Lithium Royalty Corp. ((TSE:LIRC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Lithium Royalty Corp. (LRC) conveyed a cautiously optimistic sentiment, highlighting significant revenue growth and strategic milestones. The company reported an impressive increase in revenue and the start of production at the Tres Quebradas project, while also expanding its portfolio with new acquisitions. Despite these positive developments, challenges such as price volatility and continued adjusted EBITDA losses were acknowledged, tempering the overall outlook with a note of caution.
Significant Revenue Growth
Lithium Royalty Corp. reported a substantial revenue increase for the quarter, reaching $417,000, which represents an 86% rise compared to the same period last year. This growth was largely attributed to favorable quotational pricing adjustments, showcasing the company’s ability to capitalize on market opportunities.
Tres Quebradas Project Milestone
A key highlight of the earnings call was the start of production at the Tres Quebradas lithium project in Argentina by Zijin Mining. This development marked LRC’s first revenue from this asset, signaling a promising new revenue stream and a significant milestone in the company’s growth trajectory.
Strong Pipeline and Strategic Acquisitions
LRC continued to strengthen its portfolio through strategic acquisitions, including a 1.25% net smelter return royalty on the Fox tungsten asset. This acquisition enhances the diversification of LRC’s portfolio, positioning the company to benefit from a broader range of mineral assets.
Robust Lithium Demand
The company projected a strong growth trajectory for lithium demand, estimating an increase of over 25% by 2025. This demand is primarily driven by the electric vehicles and energy storage sectors, underscoring the strategic importance of LRC’s focus on lithium assets.
Positive Market Developments
LRC anticipates the fourth quarter of 2025 to be the first quarter of positive year-on-year price growth in spodumene concentrate since its IPO. This development is expected to contribute positively to the company’s financial performance and market positioning.
Volatility in Lithium Prices
The earnings call highlighted the volatility in spodumene prices, which ranged from $620 to $1,000 per tonne during the quarter. This price fluctuation poses a challenge to revenue stability, reflecting broader market dynamics that the company must navigate.
Adjusted EBITDA Loss
LRC reported an adjusted EBITDA loss of $1.1 million for the quarter, consistent with the same period last year. This ongoing challenge underscores the need for continued strategic management to improve financial performance.
Forward-Looking Guidance
Looking ahead, Lithium Royalty Corp. remains focused on expanding its portfolio, with a particular emphasis on acquiring additional lithium royalties and exploring other critical mineral opportunities. The company maintains a strong balance sheet with $27.5 million in cash and no debt, positioning it well for future growth. Expectations for more significant contributions from the Tres Quebradas project in 2026 further bolster the company’s growth prospects.
In summary, the earnings call for Lithium Royalty Corp. painted a picture of cautious optimism, with significant revenue growth and strategic milestones balanced by challenges such as price volatility and adjusted EBITDA losses. The company’s focus on expanding its portfolio and capitalizing on robust lithium demand positions it well for future growth, despite the current market uncertainties.