Electric Royalties to Acquire Massive 1 Million Acre Lithium Portfolio - Ultimate Exposure to the EV Battery Boom

• Electric Royalties recently announced the signing of a letter of intent to acquire a massive 1 million acre lithium prospect portfolio in Ontario, Canada for a C$3 million cash payment and the issuance of 3,000,000 common shares of the company, upon the closing of the transaction. This provides royalty generation potential and near-term cash flow.
• The lithium portfolio already has over 100 properties being optioned to third parties, and is expected to provide option revenue of C$1.4 million in 2024, C$2 million in 2025, and C$2.7 million in 2026, for a total of approximately C$6 million over the next three years, subject to the optioned properties remaining optioned.
• The lithium deal provides near-term cash flow to cover overhead costs.
• The current commodity bear market provides enormous upside opportunity for investors, with significant demand growth forecasted in Electric Royalties' metals like lithium, tin, and graphite.
• The royalty model provides commodity price leverage without risks like inflation, capital cost overruns, or production issues that mining companies face, making Electric Royalties a relatively safe long-term investment.

About Electric Royalties

Electric Royalties is a royalty company exclusively focused on battery and clean energy metals. With a portfolio of 22 royalties on projects mainly in North America, Europe, and Australia, the company provides leveraged exposure to the secular growth trends in electrification and decarbonization without the typical risks inherent in mining operations.

Interview with Chief Executive Officer, Brendan Yurik

A Transformative Lithium Deal

In a transformative move, Electric Royalties recently announced its intention to acquire a 1 million acre lithium property portfolio in Ontario, Canada for just a C$3 million cash payment and the issuance of 3,000,000 common shares of the company, upon closing of the transaction. This provides enormous optionality given rapidly growing lithium demand, with Electric Royalties CEO Brendan Yurik calling Ontario “the Saudi Arabia of lithium”.

While 126 properties sounds daunting, the company is not actually developing this massive land package. Instead, it follows a royalty generation model, with over 100 properties already under option to third parties. As those third parties explore and advance projects, Electric Royalties will retain royalties on any future production.

This deal provides multiple benefits for Electric Royalties:

• Near-term cash flow potential, with option payments to the company of approximately C$1.4million in 2024, C$2 million in 2025, and C$2.7 million in 2026, for a total of approximately C$6 million over the next three years, subject to the optioned properties remaining optioned, to cover overhead costs.
• Upside exposure to any exploration success and lithium development on the properties, with minimal upfront investment.
• The potential cash flow and portfolio size raises Electric Royalties’ profile, potentially attracting more investors and deal flow in the battery metals space.

Additional Portfolio Upside

In addition to the transformative lithium deal, Electric Royalties' portfolio contains several other promising royalty assets that could generate strong growth as commodity prices rise.

Electric Royalties also has exposure to surging graphite demand through a 1% gross revenue royalty on the Bissett Creek project being advanced by Northern Graphite, one of the only North American producers. Recent Chinese export restrictions on graphite have improved market conditions by reducing low-priced supply. With graphite a crucial component in lithium-ion battery anodes, once developed, the Bissett Creek project stands to benefit from demand growth.

Electric Royalties also holds royalties on several promising lithium properties where active exploration and development work is underway - in Canada and in proximity to growing U.S. EV battery manufacturing hubs. As these assets advance, the company could realize substantial value from its royalty exposure to surging lithium demand from the EV revolution.

Looking forward, Electric Royalties continues evaluating opportunities to acquire additional royalties on the most compelling battery and clean energy metal assets located in mining-friendly jurisdictions.

The Royalty Advantage

Electric Royalties provides exposure to the electrification megatrend in a differentiated way compared to mining equities. As a royalty company, Electric Royalties avoids common mining risks:

• No operating costs, inflation impacts, or capital requirements. Project funding is handled by the operating partner companies.
• Commodity price leverage with no risk from cost overruns. Revenues scale directly with metal prices.
• Diversification lowers risk, with exposure across 9 metals and 22 projects. Single asset miners carry more risk.

With potential lithium deal cash flows covering overhead, and diversified commodity price exposure, Electric Royalties offers a relatively safe way to invest in the high growth battery metals space. Despite turbulent market conditions, the secular megatrends of vehicle electrification and grid-scale renewable energy storage will drive commodity demand higher in the coming decades. Once cash flows from producing royalties ramp up around 2025-2026, Electric Royalties’ revenues and valuation should expand rapidly. Conservative investors can buy the stock today and hold with confidence as the energy transition accelerates.

Conclusion

For investors seeking leveraged exposure to battery metals like lithium, graphite, cobalt, and manganese, Electric Royalties provides an attractive risk/reward proposition compared to mining equities. The royalty model avoids common mining risks while providing direct commodity price upside. With potential cash flow from an enormous lithium royalty portfolio set to cover overhead costs, Electric Royalties has lower capital and dilution risk, and expects to use excess cash flows to acquire royalties that are accretive to its portfolio. As the energy transition gains momentum over the coming decade, growing demand from EVs, grid storage, and renewable energy should drive increasing royalty revenues. Electric Royalties gives investors relatively safe access to this secular growth story in the battery metals sector.