Transcript: Electric Royalties (ELEC) - Revenue Guidance for 2022

Morgan Leighton
September 20, 2021

Electric Royalties Inc is a royalty company set to take advantage of the demand for a wide range of commodities including lithium, vanadium, manganese, tin, graphite, cobalt, nickel & copper. These commodities will benefit from the drive to electrification and be used in cars, rechargeable batteries, large scale energy storage, renewable energy generation and other applications.  

Electric Royalties is the only royalty group that is focused exclusively on the entire suite of metals required for the transition to clean energy moving towards a decarbonised economy.Electric vehicle, battery production capacity and renewable energy generation is set to increase significantly over the next several years and with it the demand for target 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 has a growing portfolio with 17 royalties to date. They now have cash flow from their recently closed MTM (Middle Tennessee Mine Royalty) acquisition in the US and they are looking to offer investors exposure to end of line commodities that will be required to build out the clean energy future.Electric Royalties closed the Sprott deal on better terms that they originally signed up to and they are excited to see the Sprott partnership moving forward.

The Middle Tennessee Mine Royalty is their first cash flowing royalty and is operated by the Trafigura Group. This mine has been producing for over 50 years and the expectation is that it will remain a producing mine for decades to come.

Electric Royalties has also closed on a Vox acquisition which gives them exposure to near-term graphite production at the Graphmada Project in Madagascar which is on care and maintenance but looking to be back in production as early as Q2, 2022. They will also have exposure to a high-grade graphite deposit with exploration upside at the Yalbra Project, Western Australia. These are exciting prospects and they will also have an ongoing corporate relationship with Vox Royalty Corp going forward.

We Discuss:

0:00 – Company Overview

00:51 – Good Deals, Current Revenue, & Finding Out More

09:22 – Timeframe for the second quarter, management teams, & future deals

16:18 – Technical Commodities, Contributions, & Representative Certainty

20:06 – Stocks, Short Term Revenue, Private Transactions & Deal Decisions

35:30 – Outro

Matthew Gordon: Welcome to crux cast, whether you're in your car, at work or at home, we hope you enjoy this interview. And if you do, you can find more like it on, so please subscribe.

Brendan Yurik: Brendan Yurik, CEO of Electric Royalties. Electric Royalties is the only Royalty group out there that's focused exclusively on the entire suite of metals, really required for the transition to clean energy. We're really talking about is rebuilding the global infrastructure towards a decarbonized global economy. That's gonna have an impact on a wide range of metals that are required for that and the building blocks of clean energy. We've got a growing portfolio of 17 Royalties today. We have got cash flow, from our recently closed MTM acquisition in the US and really looking to offer investors exposure to the underlying commodities that are going to be required as we build out this clean energy future.

Matthew Gordon: Cool, Brendan, good to see you again. We’ve seen you a couple times, we've seen you in March and back in June, good to see you again. I just wanted to catch up with you today, before the markets get moving. I think this the first week that's what people get back, start paying attention after a nice long holiday. You closed the Sprott deal, that's got over the line now, there are no hiccups, seems to have gone smoothly.

Brendan Yurik: Yes, we've closed it off on better terms than we initially had signed up many months ago. Sprott has come in, they came in for 13.5M cash, and co- invested alongside of us. So that's sort of why that partnership, we got that time. We're excited to see where we go with that partnership moving forward. On the flip side of that, as part of the Globex acquisition, so we now have our first cash flow and Royalty, it's on the Middle Tennessee Zinc Mine in the US, operated by Trafigura. We're very excited about this, that's producing for over 50-years, and we expect it's going to be producing for decades to come so we got that deal done. Then we also recently closed off our VOX acquisition, to graph our Royalties in that portfolio. One of those is on care maintenance, the Graphmada mine in Madagascar. That could be back on production as early as Q2 of next year. We're excited, we’ve solidified that partnership as well and it's not going to be the only deal that we ever do with VOX guys. I think it'll be interesting to see how that partnership progresses as we move forward as well.

Matthew Gordon: I'm not going to go over all ground here. We'll put the links below to the previous interviews, we talk in detail about the numbers and the timing, etc. We'll park that up for now. People who are interested, go watch the previous interviews. With regards to so when you talk about, you've got revenue now, okay, can you just give us that kind of ramp up, give us a sense of what your revenue profile looks like, not just rest of this year, but next year and the year after?

Brendan Yurik: Yes, sure. So, just from the Middle Tennessee Royalty, right now, we only on 25%. We did that just to basically reduce the amount of dilution we had to face today. We have an option to go back and increase our ownership and dress up to 50% alongside us abroad. And so that option basically kicks in at the end of year one and that would basically double the revenue we expect from the Middle Tennessee Royalty. For this first year, we're expecting it'd be about 500,000. Obviously, we would expect to execute on that option, at the end of year one, that would be boosting our revenue up, moving forward to about $1M a year. Graphmada, as I mentioned, we expecting that that'll come back online next year. They've had 30-months continuous production, they've had all their offtake qualified, it's a big major step that you see in the Graphite space that you don't see in any of the other commodities. And so, that's back online, we're expecting, that'll be about 0.5M a year as well. Then just internally from our own portfolio, Sayona Mining, which has absolutely gone crazy, I think since we last talked. They just finalised and closed their acquisition of the Canada Lithium mine, and that sits right next door to Authier Lithium Royalty project. And so really, the plan there is actually to blend the ore from the Authier project to ramp up production at the mine. They're putting up a formal plan together, but we're expecting that to come online in production within the next 2-years now. So I have very good eyesight, you could say, just from our kind of current portfolio of us getting the 3 cash flowing Royalties.

Matthew Gordon: Give me some numbers here because if we look at, you can take 25% or 50%, that's gonna cost you money, right? What's that gonna cost you to be able to get up to $1M?

Brendan Yurik: It's actually pretty good deal. We're paying, essentially what Sprott paid quite frankly. The number is actually a 10% increase on what they pay cash as of now, but it's minus the cash that they received from that 25% ownership of the Royalty. So essentially, it's 0 interest, kind of option as we're, and we're gonna pay exactly as Sprott pays about for $4.5M but we can choose the timing of that, really anytime starting after year 1.

Matthew Gordon: But are you going to do that because you got to pay $4.5M to go from 0.5M to presumably, well, is it going to be a million or does that become something different?

Brendan Yurik: Trafigura has just taken over this asset so we have some expectations in terms of where Trafigura is going to go with this. If you look at historically operations, they've gone in, they haven't gone in and minimised operations, they're usually looking at how do we maximise this? This mine is very strategically important because it's related to the Clarksville smelter. Now, smelting operations at these big groups, it dwarfs the mining business, and in fact that by a factor of 10. The concentrate at the Middle Tennessee mine is among the highest grade and cleanest globally. It's a very good concentrate to have, to blend other ores with where you might not have that. We're expecting that there's gonna be some updates on that. We're expecting they're gonna be ramping up production, they're still kind of getting over some of the COVID delays that have impacted most of the world. But obviously, this mining operation as well, in 2020, and you're still kind of seeing some of that was in July 2021. So I think you're gonna have a much different picture, quite frankly, by the time we have to actually make that choice. We are expecting we would, we're expecting those numbers are gonna look a little bit better.

Matthew Gordon: So you’ve got a window. Your window doesn't grow and change, your windows are fixed. They have been affected by COVID and they're moving at whatever pace they're moving at. When you say, there'll be more information for you to build and make a decision, what happens if there’s not, do you have to make a call and go, like based on in fact, that's Trafigura, based on the fact that whatever is happening in that sector, we're gonna have to go and raise this money, or we're gonna have to issue more shares, or probably both. So that's a tough one, right?

Brendan Yurik: I don't like to comment on stuffs until actually, you're in the moment, because it is always nice to have more information. I think even where we look at it today and where we think commodities are going. I mean, when you're talking about the real opportunity here, I think people are underestimating the size of this, in the entire human history. Some of these markets only got up to 100,000t or 400,000t and you're talking about now in the next 10-years, right? The human history is a long period of time. In the next 10-years, we're gonna have to double, triple, quadruple that. I don't think people understand mining as well as they think, because that's not an easy process. There has been almost no money that has gone into a lot of the exploration effort and work required to move things along that 15- year development timeline. We're expecting much higher metal prices, not only for Zinc, but for across all the commodities that we're chasing. You're starting to see it already, Lithium prices have already spiked, I think they've doubled in the last6, 7-months. I think they still probably have room to run, definitely over a 10-year time frame but I think you're gonna see that for a lot of these commodities. We're very bullish, it's nice to have that extra time to actually see and watch it happen and become real. It makes it easier for other people to understand sometimes why you're doing stuff, but definitely, it's an asset that we love. It's operated by Trafigura, one of the biggest groups out there. They're definitely gonna modernise and upgrade that mine, look at every expansion case scenario again. The other side is the exploration effort, this was owned by Nyrstar formerly. Nyrstar let's say under-capitalised well, they did ultimately go under as did most of mines they're running. But yeah, exploration was not a big thing on their programme. But this deposit it was basically they just go poke a hole, 10m down, 20m out every time they needed more ore. We're expecting that there's going to be along mine life ahead and resource updates and that kind of thing will be just kind of a cap on our feather on that.

Matthew Gordon: I guess, we'll know more when you know more and when you get closer to the point where you got to make a decision. Let’s park that up for now. Graphite, Madagascar, we've had a few Madagascar stories on here and Graphite, it's very popular as well, and fitting into your theme about green energy metals. What gives you confidence that you mentioned Q2, what gives you confidence that Q2 is going to be the timeframe under which they're gonna get back up and running. How are they going to do that?

Brendan Yurik: Well that’s kind of guesstimate. It could be other than that, quite frankly. They got delayed because of COVID. They've taken that opportunity to really look at an expansion case scenario. As the case of a lot of these Graphite operations, the expansion case, actually doesn't cost very much if you want to even look at doubling production. So that's what they're looking at right now. Madagascar, it isn't one of the core areas, we said we'd ever be really looking out, but I think when you look at each of these commodities is unique. Commodities generally, they form where they form, you look at Tin there's a kind of a little place in Cornwall, UK, you find some Tin deposits, Tasmania, Malaysia, obviously and in Indonesia, but Tin doesn’t form all over the planet. Graphite in Madagascar, they seem to have a special relationship. Mick Davis has recently invested there, through his Vision Blue their fund. So he's just made an investment into the Graphite space in Madagascar. The Graphite in Madagascar is very high quality. As with a lot of these commodities, it really comes down to the quality, and what you can transform that into. You can't just have 99.5% for batteries, it's got to be 99.9% there's a big difference, right? So the flakes distribution and all that in Madagascar just seems to have kind of a special relationship. Bass Metals, the operator of this project, they're 1 of 2 ASX listed companies today who are actually capable of producing Graphite. That seems crazy to me, right? Because you got a lot of Graphite groups out there, but there's only 2 companies out there on the ASX that can actually produce Graphite right now. So these are very small markets, we're excited to be partnering up with these companies at this stage and ultimately, we hope that we can be good partners and fund these groups into mid-tiers of their commodities at some point.

Matthew Gordon: Again it’s a case of wait and see how quickly they move or can get things back up and running. Because, I get the COVID thing in Madagascar and similar, Papua New Guinea etc people getting this, quite serious, I get that, but the companies themselves their narrative is we will be getting this thing up and running soon, that's what they're telling you?

Brendan Yurik: Well, as with a lot of these management teams, their focus is a little bit distracted sometimes. But I can't really knock them for trying to diversify, because that's a very key thing that we have. They have picked up a Lithium asset so they're kind of poking around doing 2 things at once. But it's mining sometimes, unfortunately, you can't do stuff on the ground, in one place. What are you gonna do? Sit on your hands and just kind of wait? There's kind of a period of time where you can shift some focus, but ultimately, that is their overall strategy. It's definitely their flagship asset and I see them pushing hard on it over the next 3, 6-months. We'll have some more information in terms of what that ramp up looks like. Like I said, they could double, even triple production, pretty minimal Capex and they've got the resources there so, that's a good start. But really, that qualified optic is a big piece, that 30-months, in a timeframe that you don't have to do if you're a Copper miner, you know.

Matthew Gordon: The VOX Royalty that involved like $2M worth of shares, right? There's no cash component to that.

Brendan Yurik: No cash. There was $25,000.

Matthew Gordon: And then with the Sprott deal, 9M shares involved with that transaction too, is that right?

Brendan Yurik: Yeah, only cash we paid on that one was the down payment when we signed the deal.

Matthew Gordon: I’m trying to get a picture of how you're doing deals now and then when I'm speaking to you in a year's time how you're doing deals, then that's what I'm trying to get a sense of here. Because when you’re new, there's not much cash floating around and people don't know what you can and can't do and whether you're a business model works or not, cash should come by so you got to do what you got to do and I said that to you last time, right? So nothing wrong with that yet. Let's talk about the 3rd project, which is the Lithium projects. It's in Quebec, they're big, that's a nice province to do business and so tell us a little bit about that deal because again, there's like only $1M involved there. Was that a cash or shares?

Brendan Yurik: That was shares.

Matthew Gordon: Tell us about the deal and then we'll ask you some questions.

Brendan Yurik: Yes, so it's Cancet, it's in Quebec. It's right next to all the hydropower you could ever need related to mine production. It couldn't be more perfectly situated from an infrastructure point of view. Quebec Government, very supportive of development, obviously. Lithium Royalty Corp, they're probably our only competitor in the Lithium Royalty space. They actually did a Royalty financing on this asset about a month earlier than we did. They've really kind of made it a flagship to be honest. They paid about 6.5M cash on their funding about 3M of the equity. In terms of the spin out of the asset, they're raising $18M to advance this asset forward. We've got a pretty good head round, these type of spodumene deposits in eastern Canada, we have Seymour Lake. It wasn't our first one that we've looked at and quite frankly, it's really surprising how quickly they can add value to these projects. With $18M comparable asset, we've seen move through development for less than that, and they put a PEA out there that's got, 4Bn in revenues, from spodumene alone and quite frankly, we like this asset better. We think there's more exploration upside and we expect that it's going to be fast tracked. We're looking at the next 2-years, it's gonna be very exciting to see the growth in this asset where you could be looking at 40M or 50M in revenues coming back on this Royalty. We paid a $1M for it, maybe 12-24 months earlier. So, it's fun, it's gonna be one of those nice portfolio items, that's gonna be seeing an incredible growth in value as we move forward over time.

Matthew Gordon: Okay, there's some pretty big numbers you're quoting there. So that's based on what? What gives you the certainty and confidence of those sorts of numbers?

Brendan Yurik: Look like anything in mining, there's always a risk and I can't guarantee this but we looked at all the drilling, this Royalty that we've acquired covers all the heart of all of the drilling, all the current resources. It does have boundaries on both sides, all of the drilling is pretty shallow, it's all kind of within 100m but the grades very good when you compare it to some of those companies I just mentioned but really all the eastern Canada hard rock spodumene deposits. The greater looks good, but then you look at the drilling of those other deposits, it's all higher grade at depth, quite frankly and that's where they're really getting their good grades. That's all left untouched so far in Cancet. They've got an exploration target on there. So 17 to 25Mt, our drilling from what we looked at, we think that they could probably put together a resource already today. Why they didn't before all this? I don't know, but we're expecting that'll come together very quickly. That size is very significant, like I mentioned, that's a direct call to some of those assets projects out there, that have 4Bn to 9Bn in revenues forecast. It's already got the size, we already like the grades, they are very good, but we expect both of those to get better, quite frankly. And it's perfectly situated, like I said, I mean, a lot of those spodumene deposits, they are not around clean hydropower, good road access. This couldn't be better located for that and you've got a good group that's taken it for it. You've got Canaccord leading an $18M IPO. LRC Lithium Royalty Corp, they've already 6.5M into this, they're committing another 3M on the equity side and so you've got good partners, you've got good people. Like I said, I think it's gonna be exciting to see how that unfolds as we move forward.

Matthew Gordon: Okay, obviously Lithium and quite a few of these are very technical in the Graphite, very technical commodities, right. So being able to get it out, find it and get out of the ground is a good start but then you need to be able to process it so hard rock a little bit easier technically.

Brendan Yurik: That's the thing, it's technically a process that we've gotten a lot of experience with.

Matthew Gordon: What interests me is that you've said that your comps that you're using are from people who have not yet in revenue or producing, these are just forecasts, right? You must have a little bit of reservation here about what you're going to be able to get from this and what your contribution for your 1M for the shares are gonna be. So have you given guidance for it?

Brendan Yurik: As I go back to, you can't really guarantee anything in mining. My bet is that, there's only so many of these deposits out there, they're actually tougher to find than you might think. Our plan is diversification, we're gonna go get 10 of these assets, we ultimately at the prices we're paying, you only need 1 of 40 to really work out so on that basis we're doing okay. I'd like to think that we're going to do better than that but ultimately it is about diversification. And fact is, we probably do have a pretty good head in this space. We've looked at all of these other assets, we have spent about 2-years now looking at assets in this space. We feel pretty confident that this is special. It's going to go in production at some point in time and like I said, at this price, you only have to make 1 out of 40 potentially, work that to pay off everything else.

Matthew Gordon: So at the moment, you’re 23, 24, 25M depends on the time of day market cap. You’ve kind of moved sideways since we last spoke to you, what do you think you are $0.42 after we spoke, got up to $0.54 very quickly after that, and then I guess, come away with a market a little bit, sort of $0.60. Let’s come at the share deal structure, because I'm intrigued when you haven't got access to too much cash, you use what you can and then in your case, you're issuing shares at various prices. Now, if you’re moving sideways, I guess no one's gonna be selling shares in the market, there's no big overhang. Tell us a little bit about how you sort of structure these deals to ensure that people don't ruin your day by dumping stock in the market in big chunks.

Brendan Yurik: Yeah, for sure. We do put in standard clauses in there where there's hold periods, so there's an automatic 4-month hold period, boom, right out of the gate. And then we typically add on to that so we'll have some of it after, 4-6- months we'll have another kind of best period, 8, 10 or 12-months and then looked at a final best period, you know, 12 to 18-months out. So it gives us quite a bit of time and quite frankly, we're not talking huge numbers either. This is 3M shares, even over the summertime, it's been pretty slow. We're consistently trading 200,000 shares a day so even if they were sellers, which they're not, we do pick our partners carefully. These are people that have more deals to give us, they buy into the bigger picture of what we're building here.

Matthew Gordon: So, you've got VOX obviously, potentially as a source of deals for you but who are you referring to as they?

Brendan Yurik: We've got some other good partners as well, Ryan Kalt, he's one of the guys who vended us to Seymour Lake Royalty. He's got other interests out there but yes, partnerships across the board, from Sprott to VOX, to guys like Ryan Kalt, he's is one of our advisors on our team there, of which we have a number of others. There's about 7 other advisors on there. We've got a great group of people that have really bought into what we're doing with the company and see that long-term potential. It's cheesy, it sounds even cheesy to me but essentially, these metals, these critical metals are the oil fields of the future. That's going to be what supplies the energy needs for the planet as we move forward over the next 10, 20, 30-years. Now, oil will probably stick around a bit longer than people expect, just as coal is sticking around a little bit longer than people expected. But long-term, it's going to be more about Manganese, more about Lithium, more about Nickel, Cobalt than oil and gas, which has been driving the world for 100 plus years.

Matthew Gordon: Okay, I get where your head is focussed but I was just trying to understand, what protections you put in place for yourself with these structures that you're doing? Do you know what I mean?

Brendan Yurik: Yes, we do those outside of just the hold periods. We also have clauses in there whereby they have to actually come to us, inform us then say, we're looking to sell a block, you have 2-weeks or 30-days, can you go find somebody to buy it in the secondary market, maybe you get a bit of a discount on that. So there are other options that we have as well. It's about a constant stream of communications so that they can let us know if they're looking at selling because I might be getting phone calls and I do from groups that are looking to buy a block. And when you look at trying to go buy a big block of our stock, if you tried to go buy 0.5M shares one day, boom, I want it, our stock will be much higher by the time you've finished that trade. So it's not uncommon to have people calling in and asking for blocks of stock for sale.

Matthew Gordon: If I look at your short-term revenue profile a moment it's quite small, you're going to cover your G&A, great, but how do you expand because you've made a big bet, I think you're one of the only certainly that I'm aware of maybe others that is looking at the entire battery metals suites, right? There are people who focus on Nickel, Copper, there's people who focus on maybe Lithium, stuff like that. But you've said right no, we're going after all of this, but at least you've differentiated yourself, right? You could argue that but if I compare you to all the precious metal Royalty companies and Streaming companies for that matter, and even I think Nova we're talking about, Copper and Nickel, do you think you're almost too broad even within that kind of battery metals thing, you're too broad, you're trying to be all things to all men. Is that gonna work for you?

Brendan Yurik: I think there's a tremendous amount of opportunity here in this sector. Differentiation right away just by focusing on the clean energy, metal space, we've differentiated ourselves from 95% of the Royalty groups out there. You mentioned Nickel and Copper, yes, Nova Royalties, they only do Nickel and Copper. They don't look at the other several commodities that we're targeting, Lithium Royalty Corp, probably only does Lithium. I think there is supply side risk on that, where new supply comes on, if you're only in Lithium prices could get hurt. We look at this as really a broader opportunity. Our strategy is really to stay diversified across each of these commodities. So, at the end of the day, we're not really making a bet in terms of where battery chemistry is going to go, what technologies might come to the fore. I'm telling you that we can see the future on supply disruption risks that might arise either in Nickel, you have Big Nickel and all that in China, for example. By staying diversified, they all have exponential growth forecasts across the board, I think ultimately, we're going to need all the technologies we're developing right now, and all the commodities that can actually build those technologies to actually rebuild the world infrastructure, that's an incredible challenge. I think, they're missing out on a lot of the opportunity there. Our plan is to really tie ourselves to this clean energy revolution, offering investors exposure to the underlying building blocks of that and so that's just a bit of a difference in strategy. We're staying diversified across all of them, one or two, ultimately, may fall by the wayside but by staying diversified, it's more of a bet on the overall kind transition to clean energy, rather than any one commodity.

Matthew Gordon: How do you drive your revenue in short order, because that's the thing that people are gonna judge you on. The Royalty companies which have got, long lead item on revenue, they're going to be in trouble, they're going to struggle. You got to get there quick but you've got a couple of projects, which are generally a little bit of cash, I guess, you're really kind of, well, you've got to hope that Quebec Lithium gets going quickly, you got to hope that Graphite in Madagascar gets back up and running in some way, shape or form. And you've got to make that call as to whether or not you spent $4.5M to buy back the 25 plus another 25% on the Sprott deal. So it's like, it's tough, can you do it?

Brendan Yurik: Well, honestly, I think, we've only been public now for about a year, right? And close that offer initial private transactions kind of going into late August so it'd be about a year, at this point in time, we've got a portfolio 17 Royalties. Now, I think, I mentioned a couple of those ones that we have that I'm expecting will be near term cash flow, because they've had announcements, or they've already been in production or they’ve been care and maintenance or they're right next to a mine, they plan to use that ore body. But we've got a number of Feasibility, we’ve got Bissett Creek, Graphite Feasibility stage asset in our portfolio. It couldn't be any more ready to production, except for the construction part so they got to get going on that. As soon as they get an offtake agreement, they'll be off to the races, that's kind of 2-years out. And we've got some ones that are portfolio that are kind of more 4 or 5- years out, but are very exciting. We're expecting 2 of them alone, just within our Vanadium Royalty, our Manganese Royalty. We're looking at about $7.5M a year in cash flow and those have big mine lives, so they're gonna have 35, 40-year plus mine lives. So just by virtue of doing nothing over time, you're gonna start to see that but ultimately, I'm not going to be waiting around for that to happen. I think, as we finally are getting into that size, quite frankly, where people might think we've already done some interesting things, but it's very tough to do that when you're only 15M, $20M company. We're now just starting to get into that size level, wherever we can start out some really interesting discussions. I think we're pretty much there, we're already starting to have some of those but I'm looking to surprise people again, in terms of, stuff that people aren't maybe doing to ramp up cash flow. We make a lot of proposals to groups in a kind of special, unique ways to do things. So there's gonna be some aspect of that in working with big private equity groups out there, potentially, to really ramp things up quickly. I know that we are in discussions with a number of those. But ultimately, I'd like to still just continue picking up deals like we did with Cancet that we just announced because those are such a value-add deals that along the way that's value-add to the business. And those are the ones that if you can get in early, you're paying them the right price. That's where you get this incredible growth and value where the Royalty by 2-years from now might be worth 10, 20 times when we paid for it today. There's a good mix where you don't want to necessarily stop doing ones like Cancet or earlier stage because that's where you get a lot of the value capture. But we've definitely got a lot of deals, I mean, we've got working out about 15 different deals right now. And those are mostly not production case to be honest but we're gonna be back of production looking for that, another MTM Royalty to take down as early as October.

Matthew Gordon: I think, we're now getting in a really interesting area, because again, for me, it's not, when you're starting up, it's sometimes it's just about survival. You want to be able to hang around long enough so that the interesting ones that you mentioned some there, which could be some pretty big numbers down the line, you're still around to kind of, benefit from what your shareholders are there to benefit from. But when you're starting out, you've got, it's as much about the deals you don't do as the deals that you do do, because the cost of those can sometimes kill the company before you get a chance to kind of breathe and actually run the race. Do you think that you should have done all of the deals that you've done to date? Could you have stepped away from 1 or 2 of those?

Brendan Yurik: I got to say, we've stepped away from 3 deals and I regret them all. That's one of those, I mean, is Argentina, we did a lot of work on that, but we couldn't figure out. If we had invested on the equity, we might have made 800% or something like that but it is what it is. It is important and I think one of our definitely focus is once we announce something, we want to do it, and we kind of commit to getting it done. If we announced a Royalty like the MTM Royalty, $20M deal, we're 20M market cap, we’re trying various products. We don't get that done, that's not good. That could be a deal that would be like, I don't know where this company is gonna go now. So yeah, getting the deals done, that we actually commit to and doing it on good terms, I think is very important. It is very much about staying alive at the beginning. It's about survival when you're first getting going and I think that's part of it, too. I think a lot of especially the private equity groups are looking at, what can this guy do with it, you know, without us or where's this company going to go? Are they gonna make it? And that's where we're really, like I said, starting to get into an exciting period. I think there's a number of potential exciting partnerships that we've been looking at in that space. We get a lot of groups actually reaching out to us, it's crazy, the number of groups as I said, we want to get active in the space. But we don't really know the landscape, or where the good projects are and so we get a lot of management teams that have come to us saying, hey, we're looking for stuff, a lot of investment funds that are coming to us saying, hey, where can we deploy some capital? We had a lot of groups coming out and saying, hey, we'd like to co-invest on opportunities as well. There's a lot of groups that have been kind of funnelling towards this opportunity. It's kind of interesting to be the gatekeeper a little bit at least at this stage to try and show people the right opportunities.

Matthew Gordon: I think it's the right market, though, it's always like this, when these cycles or this period of a cycle comes around, everyone's phoning everyone to find the next deal to load into the next shell, because they're gonna be able to raise some money off the back of it. I think those conversations are normal. My question isn't around that and whether people come in talking to you because it's been around for years that they know you exist. My question is around, have you picked the right deals for the stage of the company without diluting your shareholders too much? I don't mind if you well, committing to doing a deal and not doing it, it's unfortunate, but it's better than committing to the wrong deal is where I'm getting to. I'm intrigued by the conversations that you're having with groups that want to fund you to buy and acquire revenue, come back to that revenue is really important for you. Because 1) they can be expensive, it can be competitive, it can take a lot of time, and there's not a lot necessarily out there. So what's going to give you the competitive advantage, can you raise the money and can you do good deals with revenue?

Brendan Yurik: I think we've proven now that we can actually syndicate a deal. And Sprott is very supportive partner, I mentioned we have had quite a few groups, but I like to be a partner. They are partners to us, they work with us, I'd like to do another deal with them. We are just taking a moment pause because we just close that transaction, let it settle for a second. We had a big build-up of opportunities in our pipeline that were just kind of pushed to the side, but now those are the ones where you're paying $1 today and it's going to be worth $40. So they're good to pick up but we are definitely gonna be focused back on getting cash flow. We have cash flow from 5 producing assets, that's the first time I've ever looked on taking on debt, diversified stream of cash flows, and then you take a lot of the dilution away from your growth story. And so definitely cash flow is going to be something that you'll see again. I want to go get another big cash flowing Royalty before we ever go back to market. And so yes, I mean, it's gonna be exciting to follow us because we're gonna do a little bit of everything, we're always going to be having a focus on cash flow but like I said, you know, it's just kind of a bit of a pause to pick up some of these deals that we had in our pipe, that are very value accretive.

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