MD&A – Q2 Financial Statements & Management Discussion & Analysis MD&A

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# MD&A – Q2 Financial Statements & Management Discussion & Analysis MD&A

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# MD&A – Q2 Financial Statements & Management Discussion & Analysis MD&A
Elemental Royalty Corporation
(formerly Elemental Altus Royalties Corp.)
Management's Discussion and Analysis
Three and Six Months Ended June 30, 2026
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 August 10, 2026.
This MD&A is intended to help the reader understand the consolidated financial statements and should be read in conjunction
with the condensed consolidated interim financial statements of the Company for the three and six months ended June 30, 2026
together with the audited consolidated financial statements for the year ended December 31, 2025. The condensed consolidated
interim financial statements have been prepared in accordance with IFRS Accounting Standards applicable to the preparation of
interim financial statements, under International Accounting Standard 34, Interim Financial Reporting, as issued by the
International Accounting Standards Board ("IASB"). All amounts are expressed in United States dollars unless otherwise 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 Statements" 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 Abbreviated Definitions
General 2 Periods under review
Description of the Business 3 "Q4" The three-month period ended December 31
"Q3" The three-month period ended September 30
Strategy 3
"Q2" The three-month period ended June 30
Highlights 3 "Q1" The three-month period ended March 31
Revenue and GEO Performance 5 "H1" The six-month period ended June 30
Corporate Updates for Q2 2026 7
Measurement
Key Producing Royalty Updates 8 "GEO" Gold equivalent ounces
Development Royalty Updates 10 "oz" Ounce
Royalty Generation Updates 11 "t" Tonne
Results of Operations 12 "lb" Pound
Liquidity and Capital Resources 16 "Kt" Thousand tonnes
"Mlbs" Million pounds
Quarterly Information 18
"Tsol" Total soluble
Risk and Capital Management: Financial 20
Interest types
Instruments
"NSR" Net smelter return
Non-IFRS Financial Measures 24 "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" Australian 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: 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 Nasdaq Exchange ("NASDAQ") and on the Toronto Stock Exchange ("TSX")
under the ticker 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 precious metals. 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 long-term shareholder value.
Highlights
Q2 2026 continued with a strong performance across Elemental’s expanded portfolio, supported by favorable commodity prices
and solid contributions from key producing assets, including Karlawinda, Bonikro, Caserones, Timok, and Leeville. The quarter
further demonstrated the benefits of the Company’s enhanced scale and diversification following the merger with EMX Royalty
Corporation ("EMX"), with a broad base of cash-flowing assets supporting a resilient and growing revenue profile.
A key highlight of the quarter was the proposed acquisition of Vizsla Royalties, which will add a significant royalty over the high-
grade Panuco silver-gold project in Mexico. The transaction will further enhance the scale and quality of Elemental’s portfolio,
increase the Company’s exposure to silver and add a cornerstone development-stage asset with the potential to generate
meaningful future cash flow. The acquisition will also provide additional exploration and mine-life extension optionality as
Panuco continues to advance. Following a successful shareholder vote and court approval, the transaction remains subject to
regulatory and other customary closing conditions and is expected to close during the third quarter of 2026.
Subsequent to quarter-end, Elemental also increased its royalty interest in the Chapi copper mine and completed a strategic
investment in Quilla Resources, owner of the Chapi mine. Together, these investments further expand the Company’s copper
exposure and add long-term development and exploration optionality to the portfolio.
Elemental continued to return capital to shareholders through purchases under its normal course issuer bid and the declaration
of a second quarterly dividend of $0.03 per share. Supported by strong operating performance, disciplined capital allocation and
continued portfolio growth, Elemental remains well positioned to deliver long-term shareholder value.
TSX: 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 and Six Months Ended June 30, 2026 and 2025:
Three months ended June 30, Six months ended June 30,
(In thousands of dollars, except GEOs) 2026 2025 2026 2025
Statement of Income
Revenue $ 23,788 $ 9,094 $ 48,110 $ 20,733
General and administrative costs 5,603 2,243 11,189 3,843
Royalty generation expenses, net 1,081 - 2,517 -
Income from operations 6,308 1,440 12,949 5,819
Net income $ 3,598 $ 160 $ 4,681 $ 3,608
Statement of Cash Flows
Cash flows from operating activities $ 15,532 $ 13,222 $ 30,026 $ 15,594
Cash flows from investing activities (7,127) 6,311 (8,078) 7,328
Cash flows from financing activities $ (3,210) $ 4 $ (865) $ (3,066)
1
Non-IFRS Financial Measures
Revenue plus attributable share of Caserones $ 23,788 $ 10,497 $ 48,110 $ 23,758
Adjusted cash flows from operating activities $ 15,532 $ 14,410 $ 30,026 $ 17,704
Adjusted EBITDA $ 17,437 $ 8,784 $ 35,178 $ 20,255
GEOs sold 5,248 3,184 10,231 7,790
Average gold price ($/oz) $ 4,533 $ 3,297 $ 4,702 $ 3,050
June 30, December 31,
Statement of Financial Position 2026 2025
Cash and cash equivalents $ 74,221 $ 53,143
Working capital $ 96,285 $ 80,064
Non-IFRS Financial Measures1:
The Company had revenue plus attributable share of Caserones, and adjusted EBITDA of the following:
Revenue plus Attributable Share of Caserones & Revenue plus Attributable Share of Caserones - by
Adjusted EBITDA Asset
(in thousands) (in thousands)
$24,000 $24,000
$20,000 $20,000
$16,000 $16,000
$12,000 $12,000
$8,000 $8,000
$4,000 $4,000
$- $-
Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26
Bonikro Caserones
Revenue plus attributable share of Caserones
Karlawinda Korali-Sud
Adjusted EBITDA
Leeville Timok
Other producing royalties Advanced royalty payments
Other revenue
1
Refer to the "Non-IFRS Financial Measures" section on page 24 of this MD&A for more information on each non-IFRS financial measure.
TSX: ELE / NASDAQ: ELE Elemental Royalty Corporation 4
Management's Discussion & Analysis
(Expressed in U.S. Dollars, except where indicated)
Revenue and GEO1 Performance
The following table summarizes the Company’s revenue from royalty interests during the three and six months ended June 30,
2026 and 2025:
Three months ended June 30, Six months ended June 30,
(In thousands of dollars) 2026 2025 2026 2025
Ballarat $ 799 $ 613 $ 1,765 $ 1,087
Bonikro 5,009 3,229 11,159 5,422
Caserones2 6,653 - 13,490 -
Gediktepe 610 - 1,694 -
Karlawinda 3,097 2,184 5,918 4,027
Korali-Sud - 2,513 - 9,161
Leeville 2,121 - 4,186 -
Timok 2,227 - 4,469 -
Other producing royalties 2,829 555 4,442 1,036
Advanced royalty payments 89 - 168 -
Total royalty revenue $ 23,434 $ 9,094 $ 47,291 $ 20,733
Option, property and other revenue 354 - 819 -
Caserones (before reclassification)2 - 1,403 - 3,025
Revenue plus attributable share of Caserones1 $ 23,788 $ 10,497 $ 48,110 $ 23,758
The following table summarizes the Company’s GEOs1 during the three and six months ended June 30, 2026 and 2025:
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
Ballarat 176 186 374 351
Bonikro 1,105 979 2,365 1,741
Caserones2 1,468 - 2,869 -
Gediktepe 135 - 357 -
Karlawinda 683 662 1,261 1,302
Korali-Sud - 762 - 3,071
Leeville 468 - 891 -
Timok 491 - 950 -
Other producing royalties 624 169 955 336
Advanced royalty payments 20 - 36 -
Total GEOs from royalty interests 5,170 2,758 10,058 6,801
Option, property and other revenue 78 - 173 -
Caserones (before reclassification)2 - 426 - 989
Total GEOs 5,248 3,184 10,231 7,790
1
Refer to the "Non-IFRS F

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