Mr. Brendan Yurik reports

ELECTRIC ROYALTIES SIGNS LETTER OF INTENT TO ACQUIRE PORTFOLIO OF 126 LITHIUM PROPERTIES IN EASTERN CANADA

Electric Royalties Ltd. has entered into a letter of intent with Perry English, Michael Kilbourne, 1544230 Ontario Inc. and Gravel Ridge Resources Ltd., dated Nov. 3, 2023, to acquire a portfolio of 126 lithium properties in Eastern Canada.

Brendan Yurik, chief executive officer of Electric Royalties, commented: "This proposed acquisition comprises a land package of 126 properties totalling over one million acres of highly prospective lithium prospects in Eastern Canada -- a region that could be the centre of clean energy metals production for decades to come. Of these 126 properties, 101 have been optioned to various companies under a royalty prospect-generation model, whereby exploration companies make cash payments to the royalty prospector. This generates near-term cash flow while maintaining long-term upside via royalties on those assets.

"This acquisition covers lithium properties in Eastern Canada and could not come at a better time -- the U.S. is experiencing an electric vehicle (EV) battery boom, with a record $82-billion (U.S.) of investment announced to build 96 EV, electric battery and battery recycling plants across the country. The lithium properties of Eastern Canada are strategically located in close proximity to the U.S. battery belt that stretches from the northeast to the southeast of the country. Canadian-sourced lithium is expected to play an important role in the EV battery supply chain, especially since the U.S. Inflation Reduction Act incentivizes lithium sourced from Canada.

"We anticipate that this acquisition will bolster our cash generation over the next three years as 101 properties are under option agreements with third parties with option payments of approximately $6-million scheduled over that period. Thanks to the recently announced enlarged credit facility commitment from Gleason & Sons LLC, the family office of our largest shareholder Stefan Gleason, Electric Royalties is well positioned to seize the potential opportunity to significantly grow the size of our royalty portfolio."

Overview of lithium portfolio

The portfolio consists of 126 lithium properties in Eastern Canada, primarily in the province of Ontario. One hundred one properties are currently being explored by third parties pursuant to option agreements and, to the extent such properties are successfully explored and developed, have the potential to result in royalties payable to Electric Royalties by the optionee of the applicable properties. The company anticipates that the portfolio of properties will yield option payments to the company of approximately $1.4-million in 2024, $2-million in 2025 and $2.7-million in 2026 for a total of approximately $6-million over the next three years, subject to the optioned properties remaining optioned.

Electric Royalties would retain its ownership interest in any properties that are not ultimately transferred to an optionee.

The properties cover prospective land on the same geological trends of, and surrounding major lithium discoveries in Ontario. Six of 24 developed lithium prospects in Ontario with reported reserves or resources are located in the vicinity of these properties. Several of these properties are adjacent to Green Technology Metals' Seymour Lake lithium project (on which Electric Royalties holds a 1.5-per-cent net smelter royalty interest) that hosts the Aubry deposits. The Seymour Lake lithium project is road accessible year-round and is envisioned as a central processing facility with the potential to add production from other deposits in the area. Green Technology Metals is currently pursuing a vertically integrated strategy with multiple mine and processing hubs supplying a central lithium conversion facility that would be built in Thunder Bay, Ont.

Several other properties in the portfolio flank Frontier Lithium's Pak and Spark projects. Pak contains North America's highest-grade lithium resource and is the second-largest known resource in North America by size.

Currently, Canada hosts the sixth-highest lithium reserves of any country, yet 2022 production totalled an estimated 500 tonnes -- an amount dwarfed by global lithium powerhouses such as Chile and Australia. The underdeveloped hard-rock lithium deposits in Canada are hosted in pegmatites containing a lithium-bearing mineral known as spodumene. Lithium hosted in spodumene provides producers with greater flexibility as it can be processed into either lithium hydroxide (mainly used in high-density EV batteries) or lithium carbonate. It also offers faster processing times and is higher quality than lithium extracted from brine as spodumene typically contains higher lithium content. Spodumene-bearing pegmatites are often hosted in metavolcanic or metasedimentary rocks adjacent to granitic intrusions. Many of the world's largest occurrences are found in Archean or Paleoproterozoic orogens -- geological environments underlying approximately two-thirds of Ontario.

Proposed transaction terms

The company will make a $75,000 cash payment to the vendor in consideration for entering into an exclusivity period ending March 28, 2024, in order to perform due diligence on the portfolio of lithium properties.

Acquisition terms:

• The company will issue an aggregate of three million common shares in the capital of the company and make a cash payment (the sum of $3-million less the (i) exclusivity fee and (ii) the amount of certain payments received by the vendors under any earn-in, option, royalty or similar agreement on or after Jan. 1, 2024) on closing of the transaction;
• Make a cash payment of $750,000 on the 12-month anniversary of the closing;
• Make a cash payment of $750,000 on the 18-month anniversary of the closing.

Completion of the proposed transaction remains subject to a number of conditions, including: the satisfactory completion of due diligence; board approval; the receipt of any required regulatory approvals; and the negotiation of definitive documentation.

David Gaunt, PGeo, a qualified person who is not independent of Electric Royalties, has reviewed and approved the technical information in this release.

About Electric Royalties Ltd.

Electric Royalties is a royalty company established to take advantage of the demand for a wide range of commodities (lithium, vanadium, manganese, tin, graphite, cobalt, nickel, zinc and copper) that will benefit from the drive toward electrification of a variety of consumer products: cars, rechargeable batteries, large-scale energy storage, renewable energy generation and other applications.

Electric vehicle sales, battery production capacity and renewable energy generation are slated to increase significantly over the next several years and, with it, the demand for these targeted commodities. This creates a unique opportunity to invest in and acquire royalties over the mines and projects that will supply the materials needed to fuel the electric revolution.

Electric Royalties has a growing portfolio of 22 royalties. The company is focused predominantly on acquiring royalties on advanced-stage and operating projects to build a diversified portfolio located in jurisdictions with low geopolitical risk, which offers investors exposure to the clean energy transition through the underlying commodities required to rebuild the global infrastructure over the next several decades toward a decarbonized global economy.

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