EMX Royalty (EMX) - 2025 Q2 - Quarterly Report

General Information This section provides foundational details for the MD&A, covering reporting period, accounting standards, currency, forward-looking statements, and key definitions Introduction This Management's Discussion and Analysis (MD&A) for EMX Royalty Corporation covers the six months ended June 30, 2025, prepared as of August 6, 2025, in accordance with IFRS Accounting Standards, with all dollar amounts in United States dollars - The MD&A covers the six months ended June 30, 2025, and was prepared as of August 6, 2025, in accordance with IFRS Accounting Standards[2] - All dollar amounts are presented in United States dollars unless otherwise noted[2] Forward-Looking Information and Cautionary Statement The MD&A contains forward-looking statements, and readers are advised to consult the dedicated 'Forward-Looking Information and Cautionary Statement' section for details on potential variations from management's expectations - The MD&A contains forward-looking statements, and actual events may differ from management's expectations[3] - Additional company information, including Annual Information Form and Form 40-F, is available on SEDAR+ and EDGAR[3] Abbreviated Definitions This section provides a glossary of abbreviated definitions used throughout the MD&A, covering periods, measurements (e.g., GEO, oz, t), interest types (e.g., NSR, GSR, NPI), places and currencies, and other technical terms (e.g., FS, IRR, LOM) Key Abbreviated Definitions | Category | Definition | | :--- | :--- | | Periods under review | Q4 (Dec 31), Q3 (Sep 30), Q2 (Jun 30), Q1 (Mar 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), 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) | | 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), MRE (Mineral Resource Estimate) | Overview EMX Royalty Corporation specializes in the acquisition and management of royalties, strategic investments, and organic generation of royalties from a diverse portfolio of 212 mineral properties globally - EMX's business involves the acquisition and management of royalties, strategic investments, and organic generation of royalties from a portfolio of mineral property interests[6] EMX Royalty and Mineral Property Portfolio (as of June 30, 2025) | Asset Type | Quantity | | :--- | :--- | | Producing Royalties | 7 | | Advanced Royalties | 11 | | Exploration Royalties | 121 | | Total Royalties | 139 | | Royalty Generation Properties | 73 | - The Company's common shares are listed on the TSX Venture Exchange and NYSE American Exchange under 'EMX', and on the Frankfurt Stock Exchange under '6E9'[7] Strategy EMX's core strategy is to offer shareholders exposure to exploration success and commodity upside through a balanced portfolio of precious and base metals, with a focus on gold and copper - EMX's strategy aims to provide shareholders exposure to exploration success and commodity upside, emphasizing a balanced portfolio of precious and base metals, particularly gold and copper[8] - The Company's business strategy combines producing royalties, advanced royalty projects, and early-stage exploration royalty properties to provide immediate cash flow, near-term development, and long-term discovery exposure[8] Royalty Acquisition EMX acquires royalty interests across various stages, from producing mines to development projects, focusing on base metals, precious metals, and battery metals, while also considering other cash-flowing opportunities, including in the energy sector - EMX acquires royalty interests ranging from producing mines to development projects[9] - Acquisitions target base metals, precious metals, battery metals, and other cash-flowing royalty opportunities, including the energy sector[9] Royalty Generation and Project Evaluation Leveraging over 20 years of exploration expertise, EMX organically generates mineral property royalty interests by acquiring prospective ground, building value through low-cost work, and then selling or optioning these properties to partners for retained royalties, advance payments, milestone payments, and equity interests, providing early cash flow and future royalty potential - EMX organically generates mineral property royalty interests by leveraging in-country geological expertise to acquire prospective properties and build value through low-cost work programs[9] - Properties are sold or optioned to partner companies for retained royalty interests, advance minimum royalty (AMR) and annual advance royalty (AAR) payments, project milestone payments, and other considerations including equity interests[9] - This strategy provides early-stage cash flows to EMX and potential for future royalty payments upon production, with EMX participating in project upside optionality at no additional cost[9] Strategic Investment EMX complements its royalty generation and acquisition efforts through strategic equity investments in companies with undervalued mineral assets that possess upside exploration or development potential, with exit strategies including equity sales, royalty positions, or a combination - Strategic equity investments are made in companies with undervalued mineral assets that have upside exploration or development potential[9] - Exit strategies for these investments can include equity sales, royalty positions, or a combination of both[9] Highlights In Q2 2025, EMX Royalty Corporation demonstrated robust royalty production and benefited from strong metal prices, achieving significant debt repayment, share repurchases, and early property payments - In Q2 2025, EMX achieved robust royalty production, benefited from strong metal prices, repaid $10,000,000 in corporate debt, and repurchased 1,202,168 common shares for $2,554,000 under its NCIB program[10] - The Company received early property payments of $6,850,000 from AbraSilver Resource Corp for Diablillos and $1,500,000 from Aftermath Silver Ltd for Berenguela[10] - Adjusted cash flows from operating activities significantly increased to $8,978,000 in Q2 2025, compared to $1,341,000 in Q2 2024, primarily due to early property payments[11] Financial Highlights EMX reported a net income of $642,000 in Q2 2025, a significant improvement from a net loss of $4,022,000 in Q2 2024, with adjusted royalty revenue increasing by 4.8% in Q2 2025 and 22.4% for the six-month period year-over-year Summary of Financial Highlights (in thousands of dollars) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue and other income | $6,239 | $6,005 | $14,661 | $12,245 | | Income (loss) from operations | $975 | $(837) | $1,514 | $(2,275) | | Net income (loss) | $642 | $(4,022) | $1,902 | $(6,249) | | Cash flows from operating activities | $6,892 | $(514) | $8,181 | $513 | | Adjusted revenue and other income | $8,686 | $8,758 | $20,114 | $17,051 | | Adjusted royalty revenue | $8,214 | $7,836 | $18,965 | $15,493 | | Adjusted cash flows from operating activities | $8,978 | $1,341 | $11,884 | $4,002 | | EBITDA | $3,065 | $(981) | $7,957 | $268 | | Adjusted EBITDA | $4,949 | $4,639 | $12,050 | $7,862 | | GEOs sold | 2,505 | 3,352 | 6,261 | 7,047 | | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $17,158 | $26,773 | | Working capital | $30,188 | $41,501 | - Adjusted royalty revenue increased by 4.8% in Q2 2025 (YoY) and 22.4% for the six months ended June 30, 2025 (YoY)[12] - Net income for Q2 2025 was $642,000, a significant improvement from a net loss of **$4,022