Electric Royalties Signs Asset Purchase Agreement To Acquire Lithium Royalty and Option Portfolio

VANCOUVER, BC / ACCESSWIRE / April 9, 2024 / Electric Royalties Ltd. (TSXV:ELEC)(OTCQB:ELECF) ("Electric Royalties" or the "Company") is pleased to announce that, further to the amended and restated letter of intent described in its March 6, 2024 news release (the "LOI"), the Company has entered into an Asset Purchase Agreement with 1544230 Ontario Inc., MK Exploration Services Inc., and Gravel Ridge Resources Ltd. (together, the "Vendors"), dated April 8, 2024, to acquire a portfolio of 18 royalty agreements and 32 lithium properties in Ontario, Canada, selected for their prospectivity after Company due diligence (the "Transaction").

31 of the 32 properties are currently being explored by third parties pursuant to option agreements and, to the extent that the applicable option payments (yielding the Company up to C$2.2 million) are made over the next two and a half years and the options are exercised, each of the properties would revert into royalty interests for Electric Royalties. Electric Royalties would retain its ownership interest in any properties that are not ultimately transferred to an optionee and would have the right to re-option, sell, or relinquish the released properties.

Transaction Terms

The Company will issue to the Vendors an aggregate of 2,250,000 common shares in the capital of the Company (the "Consideration Shares"), make a cash payment (the sum of C$1,875,000 less the (i) C$75,000 non-refundable exclusivity fee already paid; (ii) the amount of certain payments received by the Vendors under certain earn-in, option, royalty, or similar agreements on or after January 1, 2024; and (iii) 50% of any proceeds received by the Vendors for the sale of certain property interests described in the LOI on closing of the Transaction ("Closing").

Completion of the proposed Transaction is expected during April 2024 and remains subject to a number of conditions, including: the satisfactory completion of due diligence; the receipt of TSX Venture Exchange approval for the issuance of the Consideration Shares, the receipt of certain third party approvals with respect to certain royalties and lithium properties under option and the receipt of any other required regulatory or third party approvals.

Drawdown under Convertible Credit Facility

The Company has elected to draw down C$2,500,000 (the "Drawdown") under its C$10,000,000 amended and restated convertible credit facility with Gleason & Sons LLC (the "Lender") dated February 16, 2024 (the "Credit Facility") for working capital and to fund the cash payment of the Transaction and associated Transaction costs.