Electric Royalties Closes Cash Flowing Royalty Acquisition

- August 11th, 2021

Electric Royalties Ltd. is pleased to announce that it has closed the previously announced acquisition of the Globex portfolio of royalties . The Company acquired 25% of the Middle Tennessee Mine Royalty and 100% of the Glassville Manganese Royalty for C$250,000 and 9,000,000 common shares and 5,500,000 common share purchase warrants of the Company in the transaction. Funds controlled by Sprott Resource Streaming …

Electric Royalties Ltd. (TSXV: ELEC) (“Electric Royalties” or the “Company”) is pleased to announce that it has closed the previously announced acquisition of the Globex portfolio of royalties (“Globex Portfolio”). The Company acquired 25% of the Middle Tennessee Mine Royalty (“MTM Royalty”) and 100% of the Glassville Manganese Royalty (the “Glassville Royalty”) for C$250,000 and 9,000,000 common shares and 5,500,000 common share purchase warrants of the Company (see Company news release dated May 26, 2021 ) in the transaction. Funds controlled by Sprott Resource Streaming and Royalty Corp. (“Sprott Streaming”) co-invested and acquired 75% of the MTM Royalty for C$13.5 million with Electric Royalties retaining an option to acquire an additional 25% royalty interest from Sprott Streaming (see Company news release dated May 26, 2021 ).

Brendan Yurik , CEO of Electric Royalties , stated “We are excited to close this transformational acquisition with our partners at Sprott Streaming. On receipt of the first royalty payment we will be transformed into a cash flowing royalty company, a significant milestone for Electric Royalties. The transaction is our first syndication of a royalty financing, setting the stage for additional co-investment transactions moving forward, a mechanism which minimizes dilution to the Company whilst potentially enabling us to acquire interests in royalties on significant assets. Our portfolio now consists of 14 royalties, including our 25% interest in the revenue generating MTM Royalty acquired from Globex as part of the Globex Portfolio, and a number of significant development stage royalties being advanced toward production by the owners of the underlying properties at no cost to Electric Royalties and we look forward to updating the market with new potential portfolio acquisitions in the near future.”

Globex Portfolio
The Globex Portfolio acquired consists of a sliding-scale, gross metal royalty (described below) on zinc production at the operating Middle Tennessee Mine, located in Smith County, Tennessee , United States , and operated by a subsidiary of the Trafigura Group (“Trafigura”), and a 1% Gross Revenue Royalty (“GRR”) on the Glassville Manganese Project which is located in close proximity to the Battery Hill project in New Brunswick, Canada on which the Company holds an existing royalty.

MTM Royalty
The MTM Royalty is a sliding-scale gross metal royalty that varies with the zinc price: no royalty is payable if the zinc price is below US$0.90 per pound, a 1.0% royalty is paid at zinc prices between US$0.90 and US$1.10 and a 1.4% royalty is paid at zinc prices above US$1.10 per pound. The Mid Tennessee Zinc Mines have been in intermittent operation for over 50 years and have produced over 2.7 billion pounds of zinc ( https://www.northernminer.com/news/sra-revives-mid-tennessee-zinccomplex/1000220368/ ). Three underground mines make up the complex, namely Gordonsville , Elmwood and Cumberland . The mine complex is owned by Trafigura and operated by Nyrstar, Trafigura’s integrated mining business unit that includes the nearby Clarksville, Tennessee smelter complex.

About Electric Royalties Ltd .

Electric Royalties is a royalty company established to take advantage of the demand for a wide range of commodities (lithium, vanadium, manganese, tin, graphite, cobalt, nickel, zinc & copper) that will benefit from the drive toward electrification of a variety of consumer products: cars, rechargeable batteries, large scale energy storage, renewable energy generation and other applications.

Electric vehicle sales, battery production capacity and renewable energy generation are slated to increase significantly over the next several years and with it, the demand for these targeted commodities. This creates a unique opportunity to invest in and acquire royalties over the mines and projects that will supply the materials needed to feed the electric revolution.

Electric Royalties currently has a growing portfolio of 14 royalties and is focused predominantly on acquiring royalties on advanced stage and operating projects to build a diversified portfolio located in jurisdictions with low geopolitical risk.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements Regarding Forward-Looking Information and Other Company Information

This news release includes forward-looking information and forward-looking statements (collectively, “forward-looking information”) with respect to the Company and these other companies and within the meaning of Canadian securities laws. Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. This information represents predictions and actual events or results may differ materially. Forward-looking information may relate to the Company’s future outlook and anticipated events or results or those of these other companies and may include statements regarding the Company’s financial results, future financial position, expected growth of cash flows, business strategy, budgets, projected costs, projected capital expenditures, taxes, plans, objectives, industry trends and growth opportunities or those of these other companies.

While management considers these assumptions to be reasonable, based on information available, they may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or these other companies to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving the renewable energy industry; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the mining industry generally, the Covid-19 pandemic, recent market volatility, income tax and regulatory matters; the ability of the Company or any of these other companies to implement its business strategies including expansion plans; competition; currency and interest rate fluctuations, and the other risks.

The reader is referred to the Company’s most recent filings on SEDAR and those of these other companies, or equivalent public filings for a more complete discussion of all applicable risk factors and their potential effects, copies of which may be accessed through the Company’s profile page at www.sedar.com .

SOURCE Electric Royalties Ltd.

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