Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) is adding a new royalty to its portfolio in the form of a producing copper mine in Chile.
The company announced it has entered into a definitive agreement to acquire a 0.75% Gross Revenue Royalty (GRR) on the producing Punitaqui copper mine in Chile for C$3.5 million.
Punitaqui resumed operations in May 2024 after infrastructure upgrades and is expected to produce between 19 million and 23 million pounds of copper annually in concentrate at full capacity.
The deal, finalized with Battery Mineral Resources and associated vendors, underscores Electric Royalties’ commitment to investing in projects aligned with the global clean energy transition.
Brendan Yurik, CEO of Electric Royalties, told shareholders that the company believes Punitaqui holds opportunity for sustainable copper production and revenue “in the near term.”
“The demand for copper is poised to increase due to the accelerating global transition towards clean energy and the growth of artificial intelligence data centers,” Yurik said in a statement.
“Through this royalty acquisition, Electric Royalties is investing in a project that could help supply the growing demand for copper while capitalizing on rising copper prices."
The Punitaqui mine, which operated from 2010 until 2020 under previous ownership, includes four satellite copper deposits: San Andres, Cinabrio, Cinabrio Norte, and Dalmacia. The mine’s processing plant is centrally located, facilitating efficient transport and processing of ore from these deposits.
Drilling programs are underway to expand resources and enhance near-term mining sequences.
BMR is advancing development of the Cinabrio Norte deposit, with plans to initiate production by the second half of 2025.
Electric Royalties will pay C$3.05 million upon closing, with the remaining C$450,000 due within 45 days. The agreement also allows the vendors to repurchase 0.375% of the GRR for US$1.5 million after royalty payments exceed C$4 million.
The acquisition will be financed through Electric Royalties’ existing convertible credit facility with Gleason & Sons LLC. The company has pledged its 1% gross metal royalty on the Mont Sorcier Project in Québec as additional collateral.