General Base Metals
Electric Royalties (TSX-V: ELEC)(OTC: ELECF) CEO Brendan Yurik on Capitalizing on Battery Metals' Price Surge in 2022
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Electric Royalties – Mr. Brendan Yurik. Brendan, it's been a minute. It's great to have you back on. How are you doing, sir?
Brendan Yurik: Yeah, I'm doing very well. Thank you. I appreciate having me back. How are you doing today?
Gerardo Del Real: I'm well. I'm well. Thank you for asking. I had to reach out because you had a news release a week and a half or so ago that provided a pretty comprehensive update across 50% of your royalty portfolio. And I couldn't help but notice that, you know, several of those updates were coming from lithium assets, right? Streams or royalties on lithium assets.
And it seems to me, and we talked a bit off air, but it seems to me like the portfolio is positioned pretty well given where lithium prices are. You had some tin news this morning. You have copper, you have some nickel in the portfolio. So a lot to chat about. Can you give us an overview on where the portfolio is and why you believe it's positioned to really take advantage of what I see as a commodity supercycle, right? This trend, I think with lithium and with copper and with nickel and cobalt isn’t one that's going the other way any time soon.
Brendan Yurik: Yeah, well, that's the really exciting thing. You know, I think this trend, this is a supercycle and we really see it on the supply side, and that's the side that most groups and parties aren't really knowledgeable about. But we know because we can see the supply side, you know, there's an average 15 year development timeline. And so, you know, you can, you can pretty accurately forecast to a degree what at least supply is going to be like, you know, and that's why it's so interesting.
We are heavy lithium right now. Lithium prices are up 400%, you know. So I bet you can imagine what that goes to the economics. We've got a fantastic lithium portfolio. Yeah. We had 40 million just raised on our Seymour Lake and our Cancet lithium properties in November 2021. We're expecting economics to come out of both those assets this year that looks very favorable. Our Authier lithium royalty looks like it's going to be coming into production as early as 2023.
That operator just finished the acquisition of the Canada lithium mine and basically their plan is to blend ore from the Authier project which sits right next door to ramp up production of that mine. You know things are good. I mean we've got catalysts really coming on our entire portfolio. Most of it, I would say 80% this year we're expecting to have major catalysts that are funded by operators at no cost to us.
Gerardo Del Real: How many royalties are in the portfolio now? There's going to be a lot of new eyes to the stock and to this story given what these battery metals are doing. How are you positioned right now? How many royalties? You mentioned 40% lithium. Where's the rest of the commodity balance there?
Brendan Yurik: Yeah, so we we just actually announced a new acquisition this morning. It's our first tin royalty acquisition. It's one of two. This is according to USGS, right? One of two potentially economic tin deposits in the entire U.S. The U.S. hasn't produced tin since 1980. It being a very critical metal so actually that basically rounded out our targeted commodity exposure.
They are nine different clean energy metals we are targeting you now have exposure to all of them And so those would be tin, nickel, copper, manganese, zinc, graphite, vanadium, and tin as well as lithium. So you know there's there's nine different metals we've got about I'd say 40% of our exposure in lithium right now. And then kind of spread around the rest of them.
But our goal is to really stay diversified across all these different clean energy metals. They all have fantastic outlooks, multiple decades, almost, of exponential demand growth. And so what we're offering is really exposure to these basic pieces that are the very basic inputs required for the world to move to a clean energy future.
Gerardo Del Real: What's the rest of the year look like on the corporate side? I got to believe that you continuously vet deals that are looking for accretive royalties to capture, right? Obviously, by the news this morning that's clear. But is that an active ongoing strategy for the company?
Brendan Yurik: Yeah. So we're kind of on a two pronged approach. I mean, there's certain deposits where there are kind of one or two or the only like our manganese district, our zinc royalty being kind of the only primary producer in the U.S. So the one-and-onlys we always kind of, you know, we we do definitely target and we'll pick up any time we can.
The other part is definitely going to be getting some cash flows, more cash flowing royalties, you know, kind of utilizing what we did last year where we brought in Sprott, they funded 100% of the cash requirement to acquire a producing royalty on that zinc mine in the U.S. and that's a very prudent financing mechanism for us. Lets us get into some tier one assets on the cash flow producing side where that was a $17.5 million deal. Our cash cost on that was $250,000, you know, so we can do some exciting stuff with not a lot of cash. We got to get some more cash flow in the company. And so yeah, it's kind of a two pronged approach, right?
You know, there's ones like this where, you know, you can't replicate that type of royalty exposure, you know, so we definitely want to get those, but we're going to be going out after some cash flowing royalties here very soon. Don’t you worry.
Gerardo Del Real: Well, it sounds like you and I will be chatting a bit more. We joked off air that you had been you know, it was way we were way overdue for a catch up. If it wasn't for lack of activity behind the scenes on your part, it was more, you know, lack of actual news to the market. It sounds like you've set the table well for 2022. Anything to add to that, Brendan?
Brendan Yurik: Well, it's going to be an exciting year. I think we've got a couple of royalties from our portfolio that look like could be entering production here over the next kind of six to 12 months. And you know, we should be cash flow positive here shortly and just lots of good news coming really across the portfolio. I'm really excited to see our Battery Hill PEA come out in the next month or so.
You know, we're expecting that's going to showcase 5 or 6 million a year in royalty revenue back to us once in production and the metallurgy’s very advanced on that. So you know they get fast-tracked to the stage but I don't think people understand what we have there. So that's going to be an exciting announcement coming out here in the near term as well.
Gerardo Del Real: Brendan, thanks again for that good, thorough, comprehensive update. Look forward to chatting again soon.
Brendan Yurik: Yeah. Thanks a lot Gerardo.
Gerardo Del Real: All right. Take care.