Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) said it has signed an agreement to sell 1% of its existing 1.5% Net Smelter Royalty (NSR) on the Seymour Lake lithium deposit in Ontario to Lithium Royalty Corp.
The clean energy commodities royalty company said it will receive C$4 million in cash consideration for selling two-thirds of its 1.5% NSR, being one-half of the total 3% NSR on the Seymour Lake deposit.
Sandstorm Gold Ltd (TSX:SAND) holds the balance of the project’s NSR.
“This partial sale along with the cash from our recent financing will enable us to deploy capital into additional nearer-term production opportunities with a view to increasing cash flow,” Electric Royalties CEO Brendan Yurik said in a statement.
READ: Electric Royalties updates investors on 'exciting developments' across its royalty portfolio
“We believe our current valuation does not reflect the value of our royalty portfolio of 19 royalties acquired to date, with potential for promising cash flow over the next few years,” Yurik added.
Electric Royalties noted it will retain a 0.5% NSR on Seymour Lake upon closing of the transaction, which is expected to occur around mid-August 2022, and is subject to completion of due diligence and certain customary conditions.
Electric Royalties is a royalty company established to take advantage of the demand for a wide range of commodities that will benefit from the drive toward electrification of a variety of consumer products and other applications.
Contact Sean at sean@proactiveinvestors.com