Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) CEO Brendan Yurik joined Proactive to discuss the company’s exciting new copper stream acquisition and its impact on future cash flow.
Yurik highlighted the importance of the agreement for bridging short-term cash flows, allowing the company to cover general and administrative costs over the next four years.
Proactive: You've just announced a new copper stream deal. Can you tell us more about it?
Brendan Yurik: Absolutely. We’ve entered into an agreement to acquire a copper stream, and it's quite an exciting deal for Electric Royalties. It allows us to purchase 76,000 pounds of copper every month at $2.75 per pound, which gives us stable cash flow for the next four years.
How much revenue does that translate into for Electric Royalties?
With copper at current prices, we’re looking at approximately $2 million per year in revenue. But if copper prices rise to $5 per pound, that revenue doubles, so it's a very flexible deal that can become more lucrative as the market improves.
Does this help with short-term cash flow for the company?
Yes, absolutely. This deal essentially covers our G&A costs for the next four years. It's a key part of our strategy to ensure we have cash flow coming in while continuing to grow our royalty portfolio.
And there's an option to increase the stream, right?
That's correct. We have the option to double the size of the copper stream, which gives us a lot of potential upside depending on how the market moves.
How does this fit into the broader strategy for Electric Royalties?
From our perspective, this deal is a fantastic bridge for us. Over the next five years, we expect to see significant growth across our royalty portfolio. We currently have 40 royalties, with a lot of focus on our copper assets, which will be crucial as global demand increases.
So, looking ahead, what excites you most about the future?
We're really excited about where we're headed. The copper market is strong, and we see a lot of potential in our portfolio to deliver long-term value for shareholders.
Quotes have been lightly edited for clarity and style