Electric Royalties

Overview

The increasing popularity of electric vehicles and the green energy movement has disrupted the transportation and power industry entirely. By 2050, more than 17 countries announced 100 percent zero-emission vehicle targets to phase out internal combustion engine vehicles.

Seeing these unprecedented trends in growth across the electric vehicle market means the demand for key raw materials used in lithium-ion batteries that power these technological innovations could experience significant parallel growth. As prices for these raw commodities grow, market researchers predict more money investment opportunities coming into the sector. Especially for royalty companies with widespread exposure across the market, the investment upside could be significantly advantageous.

As a royalty company, Electric Royalties does not operate mines nor needs large and highly specialized teams to carry out their operations. Likewise, having a robust commodity portfolio helps to diversify investment and mitigate risk for investors and shareholders while leveraging exploration upside, revenue-driven business modelling and more. It currently has a growing portfolio of 20 royalties on assets located primarily in North America and Australia.

Recently added to the company’s royalty portfolio is the producing Penouta tin-tantalum mine in Spain. Electric Royalties closed an agreement with Strategic Minerals Europe Corp. (NEO: SNTA,OTCQB: SNTAF) to acquire a newly granted, 0.75 percent gross revenue royalty for a cash payment of C$1 million and 500,000 common shares of Electric Royalties. The company will have an option to acquire an additional 0.75 percent of Penouta in exchange for an additional cash payment of C$1.25 million. The royalty rates will be reduced to 0.5 percent, respectively, once certain minimum royalty payments have been made.

Unlike other royalty companies, Electric Royalties has an exceptionally robust nine-commodity portfolio and a top management team that understands the ins and outs of how the royalty game works. “We’re creating new royalties where we make sure it’s gross revenue, covers the whole deposit and it’s drafted by us. At this point in time, we do this for a living. Ultimately, you’re going in, and you’re creating and adding some value to a group,” commented Electric Royalties CEO and director Brendan Yurik.

In May 2022, Electric Royalties closed a C$3.45 million marketed public offering with Cannacord Genuity Corp. (TSX:CF) as the lead agent and sole bookrunner. The offering was composed of 11.5 million units at C$0.30 per unit. Net proceeds of the offering will fund potential future acquisitions of royalties and other interests.

Electric Royalties’ management team is an experienced group of executives and advisors with proven track records of success across multiple related industries like mining, finance and more. Together, their years of expertise primes the company for significant growth in line with the exponential growth forecast in the demand for clean energy metals globally.

Company Highlights

• Electric Royalties is a royalty company established to take advantage of the demand for a wide range of metal commodities, driven by the electrification of a variety of consumer products and industries like transportation, battery development and energy.
• The company is generating revenue from a growing portfolio of 20 royalties focusing predominantly on acquiring royalties on advanced-stage and operating projects to build a diversified portfolio in politically stable jurisdictions.
• Market research expects electric vehicle sales, battery production and renewable energy generation to increase significantly over the next several years. Demand for valuable commodities necessary for the production of electric vehicles is slated to grow with these trends.
• Electric Royalties leverages a unique opportunity to invest in and acquire royalties over highly prospective mines and projects that host widespread mineralization of commodities like zinc, lithium, copper, nickel, tin, manganese, vanadium, graphite and cobalt.
• The company brings together an experienced management team with decades of expertise in finance, mining, business development and more.
• Electric Royalties closed the acquisition of a 0.5 percent gross revenue royalty on the Zonia Copper Oxide Project in Arizona, USA with World Copper Ltd. (TSX.V:WCU,OTCQB:WCUFF,FRA:7LY0).

Key Royalties

Middle Tennessee Zinc Mine Royalty

This producing zinc asset hosts levels of annual production hovering at 50,000 tons of zinc concentrate across a 15-year mine life.

Middle Tennessee zinc mines have produced over 2.7 billion pounds of zinc for over 50 years. The strategically positioned zinc mine leverages close proximity and association with Trafigura’s Clarksville smelter, the only primary zinc producer in the US.

In April 2022, Electric Royalties announced that the strong upward trend in the zinc price has significantly increased the Middle Tennessee Mine (MTM) zinc royalty payments. The MTM zinc royalty is in a limited partnership with Electric Royalties owning 25 percent of economic interest with the remaining 75 percent interest held by Sprott Streaming and Royalties Corp. From the time the MTM zinc royalty was acquired to March 31, 2022, the aggregate gross amount of royalty revenue accrued to MTM LP on a 100 percent basis is approximately US$1.158 million and a total of US$289,000 is attributable to the company.

Authier Lithium Royalty

The Authier Lithium is a 0.5 percent gross revenue royalty and the project sits in close proximity to the only producing lithium mine in Canada, about 45 kilometers northwest of Val d’Or and is operated by Sayona Lithium. It stands as a simple, near-surface deposit with resources defined in one spodumene-bearing pegmatite based on 31,000 metres of diamond drilling. Authier also leverages excellent infrastructure, including existing mining support services, environmentally friendly, low-cost hydroelectric power, gas and road networks.

On May 23, 2022, Sayona Mining Limited (ASX:SYA) announced a pre-feasibility study for its flagship North American Lithium Project (NAL) in Québec, Canada which also integrated the Authier Lithium Project with the NAL operation into Sayona’s AbitibiLithium Hub. Sayona Mining launched a pre-feasibility study (PFS) to examine the option of producing lithium carbonate from spodumene produced at NAL, where production of spodumene concentrate is scheduled to commence in Q1 2023. Major engineering firm Hatch will undertake the lithium carbonate PFS, targeting completion by March 2023.

Graphmada Graphite Royalty

The near-production Graphmada Large Flake Graphite Mining Complex is located in Eastern Madagascar and was in continuous production for 30 months prior to being placed in care and maintenance due to Covid-related restrictions put in place at the start of 2020. The operator, Greenwing Resources (formerly Bass Metals), has updated the project’s mineral resource with 61.9 million tonnes at 4.5 percent fixed carbon, nearly tripling the total contained graphite to 2.7 Mt.. All mining and processing infrastructure, including roads, bridges, power, camp, tailings dams are in place, along with 40-year mining permits and 20-year landholder agreements. The complex sits adjacent to the main national highway and is110km to the country’s only deep-water port at Toamasina. The royalty is a 2.5 percent gross revenue royalty.

Greenwing Resources (ASX:GW1) completed its 3,268-metre drill program in Madagascar comprising 69 diamond holes, with results recording significant intercepts of graphite mineralization. The drill program has significantly expanded the mineralization footprint of the Graphmada Mineral Resource. Greenwing also plans to assess the need for further drilling to update resource confidence and test the mineralization laterally.

Bissett Creek Graphite Royalty

The Bissett Creek property sits between Ottawa and North Bay in Ontario, Canada. The feasibility stage asset has a potential annual production level of 33,200 tons with a mine life of approximately 21 years at a US$1,800 revenue per ton ratio.

Bissett Creek hosts open pit mining potential and has already seen significant bulk sampling, pilot plant testing and recoveries of over 92.4 percent graphite. The next steps include further exploration and production expansion of some of the highest large flake yields reported from any graphite project globally.

​

Mont Sorcier Vanadium Royalty

The Mont Sorcier property hosts a large-high-quality iron resource with significant and extractable vanadium in a top-tier mining jurisdiction.

Exceptionally low titanium content makes the deposit unique to other iron-titanium-vanadium deposits around the world. Low titanium in the deposit allows the iron ore and vanadium processing directly through a blast furnace for potential lower-cost operations and open-pit mining with a life of mine strip ratio of 0.89.

Glencore has entered into a long-term arrangement to support the development of the Mont Sorcier project and is assisting with raising capital to finalize feasibility studies.

​

Battery Hill Manganese Royalty

Battery Hill is a historic resource that spans 1,228 hectares and leverages fast-tracked feasibility study stage potential. Kemetco currently has operations to develop and commercialize a flow sheet to produce a battery-grade manganese product for the growing electric vehicle and energy storage industries. The property has great highway access and transmission lines. Electric Royalties has early-mover potential with Battery Hill as there are no producing manganese mines in North America.

Royalty asset partner Manganese X Energy (TSXV:MN) published a preliminary economic assessment (PEA) showing significant gross revenue projections for the Battery Hill project of US$177 million per year over an initial forecast mine life of 47 years. Electric Royalties' royalty entitles the company to 2 percent of those gross revenues. The Battery Hill PEA forecasts robust economics and a short payback period for relatively low capital investment.

In early 2022, Manganese X Energy initiated discussions with potential strategic partners seeking high-purity manganese products and started the development of the pilot plant program for the Battery Hill manganese project. Manganese X kicked off its high-purity manganese sulphate monohydrate (HPMSM) pilot plant at Kemetco Research Inc. (Kemetco) in Richmond, BC, Canada. Kemetco has now received a 1,500-kilogram bulk sample from the company’s Battery Hill manganese property located in Woodstock, NB, Canada.

Manganese X Energy filed a provisional patent on the manganese purification process in preparation for its upcoming pilot project at the Battery Hill manganese project. Manganese X also started the development of the field pilot plant with the goal of demonstrating its proprietary process for treating Battery Hill mineralization under near commercial-scale operating conditions that incorporates a modular design. The company further plans to commence the Battery Hill pre-feasibility study in-fill and step-out drilling program. Geotechnical and hydrogeological drilling is planned for early 2023 for open-pit mine design and to advance the understanding of ground conditions in proposed infrastructure sites. Additional environmental baseline data will continue to be collected through 2023.

For more information on Electric Royalties’ complete royalty portfolio, see its corporate presentation here https://www.electricroyalties.com/presentation

Management & Board of Directors

Brendan Yurik - CEO and Director

Brendan Yurik is the founder and CEO of Evenor Investments Ltd, a financial advisory group to junior mining companies for alternative financing, debt, equity and M&A with experience on over C$2 billion in mining financing transactions throughout his career. He has prior global experience as a research analyst as well as in business development and mining financial advisory roles with Endeavour Financial, Cambrian Mining Finance Ltd, Northern Vertex Mining Corp. and King & Bay West Management Corp.

Luqman Khan - CFO

Luqman Khan is also the CFO of RE Royalties Ltd, a renewable energy royalty company, involved in the acquisition of 86 royalties to date. He has been a financial reporting executive with over 20 years of professional experience in accountancy and business management. Additionally, Khan has served as CFO for several publicly listed TSX-V resource companies and previously with Ernst and Young in their assurance practice.

David Gaunt - Technical Consultant

David is an economic geologist specializing in project assessment and resource estimation. His experience spans projects worldwide and includes roles with senior mining companies and junior exploration companies. He is a co-recipient of the PDAC’s Thayer Lindsley International Discovery Award.

Marchand Snyman CA - Chairman and Director

Marchand Snyman CA is a co-founder and chairman of RE Royalties Ltd, a renewable energy royalty company, involved in the acquisition of 84 royalties to date. Over 25 years senior executive experience in corporate finance and mining with a global merger, financing, acquisition and divestiture track record of more than 50 transactions.

Manuela Balaj-Coroiu - Corporate Secretary

Manuela Balaj-Coroiu is a chartered governance professional and corporate secretary who brings over 13 years experience in the legal field, where she has acted as legal counsel to various private companies in Romania and as manager of legal affairs and paralegal for public companies and over 500 private companies in Canada. Balaj-Coroiu recently graduated the Chartered Governance Institute of Canada and applies her in-depth knowledge of corporate laws, capital markets, security laws and corporate governance to provide all types of support and guidance to company directors, helping them in discharging their duties.

Craig Lindsay - Director

Craig Lindsay is the founder and CEO of Otis Gold Corp (TSXV: OOO) and a current director of Excellon Resources, VR Resources and Alianza Minerals. Prior to Otis, he was the founder and CEO of Magnum Uranium Corp and led its sale to Energy Fuels Inc. (TSX: EFR).

Robert Schafer - Director

Robert Schafer is the co-founding director of International Royalty Corp (sold for $800 million to Royal Gold). More than 30 years of experience working internationally in business development roles with major and junior mining companies including formerly representing as Chairman of PDAC. Serves as a director of a number of public resource companies.