Electric Royalties Closes Acquisition of Lithium Royalty and Option Portfolio IN Ontario, Canada
1
ELECTRIC ROYALTIES CLOSES ACQUISITION OF LITHIUM ROYALTY AND OPTION PORTFOLIO IN
ONTARIO, CANADA
VANCOUVER, BRITISH COLUMBIA – May 1, 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 portfolio of 18 royalty agreements and 32 lithium properties
in Ontario, Canada (the “ Ontario Lithium Project s” or the “ OLP”). Pursuant to the Asset Purchase
Agreement between the Company and 1544230 Ontario Inc., MK Exploration Services Inc. and Gravel
Ridge Resources Ltd. (together, the “ Vendors”) dated April 8, 2024, the Company has issued 2,250,000
common shares of the Company to the Vendors and made a net cash payment of C$1,689,000 (which
reflects a total cash consideration of C$1,875,000, less C$75,000 down payment provided to the Vendors
in November 2023 and C$111,000 held in escrow representing cash payments and the value of shares
received by the Vendors after January 1, 2024 pursuant to certain mineral property interests in the OLP).
Brendan Yurik, CEO of Electric Royalties, commented: “Northwestern Ontario is known for its lithium
potential; thus we are very pleased to complete the acquisition of these prospective lithium royalties and
optioned properties in that region. We have strategically selected these royalties and projects from an
initial 126 projects, based on our assessment of their prospective geology and greate r proximity to
prospects with reported lithium resources and exploration activity.
“Current lithium market conditions have allowed us to acquire this portfolio at a relatively low cost, while
doubling the size of our overall royalty portfolio. The acquisition represents a significant opportunity for
Electric Royalties to grow in an accretive manner , as forecasts suggest lithium prices will rebound in the
longer term.”
Overview of the Ontario Lithium Projects (OLP)
The OLP portfolio consists of 18 royalties (Table 1) and 32 lithium properties (Table 2) located in the
province of Ontario, Canada. 31 of the 32 properties are currently being explored by third parties pursuant
to option agreements and, to the extent that the applicable option payments (yielding the Company up
to $2.2 million) are made over the next two and a half years and the options are exercised , each of the
properties would revert into royalty interests for Electric Royalties. Electric Royalties would retain its
ownership interest in any properties that are not ultimately transferred to an optionee and would have
the right to re-option, sell, or relinquish such properties.
The properties cover prospective land on the same geological trends of, and surrounding , major lithium
discoveries in Ontario. Six of 24 developed lithium prospects in Ontario with reported reserves or
resources are located in the vicinity of these properties1. Several of these properties are adjacent to Green
Technology Metals’ Seymour Lake Lithium Project (on which Electric Royalties holds a 1.5% net smelter
royalty interest) that hosts the Aubry deposits (see Figure 1). The Seymour Lake Lithium Project is ro ad-
accessible year -round and is envisioned as a central processing facility with the potential to add
production from other deposits in the area. Green Technology Metals is currently pursuing a vertically
2
integrated strategy with multiple mine and processing hubs supplying a central lithium conversion facility
that would be built in Thunder Bay, Ontario2.
Table 1: OLP Royalties
Operator
Operator Stock
Exchange
Listing Property underlying Royalty
1
Maple Minerals (acquired by
Cohiba Minerals) n/a (private) Rogers Creek / McCluskey
2
Maple Minerals (acquired by
Cohiba Minerals) n/a (private) Big Rock / Ottertail River SW
3
Maple Minerals (acquired by
Cohiba Minerals) n/a (private) Ottertail / Ottertail River NE / Mahamo
4
Maple Minerals (acquired by
Cohiba Minerals) n/a (private) Gathering Lake
5 FE Battery Metals CSE Cosgrave
6 Musk Metals CSE Allison Lake
7
Electrification and
Decarbonization
AIE LP n/a (private) Jubilee, Campus Creek, Crescent
8
Lithium Triangle
Resources n/a (private) Root Bay
9 Portofino Resources TSX-V Birkett
10 Double O Seven Mining n/a (private) Separation Rapids Lithium
11 Private BC Company n/a (private) Arrel
12 Lithium One Metals TSX-V Otatakan Township 50% ownership
13 Fifty St George n/a (private) Lauri
14 Sultan Resources ASX Kember / Pakeageama
15 Sultan Resources ASX Allison Lake / Ruddy
16 Lithos Minerals n/a (private) Peggy Lithium
17 Private BC Company n/a (private) Margot Lithium
18 Private BC Company n/a (private) Barbara Lake
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Table 2: OLP Properties
Operator
Operator Stock
Exchange
Listing Property
1 Lithium Triangle Resources n/a (private) Allison Lake North and South
2 Mosam Ventures n/a (private) Pakwan Lithium
3 Mosam Ventures n/a (private) Margot Lake
4 Tearlach Resources TSX-V Wesley Lake
5 Tearlach Resources TSX-V Ferland Station
6 Tearlach Resources TSX-V Margot South
7 Tearlach Resources TSX-V McCluskey
8 Private BC Company n/a (private) Jeanette 1
9 Forza Lithium CSE Jeanette 2
10 Planet Green Metals CSE Harrison Road
11 Xplore Resources TSX-V Raggy / Aerial / Cathy Creek
12 Xplore Resources TSX-V Falls / Joseph / Root Bay
13 Xplore Resources TSX-V Root Bay North / Root Bay
14 Xplore Resources TSX-V Root Lake
15 EEE Exploration CSE Barbara
16 Bastion Minerals ASX Pakwan
17
Austek
Resources n/a (private) McCombe
18 LiCan Exploration CSE Crescent
19 LiCan Exploration CSE Wakeman East
20 Private BC Company n/a (private) Maskerine / Lynxpaw / Bingo
21 Mosam Ventures n/a (private) Sharp Lake
22 Lithium One Metals TSX-V Adamhay
23 Lithium One Metals TSX-V Dagny
24 Altari Capital n/a (private) Rosyln Lithium
25 Westmount Minerals CSE Kaba
26 Redstone Resources ASX Greenside Lake / Witchwood
27 Manning Ventures OTC Kaba Cu-Li
28 GoldOn Resources TSX-V Hagarty Creek
29 Solstice Gold TSX-V Purdom
30 Solstice Gold TSX-V Kamuck
31 Private BC Company n/a (private) Falcon Lake
32
Electric Royalties (recently
terminated by Maverick
Minerals) TSX-V Sollas Lake / Muriel
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Figure 1: Map showing claim groups comprising the OLP in the Seymour Lake area
Currently, Canada hosts the sixth-highest lithium reserves of any country, yet 2022 production totaled an
estimated 500 tonnes – an amount dwarfed by global lithium powerhouses such as Chile and Australia 3.
The hard-rock lithium deposits in Canada are hosted in pegmatites containing a lithium-bearing mineral
known as spodumene. Lithium hosted in spodumene provides producers with greater flexibility as it can
be processed into either lithium hydroxide (mainly used in high-density electric vehicle (EV) batteries) or
lithium carbonate4. It also offers faster processing times and is higher quality than lithium extracted from
brine as spodumene typically contains higher lithium content4. Spodumene-bearing pegmatites are often
hosted in metavolcanic or metasedimentary rocks adjacent to granitic intrusions 5. Many of the world’s
largest hard -rock lithium occurrences are found in Archean or Paleoproterozoic orogens – geological
environments underlying approximately two-thirds of Ontario6.
One of the most advanced and high-grade lithium projects in Ontario is Frontier Lithium’s (“Frontier”) PAK
and Spark deposits on which a positive pre-feasibility study was recently announced7. PAK contains one
of North America's highest-grade lithium resources and is one of the largest known deposits of its subtype
in North America 8. Further, Frontier has recently received a grant from the Ontario government to
advance its understanding of the processing of lithium into battery metal products. Electric Royalties’ OLP
acquisition includes two large unexplored, optioned claim groupings located less than 10 kilometres from
the Frontier projects and adjacent to terrane hosting geologically favourable two-mica granitic rocks (see
Figure 2).
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Figure 2: Map showing claim groups comprising the OLP, and Frontier Lithium’s Spark and PAK deposits
One of the most exciting new lithium exploration stories in Ontario is the emerging Root Bay project being
advanced by Green Technology Metals. Drilling programs completed in the last year and a half resulted in
the announcement of a 9.4 million -tonne (Mt) indicated resource grading 1.3% lithium oxide (Li 2O) for
Root Bay and a 4.5 Mt inferred resource grading 1.01% Li 2O for the associated McCombe deposit , at a
0.2% Li2O cut-off, reported under the Australasian Code for Reporting of Exploration Results, Mine ral
Resources and Ore Reserves (or “the JORC Code”)9. The OLP includes numerous claims in this area, staked
prior to the Root Bay discovery. Many of these claims are on or near to the subprovince terrane boundary,
host numerous tourmaline occurrences and are on or near the Root Bay pluton 10 – all of which are key
exploration indicators of lithium -bearing pegmatites. One such claim in the OLP , the McCombe North
Property, was optioned to Bastion Minerals and is located less than 2 kilometres from the Root Bay
deposit11. Another claim group in the OLP , the Harrison Road Property located a few kilometr es to the
south of Root Bay, was sampled by the Ontario Geological Survey (OGS)12, and returned anomalous lithium
values in lake sediments; hence, it is considered to be prospective (see Figure 3).
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Figure 3: Map showing OLP claim extents in the Root Bay area
Rock Tech Lithium’s Georgia Lake Project is also one of the more advanced integrated lithium
development projects in Ontario. Rock Tech Lithium is , reportedly, pursuing a vertically integrated
strategy which not only includes development of the Georgia Lake deposit, but also the construction of a
lithium processing plant. The plan is to build a facility that is capable of processing material from various
sources and is adaptable to the region’s growing lithium industry 13. There is tremendous exploration
potential in the Georgia Lake area as it has been described as the largest concentration of rare-element
mineralization in the Superio r Province of Ontario 14. Other companies have reported interesting results
from work in the Georgia Lake district. Tearlach Resources recently announced the results of channel
sampling which ranged from 1.56% Li2O over 3 meters to 4.04% Li2O over 0.7 meters in channel samples
on their property15.
The OLP includes the largest land position in the Georgia Lake lithium district (see Figure 4). One of the
properties, the Arrel Lithium Property, is 20 kilometres east of the Rock Tech pegmatites, and not only is
underlain by a muscovite-bearing peraluminous granite but is also in contact with metasediments which
make excellent hosts for pegmatites.
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Figure 4: Map showing claim groups comprising the OLP in the vicinity of the Georgia Lake projects
Lithium Development in Ontario
Ontario is a province with a deep -rooted mining tradition, abundant clean hydroelectric and nuclear
power, and a skilled mining workforce. The permitting environment in Ontario is rigorous, fair , and
process-based, and both the federal and provincial governments are supportive of battery metal projects
as shown in their recent investments and initiatives16,17.
Access to sustainable power, abundant water, and skilled personnel make s mine development and
permitting easier, and it is one of the compelling reasons for Electric Royalties’ interest in the OLP
acquisition. The properties cover a collective area of over 1 million acres and are adjacent to some of the
most prominent lithium exploration and development plays in North America.
Lithium Outlook
The shift to clean energy systems is forecast to drive a significant increase in the demand for battery
metals, and this is particularly true in the case of lithium. Lithium is a key component in current and
anticipated battery chemistries . According to the International Energy Agency (IEA)’s Sustainable
Development Scenario (SDS), clean energy technologies will ultimately account for 90% of the demand
for lithium, which could result in a 40-fold increase in demand by 204018.
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New sources of lithium will need to be developed and , equally important, new processing facilities will
need to be built to meet long-term demand. Finding new lithium deposits in proximity to where the metal
is processed into products suitable for battery production is imperative to secure supply chains. Complex
supply chains and foreign sources of supply increase the risk of exposure to physical disruption and trade
restrictions, while increasing the carbon footprint of the process.
Completion of Drawdown under Convertible Credit Facility
Further to the Company’s news release on Ap ril 9, 2024, it has completed the C$2,500,000 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”) for working capital and to fund
the cash payment of the Transaction and associated Transaction costs.
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 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 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 a djustment 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 Conversion Price for the Drawdown is C$0.50, and as a result a total 5,000,000 common shares of the
Company are issuable on conversion thereof. The Drawdown is subject to final TSX Venture Exchange
approval.
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.
1 https://mndm.maps.arcgis.com/apps/webappviewer/index.html?id=66ee0efe4d3c4816963737dbdb890708
2 Green Technology Metals news release dated October 9, 2023
3 https://www.cbc.ca/news/climate/lithium-in-the-world-1.6841339
4 https://elements.visualcapitalist.com/visualizing-the-worlds-largest-lithium-producers/
5 USGS Mineral-Deposit Model for Lithium-Cesium- Tantalum Pegmatites; Scientific Investigations Report 2010–
5070–O; By Dwight C. Bradley, Andrew D. McCauley, and Lisa M. Stillings