Elemental Royalties Announces Strong Revenue and Operating Cash Flow in Q1 2022 Results
Elemental Royalties Announces Strong
Revenue and Operating Cash Flow in Q1 2022
Results
Vancouver, British Columbia--(Newsfile Corp. - May 19, 2022) - Elemental Royalties Corp. (TSXV: ELE)
(OTCQX: ELEMF) ("
Elemental
" or "the
Company
") is pleased to announce its operating and financial
results for the three months ended March 31, 2022. For complete details please refer to the Financial
Statements and associated Management Discussion and Analysis for the three months ended March
31, 2022, available on SEDAR (
www.sedar.com
) or the Company's website
(
www.elementalroyalties.com
).
Frederick Bell, CEO of Elemental commented:
"The timing of the unsolicited approach that Elemental received was no coincidence; 2022 is forecast
to deliver a 50-80% increase in Gold Equivalent Ounces and represent another consecutive record
year for the Company. We have seen the Mount Pleasant royalty start to contribute meaningfully in
Q1 and expect the additions of the Ming gold stream in Q2 and Mercedes royalty in Q3 to further
accelerate our growth.
"The announcement in the quarter of the Company's first gold stream on Rambler's Ming copper-gold
mine in Newfoundland further broadens Elemental's portfolio of producing assets and opens up a new
avenue for business development directly with mine operators. Post quarter-end we were very pleased
to close the acquisition with the support of a new institutional shareholder through an over-subscribed
non-brokered private placement.
"Alongside a solid quarter of production across our royalties, we are particularly excited to see
exploration underway across some of our major assets that will continue to demonstrate the upside
potential for shareholders at no cost to Elemental."
Asset Highlights
Announced acquisition of a 50% gold stream on Rambler Metal and Mining's Ming copper-gold
mine in Newfoundland, Canada. The stream steps down to 35% of payable gold production after
10,000 ounces are delivered and then 25% once 15,000 ounces are delivered
First material revenue from Mount Pleasant royalty following start of mining at Tuart underground
mine. Tuart forms part of Zijin Mining's Paddington Operation in Western Australia and is operated
by fully owned subsidiary Norton Goldfields
Record quarterly gold production at Capricorn's Karlawinda mine alongside commencement of a
129 hole, 29,500 metre near-mine RC drill program
Wahgnion exploration comprising of 6,500 metres of drilling completed in Q1 with US$9 million
budget allocated by operator Endeavour Mining for 2022
Increase in Indicated Resource at Focus Minerals' Beasley Creek South gold deposit
Positive results at Future Metals' Panton high-grade PGM resource in Western Australia
demonstrate potential for new bulk mining model
Financial Highlights
Quarterly revenue of US$2.2 million generated across five diversified royalties
Total of 1,147 attributable gold equivalent ounces (GEOs) sold at zero cash cost to the company
Operating cash flow inflow of US$1.2 million
Net loss of US$1.2 million
Adjusted EBITDA of US$1.0 million, refer to the "Non-IFRS Measures" section of the MD&A
Cash and cash equivalents of US$17.3 million prior to the acquisition of the Ming gold stream
Outlook
Elemental continues to expect a record 5,700 to 6,700 GEOs in 2022 from its existing portfolio, a gain of
between 54% and 81% from 2021. GEOs are weighted towards the second half of the year, with the
addition of the Ming gold stream from Q2 and the Mercedes royalty from Q3 further diversifying the
revenue base.
Approximately 95% of expected revenue is from gold and silver. At a US$1,800 per ounce average
received gold price, this guidance would achieve revenue of approximately US$10 million to US$12
million in 2022.
Corporate Update
On May 12, 2022, Elemental confirmed that the unsolicited all-share hostile bid (the "Hostile Bid") made
by Gold Royalty Corp. ("Gold Royalty") had not been successful. Based on available information the
Company estimates that significantly less than 5% of its shares were tendered to the Hostile Bid. Having
failed to meet the statutory minimum tender condition of more than 50% of the Elemental shares
outstanding (excluding those shares beneficially owned, or over which control or direction is exercised
by, Gold Royalty or by any persons acting jointly or in concert with Gold Royalty), Gold Royalty allowed
the Hostile Bid to expire.
As previously disclosed, Elemental's Board continues to review alternative strategic options. Elemental
cautions shareholders that there can be no certainty of a transaction and alternative strategic options
involving counterparties other than Gold Royalty.
On behalf of Elemental Royalties Corp.
Frederick Bell
CEO and Director
Corporate Inquiries:
Dustin Zinger, Investor Relations Manager
Corporate Website:
www.elementalroyalties.com
Direct: +1 (604) 653-9464
Email:
Elemental is a proud member of Discovery Group. For more information please visit:
www.discoverygroup.ca
or contact 604-653-9464.
TSX.V: ELE | OTCQX: ELEMF | ISIN: CA28619L1076
About Elemental Royalties
Elemental is a gold-focused royalty company listed on the TSX-V in Canada and provides investors with
lower risk precious metals exposure through a portfolio of ten high-quality royalties and streams.
This
enables investors to benefit from ongoing royalty revenue, future exploration upside and low operating
costs. Elemental's experienced team seeks to secure royalties in advanced precious metals projects,
run by established operators, from its pipeline of identified opportunities.
Qualified Person
Richard Evans, FAusIMM, is Senior Vice President Technical for Elemental, and a qualified person
under National Instrument 43-101 - Standards of Disclosure for Mineral Projects, has reviewed and
approved the scientific and technical disclosure contained in this press release.
Notes
1. Non-IFRS Measures
The Company has included certain performance measures which are non-IFRS and is intended to
provide additional information and should not be considered in isolation or as a substitute for measures
of performance prepared in accordance with IFRS. These non-IFRS measures do not have any standard
meaning under IFRS and other companies may calculate measures differently.
Adjusted EBITDA excludes the effects of certain other income/expenses and unusual non-recurring
items. Adjusted EBITDA is comprised of earnings before interest, taxes, depletion and share based
compensation. Management believes that this is a useful measure of the Company's performance
because it adjusts for items which may not relate to underlying operating performance of the Company
and/or are not necessarily indicative of future operating results.
2. Gold Equivalent Ounces
The Company's royalty revenue is converted to an attributable gold equivalent ounce basis by dividing
the royalty revenue received in a period by the average gold price for the same respective period. The
production forecast was derived using information that is available in the public domain as at the date
hereof, which included guidance and estimates prepared and issued by management of the operators of
the mining operations in which Elemental holds an interest. The production forecast is sensitive to the
performance and operating status of the underlying mines. None of the information has been
independently verified by Elemental and may be subject to uncertainty. There can be no assurance that
such information is complete or accurate.
Neither the TSX-V nor its Regulation Service Provider (as that term is defined in the policies of
the TSX-V.) accepts responsibility for the adequacy or accuracy of this press release.
Cautionary note regarding forward-looking statements
This release contains certain "forward looking statements" and certain "forward-looking information" as
defined under applicable Canadian securities laws. Forward-looking statements and information can
generally be identified by the use of forward-looking terminology such as "may", "will", "should", "expect",
"intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology.
Forward-looking statements and information include, but are not limited to, statements with respect to
the future growth and development of the Company, the Company's 2022 guidance, the availability of
alternative strategic options for the Company and whether such options represent greater value to
Elemental's shareholders; and whether any takeover or change of control transaction involving the
Company will occur and/or be completed and as to the timing thereof. Forward-looking statements and
information are based on forecasts of future results, estimates of amounts not yet determinable and
assumptions that, while believed by management to be reasonable, are inherently subject to significant
business, economic and competitive uncertainties and contingencies. Forward-looking statements and
information are subject to various known and unknown risks and uncertainties, many of which are beyond
the ability of Elemental to control or predict, that may cause Elemental's actual results, performance or
achievements to be materially different from those expressed or implied thereby, and are developed
based on assumptions about such risks, uncertainties and other factors set out herein, including but not
limited to: the requirement for regulatory approvals and third party consents, the impact of general
business and economic conditions, the absence of control over the mining operations from which
Elemental will receive royalties, including risks related to international operations, government relations
and environmental regulation, the inherent risks involved in the exploration and development of mineral
properties; the uncertainties involved in interpreting exploration data; the potential for delays in
exploration or development activities; the geology, grade and continuity of mineral deposits; the impact
of the COVID-19 pandemic; the possibility that future exploration, development or mining results will not
be consistent with Elemental's expectations; accidents, equipment breakdowns, title matters, labor
disputes or other unanticipated difficulties or interruptions in operations; fluctuating metal prices;
unanticipated costs and expenses; uncertainties relating to the availability and costs of financing needed
in the future; the inherent uncertainty of production and cost estimates and the potential for unexpected
costs and expenses, commodity price fluctuations; currency fluctuations; regulatory restrictions, including
environmental regulatory restrictions; liability, competition, loss of key employees and other related risks
and uncertainties. Elemental undertakes no obligation to update forward-looking information except as
required by applicable law. Such forward-looking information represents management's best judgment
based on information currently available. No forward-looking statement can be guaranteed, and actual
future results may vary materially. Accordingly, readers are advised not to place undue reliance on
forward-looking statements or information.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/124615