Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) said the strong upward trend in the price of zinc has significantly increased the zinc royalty payments it receives from the Middle Tennessee Mine (MTM).
The company noted that the zinc royalty is held in a limited partnership (MTM LP), in which it owns a 25% economic interest with the remaining 75% interest held by Sprott Streaming and Royalties Corp.
From August 11, 2021, when it acquired the royalty, until March 31, 2022, the company said the aggregate gross amount of royalty revenue accrued to MTM LP on a 100% basis is approximately US$1,158,000, with its share amounting to US$289,000. Over the same period, it said the price of zinc increased by 41% to US$4,260 from US$3,018 per ton.
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"The MTM royalty represents what we anticipate to be many more royalties of its kind as we seek to prioritize the acquisition of cash-flowing royalties to continue to grow the company,” CEO Brendan Yurik said in a statement. “With zinc prices surging almost 50% since we closed the MTM royalty acquisition last August, we remain bullish on zinc, which continues to face supply shortages due to higher energy costs and sustained production cuts from smelters. Zinc plays a critical role in batteries, energy storage and protection of steel used to build renewable energy infrastructure."
Electric Royalties said it is positioning itself to take advantage of the demand for a wide range of commodities, including lithium, vanadium, manganese, tin, graphite, cobalt, nickel, zinc and copper that will benefit from the drive toward electrification of a variety of consumer products. These include cars, rechargeable batteries, large scale energy storage, renewable energy generation and other applications.
With electric vehicle sales, battery production capacity and renewable energy generation slated to increase significantly over the next several years, the company said demand for these targeted commodities will increase, creating a unique opportunity to invest in and acquire royalties over the mines and projects that will supply the materials needed to fuel the electric revolution.
Vancouver-based Electric Royalties has a growing portfolio of 18 royalties, including one that currently generates revenue. The company is focused on acquiring royalties on advanced stage and operating projects that offer exposure to the clean energy transition.
Contact the author at stephen.gunnion@proactiveinvestors.com