Northern Graphite Closes Royalty Financing
Northern Graphite Closes Royalty Financing
Ottawa, Ontario--(Newsfile Corp. - July 16, 2020) - Northern Graphite Corporation
(TSXV: NGC)
(OTCQB: NGPHF)
(the "Company" or "Northern") has closed the previously announced sale of a one
per cent gross revenue royalty
("GRR") on its Bissett Creek Project to Electric Royalties Ltd. ("ELEC")
for $500,000 in cash and two million common shares of ELEC (the "Consideration Shares").
Half of the
Consideration Shares are subject to a 12 month hold period and half to an 18 month hold period.
Under
the terms of the agreement ELEC also has a two-year option to acquire an additional half of one per
cent GRR by paying $750,000, of which up to 25 per cent can be paid in ELEC shares.
Northern has the
option to buy back half of one per cent of the initial GRR at any time after 12 months by returning the
Consideration Shares or paying $1.5 million in cash.
Gregory Bowes, CEO of Northern, commented that: "Bissett Creek is a high margin project and the sale
of a small royalty has very little effect on its economics.
The proceeds provide a non-dilutive source of
funding while the Company continues to wait for a turnaround in graphite prices. The World Bank recently
estimated that annual graphite production will ultimately have to increase 500 per cent to meet the
demands of the electric vehicle and energy storage markets.
This is the largest projected increase of
any of the battery minerals.
And there are no new graphite mines currently under construction."
He added
that: "We are happy to support ELEC in bringing more attention to the electric metals/minerals space by
selling a royalty on what we believe is one of the world's highest quality, undeveloped graphite projects."
Brendan Yurik, CEO of Electric Royalties Ltd., commented that: "We are excited to become a financial
partner to Northern through a non-dilutive royalty financing given its project is conveniently located in
Canada in easy transportation distance to announced new battery factories and has a long mine life with
high quality graphite for
battery and industrial uses.
We are also very pleased to welcome Gregory
Bowes to our Advisory Board."
About Northern Graphite
Northern's 100% owned Bissett Creek graphite deposit is located in the southern part of Canada with
ready access to labour, supplies, equipment and concentrate transportation whereas most of the
Company's peers are located in the northern part of Canada or Africa.
Bissett Creek is an advanced
stage project with a full Feasibility Study and a Preliminary Economic Assessment which contemplates
doubling production after three years of operation.
Permitting is well advanced and the Company is in a
position to make a construction decision subject to financing.
The Bissett Creek Project has a reasonable capital cost, an initial production rate that is realistic relative
to the size of the current market (and which can be expanded as demand grows), and it has one of the
highest percentages of large/XL flake.
The latter will enable the Company to initially focus on high
margin, value-added industrial markets and expand into the LiB market as conditions warrant.
Unlike
many graphite deposits, essentially all Bissett Creek production is "battery grade".
About Electric Royalties Ltd
Electric Royalties is a royalty company set to take advantage of the demand for a wide range of
commodities (lithium, vanadium, manganese, tin, graphite, cobalt, nickel & copper) that will benefit from
the drive to electrification (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 feed the electric revolution.
Electric Royalties currently has a portfolio of seven royalties with six additional royalties under binding
letters of intent and plans to focus predominantly on acquiring royalties on advanced stage and operating
projects to build a diversified portfolio located in jurisdictions with low geopolitical risk.
Qualified Person
Gregory Bowes, B.Sc. MBA, P. Geo., a Qualified Person as defined under National Instrument 43-101,
has reviewed and is responsible for the technical information in this news release.
For additional information, please contact:
Gregory Bowes, CEO
(613) 241-9959
This news release contains certain "forward-looking statements" within the meaning of applicable
Canadian securities laws. Forward-looking statements and information are frequently characterized by
words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "potential",
"possible" and other similar words, or statements that certain events or conditions "may", "will",
"could", or "should" occur. Forward-looking statements in this release include statements regarding,
among others; economic and technical studies, graphite prices, project economics, permitting, the
development timeline and the graphite market.
All such forward-looking statements are based on
assumptions and analyses made by management based on their experience and perception of
historical trends, current conditions and expected future developments, as well as other factors they
believe are appropriate in the circumstances. However, these statements are subject to a variety of
risks and uncertainties and other factors that could cause actual events or results to differ materially
from those projected including, but not limited to, unexpected changes in laws, rules or regulations, or
their enforcement by applicable authorities; the failure of other parties to perform as agreed; social or
labour unrest; changes in commodity prices; unexpected failure or inadequacy of infrastructure and
the failure of ongoing and contemplated studies to deliver anticipated results or results that would
justify and support continued studies, development or operations. Readers are cautioned not to place
undue reliance on forward-looking information or statements.
Although the forward-looking statements contained in this news release are based on what
management believes are reasonable assumptions, the Company cannot assure investors that
actual results will be consistent with them. These forward-looking statements are made as of the date
of this news release and are expressly qualified in their entirety by this cautionary statement. Subject
to applicable securities laws, the Company does not assume any obligation to update or revise the
forward-looking statements contained herein to reflect events or circumstances occurring after the
date of this news release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
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