Electric Royalties Ltd. (CVE:ELEC) (OCTMKTS:ELECF) has said it plans to complete a private placement of up to 25,000,000 units of the company at a price of $0.40 each for proceeds of up to $10 million.
The company said the proceeds will be used to fund royalty acquisitions as well as for general corporate working capital purposes.
Each unit in the private placement is comprised of one common share of the company plus one common share purchase warrant. Each warrant can be exercised for a two-year period from the closing date at $0.60 per warrant share.
READ: Electric Royalties signs LOI with Sprott Resource Streaming and Royalty to help fund Middle Tennessee Mine royalty acquisition
The units, shares and warrant shares will be subject to applicable resale restrictions, including a four-month hold period from date of closing of the offering under applicable Canadian securities laws. Completion of the offering is subject to regulatory approval, including approval of the TSX Venture Exchange.
Electric Royalties recently entered into a letter of intent (LOI) with Sprott Resource Streaming and Royalty to help fund the acquisition of the Middle Tennessee Mine (MTM) royalty. Under the proposed terms, the company said Sprott Streaming would pay C$9.15 million in cash in return for 50% of the MTM royalty with Electric Royalties retaining 50% of the MTM royalty.
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 & copper - that will benefit from the drive toward electrification of a variety of consumer products: cars, rechargeable batteries, large scale energy storage, renewable energy generation and other applications.
Electric vehicle sales, battery production capacity and renewable energy generation are slated to increase significantly over the next several years and with it, the demand for these targeted commodities. This creates a unique opportunity to invest in and acquire royalties over the mines and projects that will supply the materials needed to feed the electric revolution.
Electric Royalties has a portfolio of 12 royalties with 2 additional royalties currently under contract, subject to completion. The company plans to focus predominantly on acquiring royalties on advanced stage and operating projects to build a diversified portfolio located in jurisdictions with low geopolitical risk.
Contact the author at jon.hopkins@proactiveinvestors.com