Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) announced that it has entered an agreement to acquire 18 royalty agreements and 32 lithium properties in Ontario, Canada from vendors 1544230 Ontario, MK Exploration Services, and Gravel Ridge Resources.
The royalty company focused on commodities used in electrification said that 31 of the 32 properties are currently being explored by third parties under their respective option agreements.
It said that the applicable option payments would yield the company up to C$2.2 million over the next two and a half years and, once exercised, each of the properties would revert into royalty interests for Electric Royalties.
The company said it would retain the ownership interest in any of the properties that are not ultimately transferred to their respective optionees, having the right to re-option or sell the released properties.
In consideration for the portfolio of properties, Electric Royalties said it would pay the vendors an aggregate of 2,250,000 shares and make a cash payment of C$1,875,000 minus the C$75,000 exclusivity fee already paid.
The vendors will also receive the amount of certain payments under earn-in, option, royalty, or similar agreements on or after January 1, 2024, and 50% of the proceeds received for the sale of certain property interests specified in the agreement.
Electric Royalties said it has drawn down C$2.5 million under its C$10 million restated convertible credit facility with Gleason & Sons for working capital and to fund the cash payment of the transaction and associated costs.
It is expected the transaction will be completed in April 2024.