If You Invested in Electric Royalti (ELECF)

Electric Royalties Ltd. (ELECF) is a royalty company focused on commodities that support electrification and the energy transition. According to the company, its business model is built around acquiring and holding royalties on projects producing or targeting lithium, vanadium, manganese, tin, graphite, cobalt, nickel, zinc and copper. These commodities are expected to play important roles in products such as electric cars, rechargeable batteries, large-scale energy storage systems and renewable energy generation equipment.

Electric Royalties states that it has a growing portfolio of 43 royalties across these metals. The company emphasizes exposure to the underlying commodities rather than direct mine ownership, seeking to benefit from production and development at the project level through royalty interests. It notes that electric vehicle sales, battery production capacity and renewable energy generation are expected to increase, and it positions its royalty portfolio as a way to participate in the materials required for what it describes as the electric revolution.

Royalty-focused business model

In its news releases, Electric Royalties describes itself as a royalty company that acquires royalties over mines and projects supplying critical and battery-related minerals. A royalty interest typically entitles the holder to a share of revenue or production from a mining project. The company highlights that it is focused predominantly on acquiring royalties on advanced-stage and operating projects, aiming to build a diversified portfolio rather than concentrating on a single asset or metal.

Electric Royalties reports that its portfolio includes different royalty structures, such as gross revenue royalties, gross metal royalties and net smelter return royalties, depending on the specific project. The company also notes that some of its royalties relate to projects that are in production, while others are at stages such as resource definition, economic studies or feasibility work.

Commodity and project diversification

Across its public communications, Electric Royalties repeatedly references its diversification across lithium, vanadium, manganese, tin, graphite, cobalt, nickel, zinc and copper. It links this mix of commodities to applications in batteries, electric vehicles, large-scale energy storage and renewable energy generation. The company also refers to broader clean energy transition themes, indicating that its royalties are intended to provide exposure to materials required to rebuild energy and infrastructure systems toward a lower-carbon economy over the long term.

The company points to a range of underlying projects where it holds royalties, including copper, lithium, graphite, manganese, vanadium and nickel assets. It notes, for example, a royalty on the Punitaqui Copper Mine in Chile and references royalty interests on projects such as Seymour Lake Lithium, Battery Hill Manganese, Mont Sorcier Iron and Vanadium, Kenbridge Nickel, Bissett Creek Graphite, Graphite Bull Graphite, Millennium Copper-Cobalt, Zonia Copper and others. Electric Royalties relies on information provided by the operators of these projects and often cites their technical and economic studies, drilling results, metallurgical test work and feasibility work in its updates.

Focus on critical minerals and jurisdictional risk

Electric Royalties highlights critical minerals themes in its disclosures, including references to government initiatives and policy developments in North America and elsewhere. The company notes that some of the metals related to its royalties are considered critical for sectors such as transportation, energy, advanced manufacturing and defense. It has publicly discussed developments such as U.S. government actions related to critical minerals and export controls by other countries as context for its portfolio.

The company states that it is focused predominantly on acquiring royalties on projects located in jurisdictions with what it describes as low geopolitical risk. It links this geographic focus to investor interest in secure and sustainable supply chains for critical minerals. In its communications, Electric Royalties mentions royalty assets in places such as Canada, the United States, Australia, Madagascar and Chile through the underlying project operators’ disclosures, and it frames this geographic spread as part of its diversification approach.

Copper and other royalty examples

Electric Royalties has provided multiple updates on its copper royalty portfolio. It reports receiving revenues from its royalty on the Punitaqui Copper Mine in Chile following a royalty acquisition completed in December 2024, and it has described the mine operator’s efforts to ramp up production of copper concentrates. The company states that increased production at Punitaqui directly supports higher royalty revenues and contributes to its cash flow.

In addition to Punitaqui, Electric Royalties discusses royalties on copper-related projects such as the Zonia Copper Oxide Project in Arizona and the Millennium Copper-Cobalt Project in Queensland, Australia. It relays information from the project operators about exploration programs, drilling, resource estimates, feasibility studies and, in some cases, changes in project ownership. Electric Royalties emphasizes that it is relying on information provided by the operators and, in several instances, notes that it is unable to independently verify technical results.

Battery metals and graphite, lithium, manganese and vanadium exposure

The company also highlights royalties tied to battery metals projects. For lithium, it points to the Seymour Lake Lithium Project in Ontario, where the operator has advanced from historical resources and early metallurgical work to a preliminary economic assessment and plans for a feasibility study. Electric Royalties notes that it holds a 1.5% net smelter royalty on Seymour Lake and uses this example to illustrate how a royalty can gain value as an underlying project progresses through technical and economic milestones.

For manganese, Electric Royalties reports on the Battery Hill Manganese Project in New Brunswick, where the operator has advanced metallurgy, upgraded resources and moved toward a pre-feasibility study supported by external financing. The company holds a 2.0% gross metal royalty on Battery Hill and has shared information about ore-sorting studies and battery testing programs, while stating that it relies on the operator’s disclosures and cannot independently verify all results.

In graphite, Electric Royalties references royalties on the Graphmada Graphite Mine, the Bissett Creek Graphite Project and the Graphite Bull Project. It has highlighted developments such as scoping studies, resource estimate updates, qualification of graphite material for battery anode applications and government support for related facilities. The company again notes that it is relying on the technical and economic information released by the project operators.

For vanadium and iron, Electric Royalties points to its royalty on the Mont Sorcier Iron and Vanadium Project in Québec. It has reported on metallurgical test results and the advancement of a feasibility study, based on information from the project operator. The company describes this as part of its broader exposure to critical minerals and steel-related inputs through royalties.

Capital structure, financing and corporate initiatives

Electric Royalties has disclosed several corporate and financing activities in its news releases. It has announced interest conversions under a convertible credit facility with Gleason & Sons LLC, where accrued interest was converted into common shares, subject to TSX Venture Exchange approval. The company describes these transactions as “Shares for Debt” under TSX Venture Exchange policies and notes that they involve related party considerations under applicable securities regulations, while also citing exemptions that apply.

The company has also reported closing a non-brokered private placement of common shares for aggregate gross proceeds of approximately C$1 million, with the stated intention to use net proceeds for working capital and general corporate purposes, including evaluation, legal and due diligence costs for potential strategic transactions. Electric Royalties notes that a portion of the placement involved related parties and describes how it relied on exemptions from formal valuation and minority approval requirements.

In addition, Electric Royalties has announced the grant of incentive stock options, restricted share units (RSUs) and deferred share units (DSUs) to directors, officers and consultants under its equity incentive plans. These grants are described as subject to TSX Venture Exchange acceptance and are part of the company’s long-term incentive and compensation framework.

Cost management and corporate services

In a news release, Electric Royalties discussed a transition in its chief financial officer role and the engagement of Corex Management Inc. to provide accounting, administration, finance and corporate compliance services. The company states that this transition is part of an effort to materially reduce overhead and administrative costs while maintaining focus on building a royalty portfolio and establishing a recurring base of royalty revenues. It has also mentioned other initiatives intended to optimize overhead expenses.

Marketing and investor awareness

Electric Royalties has described marketing activities designed to increase investor awareness of its royalty portfolio. It has engaged third-party newsletter and content distribution firms, such as Jefferson Financial and Trusted Causes LLC, to distribute articles about the company to various investor-oriented audiences for specified cash fees. The company notes the nature of these relationships, including where service providers are arm’s length or affiliated with existing shareholders, and indicates that such marketing may be used from time to time.

Positioning within the basic materials and mining sector

Within the basic materials sector and the other industrial metals and mining industry classification, Electric Royalties presents itself as an entity that provides exposure to multiple mining and development projects through royalties rather than direct ownership or operation. Its disclosures emphasize diversification by commodity, project stage and geography, with a stated focus on advanced-stage and operating projects and on jurisdictions it views as having lower geopolitical risk.

The company repeatedly connects its strategy to themes such as electrification, critical minerals supply chains and the clean energy transition. It describes its royalty portfolio as a way for investors to gain exposure to metals used in electric vehicles, batteries, large-scale energy storage and renewable energy infrastructure, while relying on operators to advance the underlying projects. All technical and project-level information referenced by Electric Royalties is attributed to the respective project operators and, in many cases, is accompanied by statements that Electric Royalties is relying on that information and cannot independently verify certain results.