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DATE
Wednesday, Nov. 11, 2026
CALL PARTICIPANTS
- Chief Executive Officer - Frederick Bell
- Chief Financial Officer - Stefan Wenger
TAKEAWAYS
- Revenue -- $20.8 million, a 203% increase compared to $6.9 million in the third quarter of 2025, driven by portfolio expansion and higher commodity prices.
- GEOs Sold -- 4,861 ounces, representing growth from 2,362 ounces in the prior-year period, reflecting the impact of the EMX merger.
- Adjusted EBITDA -- $16.6 million, up from $6.2 million in the third quarter of 2025, driven by record revenue performance.
- Adjusted Operating Cash Flow -- $13.2 million, a 162% increase from the prior year, reflecting stronger distributions from cornerstone assets.
- Updated 2026 Guidance -- 19,500 to 22,000 gold equivalent ounces, incorporating 1,500 GEOs of anticipated contribution from the Orion portfolio.
- Debt -- $210 million, following a $180 million draw on the credit facility to fund the Orion portfolio acquisition.
- Cash Balance -- $23 million, down from $74 million at the start of the quarter after $53.5 million was invested for the Vizsla acquisition and $25 million for the Chapi project.
- Orion Acquisition -- $290 million for five precious metal streams and royalties, with four assets closing in October 2026 and one expected in the first quarter of 2027.
- Royalty Generation Divestiture -- More than 25% expected reduction in general and administrative expenses through the sale of the non-core business unit.
- Headcount Reduction -- 60% of the company's personnel will be transferred to the purchaser following the divestiture of the royalty generation business.
- Caserones Revenue -- $3.1 million, a decrease from $16.6 million reported for the first nine months of the year, reflecting a 30-day operational suspension caused by severe winter storms in Chile.
- Karlawinda Revenue -- $2.9 million, supported by the successful commissioning of a mine expansion that increased throughput capacity to 6.5 million tonnes per annum.
- Timok Revenue -- $2.6 million, reflecting consistent performance from the Upper Zone and ongoing development at the Lower Zone porphyry.
- Bonikro Revenue -- $5.3 million, with approximately 256,000 ounces remaining available before reaching the 560,000-ounce royalty cap.
- Leeville Revenue -- $1.6 million, reflecting 37,259 ounces of gold sales from the Nevada Gold Mines project in the third quarter.
- Strategic Investments -- $25 million for an additional 1% net smelter return royalty on the Chapi copper project and an equity investment in Quilla Resources.
- Credit Facility -- $250 million total capacity, increased from $150 million to provide additional financial flexibility for future growth.
- Annual Savings Target -- $6 million or more, driven by corporate simplification and the elimination of $5 million in annual royalty generation expenses.
- Production Target -- 50,000 gold equivalent ounces by 2030, supported by existing producing and development-stage assets.
- Year-to-Date Performance -- $68.9 million in revenue and 15,092 GEOs sold, representing record performance for the nine-month period.
- Dividend -- $0.03 per share, maintained as a quarterly payment to shareholders.
- Net Debt-to-EBITDA -- 2.5x, with management targeting a deleveraging of the balance sheet to approximately 1x by late 2027.
- Orion Cash Flow Projection -- $20 million in additional annual cash flow expected in 2027 from the acquired portfolio at current commodity prices.
- General and Administrative Expenses -- $6 million, reflecting severance and transaction-related legal costs associated with divestiture activities.
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RISKS
- Bell stated, "Caserones was the primary reason for lower-than-expected revenue in the quarter... due to a combination of storms in Chile," which impacted production and caused revenue to fall $3.5 million from the second quarter.
SUMMARY
Elemental Royalty Corporation (NASDAQ:ELE) reported record year-to-date performance while announcing a strategic transition toward a pure-play royalty and streaming model. Management confirmed the acquisition of five precious metal streams and royalties from Orion Mine Finance for $290 million and the divestiture of its royalty generation business. This reorganization is intended to reduce general and administrative expenses by more than 25% and simplify the corporate structure. The company reported record revenue and gold equivalent ounces for the first nine months of 2026, supported by organic growth and contributions from the recent merger with EMX. Management stated that the expanded portfolio provides a pathway to exceed 50,000 gold equivalent ounces by 2030 from existing assets.
- CEO Bell stated, "We are -- we have the strongest growth profile from this out to 2030 that we've had in the history of the company," noting the potential to reach over 50,000 gold equivalent ounces.
- Bell indicated that the divestiture of the royalty generation business removes 60% of personnel, despite the unit representing less than 1% of the company's net asset value.
- CFO Wenger noted that the Orion portfolio is expected to add $20 million in annual cash flow starting in 2027, assisting with the rapid deleveraging of the balance sheet.
- Management highlighted that permitting in Mexico has resumed with five permits granted to mining companies since the second quarter of 2026, which may benefit the Panuco project.
- The company reported that the Karlawinda mine expansion was completed on budget, increasing throughput capacity by approximately 30% without requiring additional capital from Elemental.
- Bell reported that i-80 Gold's Ruby Hill project has been prioritized for development, with a 130,000-meter drill program currently underway to expand the mineral resource.
INDUSTRY GLOSSARY
- EPCM: Engineering, Procurement, and Construction Management.
- GEO: Gold Equivalent Ounce, a metric used to convert various metal production into a single unit based on gold price ratios.
- GSR: Gross Smelter Return, a royalty based on the total value of metal produced before any deductions.
- NCIB: Normal Course Issuer Bid, a program allowing a company to repurchase its own shares on the open market.
- NSR: Net Smelter Return, a royalty based on the value of metal production after deducting transportation and refining costs.
Full Conference Call Transcript
Frederick Augustus Ronald Peter Bell: Good afternoon, and good morning, everyone, and welcome to Elemental's Q3 2026 Earnings Presentation. And with me today, I have my colleague, Stefan Wenger, our CFO; and you have myself, Frederick Bell, CEO, to talk you through the slides. In terms of an overview of the portfolio, just to give you a summary at the beginning, the company has had a record year-to-date performance in terms of both revenue and in gold equivalent ounces.
We are -- we have the strongest growth profile from this out to 2030 that we've had in the history of the company, getting to a total from existing producing and development assets of over 50,000 gold equivalent ounces from where we are today and that is already within the portfolio [ depth ]. The portfolio remains precious metals weighted. So that is approximately 2/3 precious gold and silver and 1/3 other commodities, primarily copper. It is diversified across operator counterparty and jurisdiction and we have continued to add to that and further diversify with the most recent transaction we have announced. We also just recently closed on an upsized credit facility.
That is the second time we have upsized our credit facility this year, which means that we were both able to use that for the Orion transaction, but also maintaining financial flexibility and drawing on it going forward. In terms of capital allocation, we have a normal course issuer bid put in place during the year that we utilized particularly over the summer where the share price was low and it gives us that flexibility going forward to use it again at the same time that we have had our first dividend in Q1 and now paid on a quarterly basis going forward.
In terms of the management team, we have strengthened that as well over the course of the year, both on the finance team, on the legal team and adding to our technical team as well as we go forward. And lastly, we have -- after the close of -- the final close of the Orion transaction, we have Tether remaining a cornerstone shareholder of about 27% currently and very supportive of the company's strategy going forward.
So a highlight then in Q3 specifically and it was a very active quarter for us, both in terms of transactions that we announced and completed as well as the continuing improvement to liquidity and the capital markets profile of the company that we have done. And one particular, I think, feature was the sale of the generation unit. And what we're doing here is we are both improving that liquidity for shareholders and it came with the GDXJ inclusion for the first time in September.
And then I think the combination of closing the Vizsla transaction previously announced that we finally completed in September, alongside the acquisition of a large portfolio of 5 producing streams and royalties from Orion and the sale of our generation unit that really simplifies, streamlines the company, reduces our G&A going forward and combined with the increase in revenue from the producing assets within the Orion portfolio and that reduction in G&A going into 2027, it will drive improved free cash flow and better margins going forward into 2027.
So we're really in that quarter, continuing to build out the portfolio, both producing and key development assets in Ruby Hill with i-80 at the same time that we are streamlining the business and reducing G&A going forward. In terms of year-to-date then, what we have done, I think here, it's just under $70 million in revenue for the year-to-date. We have approximately $23 million cash on the balance sheet. We still have ability to draw on our credit facility alongside that. And in terms of gold equivalent ounces, that is just under 15,100 gold equivalent ounces year-to-date, which is a record for the company, both in terms of revenue and gold equivalent ounces.
And I think that importantly, we see really strong growth going ahead from our portfolio as it was and with the addition of the Orion portfolio where we will get some partial contribution for this year and a full year's contribution going into next year alongside Endura's asset in New Zealand that will be in production, expect to have first gold in December. So I won't go through all of these milestones here, but I think we wanted just to highlight how active the company has been over the course of this year, both on transactions and on the corporate front. And I think that Q3 has really been a continuation of that.
And we announced in -- post quarter end, we announced the first close on the Orion portfolio and we're expecting to further progress Carlin East to sell the generation business and have an announcement on that in Q4, along with the final close on the last asset in the Orion portfolio in Q1 2027. In terms of our growth outlook moving forward and I think we just highlighted this earlier, but it is really the -- by far and away, the strongest growth profile that we've ever had in the company.
And you can see what it was prior to the Orion acquisition and then in the silver there, the addition of that portfolio, which is a partial year contribution this year in 2026 and then a full year in 2027 onwards and really wraps up with the contribution from i-80's Ruby Hill, where we have a very material silver stream there. And I think what you will see going into 2027 is you will see alongside that increase in gold equivalent ounces and revenue, you will also see a step down in terms of our G&A and costs that Stefan can expand on a bit further in this call. And that is driven by the sale of our generation unit.
And just as a reminder for everyone, in terms of NAV, that business unit probably represented order of magnitude, 1% or less of our NAV, but it was 60% of the personnel in the company. It was a material number of subsidiaries and in excess of 25% of our G&A as well. And so by doing this transaction and did happen simultaneously. But by doing it simultaneously, we're expanding our revenue, reducing our costs and again, should be improving that free cash flow margin going into 2027. And -- so with that, I will hand over to Stefan to run through the financial highlights for the quarter.
And then Stefan will hand back to me a bit later on to talk to a few of the asset-specific pieces and happy to take Q&A at the end of this call.
Stefan Wenger: Thank you, Fred, and good morning, everyone. Thanks for participating in our quarterly conference call. As you can -- as Fred mentioned, it was a really active quarter. The team is really performing well and we are executing on our strategy for the year. A couple of financial highlights. You can see on a revenue basis and an adjusted EBITDA basis, our results, both for Q3 and year-to-date show a substantial increase compared to the prior year. As you know, in the prior year, we were -- we have not yet merged with EMX. So this really shows the benefit of the merger.
In addition to the strong performance of our assets throughout the year, this is driven by GEOs of about 15,000 year-to-date. And you can see in the bottom there that our guidance, we're well progressing towards our full year guidance that we updated in Q3 with the announcement of Orion. So we're operating very well on all fronts on the financial perspective. As I dig into the financials a little bit more, you can see our revenue is up by 153%. Our adjusted EBITDA is up by close to 170% and we have cash of $23 million at the end of the year.
Thinking about the income statement, the question I get most is what do we expect the G&A to look like for the full year and then going forward. And this year has really been a transitional year. We've experienced higher-than-expected G&A because of our integration costs between Elemental and EMX, but also now we're -- we've spent a significant amount of time and effort in the past quarter with the divestiture of the generative business that Fred mentioned. And as we head into 2027, we're going to see the G&A decrease.
This quarter, we had higher G&A costs specifically because of some severance costs related to the divestment of the generative business and also legal costs as we work to complete that in the fourth quarter. I would expect the fourth quarter costs are still going to be in line with the third quarter. But as we head into 2027, we're going to start to really see the benefits. We're going to see the benefits in a couple of ways. Number one, the royalty generation expenses that you see there that are about $5 million a year are going to go away.
And in addition to that, because of the reduction in head count that Fred mentioned and also streamlining activities that we have within the company for simplification of our business on top of the divestiture of the German business, we're going to see significant savings on G&A. We quoted in our release when we announced the Orion acquisition that our G&A reduction -- or our cost reduction will be $6 million a year. And with those additional simplification efforts that we see, we see that we're going to save well beyond $6 million a year and we'll update that as we enter 2027. From a capital structure perspective, it was also a transitional quarter with respect to our capital structure.
We not only completed the acquisition of Vizsla, but we also -- which we drew $30 million on our line of credit. We also positioned ourselves to go ahead and acquire the Orion portfolio. So we've expanded our credit facility. And as of today, we do have $210 million of debt outstanding and $23 million of cash plus equity investments of about $36 million. So on a debt-to-EBITDA basis, we're about 2.5x net debt to EBITDA, but we see that deleveraging rather quickly. And over the next year, you'll see that nearly have as we go forward. So we see that we have still good availability with the credit facility and the accordion feature of about $90 million.
And as was mentioned, with increasing cash flow from the Orion deal, which for next year is about $20 million at current prices plus the reduction of our G&A in the generative business, we're going to be expanding our cash flow significantly that will support that debt reduction. Just a little more detail on the cash flow. For Q3, you can see we started the quarter with $74 million in cash. We generated $13 million of free cash flow just from our royalties and then invested $53.5 million for the Vizsla acquisition, another $25 million for the addition and enhancement of our investment in Quilla and the Chapi project.
And we drew on the line to fund some of those activities, ending the quarter with $23 million in cash. Just for the full year, you can see all of the activities that Fred outlined. And in addition to what I discussed on Vizsla and Chapi, we had other royalty acquisitions during the period and the draw on the RCF. You can see also we continue to fund our dividend. The dividend, we anticipate continuing to fund that and increase that into the future. And we also bought back some shares when we were in the lower share prices back in June and July. We were active on our NCIB as well.
So you can see quite active on the capital front. And with that, I'm going to turn it back to Fred for a portfolio update and then we'll take questions.
Frederick Augustus Ronald Peter Bell: Thank you, Stefan. And looking here at the global map of our portfolio, I think what stands out is we are really cornerstone now by a number of both international miners such as Lundin, Zijin, but also some Nevada Gold Mines, some specific companies in Australia, Capricorn and Genesis, 2 of the preeminent gold miners there as well as a number of producers and developers such as Vizsla and i-80 and Mansa. And that is a deliberate strategy over the course of the last 12 to 18 months of both diversifying our base, but also improving the quality of the underlying assets and the operators and counterparties who are operating those.
In terms of specific updates related to some of the assets in the quarter, the first 2 that I will talk to are Caserones and Karlawinda. Karlawinda, we had the mine expansion that has been going on over the past year. It was successfully commissioned on budget during the quarter. So towards the end of September, Capricorn announced they had completed that commissioning and we expect it now to be running at the higher approximately 150,000 ounce throughput rate. So about a 30% increase in attributable gold equivalent ounces to Elemental going forward. And you can see it's been pretty consistent in terms of the production historically.
They also earlier this year announced an increase in the resource and the reserves alongside that higher production rate that is going through. And so if you look at an asset like Karlawinda since we acquired it, it has, I think, a similar mine life at the time that we acquired it just on the reserves and not including the resources, which would approximately double it. We've benefited now from both the successful mine build, but also now an expansion of the mine that will deliver an increase in production at no cost to the company going forward and we have the optionality to the gold price.
And so it's a very good example of the embedded value that you have in royalties where we no longer have to contribute to the costs, but the operator, in this case, Capricorn are very successfully continuing to explore, add new ounces to the resources, convert existing resources into reserves and simultaneously expand the mine production so that it is now running at approximately 30% higher throughput rate. The second asset, Caserones. Caserones was the primary reason for lower-than-expected revenue in the quarter.
And you can see there the impact from Q2 to Q3, we had about $3.5 million lower revenue in Q3 than we did in the last quarter and that was due to a combination of storms in Chile. And the first one was very well publicized across the state and impacted a number of mines, particularly copper mines in Chile, and it was followed up by another storm that I think compounded the issues and delayed production in Q3. And I think they have announced since that they are updating their guidance down to the lower number for this year, but expecting production to recover both in Q4 and then getting back to normal.
So in terms of our royalty revenue, look, Caserones is a very long-life asset that in our view, we will be producing for many, many years to come. And I think that, that production there is really delayed and not lost to us in terms of revenue, but that was the primary cause of the lower revenue in the quarter of that -- that's all to Caserones. In terms of the next 3 assets, at Timok, we had again a very good quarter there continuing.
As mentioned previously, we did do a site visit to the mine earlier this year and got an update on both current mining, but also their exploration where they've been exceptionally active and the development of the Lower Zone, which is the major value driver at Timok and that is the porphyry that sits beneath the Upper Zone and they are actively developing and expect that we will have some updates from Zijin in the coming months and year on progress at the Lower Zone in addition to ongoing production from the Upper Zone, which is what we received now and then future plans at the MG Zone, which was the major discovery they made approximately 2 years ago within our royalty area as well.
So Timok remains an asset that will be paying us every year and we expect it to continue to appreciate in value as they get closer towards first production in the Lower Zone and then also looking at future plans for the MG Zone. At Bonikro, we have, again, very consistent quarter with Q2 and Q1 and the area where we received royalty from the pushback on Bonikro. That's expected to be a key part of the mine moving forward, and they are benefiting from some higher-grade areas there as well in the coming months and quarters. So we expect that to continue to perform at those levels for us.
And then lastly, in Leeville, this is Nevada Gold Mines in the U.S., and this is part of the Carlin complex. And we did have an update from the mine site team earlier this year as well for getting a better understanding of the mine plan going forward because our royalty covers part of the mine. And so it will sometimes fluctuate quarter-to-quarter. But again, really positive exploration results they have had in our royalty area in recent times and this is a mine that has been producing now for decades and will continue to do so in our opinion. So another really high-quality long-life asset operated by a Tier 1 miner.
In terms of some of our key development assets that we expect to come in, I think just touch on these 4 and 2 of them, in particular, the first 2, Panuco and Ruby Hill that have been added to the portfolio in the last 3 months with the completion of the Vizsla deal and the first close on Orion. So firstly, looking at Panuco in Mexico, and I think there are 2 real drivers there for the company. They are fully funded to build the mine. And the 2 key, I think, drivers for them are both planning on the security front and also on the permitting side.
And on the permitting side in Mexico, we have seen approximately 5 permits granted, 2 mining companies in Mexico since I think Q2 this year. And there's a couple that remain outstanding in Mexico and Vizsla is one of those in that list. So I think after a hiatus of 12 to 18 months with very little happening on the permitting front, there has been a steady stream of permits since Q2 this year, 4 different mining companies in Mexico getting those approved. So I think very positive on the permitting front in Mexico in general and specifically to Panuco, expect them to be on that list of projects awaiting that permit.
And then on the security front, I think waiting for the company to announce their plans on that side as well and getting back on site in a fulsome way and progressing the project. So those are the 2 key catalysts at Panuco. In terms of Ruby Hill, actually, the day after we announced the acquisition of this stream, there was a very good update out by the company, which was the first results from their drill program and they are doing a 130,000-meter drill program at Ruby Hill. So it's a really material exploration program partly funded by Franco-Nevada.
And they announced some very good results, a significant number above the existing resource grade, both up to, I think it was 3 kilometers to the east and 1 kilometer to the north. So material step-out drilling and results that a significant proportion were above the existing resource grade. So they're going to continue drilling that over the course of Q4 and going into Q1. And I think we expect an updated resource from them there in Q1. And I think very positive from the results that we have seen to date and they continue to aggressively to drill that out.
They also announced later in the quarter, they also announced that they are moving Ruby Hill forward in terms of their planning for projects in development. And Ruby Hill, just as a reminder, is the cornerstone asset for i-80 and they have announced that they are bringing it forward in the development time frame ahead of 2 of their other projects. And I think that was something we had anticipated, but it was good to see that announced formally by them and again, expect them to have further updates on that. But in summary, expanding the existing resource that we have coverage on there, at the same time as looking to bring the project forward as Elemental asset.
So 2 really material positive impact at that asset in the 6 or 7 weeks since we have that onstream. In terms of Laverton, we had a royalty -- existing royalty on part of the ground here and we picked up a larger royalty covering more of the ground another 2% in September of 2025. The operator, Genesis have been very active on the M&A front, consolidating ground in the Laverton District as well as surrounding. And this is one of the 2 primary hubs for Genesis in Laverton. So they have an existing mill there and they are going to come up with an updated mine plan that will look to optimize production from different ore sources.
And we expect that underground our royalty covers will be fed into that mine plan. And just to give you an idea, one of the key deposits at Beasley Creek that they call the first cab off the rank. It is double the grade of what they currently mine. We have about -- we have a 4% royalty on it. It is permitted, licensed about 20 kilometers on the road from the mill. And we expect that will be one of the first deposits that goes into their updated mine plan when they put it out.
So that would be very material for us and there are a number of deposits that we cover, our royalty covers there that we expect to come into the mine plan as they progress. Genesis have also said that they are looking to expand the mill that they have already operating there to enable them to process more given the M&A and given the consolidation they have done and the increased portfolio resources that they have.
So I think we should have some really material updates on that asset in Australia and Genesis have called it some of that ground as the best exploration ground that they have in West Australia, which is for a very well-known Australian gold producer and a management team who have historically been pretty conservative in what they said. I think that's a very positive indicator of what they see the potential there. And for us, as a royalty holder, look, you would not be able to buy that royalty from an existing operator or producer in that region now. Just to remind people, they're neighbors with Gold Fields and AngloGold Ashanti in that Laverton belt.
So I think the transaction we did, which was a third-party existing royalty that has been around for over a decade in September of last year. I think that will be a really cornerstone asset for us moving forward and we should get better clarity on the production and the time line with the first mine plan updated coming out shortly. And lastly, on Dugbe, this is an asset that is less well publicized. Mansa Resources are a private operator in West Africa, but Dugbe is a 2% to 2.5% untapped NSR for us. It currently covers just under 4 million ounces, so similar in terms of overall current size to Laverton.
And that project Dugbe is going through an updated feasibility study and it was due out before the end of the year. And alongside that it's been in the press that Mansa has been looking at financing options to start work on the project in the very near term. So they're private, but I expect we will get some news on that front in the coming months in terms of updated feasibility study for the project and then also on the financing side. And that will be in production on the last feasibility study. It was approximately 200,000 ounce a year asset. So that in terms of the royalty, makes it really material for us.
And just for context, when we look at Karlawinda, where we have a 2% royalty, that is with the expansion now going up to approximately 150,000 ounces. So just to give perspective, this is a 2% to 2.5% NSR on approximately 200,000 ounces once in production that we acquired for $16.5 million upfront in September of last year with another $3.5 million of milestone payments. So I think very much looking forward to the update on that front as well when there is not as much in the public domain. But when there is a public statement on the feasibility study and development plans, we will look to share that with shareholders and investors in the market when we can.
So that brings us back here to the slide on the year-to-date that we have had and that is in terms of revenue and GEOs, a record, notwithstanding one of our biggest royalties at Caserones having production impacted in Q3 by storm events. And we've been very active across the board on the capital market side, on portfolio in terms of adding strengthening to the team and also streamlining the business down to the pure-play royalty streaming model, which should have a very positive impact on the cost basis for the company moving forward. So with that, I think, Stefan, we're good to move on to the Q&A and take any questions from investors.
Stefan Wenger: Operator, are there any questions for us.
Operator: [Operator Instructions] And our first question comes from the line of Larry Liu with CIBC.
Chunshan Liu: I guess I'll start off with a more general kind of strategy question. If we look at the history of Elemental, the company has been more royalty focused. But now that after the Orion package, you do have streams added to the portfolio. Should we see more streams in the future? Or how should we look at stream versus royalty going forward from here?
Frederick Augustus Ronald Peter Bell: I'm happy to take that in the first instance, Larry. And look, from our side, we are agnostic whether it is a stream or a royalty. And I think that just historically, having started with smaller acquisitions, that we saw a lot more royalty opportunities than we did streams. As the company has evolved, we are now able to do larger transactions, it is more common that we are coming across streams and that is both where we are writing them with the operator as we have done in the past, but also where we are buying pre-existing streams such as the ones in the Orion portfolio.
So I think we've always been opportunistic in trying to find the best opportunity for the company, whether that is a royalty or a stream, and we just have a bigger opportunity set now than we were able to have in the past.
Chunshan Liu: Sounds good. Yes, Fred that makes a lot of sense. I think it just adds a little line to the financial statement makes Stefan added there. But that feeds on to my next question. I'm going to ask about cash flow projection. You talked about your growth outlook and we do know that with streams, there's ongoing cost component to it. So is it too greedy to ask for an operating cash flow projection for the next few years as well from that perspective?
Stefan Wenger: Larry, it's Stefan. Yes, happy to look at that with you. I don't have a cash flow projection that I'm willing to put online right now. But as we go into 2027, we will be providing guidance for 2027, particularly on the cost side and on how we classify the stream so that, that will be pretty clear.
Chunshan Liu: Amazing. Sounds good.
Stefan Wenger: I was just going to say I appreciate you pointing out the fact that streams will have a cost component, but we'll be able to demonstrate that clearly in the P&L.
Chunshan Liu: Got you. Sounds good. Sorry to keep cutting you off there, Fred and Stefan, my connection is probably not too well, so I have you cutting in and out as well. So forgive me. But on that note, I'll have just one more question. For the quarter or subsequent to the quarter, I noticed that the debt balance is about $210 million. That is why I asked about the cash flow projection for the next few years. Would you mind giving us a little hint or a little sense on how the debt repayment schedule will look like from your perspective and how that would help deleverage the balance sheet from now?
Stefan Wenger: Yes. So you're correct. So in October, we drew another $180 million on the line of credit to close the Orion portfolio. And as we go forward, just for example, with the Orion portfolio, we're adding an additional $20 million of cash flow from GEOs with the Orion portfolio just next year. And in addition to that, we're going to cut our G&A by about 1/3. So just on those couple of things, we're driving an additional sort of $30 million of cash flow into the business with that.
So as we look at deleveraging the net $185 million of net debt that we have, we see that going from 2.5x to just above 1x by the end of next year and then a total payoff period of 2 to 2.5 years.
Chunshan Liu: Sounds good. Really good to hear. And congrats, Fred and Element on a record year.
Operator: And your next question comes from the line of Heiko Ihle with H.C. Wainwright.
Heiko Ihle: The world has changed place. Geopolitical risks have obviously gone up quite a bit. Has your view on where one should be doing business changed over the past few months? And then I know your U.S. exposure isn't -- I mean it's not like it's like the majority of your business. But given the results of the U.S. election, are you changing your views of which area of the U.S. you're willing to do deals in?
Frederick Augustus Ronald Peter Bell: So maybe I could kick off with that and then pass on to Stefan for any finishing comments. I think, look, Heiko, it's -- I appreciate the question, first of all. I think we're always trying to balance as a philosophy, the geological upside and potential the jurisdiction risk. And we definitely do, as a rule, distinguish between provinces, regions within countries. And you can -- you referenced the U.S. there, but there's a number of other countries as well where we have assets and we've been active in the past. And I think we make a very material distinction between exposure in different parts of those countries.
Look, overall, where the portfolio is now, we have Australia as one of our biggest jurisdictions. We have more exposure than we have had historically in the U.S. and Canada. With the last transaction, we remain material exposure in Chile through Caserones. But I think that's a very good example here of that diversification. And there was, as mentioned, a major storm event in Q3 that impacted a material number of the larger mines in Chile. And I think historically, that would have been more impactful for us and the benefit of our portfolio today is that with approximately 20 producing royalties at any one time.
And with that being very well diversified geographically as well as from operator, it gives us a lot of insulation from delays, impacts and whether that is weather related or whether that is government related. So I think that for us, that diversification is very important in terms of jurisdictions as well as all the other factors. And I think that we're pretty comfortable, I think, where the portfolio is today. We're going to see some evolution of that as our development assets come on. But I think overall, pretty happy.
Heiko Ihle: Fair enough. And then changing gears just a little bit. The company obviously has changed, as I just mentioned, the other comment, and I guess you said the same thing throughout the call. Is there a change to your thoughts on minimum cash to keep on hand given all these changes and the spin-off?
Stefan Wenger: Maybe I can comment on that. Heiko, it's a good observation. One benefit of the divestiture of the generative business is that from an Elemental perspective, not only are we going to reduce ongoing costs and head count and some of those things that cause our G&A to be high. But in addition to that, it's also going to free up working capital. We do have working capital tied up in that business for some of the projects that we're partnered with. And all those are timing things, but it does require us to keep a bit more cash on hand.
So going forward, I think that's going to give us more flexibility to run a little leaner on the cash side. We also hold a number of investments also that over time, we expect are going to be -- provide liquidity to the company over time. So I think from our perspective, yes, we'll lighten up a bit on cash on hand, but we'll keep enough to be able to continue to run the business in a smart way.
Operator: And your next question comes from the line of John Tumazos with John Tumazos Very Independent Research.
John Tumazos: I have a couple of clarification questions. On Ruby Hill, there's at least 3 mineral zones. There's a 5.5 million ounce heap leach they call Mineral Point. There's underground sulfide refractory Archimedes and then there's an oxide underground zone too. Do you cover all of those in your royalty?
Frederick Augustus Ronald Peter Bell: So we -- our royalty is and our stream, I should correctly say is 2 things. It is -- firstly, it is a silver stream, so it does not cover the gold. So it is a 50% silver stream for the next 1.3 approximately million ounces of silver and then it is a 10% ongoing life of mine uncapped silver stream. And that covers Ruby Hill, which on a gold and silver equivalent basis is approximately 8 million ounces currently. And it also covers Archimedes, which you referred to, albeit the level of silver in that is lower. And I think Ruby Hill is unusual in the value weighting towards silver.
And so that is where from our perspective in terms of the value on that stream, I think 98% of the value is on Ruby Hill for that silver stream. But we do have coverage across most of their current license.
John Tumazos: So in my model, I have Mineral Point is 4 million ounces of silver output after it's permitted. So that's the heap leach, the big heap leach is the big silver bit. Separately, could you explain what are the 5 assets that come with the Orion transaction?
Frederick Augustus Ronald Peter Bell: John, I don't know if we just lost you there.
John Tumazos: I'm here. I asked what are the 5 assets that came with the Orion transaction.
Frederick Augustus Ronald Peter Bell: What they are?
John Tumazos: Yes.
Frederick Augustus Ronald Peter Bell: Yes. So the first one is Ruby Hill Silver Stream, which we touched on. And the second one in terms of materiality is Mansa Resources Kouroussa mine, which is immediately adjacent to the north of PDI's Bankan in the Siguiri Basin and that's a recent combination of Robex and Predictive, and that's about 14 million ounces. And Kouroussa is the second asset in there and that is a 5% stream that has a time-limited buyback on 50% of it. It also has a step down in the early 2030s. But that stream is a very interesting structure because it is on the mill, not just tied to a specific license.
And so as Mansa expand their landholding in that region, so long as it is mined through their existing mill, which we anticipate it would be, we get the optionality from exploration success, but also future exploration success on licenses that they will add to and expand in the license package. So that's the second one. The third one is Silverco's La Negra mine in Mexico and that's currently in production. It's a very good management team that are at the asset there. And they announced an updated PEA on the asset in September actually at the same time that we acquired it, that would have approximately double the production that we modeled when we bought that backwatered.
So that is the third asset, Silverco's La Negra. The fourth asset is a stream on Endura's mine in New Zealand. And that is due to -- that's run by Jake Klein. It's a private company and that is due to have first gold in December and that is from the Snowy River gold mine. So that is the fourth asset. And the fifth one is royalty on Dakota Gold ground. Now the one thing I would say about Dakota Gold ground and we have a map in the presentation. So we estimate current mine plan covered by that royalty.
And then we have a very large land package around it that I think has a lot of exploration potential, but we'll also have some permitting requirements on it as well. So those are the 5 assets that we acquired from Orion.
Operator: There's no further question at this time. I will now turn the call back over to Fred for closing remarks. Fred?
Stefan Wenger: There's a couple...
Frederick Augustus Ronald Peter Bell: Yes. No, perfect. Thank you, Stefan. And I was just -- I was looking at that. We've also had 1 or 2 pre-submitted questions coming in. So I will try and cover those off alongside Stefan now. And there's one question, which is following the closing of Vizsla and the first close of Orion, Elemental has significantly expanded its royalty portfolio. As a long-term investor, I'm interested in how management evaluates the balance between portfolio growth and per share value creation. And what financial metrics and capital allocation priorities will be most important in driving sustainable free cash flow per share over the next 2 to 3 years. So a very good question. Thank you for that.
I will -- I'll address it in maybe 2 different ways. I think as a first comment, we're absolutely focused on per share value creation. And that has been the case for as long as I have been involved with Elemental from private company all the way through. And actually, one of the reasons we -- I think the merger between Elemental assets and EMX was relatively easy to put together was because the management teams and also some of the key shareholders on both sides were very much focused on that long-term per share value creation.
And I think that what we have done as we've grown the company is using some of that revenue that we generate through the portfolio, both to help fund new acquisitions, but also to enable us to either buy back shares when we're cheap and we think the value is under -- and we think we're undervalued or to use that revenue to give ourselves a credit facility and a cost of capital that enables us to also flexibly draw on that going forward.
And in terms of the portfolio growth that we've done, I think in the short term, the combination of EMX and Elemental assets are materially stepping up our revenue, really diversifying the portfolio and reducing those risks across the board and the latest addition of the Orion portfolio and another 3 assets within that, that are producing today, I think that is -- all of that is adding to the revenue and it is going to drive the free cash flow on a share basis.
Now what I would say is that when you invest in as much growth as we have over the past year and you could see in our projections getting to over 50,000 GEOs in the early 2030s, that will mean that in the short term on a per share basis, our revenue may, in fact, come down. But when you look at it in terms of what we have added into the portfolio over those coming years, that is really going to drive that growth in free cash flow per share and alongside the NAV.
And I think that the transaction we did separating out the generation business and remaining a key shareholder in it and having exposure to it, but having it in a separate entity, I think that is also very much with a view to reducing the costs for the business and enabling us to have better free cash flow and better margins for the company going forward. So I hope that answers some of that. And Stefan, was there anything you want to jump in?
Stefan Wenger: No, I think just to add a little bit of color. I think we're in a unique situation that you don't often see in the fact that we are substantially increasing revenue over the next 5 years with the portfolio growth outlook that Fred mentioned rising to 50,000 GEOs. And that's a 160% increase in revenue. But at the same time, we're reducing costs materially. So we're driving cash flow growth in 2 ways. And that's one of our key strategies to improve our cash flow per share. We're also using the banks are good partners to use that credit facility so that we're not issuing equity to grow.
It doesn't mean we won't issue equity at the right price in the future and for the right deals. But I think that you're seeing us materially improve our metrics in a number of ways.
Frederick Augustus Ronald Peter Bell: And then maybe there's a second question here, which is with Tether being such a large shareholder, what risks do you see if they have different objectives or their interest don't align with management in the future, both regards to investments and corporate strategy. And look, I think that's the question that you see often in companies when you have material shareholders. I think what we have -- what we can say as a management team and I think consistent with what was said in the past is that I think in terms of the transactions, the merger with EMX is a great example.
These were transactions that the management teams have been working on in some cases for a long time prior to Tether's involvement and I think that since Tether came in as a major shareholder, they've been extremely supportive of the company's sort of targets and opportunities that we've identified and continuing to progress that. And I think that now been -- now had Tether as a shareholder since June of 2025. And so I think we've increasingly over the last 18 months worked together and progressed, I think there's very good alignment in terms of they would like to increase their exposure to the gold space, particularly royalties.
And I think they're comfortable with the gold, silver, copper exposure that the company already has. And I think that they'll continue to be a very supportive shareholder for the company going forward in terms of growth. Maybe there's one last question here as well that we've got in. A couple of others. There's one here, which is, do you expect 2027 to be as active in terms of acquisitions as 2026? So look, that's a good question with the CFO on the line here. I think that we're constantly looking at opportunities in parallel.
And there's anyone who's been in the royalty space will know there are a lot of transactions that we do advance and they fall away because they don't pass due diligence because we have different value expectations. So I think historically, we've said somewhere in the region of 95%, 98% of the kind of opportunities we look at, we turn down or we don't go through to completion. So there are an awfully large number of opportunities where we do not progress. And sometimes that doesn't mean we might never do it. It might just mean we have a difference in value expectations in the short term.
And it's an asset that we actually like and we would keep open mind in the future of our mind. So I think it's very hard to predict where we will be in terms of deal.
What I can say is that the team we have internally today and the management team that we've built up, the accumulated experience, the intellectual property within the company from many years of working in the royalty space and many more years of working across the mining space is that we are very well positioned to continue to grow the company where we think tagging on to the earlier question, where we think we can do that accretively and where we can do it in a way that we think we are adding value on a per share basis. And that is always the most fundamental metric. And I think that Tether are very aligned in that.
And look, when they first invested in the company 18 months ago, there were questions both to the company and to Tether of saying, why not do this privately? Why not invest in royalties directly as Tether, do it in a private vehicle and you can have 100% of it. And I think their answer at the time, about which I don't want to speak too much for them, I think remains very true, which is that they like the discipline of being a public company and they like being a shareholder in a public company where you are judged on every transaction you do and where you have to demonstrate that you are continually adding value to those transactions.
I think that for an investor like Tether who has historically been in the mining business, it gives them comfort as we grow the company and do that. And so I think we're very aligned with them in terms of wanting to grow the company, but do it in an accretive manner. And I think that we'll continue to look at opportunities throughout 2027 to add to the portfolio where we can in a sensible way and taking into account the growth that we already have in the portfolio and the acquisitions, which we have just recently closed and we are still in the process of closing. So hopefully, that answers that question there.
And I think with that, I think that is the last of the pre-submitted questions. But if we miss anything or anyone sort of a question during the call, please feel free to e-mail or reach out to us on the phone and very much always available and happy to answer any questions that investors may have. So with that, we'll bring it to wrap it up, bring it to an end. Thank you very much for joining Elemental's Q3 2026 call and for those of you who are shareholders, for your support of the company going forward.
And perhaps for those of you listening in as investors, very happy to give you a rundown on the company and a more in-depth dive on some of the assets and plans moving forward when we have time. And lastly, just for our team, thank you very much to everyone for the work in getting through this quarter, particularly busy across the board in terms of transactions and also internal processes and systems that we are upgrading this quarter. So thank you, everyone, for all the work and look forward to updating you at our next quarter results.
Stefan Wenger: Thank you.
Operator: This concludes today's call. You may now disconnect.
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