Electric Royalties Poised for Growth in Clean Energy Metals

• Empress Royalty (TSXV:EMPR) is a royalty and streaming creation company focused on revenue-generating mining assets.
• The CEO, Alexandra Whittier Sharon, discusses the company's globally diversified portfolio and plans to expand it.
• The company's management team has over 250 years of experience and a strategic relationship with Endeavor Financial.
• Empress has been increasing its debt facility and improving its credit rating based on growing revenue from investments in Peru, Mozambique, and Mexico.
• The company's competitive advantage lies in its ability to structure complex agreements and focus on origination and creation of revenue-generating assets.

About Electric Royalties

Electric Royalties is a royalty company focused exclusively on the clean energy metals required to move the world forward into a clean energy future. The company has a portfolio of 22 royalties, with 2 currently cash flowing. Electric Royalties targets 9 clean energy metals including lithium, vanadium, cobalt, nickel, graphite, copper, titanium, tin and rare earths. The company has seen over $420 million raised by operators go into its assets since acquisition. With another $100 million in planned financings recently announced, Electric Royalties is poised for significant growth in 2023.

Interview with CEO, Brendan Yurik

Strong Current Portfolio with Near-Term Catalysts

Electric Royalties CEO Brendan Yurik highlights the strength of the current royalty portfolio, with assets advancing and moving into production. The company's zinc royalty is on the vertically integrated only primary zinc producer in the US. Their lithium royalty will be on the largest lithium mining operation in Canada. And their recently closed tin royalty is on the largest and only producing tin mine in Europe.

Yurik sees the advancements and near-term production from their royalties as a strong catalyst for the company. As more royalties become cash flowing, Electric Royalties will hit an inflection point of becoming cash flow positive by the end of 2023. Once cash flow positive, the company will be able to fund new deals out of operating cash flow rather than relying on dilutive equity financings.

Major Potential Still in Early Stage Assets

While the near-term catalysts are clear, Yurik emphasizes there is still substantial potential in earlier stage assets. One example is the Authier lithium project in Quebec, operated by Sayona Mining. When Electric Royalties originally invested, Sayona's market cap was only $5 million. Now with lithium prices surging, Sayona's market cap has grown to over $2 billion. This highlights the massive upside potential even for early stage assets as the markets recognize their value.

Yurik explains that the lack of capital for explorers and developers has held back many assets. With improved capital access, Electric Royalties would be pursuing many more deals. The demand is there in the private equity world, with valuations much higher than the public markets. As the markets catch on to the upside in clean energy metals, valuations will converge.

Significant Upside for Royalty Business Model

With a current market cap of only $35 million and share price around $0.37, Yurik sees Electric Royalties as extremely undervalued. Recent lithium royalty IPO Lithium Royalty Corp came out with an $800 million market cap, over 10x the size of Electric Royalties. Yet Electric Royalties has a more diversified royalty portfolio.

Based on projected future cash flows, lithium royalty companies are trading between 20-25x earnings. Electric Royalties would need a 5-10x increase to properly reflect the value of their royalty portfolio.

As a producer of royalties rather than a direct operator, the royalty model provides leveraged upside to the underlying assets. Royalty companies avoid operational risks and capital requirements, while benefiting from operators' expenditures to advance projects. This enables outsized returns compared to miners and developers.

Major Catalysts Upcoming for Value Realization

Yurik sees upcoming catalysts that can help realize the full value of Electric Royalties:

• Additional royalties becoming cash flowing
• Inflection point of becoming cash flow positive
• Creativity on new royalty deals
• Recognition from retail investors of the upside

The cash flow positive inflection point will be key, as it will reduce dilution and enhance ability to fund new deals. As the company delivers on catalysts and communicates the upside to investors, the valuation gap to peers should narrow.

CEO Yurik also hints at plans to get creative on structuring new royalty deals in 2023. Electric Royalties has built their portfolio through innovative deal-making. Applying this creativity to new opportunities in a bull market for clean energy metals could quickly enhance the portfolio.

Key Takeaway for Investors

Electric Royalties provides leveraged exposure to clean energy metals required for decarbonization, with near-term catalysts including royalties going cash flow positive. The company appears significantly undervalued based on its expansive royalty portfolio and upside potential, presenting an attractive investment opportunity. Realizing the full value depends on communicating the upside to investors as milestones are achieved.

Conclusion

For investors seeking leveraged exposure to the upside in clean energy metals, Electric Royalties provides an attractive opportunity. The expansive portfolio of royalties covers lithium, copper, nickel, cobalt and more - all critical materials for decarbonization. Compared to miners and developers, Electric Royalties offers torque to the sector upside without operational risks.

With near-term catalysts on the horizon, a discounted valuation, and ambitious growth plans, now may be an opportune time to invest in Electric Royalties. As the markets recognize the potential of their royalty portfolio in surging clean energy metals, significant upside could be in store.