Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) said it has closed the previously-announced acquisitions of 25% of the Middle Tennessee Mine (MTM) royalty plus 100% of the Glassville manganese royalty from Globex Mining Enterprises Inc. (TSX:GMX, OTCQX:GLBXF)
Electric Royalties paid C$250,000 in cash and issued nine million of its common shares, plus 5.5 million of its common share purchase warrants in consideration for the two royalty interests.
“On receipt of the first royalty payment we will be transformed into a cash flowing royalty company, a significant milestone for Electric Royalties,” Electric Royalties CEO Brendan Yurik said in a statement.
“The transaction is our first syndication of a royalty financing, setting the stage for additional co-investment transactions moving forward, a mechanism which minimizes dilution to the company whilst potentially enabling us to acquire interests in royalties on significant assets,” Yurik added.
Funds controlled by Sprott Resource Streaming and Royalty Corp co-invested and acquired the remaining 75% of the MTM Royalty for C$13.5 million, with Electric Royalties retaining an option to acquire an additional 25% royalty interest from Sprott Streaming.
Electric Royalties noted the Glassville manganese project is located in close proximity to the Battery Hill project in New Brunswick, on which the company holds an existing royalty.
The MTM Royalty is a sliding-scale gross metal royalty that varies with the zinc price. No royalty is payable if the zinc price is below US$0.90 per pound, a 1.0% royalty is paid at zinc prices between US$0.90 and US$1.10 and a 1.4% royalty is paid at zinc prices above US$1.10 per pound.
Electric Royalties is a royalty company established so that investors can participate in the demand for commodities, such as lithium, vanadium, manganese, tin, graphite, cobalt, nickel and copper, which will benefit from the global drive toward electrification of a variety of consumer products, including cars, rechargeable batteries, large scale energy storage, and renewable energy generation.
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