The company’s royalty structure protects investors from rising fuel and chemical costs that are putting pressure on conventional miners.
RBC Capital Markets has highlighted Ecora Royalties PLC (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF, FRA:HGR), the London-listed mining royalties company, as one of the best-performing stocks since the outbreak of the war with Iran.
The Canadian bank reiterated its “outperform” rating and price target of 175p against the current share price of 133p (up 3%).
A royalty company collects a percentage of the revenue or production from the mining operations it has helped finance, without assuming the direct costs of running those operations.
That structure has become particularly valuable in the current environment, RBC maintains, because Ecora has no direct exposure to the rising cost of oil, which is driving up operating expenses across the mining sector through higher diesel and transportation costs.
The bank notes that bulk commodity miners such as Rio Tinto and BHP, the Anglo-Australian mining giant, are facing freight cost increases of around $3.50 per tonne on shipments from Australia to China, while diesel accounts for 10% to 15% of typical site costs.
Ecora’s overall income basket has fallen just 2% since the conflict broke out, compared with much steeper declines elsewhere.
The note also notes a possible increase in cobalt and nickel, two metals in which Ecora has significant royalty exposure.
About 75% of the world’s supply of sulfur, used to produce sulfuric acid for nickel processing, comes from the Middle East and reserves are reportedly declining.
A shortage could lead Indonesian producers to cut capacity at high-pressure acid leach (HPAL) plants, the processing method used to extract nickel and cobalt from laterite ore, reducing supplies of both metals.
RBC also sees potential near-term catalysts in Ecora’s development pipeline.
A final investment decision on the Santo Domingo copper project in Chile is expected in the second half of 2026, while unconfirmed media reports suggest South32 may be a lead bidder for BHP’s West Musgrave nickel project in Western Australia.
If the sale goes through, RBC estimates it could bring forward Ecora’s planned commissioning date for West Musgrave from 2035 to 2027, which could add about 9% to the company’s spot valuation.
Additionally, the Rook 1 uranium project in Canada received its final regulatory approval in March, and Ecora owns a 2% royalty on an area containing nearby uranium mineralization that RBC believes could eventually extend the life of the Rook 1 mine into the late 2030s.