Electric Royalties Announces Agreement To Increase Convertible Credit Facility From C$5 Million to C$10 Million on Favourable Terms
Electric Royalties Announces Agreement To Increase
Convertible Credit Facility From C$5 Million to C$10
Million on Favourable Terms
VANCOUVER, BC / ACCESSWIRE / February 20, 2024 / Electric Royalties Ltd.
(TSXV:ELEC)(OTCQB:ELECF) ("Electric Royalties" or the "Company") is pleased to
announce, further to its news releases on October 19, 2023 and April 20, 2023, that it has signed
an amended and restated convertible loan agreement (the "A&R Agreement") with Gleason &
Sons LLC (the "Lender") dated February 16, 2024 to increase the Company's existing
convertible credit facility (the "Credit Facility") from C$5,000,000 to C$10,000,000, subject to
certain conditions set out in the A&R Agreement. Gleason & Sons LLC is controlled by Stefan
Gleason, a significant shareholder and board member of Electric Royalties.
Interest will accrue on the outstanding principal amount of the Credit Facility at a rate per annum
equal to the lesser of (a) the secured overnight financing rate, as published by the Federal
Reserve Bank of New York (or a successor administrator of the secured overnight financing rate)
from time to time, plus 7% per annum, and (b) 12.5% per annum. Such interest shall be
calculated daily and compounded annually, payment of which may be deferred until maturity.
The maturity date of the A&R Agreement is January 12, 2028 (the "Maturity Date"), extended
two years from the prior loan agreement. Under the terms of the A&R Agreement, no origination
or draw fees are assessed. Furthermore, the Company has the right to repay all or any portion of
the indebtedness, without incurring any prepayment fee, upon at least 15 days' prior written
notice to the Lender.
Prior to the Maturity Date, on at least 10 days' prior written notice to the Company and subject to
all required TSX Venture Exchange approvals having been obtained, the Lender has the right to
convert all or any portion of the outstanding principal amount of the Credit Facility and accrued
and unpaid interest into the Company's common shares, on the terms and conditions set out in
the A&R Agreement. Any outstanding principal amount with respect to a drawdown under the
Credit Facility will be converted at a conversion price equal to the greater of: (i) C$0.50; (ii) a
100% premium above the 30-day volume weighted average trading price of the common shares
of the Company on the TSX Venture Exchange at the time of such drawdown; and (iii) the
minimum price acceptable to the TSX Venture Exchange, per common share of the Company,
subject to adjustment as provided in the convertible note evidencing such drawdown. Any
accrued and unpaid interest may be converted at conversion price equal to the Market Price (as
defined under the TSX Venture Exchange's Policy 1.1) at the time of settlement.
The Credit Facility will be secured by: (i) a portion of the Company's existing royalty portfolio
(1.5% Gross Revenue Royalty on the Penouta mine in Spain, 0.5% Gross Revenue Royalty on
the Kenbridge nickel project in Canada, Gross Revenue Royalties on the Authier lithium project
in Canada, 1.5% Gross Revenue Royalty on the Bissett Creek graphite project in Canada, 0.5%
Gross Revenue Royalty on the Zonia copper project in the United States, 2.5% Net Smelter
Royalty on the Graphmada mine in Madagascar, and 2% Gross Metal Royalty on the Battery Hill
manganese project in Canada) (collectively, the "Secured Royalties"); and (ii) collateral
assignments of the receivables and proceeds of each Secured Royalty.
The A&R Agreement constitutes a "related party transaction" within the meaning of Multilateral
Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-
101"). The A&R Agreement is exempt from the formal valuation requirements of MI 61-101 by
virtue of the exemption contained in section 5.5(b) as the Company's common shares are not
listed on a specified market. The Company is seeking disinterested shareholder approval of the
A&R Agreement at the Company's special meeting of shareholders to be held on March 19, 2024
in accordance with MI 61-101 (the "61-101 Approval").
The aggregate drawdowns under the Credit Facility are limited to C$5 million until the 61-101
Approval is obtained, along with disinterested shareholder affirmation of Gleason's status as a
"control person". As of the date of the press release, $4,450,000 has been advanced under the
Credit Facility.
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 and
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 fuel the electric revolution.
Electric Royalties has a growing portfolio of 22 royalties. The Company is focused
predominantly on acquiring royalties on advanced stage and operating projects to build a
diversified portfolio located in jurisdictions with low geopolitical risk, which offers investors
exposure to the clean energy transition via the underlying commodities required to rebuild the
global infrastructure over the next several decades toward a decarbonized global economy.
For further information, please contact:
Brendan Yurik
CEO, Electric Royalties Ltd.
Phone: (604) 364‐3540
Email: [email protected]
www.electricroyalties.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined
in the policies of the TSX Venture Exchange), nor any other regulatory body or securities
exchange platform, accepts responsibility for the adequacy or accuracy of this release.
Cautionary Statements Regarding Forward-Looking Information and Other Company
Information
This news release includes forward-looking information and forward-looking statements
(collectively, "forward-looking information") with respect to the Company within the meaning of
Canadian securities laws. This news release includes information regarding other companies
and projects owned by such other companies in which the Company holds a royalty interest,
based on previously disclosed public information disclosed by those companies and the
Company is not responsible for the accuracy of that information, and that all information
provided herein is subject to this Cautionary Statement Regarding Forward-Looking Information
and Other Company Information. Forward looking information is typically identified by words
such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are
those, which, by their nature, refer to future events. This information represents predictions and
actual events or results may differ materially. Forward-looking information may relate to the
Company's future outlook and anticipated events and may include statements regarding the
financial results, future financial position, expected growth of cash flows, business strategy,
budgets, projected costs, projected capital expenditures, taxes, plans, objectives, industry trends
and growth opportunities of the Company and the projects in which it holds royalty interests.
While management considers these assumptions to be reasonable, based on information
available, they may prove to be incorrect. Forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual results, performance
or achievements of the Company or these projects to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking statements.
These risks, uncertainties and other factors include, but are not limited to risks associated with
general economic conditions; adverse industry events; marketing costs; loss of markets; future
legislative and regulatory developments involving the renewable energy industry; inability to
access sufficient capital from internal and external sources, and/or inability to access sufficient
capital on favourable terms; the mining industry generally, recent market volatility, income tax
and regulatory matters; the ability of the Company or the owners of these projects to implement
their business strategies including expansion plans; competition; currency and interest rate
fluctuations, and the other risks.
The reader is referred to the Company's most recent filings on SEDAR as well as other
information filed with the OTC Markets for a more complete discussion of all applicable risk
factors and their potential effects, copies of which may be accessed through the Company's
profile page at sedarplus.ca and at otcmarkets.com.
SOURCE: Electric Royalties Ltd.