Elemental Royalty (NASDAQ:ELE) reported its second-highest quarterly revenue result in company history for the second quarter of 2026, as the royalty company benefited from growth in its portfolio following its combination with EMX Royalty.
President and COO Frederick Bell said the company recorded a quarterly record for gold equivalent ounces, or GEOs, sold and was ahead of the midpoint of its full-year guidance at the halfway point of 2026. Elemental ended the quarter with approximately $74 million in cash before subsequent investments and the planned closing of its acquisition of Vizsla Royalties.
Guidance and Financial Position
Elemental said it was tracking toward the upper end of its annual GEO guidance range of 17,000 to 21,000 GEOs. The company reported approximately $48 million in revenue and 10,000 GEOs for the first half of the year.
Wenger said the GEO figures reported by the company are calculated using actual average commodity prices for the quarter, with revenue divided by the average price. The company’s guidance assumptions used gold at $4,500 per ounce and copper at $5.50 per pound. He said gold had been slightly below the company’s guidance range while copper had exceeded it.
Elemental had working capital of $96 million at quarter-end and an expanded credit facility of $150 million, plus a $50 million accordion feature. Wenger said the company expects to use about $60 million in cash to complete the Vizsla transaction and had also completed the Chapi investment after the quarter ended. The company may use a small amount of its credit facility to maintain working capital following those outlays.
The company’s largest sources of cash flow during the first half included royalties on Caserones, Bonanza Creek, Karlawinda, Leeville and Timok. Wenger said those five assets accounted for about 80% of Elemental’s revenue.
Costs, Shareholder Returns and Capital Allocation
Wenger said general and administrative expense was elevated in the first half because of merger integration and corporate initiatives, including the company’s NASDAQ listing, TSX uplisting, dividend, normal course issuer bid and credit-facility refinancing.
He expects quarterly G&A expense to decline from $5.6 million in the first half to the low-$4 million range going forward, or roughly $16 million to $18 million annually. The company is targeting a reduction of more than 50% in the number of legal entities across the combined group. Wenger said Elemental aims to increase adjusted EBITDA to more than 80% of revenue by 2027, compared with about 74% currently.
During the first half, Elemental invested about $7 million to expand its Western Queen royalty, spent $2 million repurchasing shares under its normal course issuer bid and made nearly $2 million in dividend payments. The company introduced its dividend in the first quarter and said shareholders can elect to receive future distributions in either cash or Tether Gold.
Bell said Elemental’s portfolio is roughly two-thirds focused on gold and other precious metals and one-third on copper. The company expects to continue increasing its precious-metals exposure, although management said the copper assets are generating substantial cash flow.
Vizsla Transaction and Portfolio Developments
Elemental expects to close its acquisition of Vizsla Royalties in the third quarter, subject to approval from Mexico’s antitrust commission. Bell said the transaction has already received shareholder and court approvals, and the company expects the remaining clearance “in the coming weeks,” assuming no further follow-up questions.
The proposed acquisition would add an uncapped 2% to 3.5% net smelter return royalty on Vizsla’s Panuco project in Mexico. Bell described Panuco as a potentially material future contributor and cited exploration potential across the property, where he said only about one-third of known veins have been explored. Vizsla is also awaiting a mine permit for the project.
Bell said Elemental has deployed about $750 million in the year through June 2026, including the EMX and Vizsla corporate transactions, compared with about $28 million in acquisitions during the prior 12-month period. The company said its six largest cornerstone assets would have an average value of approximately $170 million after closing the Vizsla transaction, compared with roughly $40 million as of mid-2025.
Elemental also increased its royalty exposure at Chapi in Peru and took an equity position in the operator. Bell said the mine was commissioned in the first half at an initial production level of 10,000 tonnes per year and is being evaluated for expansion to 30,000 tonnes per year.
Operating Asset Updates and Growth Outlook
At Karlawinda, Elemental received about $3 million in second-quarter revenue. Bell said Capricorn Metals’ expansion is on track for completion in the third quarter and is expected to increase annual production to about 150,000 ounces from approximately 115,000 to 120,000 ounces. Capricorn also reported increases of about 30% in reserves and 48% in total resources following the quarter.
At Caserones in Chile, operator Lundin Mining has continued exploration work, including about 100 kilometers of drilling over the past 18 months, according to Bell. He said the operation has shown incremental improvement since Lundin took majority ownership, despite weather-related interruptions announced for the third quarter.
Bell also highlighted ongoing development and exploration at Timok, Leeville and Bonikro. He said Timok’s operator is advancing a lower-zone expansion while continuing to mine the upper zone, and has identified the MG Zone discovery within Elemental’s royalty area. At Leeville, Bell said management sees a multi-decade mine life before accounting for additional exploration. Elemental’s Bonikro royalty is a 4.5% NSR that is expected to continue generating revenue until approximately 2029.
Looking ahead, Elemental forecast production of about 25,000 GEOs in 2028 and approximately 30,000 to 35,000 GEOs in 2029 and 2030. Bell said that outlook does not include potential mine-life extensions or exploration success at existing assets such as Karlawinda and Caserones.
About Elemental Royalty (NASDAQ:ELE)
Elemental Royalties (NASDAQ: ELE) is a publicly traded company that acquires and manages royalty and streaming interests in the mining sector. The firm focuses on securing long‑lived, low‑cost interests that provide ongoing, contractually defined payments or metal deliveries from producing and near‑term development mineral projects. By targeting royalties and streams rather than operating mines, the company seeks exposure to commodity price upside while avoiding the capital intensity and operating risks of miners.
Elemental Royalties’ activities include sourcing and negotiating royalty and stream transactions, performing technical and commercial due diligence on potential assets, and actively managing a diversified portfolio of interests.
