Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) said it has closed its acquisition of a 0.75% gross revenue royalty (GRR) on the producing Penouta tin-tantalum mine in Spain with Strategic Minerals Europe Corp for $1 million in cash and 500,000 Electric Royalties shares.
The company also has an option for a period of seven months from closing to acquire an additional 0.75% GRR on Penouta in exchange for an additional cash payment of C$1,250,000. The respective royalty rates will be reduced to 0.5% once certain minimum royalty payments have been made.
The acquisition marks the company's first cash flow exposure to tin as well as tantalum.
READ: Electric Royalties highlights successes at its lithium and graphite projects in royalty portfolio update
The Penouta mine, in the northwestern Spanish province of Ourense, is currently the largest tin and tantalum producer in Europe. In January 2022, Strategic Minerals re-commenced open pit production of tin and tantalum, and in June 2022 received an exploitation permit to mine for 30 years, renewable for up to 75 years.
Strategic Minerals recorded its highest monthly production levels of the year in September 2022 and plans to focus on expanding production. In September 2022, Strategic Minerals produced 80.2 tonnes of primary concentrate, comprising 66.2 tonnes of cassiterite concentrate with a tin content of 70.2% and 14.0 tonnes of tantalite/columbite concentrate containing 25.5% tantalite and 24.8% columbite.
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.
Contact the author at jon.hopkins@proactiveinvestors.com