Mr. Brendan Yurik reports

ELECTRIC ROYALTIES SIGNS ASSET PURCHASE AGREEMENT TO ACQUIRE LITHIUM ROYALTY AND OPTION PORTFOLIO

Further to the amended and restated letter of intent described in Electric Royalties Ltd.'s March 6, 2024, news release, the company has entered into an asset purchase agreement with 1544230 Ontario Inc., MK Exploration Services Inc. and Gravel Ridge Resources Ltd., 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.

Thirty-one 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 $2.2-million) are made over the next 2-1/2 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 reoption, sell or relinquish the released properties.

Transaction terms

The company will issue to the vendors an aggregate of 2.25 million common shares in the capital of the company, make a cash payment (the sum of $1,875,000 less the (i) $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 Jan. 1, 2024; and (iii) 50 per cent of any proceeds received by the vendors for the sale of certain property interests described in the LOI on closing of the transaction.

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 $2.5-million under its $10-million amended and restated convertible credit facility with Gleason & Sons LLC dated Feb. 16, 2024, for working capital and to fund the cash payment of the transaction and associated transaction costs.

Loans drawn under the credit facility bear interest at a floating rate (United States secured overnight financing rate as published by the New York Federal Reserve plus 7 per cent), with a maximum interest rate of 12.5 per cent, with interest payments capitalized into the principal amount and due at the maturity date of Jan. 12, 2028. 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. 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 is a related party transaction within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. The credit facility is exempt from the valuation requirement 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 received disinterested shareholder approval of the credit facility at the company's special meeting of shareholders held on March 19, 2024, in accordance with MI 61-101.

The drawdown is subject to completion of documentation, the approval of the TSX Venture Exchange and other customary closing conditions.

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.

Upon completion of the transaction, Electric Royalties has a growing portfolio of 40 royalties across the world and 32 lithium properties in Ontario, Canada. 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 via the underlying commodities required to rebuild the global infrastructure over the next several decades toward a decarbonized global economy.

We seek Safe Harbor.