General Base Metals
Electric Royalties (TSX-V: ELEC)(OTC: ELECF) CEO Brendan Yurik on Electric Royalties As a De-Risked Inflation Hedge
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, how are you today? Thanks for coming on.
Brendan Yurik: Hey, Gerardo, it's a pleasure to be back.
Gerardo Del Real: Interesting times. Interesting markets. As I speak, the Dow is down some 1,300 points. The NASDAQs down 4%. I could go on, but look, I'm looking around the junior resource space, and I got to say, Brendan, you're in the right sector. You recently had an update on the portfolio, and you just announced a $3 million financing. I've known you for a little bit now. I've gotten to know you, and if you're raising capital, I'm going to go out on a limb here and assume that you're probably looking to bring in some accretive royalties and/or streams, but I'll let you opine on that. And I'll let you provide the update there. Clearly, you're in the right sector with a mega trend behind you.
Brendan Yurik: Yeah, well, that's the crazy thing. I mean, our portfolio is, right now, heavy lithium. Lithium prices are up 400% last year, but really metal pricing across the board. Tin was up 100%, cobalt 75%. Yeah, definitely interesting times. I think these markets, especially among junior companies, it's not as efficient a market as we think it is. There's definitely some big gaps in terms of valuations on companies and relative to the assets they have. Right now, it's just crazy. Where we're valued right now is absolutely not... It wouldn't have been my preference to do our equity financing at these prices, but we just, yeah, we've got deals that we want to go get done. And we felt like those were more important to go get.
Yeah, we're going to complete this financing here. And I think the timeline is really over the next week is the kind of deadline on that. And then, yeah, back to acquiring royalties. We don't seem to be getting the right recognition in the market yet, but that's going to come, regardless. Great inflation hedge in this type of market. Our royalties are tied to metals that you can't print more of. They're very rare. And as a royalty company, we're protected against operating cost inflation, because we have no operating costs. So our costs do not go up as miners would. And we are not on the hook for costs for capital development, putting the mine in production. And so our cost inflation on capital cost is also protected. So yeah, we couldn't be in a better place right now.
Gerardo Del Real: I absolutely agree that when you have inflationary pressures and/or stagflation, the royalty companies definitely tend to outperform, especially when the underlying metals or commodities are also outperforming. The update that you had here a few weeks back, you really focused on updating the market on multiple lithium royalties, graphite royalties. Obviously, the right metals, the right battery type metals that are in the midst of what I think, it's still kind of early days of what I think is going to be a decade or multi-decade mega trend. This electrification of everything. This pivot from governments all around the world to want to pivot towards clean energy. You're hitting the sweet spot right now. You talked about the valuation. Walk me through catalysts here for the remainder of the year, and then where your market cap is right now for someone that is looking for that inflation hedge, that is looking for exposure to these metals that are going to continue to be in high demand and short supply.
Brendan Yurik: Yeah. Well look, I mean, in any given day, I think right now we're trading around 25 million, which is pretty ridiculous, to be honest with you. I mean, I like our portfolio better than some companies trading a hundred million plus. So we're definitely undervalued. We are the only group out there really focused on the clean energy metal space, and it is exciting. I mean, this is a space that didn't exist really five years ago. And we're talking about that space, basically supplying the world's energy needs, kind of two decades out.
And so in between that period of time, there's going to be a huge growth in the sector. And you're talking about the oil and gas sector, about four or five times as big as the mining sector. It's going to still be around 20 years from now, but that's what we're cannibalizing. You take that on the other side of your clean energy metals didn't exist, becoming a market basically four to five times the size of the mining market. So yeah, I mean, it's exciting. We do think there's two decades runway. I don't think that's very often like, you see two decades runway like this, but we're excited about it.
Valuation is, like people always say, "Oh, you're a public company. Valuation is what it is." I know that the smart private equity groups out there that are trying to put together their own portfolios, they value us pretty differently, but that should work itself out over time. We just keep growing, keep adding good royalties, and the market will get it. That last asset update, look, we had 40 million raised just on two assets, Seymour Lake and Cancet in November of 2021 alone. There is a lot of money going into our portfolio this year.
We're probably going to have to make asset updates a monthly thing. Otherwise, we tend to have seven or eight updates every two months. That's going to continue on and continue being done by third parties at no cost to us. That's really that accretive build in the value of these royalties as we move forward. We have catalysts coming across the board. We're expecting some economics to come out on some of those lithium assets. We're expecting economics to come out on our manganese asset this year. That's a big, big asset. The only manganese district in North America being involved with EV space. So, I mean, there's really a lot of catalysts. We'd have to do a much longer catch up to run through them all that we expect this year, but it's going to be a busy year, that's for sure.
Gerardo Del Real: A lot to like. Brendan, it's good to catch up. Let's do it again soon.
Brendan Yurik: Definitely.
Gerardo Del Real: Thanks for coming on again. Cheers.
Brendan Yurik: Cheers, mate. Always a pleasure.Click here to see more from Electric Royalties