| Leveraging softer lithium markets to increase exposure for long-term growth
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| |  | | Ready For The Lithium Rebound
| | | Lithium prices have been extremely volatile, with market enthusiasm for lithium assets riding the rollercoaster with the price.
Electric Royalties (ELEC.V; ELECF.OTC) has taken advantage of the market’s disdain to lock up a prospective suite of early-stage lithium royalty assets.
Now they’re positioned for the eventual rebound.
| | | | Buy low, sell high.
| | That’s the name of the game in investment and in business.
And with its pending acquisition of no less than 126 lithium properties for just three million common shares and C$3 million in initial cash payments, Electric Royalties (ELEC.V; ELECF.OTC) is setting itself up for the classic “buy low, sell high” situation.
You see, after going on a tear in 2022, lithium prices returned earthward in 2023 and into 2024.
| | That has opened up the opportunity for this Green Revolution-focused royalty company to swoop in and buy up a massive swath of prime lithium ground in Ontario.
| | As you’re about to see, that puts Electric Royalties in prime position in terms of the future supply chain for North American auto manufacturers.
It also sets up Electric for a significant re-rating when lithium prices rebound.
| | A One-Million-Acre Land Position
In Big Auto’s Backyard
| | Even with the recent drop in lithium prices, the long-term picture for energy metals remains bright.
The U.S. is experiencing an electric vehicle battery boom, with a record US$82 billion of investment announced to build 96 EV, electric battery and battery recycling plants across the country.
| | The suite of lithium royalty assets that Electric Royalties is buying is literally in North American Big Auto’s backyard.
| | That puts them in close proximity to the U.S. battery belt that stretches from the northeast to the southeast of the country.
They’ll also benefit from the U.S. Inflation Reduction Act, which incentivizes lithium sourced from Canada.
| | Cash To Flow From Property Payments
| | Electric Royalties’ portfolio would increase by 101 lithium properties that have been optioned under a royalty prospect generation model.
| | That means the projects will be producing income for Electric Royalties over the next few years. Electric anticipates option payments of C$1.4 million in 2024, C$2.0 million in 2025, and C$2.7 million in 2026, subject to the properties remaining optioned.
| | Six properties with reported reserves or resources are located near the property suite that Electric is buying.
That includes the Seymour Lake project on which Electric holds a 1.5% net smelter royalty interest.
Seymour Lake’s underlying owner, Green Technology Metals, is currently pursuing a vertically integrated strategy with multiple mine and processing hubs supplying a central lithium conversion facility in Thunder Bay, Ontario.
| | More Than Just Lithium
| | And, as critical as lithium is to Electric Royalties’ future, the company’s overall portfolio is much more comprehensive and diverse.
Other commodities on which Electric holds royalties on include vanadium, manganese, tin, graphite, cobalt, nickel, zinc and copper.
Prior to the closing of the Ontario Lithium Portfolio acquisition, Electric Royalties holds 22 royalties in six different countries.
| | Two of those royalties, on the Middle Tennessee Zinc mine and on the Penouta tin and tantalum mine in Spain, are in the production stage.
| | Another, its royalty on the Authier lithium project in Quebec, is in pre-production. And a graphite royalty project in Madagascar is on the verge of a restart.
This diversification makes Electric Royalties a unique, one-stop-shop investment play on the Green Revolution.
| | The Royalty Company Advantage
| | Electric also comes with all the advantages of a royalty company over mining explorers, developers and producers.
In past cycles, royalty companies like Franco Nevada and Wheaton Precious Metals have proven to outperform mining companies.
| | | That’s because royalty companies diversify investments and mitigate risk. Royalties are typically paid based on revenues, irrespective of underlying profitability.
Moreover, there is no exposure to capital expense overruns, no sustaining costs, no exploration costs and fixed cash costs.
| | Better still, when generalist investors rotate into a sector like energy metals, royalty companies like Electric Royalties tend to be the first names off the shelf in terms of investments.
| | Undervalued…For Now
| | As mentioned, Electric Royalties’ big lithium property acquisition in Eastern Canada comes at a time of extreme volatility in lithium prices.
Regardless of where those prices stand now, the trend towards electrification virtually guarantees they’ll be higher over the long term.
| | In Electric Royalties, you have a company with a potentially cash flowing, million-acre, lithium royalty property acquisition and the long-term benefit of a fully-diversified portfolio of premier energy metal royalties.
| | If you’re looking for a compelling and leveraged way to invest in the Green Revolution and the decarbonization trend, you’ll want to take a close look at Electric Royalties now, before lithium prices rebound.
| | CLICK HERE
To Learn More about Electric Royalties
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