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Electric Royalties Closes Cash Flowing Royalty Acquisition

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Electric Royalties Closes Cash Flowing Royalty Acquisition

 

 

 

 

 

Electric Royalties Ltd. (TSX-V: ELEC) 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 (see Company news release dated May 26, 2021) in the transaction. Funds controlled by Sprott Resource Streaming and Royalty Corp.  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, and a 1% Gross Revenue Royalty 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.

 

Posted August 11, 2021

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