November 29, 2023
Empress Royalty Corp. (TSXV:EMPR, BUY, C$0.45 target, David A. Talbot) reported financial results for three and nine months ended September 30th, 2023, with an EPS of negative US$0.01, below our estimate of US$0.01. Revenue of US$1.0M was offset by US$428k in COGS and depletion charges. G&A, project evaluation and non-share based compensation added a further US$1M to costs. The US$0.73M loss is from combining a US$0.4M loss from operations and US$0.3M in financing costs. Revenue continues to improve and we believe that Empress’ current annualized revenue exceeds US$3M, still well below the estimated US$8M-9M of annualized revenue expected once its four key royalty properties are producing at capacity. That said, its three existing paying royalties, Tahuehueto, Manica and Sierra Antapite, are each still undergoing production ramp up, and we expect revenue from its new streaming deal on the Galaxy gold mine to kick in only as of Q1/24 (read note). Rising revenue should help offset its est. US$3M of annual G&A and project evaluation costs. We expect these line items to remain relatively unchanged over time given that Empress is a royalty company, unlike other growing mining companies whose G&A grows in tandem with the scope of its business. Hopefully, we will also see a relative improvement in financing costs with either a renewal or replacement of its credit facility on better terms, prior to further use to fund additional acquisitions as management remains on the hunt for further royalty and stream deals. Read more
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Empress Royalty Corp. – TSXV:EMPR – 3
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