A Hidden Gem in the EV Metal Space Hi everyone,
I’ve been following Electric Royalties Ltd. (TSXV: ELEC / OTCQB: ELECF) and wanted to share some interesting updates and insights. I’d love to hear your thoughts and questions on this.
Highlights:
- In May 2024, ELEC acquired the Ontario Lithium Projects (OLP) for $1.87M cash and 2.25M shares. This includes 18 royalty agreements and 32 lithium properties, with 31 currently optioned to third parties. They could receive up to $2.2M in option payments over the next 2.5 years.
- ELEC’s investments target EV and clean energy metals such as lithium, graphite, cobalt, copper, and nickel.
- Their portfolio has grown to 40 projects, including two past-producing mines, seven advanced-stage projects expected to enter production within the next four to five years, and 31 others in various exploration stages.
- We believe their portfolio has the potential to generate US$10M+ in royalties by 2028.
- 25 out of 40 royalties focus on lithium. Although lithium prices are down 65% YoY to US$13k/t, we are optimistic about lithium stocks as prices seem to have stabilized, and battery/EV manufacturers are seeking stable, long-term supply sources.
- ELEC's investee companies have multiple near-term catalysts. The average sector Enterprise Value/Royalty Investments is 1.98x compared to 1.16x for ELEC, indicating a 41% discount.
Discussion Points:
- What are your thoughts on the Ontario Lithium Projects acquisition? Do you think this will significantly impact ELEC’s portfolio?
- How do you feel about the current lithium market? Are we poised for a rebound?
- ELEC seems undervalued based on the sector’s average Enterprise Value/Royalty Investments ratio. Do you think this is an opportunity for investors?
- With multiple near-term catalysts expected from ELEC’s investee companies, which ones are you most excited about?
Looking forward to hearing your perspectives and any additional insights you might have!
Read the report here: https://www.researchfrc.com/content/reports/post/113/an-undervalued-royalty-portfolio-in-the-ev-metal-space