is undrawn, and remains net cash positive even after accounting for the cash component of the newly announced Panuco acquisition.

• Full-year 2026 guidance is maintained, with the company reporting that Q1 results are tracking even better than anticipated at the time of the merger.

• Quarterly GEO (gold equivalent ounce) sales were ~5,000, putting the company on track to reach the full-year target of 20,000 GEO annually.
• Annualized revenue from Q1 already exceeds initial full-year 2026 revenue guidance.
• The company maintains its existing full-year 2026 guidance for the Bonacro royalty asset, noting that Q1 outperformance was driven by quarterly sales timing rather than a structural change.

No explicit risks or operational failures were discussed during this earnings call.

Q: Bonacro royalty had a strong Q1. Was outperformance solely due to higher gold prices, or was it from better coverage of the mine's production from the royalty? How should we expect the asset to perform for the rest of 2026? / A: The Q1 outperformance was mostly due to the timing of sales that fluctuates quarter-over-quarter, not a change in which parts of the mine the royalty covers or a jump in gold prices. It was a stronger quarter than expected, but the company is maintaining its full-year guidance for Bonacro, and quarterly results will continue to fluctuate with sales timing.

Q: Corelli Stud (Quanticrobe) had zero royalty revenue this quarter, as expected with the ongoing acquisition of operator Allied Gold by Zijin. When can we expect future royalty or milestone payments from this asset? / A: The new operator will release a refreshed mine plan after the acquisition closes. The company expects residual royalty revenue from already mined material and additional milestone payments to come in sometime in 2026. It is still waiting on the updated mine plan from the new owner, but has contractual rights to royalty payments that will be honored.