The royalty company's structure shields investors from rising fuel and chemical costs that are squeezing conventional miners

RBC Capital Markets has highlighted Ecora Royalties PLC (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF, FRA:HGR), the London-listed mining royalty company, as one of the better-performing equities since the outbreak of war with Iran.

The Canadian bank reiterated its 'outperform' rating and 175p price target against a current share price of 133p (up 3%).

A royalty company collects a percentage of revenue or production from mining operations it has helped finance, without bearing the direct costs of running those operations.

That structure has become particularly valuable in the current environment, RBC argues, because Ecora has no direct exposure to the rising cost of oil, which is pushing up operating expenses across the mining sector through higher diesel and freight costs.

The bank notes that bulk commodity miners such as Rio Tinto and BHP, the Anglo-Australian mining giant, face freight cost increases of around $3.50 per tonne on shipments from Australia to China, while diesel accounts for 10% to 15% of typical site costs.

Ecora's overall revenue basket has fallen only 2% since the conflict broke out, compared with much steeper declines elsewhere.

The note also flags potential upside in cobalt and nickel, two metals in which Ecora has significant royalty exposure.

Around 75% of the global sulphur supply, used to produce sulphuric acid for nickel processing, comes from the Middle East, and stockpiles are reported to be dwindling.

A shortage could prompt Indonesian producers to cut capacity at high-pressure acid leach (HPAL) plants, the processing method used to extract nickel and cobalt from laterite ore, tightening supply of both metals.

RBC also sees possible near-term catalysts in Ecora's development portfolio.

A final investment decision on the Santo Domingo copper project in Chile is expected in the second half of 2026, while unconfirmed media reports suggest South32 may be a lead bidder for BHP's West Musgrave nickel project in Western Australia.

If a sale proceeds, RBC estimates it could bring forward Ecora's expected commissioning date for West Musgrave from 2035 to as early as 2027, potentially adding around 9% to the company's spot valuation.

Additionally, the Rook 1 uranium project in Canada received its final regulatory approval in March, and Ecora holds a 2% royalty over an area containing nearby uranium mineralisation that RBC believes could eventually extend Rook 1's mine life into the late 2030s.