Mr. Brendan Yurik reports

ELECTRIC ROYALTIES ANNOUNCES AGREEMENT TO INCREASE CONVERTIBLE CREDIT FACILITY FROM C$5 MILLION TO C$10 MILLION ON FAVOURABLE TERMS

Further to Electric Royalties Ltd.'s news releases on Oct. 19, 2023, and April 20, 2023, it has signed an amended and restated convertible loan agreement (the A&R agreement) with Gleason & Sons LLC (the lender) dated Feb. 16, 2024, to increase the company's existing convertible credit facility from $5-million to $10-million, subject to certain conditions set out in the A&R agreement. Gleason & Sons is controlled by Stefan Gleason, a significant shareholder and board member of Electric Royalties.

Interest will accrue on the outstanding principal amount of the credit facility at a rate per annum equal to the lesser of (a) the secured overnight financing rate, as published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) from time to time, plus 7 per cent per annum, and (b) 12.5 per cent per annum. Such interest shall be calculated daily and compounded annually, payment of which may be deferred until maturity.

The maturity date of the A&R agreement is Jan. 12, 2028, extended two years from the prior loan agreement. Under the terms of the A&R agreement, no origination or draw fees are assessed. Furthermore, the company has the right to repay all or any portion of the indebtedness, without incurring any prepayment fee, upon at least 15 days prior written notice to the lender.

Prior to the maturity date, on at least 10 days prior written notice to the company and subject to all required TSX Venture Exchange approvals having been obtained, the lender has the right to convert all or any portion of the outstanding principal amount of the credit facility and accrued and unpaid interest into the company's common shares, on the terms and conditions set out in the A&R agreement. Any outstanding principal amount with respect to a drawdown under the credit facility will be converted at a conversion price equal to the greater of: (i) 50 cents; (ii) a 100-per-cent premium above the 30-day volume-weighted average trading price of the common shares of the company on the TSX Venture Exchange at the time of such drawdown; and (iii) the minimum price acceptable to the TSX Venture Exchange, per common share of the company, subject to adjustment as provided in the convertible note evidencing such drawdown. Any accrued and unpaid interest may be converted at conversion price equal to the market price (as defined under the TSX Venture Exchange's Policy 1.1) at the time of settlement.

The credit facility will be secured by: (i) a portion of the company's existing royalty portfolio (1.5-per-cent gross revenue royalty on the Penouta mine in Spain, 0.5-per-cent gross revenue royalty on the Kenbridge nickel project in Canada, gross revenue royalties on the Authier lithium project in Canada, 1.5-per-cent gross revenue royalty on the Bissett Creek graphite project in Canada, 0.5-per-cent gross revenue royalty on the Zonia copper project in the United States, 2.5-per-cent net smelter royalty on the Graphmada mine in Madagascar and 2-per-cent gross metal royalty on the Battery Hill manganese project in Canada); and (ii) collateral assignments of the receivables and proceeds of each secured royalty.

The A&R agreement constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The A&R agreement is exempt from the formal valuation requirements of MI 61-101 by virtue of the exemption contained in Section 5.5(b) as the company's common shares are not listed on a specified market. The company is seeking disinterested shareholder approval of the A&R agreement at the company's special meeting of shareholders to be held on March 19, 2024, in accordance with MI 61-101.

The aggregate drawdowns under the credit facility are limited to $5-million until the MI 61-101 approval is obtained, along with disinterested shareholder affirmation of Mr. Gleason's status as a control person. As of the date of the press release, $4.45-million has been advanced under the credit facility.

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.

We seek Safe Harbor.