ele 20251231xexx993xmda

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# ele 20251231xexx993xmda

Source: https://www.sec.gov/Archives/edgar/data/2086771/000162828026020856/ele-20251231xexx993xmda.htm
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# ele 20251231xexx993xmda
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ele-20251231xexx993xmda.htm
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Document Elemental Royalty Corporation (formerly Elemental Altus Royalties Corp.) Management's Discussion and Analysis Year Ended December 31, 2025 Management's Discussion & Analysis (Expressed in U.S. Dollars, except where indicated) General This Management's Discussion and Analysis ("MD&A") for Elemental Royalty Corporation (formerly Elemental Altus Royalties Corp.) (the "Company", or "Elemental") has been prepared based on information known to management as of March 23, 2026. This MD&A is intended to help the reader understand the consolidated financial statements and should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2025, prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board. All dollar amounts included therein and in this MD&A are in United States dollars except where noted. Readers are cautioned that the MD&A contains forward-looking statements and that actual events may vary from management's expectations. Readers are encouraged to read the "Forward-Looking Information" at the end of this MD&A. Additional information related to the Company, including our Annual Information Form ("AIF") and Form 40-F, are available on SEDAR+ at www.sedarplus.ca, and on EDGAR at www.sec.gov, respectively. These documents contain descriptions of certain of Elemental's producing royalties as well as summaries of the Company's advanced royalties, exploration royalties and royalty generation assets. For additional information, please see our website at www.elementalroyalty.com. Table of Contents Description of the Business 3 Strategy 3 Highlights 3 Guidance 6 Portfolio Growth 6 Corporate Updates 7 Key Producing Royalty Updates 9 Development Royalty Updates 11 Royalty Generation Updates 14 Results of Operations 15 Liquidity and Capital Resources 19 Annual Information 21 Quarterly Information 21 Risks and Uncertainties 22 Risk and Capital Management: Financial Instruments 23 Non-IFRS Financial Measures 29 Abbreviated Definitions Periods under review "Q4" The three-month period ended December 31 "Q3" The three-month period ended September 30 "Q2" The three-month period ended June 30 "Q1" The three-month period ended March 31 Measurement "GEO" Gold equivalent ounces "oz" Ounce "t" Tonne "lb" Pound "Kt" Thousand tonnes "Mlbs" Million pounds "Tsol" Total soluble Interest types "NSR" Net smelter return "GSR" Gross smelter return "GRR" Gross revenue royalty "NPI" Net profits interest "AMR" Advance minimum royalty "AAR" Annual advance royalty Places and currencies "U.S." United States "$" or "USD" United States dollars "C$" or "CAD" Canadian dollars "A$" or "AUD" Australia dollars Other "FS" Feasibility study "IRR" Internal rate of return "LOM" Life of mine "NPV" Net present value "PEA" Preliminary Economic Assessment "PFS" Pre-feasibility study TSX.V: ELE / NASDAQ: ELE Elemental Royalty Corporation 2 Management's Discussion & Analysis (Expressed in U.S. Dollars, except where indicated) Description of the Business Elemental is in the business of acquisition and management of royalties and organically generating royalties derived from a portfolio of mineral property interests. Elemental's royalty and mineral property portfolio consists of 256 assets across North America, South America, Europe, Africa, and Australia. The Company's common shares are listed on the TSX Venture Exchange ("TSX-V") and on the Nasdaq Exchange ("Nasdaq") under the symbol "ELE". Strategy Elemental’s strategy is to advance a disciplined growth strategy focused on building a diversified portfolio of high-quality royalty and streaming interests across both precious and base metals. The Company focuses on acquiring and creating high-quality royalty and streaming interests, making strategic investments, and selectively generating royalties, with a balanced exposure to precious and base metals and an emphasis on gold and copper. The key components of Elemental’s business strategy are summarized as follows: Royalty and Streaming Acquisitions and Financing Elemental seeks to acquire and finance royalty and streaming interests across a spectrum of asset stages, ranging from producing operations to advanced development projects. The Company targets opportunities in the precious metals, base metals, and battery metals sectors, and will also consider other cash-flowing royalty and streaming opportunities, including within the energy sector. Through disciplined capital allocation and transaction structuring, Elemental aims to build a portfolio that delivers near-term cash flow, long-term optionality, and exposure to commodity price upside. Royalty Generation Royalty generation is a complementary component of Elemental’s broader acquisition, financing, and investment strategy. The Company leverages in-country geological expertise to originate and evaluate mineral projects, partner with major and junior companies, and selectively retain royalty interests. These activities can result in royalties, advance royalty payments, milestone payments, and occasional equity consideration, providing modest early-stage cash flows and long-term upside optionality with limited capital deployment. Elemental’s diversified portfolio of producing, development-stage, and exploration royalties provides exposure to near-term cash flow and long-term discovery upside. By integrating acquisitions and financing, strategic investments, and selective royalty generation, the Company has established a resilient platform for sustainable long-term shareholder value. Highlights The financial year ended December 31, 2025 was transformational for Elemental. The Company completed its merger with EMX Royalty Corporation (“EMX”), creating a larger, diversified mid-tier royalty and streaming company with enhanced scale, asset quality, and long-term growth potential. Elemental also welcomed a new strategic shareholder, Tether Investments S.A. de C.V., which acquired a significant equity interest during the year and invested an additional $100 million in private placement proceeds concurrent with closing of the acquisition of EMX. This investment, together with the Company’s amended and upsized $150.0 million revolving credit facility with a $50.0 million accordion feature, enhances the Company's financial flexibility to support acquisitions, investments and royalty generation efforts in the immediate future. During the year, the Company completed several royalty acquisitions, including a 2% gross revenue royalty on the Laverton Gold and Jasper Hills Projects in Western Australia for $52.0 million, and a 2% NSR royalty on the Dugbe Project in Liberia for $16.5 million, reflecting disciplined capital allocation toward high-quality assets with development and exploration upside. The Company’s common shares also commenced trading on the Nasdaq under the ticker symbol “ELE,” expanding U.S. market access and liquidity. Subsequent to year end, Elemental announced the initiation of a dividend, underscoring confidence in its cash flow profile, while continuing to grow its royalty portfolio as partners advanced development, expansion, and exploration activities across the asset portfolio. The Company also introduced an option for shareholders to receive dividends in Tether Gold (XAU₮), an industry first, providing exposure to physical gold through tokenized payments. TSX.V: ELE / NASDAQ: ELE Elemental Royalty Corporation 3 Management's Discussion & Analysis (Expressed in U.S. Dollars, except where indicated) Summary of Financial Highlights for the Three Months and Year Ended December 31, 2025: For the three months ended December 31, For the year ended December 31, (In thousands of dollars) 2025   2024   2025   2024   Statement of Income Revenue $ 16,047  $ 5,519  $ 43,643  $ 16,323  General and administrative expense 9,842  2,149  16,467  7,396  Royalty generation expense, net 1,058  -  1,058  -  Income (loss) from operations (1,957) 629  5,281  2,294  Net income (loss) from continuing operations $ (3,209) $ 132  $ 1,772  $ (312) Statement of Cash Flows Cash flows from operating activities $ 11,203  $ 2,555  $ 30,811  $ 4,816  Cash flows from investing activities (47,392) 556  (56,325) 4,514  Cash flows from financing activities $ 75,244  $ (4,624) $ 74,556  $ (16,109) Non-IFRS Financial Measures 1 Revenue plus attributable share of Caserones $ 17,226  $ 6,827  $ 49,200  $ 21,600  Adjusted cash flows from operating activities $ 11,203  $ 3,315  $ 33,937  $ 8,738  Adjusted EBITDA $ 8,456  $ 4,769  $ 34,901  $ 15,111  GEOs sold 4,133  2,551  14,285  8,987  Statement of Financial Position Cash and cash equivalents $ 53,143  $ 4,454  Working capital 80,064  17,737  Long-term debt $ -  $ 2,687  Revenue plus attributable share of Caserones 1 presented above are inclusive of revenue earned from assets acquired from EMX Royalty Corporation after the closing of the transaction. Had the merger taken place on January 1, 2025, the Company would have generated $72.2 million in revenue and $87.5 million in revenue plus attributable share of Caserones 1 . Non-IFRS Financial Measures 1 : The Company had revenue plus attributable share of Caserones, and adjusted EBITDA of the following: 1 Refer to the "Non-IFRS Financial Measures" section on page 29 of this MD&A for more information on each non-IFRS financial measure. TSX.V: ELE / NASDAQ: ELE Elemental Royalty Corporation 4 Management's Discussion & Analysis (Expressed in U.S. Dollars, except where indicated) Revenue and GEO 1 Performance The following table summarizes the Company’s revenue from royalty interests during the three months and year ended December 31, 2025 and 2024: For the three months ended December 31, For the year ended December 31, (In thousands of dollars) 2025   2024   2025   2024   Ballarat $ 745  $ 403  $ 2,454  $ 807  Bonikro 2,886  2,407  10,886  5,430  Caserones 2 3,665  -  3,665  -  Gediktepe 3 1,613  -  1,613  -  Karlawinda 2,699  1,490  8,857  5,199  Korali-Sud 307  -  10,515  -  Leeville 3 1,192  -  1,192  -  Timok 3 1,086  -  1,086  -  Wahgnion -  764  -  2,692  Other producing royalties 3 1,403  455  2,924  1,865  Advanced royalty payments 3 167  -  167  -  Total royalty revenue $ 15,763   $ 5,519   $ 43,359   $ 15,993   Option, property and other revenue 284  -  284  330  Caserones (before reclassification) 2 1,179  1,308  5,557  5,277  Revenue plus attributable share of Caserones 1 $ 17,226   $ 6,827   $ 49,200   $ 21,600   The following table summarizes the Company’s GEOs 1 during the three and twelve mont

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