Electric Royalties Closes Acquisition of 0.75% Gross Revenue Royalty on Producing Punitaqui Copper Mine in Chile
Electric Royalties Closes Acquisition of 0.75% Gross Revenue
Royalty on Producing Punitaqui Copper Mine in Chile
VANCOUVER, BC / December 4, 2024 / Electric Royalties Ltd. (TSXV:ELEC)(OTCQB:ELECF)
("Electric Royalties" or the "Company") is pleased to announce the closing of the previously
announced transaction (the "Transaction") to acquire a 0.75% Gross Revenue Royalty (the "0.75%
GRR") on the mining claims, mining leases and mineral tenures comprising the producing Punitaqui
copper mine in Chile (the "Project" or "Punitaqui"). In addition, the 0.75% GRR will apply to third-
party materials processed through the Punitaqui mining complex from the effective date to
December 31, 2027.
Pursuant to the definitive agreement with Minera BMR SpA ("Minera BMR") and Minera Altos De
Punitaqui Limitada (together, the "Vendors"), subsidiaries of Battery Mineral Resources Corp.
("BMR") (TSXV: BMR) (OTCQB: BTRMF), dated November 22, 2024, the Company has made a cash
payment of C$3,050,000 to the Vendors and will make another cash payment of C$450,000 within
45 days after closing.
Brendan Yurik, CEO of Electric Royalties, commented: "This royalty acquisition is a strategic
move for Electric Royalties, marking our first cash-flowing copper royalty within a diversified
portfolio of nine clean energy metals. It is expected to provide us with a steady revenue
stream from the Punitaqui copper mine, which is set to ramp up production. This should
bolster revenue generation at Electric Royalties and position us for growth as our other royalty
assets continue to progress along the development curve. "
See Electric Royalties' November 22, 2024 news release for more details on the Transaction and the
Punitaqui copper mine.
Completion of Drawdown under Convertible Credit Facility
Further to the Company's news release on November 26, 2024, the Company announces that it has
completed the C$3,050,000 drawdown (the "Drawdown") under its C$10,000,000 amended and
restated convertible credit facility with Gleason & Sons LLC (the "Lender") dated February 16, 2024
(the "Credit Facility") to fully fund the cash payment due at closing for the Punitaqui royalty
acquisition.
Loans drawn under the Credit Facility bear interest ("Interest") at a floating rate (United States
Secured Overnight Financing Rate as published by the New York Federal Reserve ("SOFR") + 7%),
with a maximum interest rate of 12.5%, with Interest payments capitalized into the principal
amount and due at the maturity date (the "Maturity Date") of January 12, 2028. Prior to the Maturity
Date, on at least 10 days' prior written notice to the Company and subject to all required TSX
Venture Exchange (the "TSXV"), 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. 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 TSXV at the time of such drawdown; and (iii) the minimum
price acceptable to the TSXV , 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 TSXV's Policy 1.1)
at the time of settlement.
The Conversion Price for the Drawdown is C$0.50, and as a result a total 6,100,000 common shares
of the Company are issuable on conversion thereof (any such conversion to be in accordance with
the terms and conditions of the Credit Facility, including that conversion is not permitted if it would
result in the occurrence of a Flip-in Event or result in the Lender becoming an Acquiring Person, in
each case as defined in the Company's amended and restated shareholder rights plan agreement
dated and effective December 11, 2023 (as may be amended from time to time). The Drawdown is
subject to final TSX Venture Exchange approval. The convertible note evidencing the Drawdown
(and any shares issued upon conversion thereunder) are subject to a hold period expiring on April 4,
2025.
Upon closing of the Punitaqui GRR acquisition, the Company intends to grant the Lender security in
the Punitaqui GRR in accordance with the Credit Facility and associated security agreement.
The Credit Facility is a "related party transaction" within the meaning of Multilateral Instrument 61-
101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Credit Facility
is exempt from the valuation requirement 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 received disinterested shareholder approval of the Credit Facility at the Company's
special meeting of shareholders held on March 19, 2024 in accordance with MI 61-101.
David Gaunt, P .Geo., a qualified person who is not independent of Electric Royalties, has reviewed
and approved the technical information in this release.
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 41 royalties in lithium, vanadium, manganese, tin,
graphite, cobalt, nickel, zinc and copper across the world. 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]
https://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 projected future production, 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.
Although the Punitaqui Project is a past producer with significant infrastructure still in place, the
projected production and production decision by Battery Mineral Resources is not based on a
feasibility study of mineral reserves demonstrating current economic and technical viability of the
Punitaqui Project and furthermore Electric Royalties is not aware of any preliminary economic
assessment or other study having been completed in respect of the projected production or
production decision by Battery Mineral Resources with respect to the Punitaqui Project. As such,
there is a higher degree of risk and uncertainty associated with the production decision, including
increased uncertainty of achieving any particular level of production or recovery of minerals or the
cost of such production or recovery. Historically, projects that are not based on a feasibility study
have a much higher risk of economic and technical failure. There is no guarantee that production
will begin as anticipated or at all or that anticipated production costs will be achieved. A failure to
commence or maintain production at the Punitaqui Project would adversely impact Electric
Royalties' potential future cash flow and profitability.
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.