Lithium Royalty Corp. Acquires Royalty Interest on the Case Lake Lithium Project in Ontario

Lithium Royalty Corp. (TSX: LIRC) (“LRC”) announced today that it has entered into an agreement to acquire a 2.0% Gross Overriding Revenue (GOR) royalty on the Case Lake Lithium Project (“Case Lake Project”) in Ontario, Canada. The project is 100%-owned by Power Metals Corp. (TSX: PWM).

Ernie Ortiz, President and CEO of Lithium Royalty Corp. commented: “This transaction adds the 32nd royalty to the LRC portfolio, our third since our March 15th, 2023 IPO transaction, and our 13th royalty in Canada. We are pleased to partner with Power Metals Corp. at its prospective Case Lake Project in an established and supportive mining jurisdiction.”

Investment Highlights

  • Impressive Geology with Renewed Focus on Lithium: In 2022, Power Metals updated its prior cesium-centric approach and is now full speed ahead on its prospective lithium project at Case Lake. The property hosts 6 known pegmatite dykes across a 10 km long trend. The company has reported consistent high grade, coarse grained, spodumene mineralogy close to surface. Drill holes on the Main Dyke include 19 meters at 1.86% Li2O from 7 meters and 15 meters at 1.58% Li2O from 19 meters. Power Metals estimates that mineralization is open in all directions and at depth. The dykes appear to show continuity which will be explored in its 2023 drill campaign.
  • Funding to Support Large-Scale Work Program: Proceeds from the sale of the royalty will be targeted to an exploration and drilling program at Case Lake. Power Metals recently hired a Vice President of Exploration to lead a 15,000-meter drill campaign, which would represent the largest drill campaign in company history and more than double the amount of cumulative meters drilled on the property.
  • Experienced Strategic Partner: Winsome Resources (ASX: WR1) disclosed in March 2023 that it increased its stake in Power Metals to approximately 10% following its initial investment in December 2022. Winsome Managing Director Chris Evans also joined the board in December 2022. Winsome has an experienced and well-regarded team that is providing technical assistance for the upcoming exploration and drilling programs at Case Lake with the aim of establishing a maiden resource.
  • Favourable Infrastructure: The Case Lake property is located near established gold mining camps in the Abitibi Greenstone belt. The property has year-round access to road infrastructure, including the Translimit Road that runs through the Northeast corner of the property. Case Lake is approximately 80 km East of Cochrane in northeastern Ontario.
  • Supporting an Emerging Battery Hub: Ontario is emerging as a destination of choice for all levels of the battery industry. Recently, Volkswagen announced that it plans to invest CAD $7 billion in Ontario, an established and supportive mining jurisdiction that has recently positioned itself as a battery center of excellence with Volkswagen and PowerCo’s recent announcement to build their largest cell factory to-date in St. Thomas, Ontario. Volkswagen is planning a 90GWH battery plant, which LRC estimates could utilize approximately 70,000 tonnes of lithium chemicals. This follows announcements by Stellantis and LG Energy Solution of their plan to invest over CAD $5 billion in Windsor for a large-scale lithium-ion battery plant and Ford’s CAD $1.8 billion investment plan to transform its Oakville Assembly Complex into a Canadian hub of electric vehicle manufacturing.

Transaction Details

  • LRC to acquire a 2.0% GOR royalty on the Case Lake Project from Power Metals Corp. for CAD$1.5 million.
  • The royalty is a perpetual royalty with no deductions or buyback provisions and would be paid by Power Metals in US dollars.

Financing The Transaction

The consideration for the royalty acquisition has been funded by LRC entirely from cash on hand.

LRC Conference Participation

LRC is pleased to participate in the following investor conferences in May:

  • Citi Battery Metals Conference on May 9, 2023
  • Canaccord Genuity Global Metals and Mining Conference on May 11-12, 2023
  • National Bank Conference on May 25, 2023

About Lithium Royalty Corp.

LRC is a lithium-focused royalty company with a globally diversified portfolio of 32 high-grade revenue royalties on mineral properties around the world that supply and are expected to supply raw materials to support the electrification of transportation and decarbonization of the global economy. Our portfolio is focused on high-grade and low-cost mineral projects that are primarily located in Australia, Canada, South America, and the United States. LRC is a signatory to the Principles for Responsible Investment; the integration of ESG factors and sustainable mining are considerations in our investment analysis and royalty acquisitions.

Forward-Looking Information

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation, including statements with regard to the production expected from the royalty acquired from Power Metals Corp. Forward-looking information involves known and unknown risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, those described under “Risk Factors” in LRC’s Annual Information Form dated March 31, 2023, and in particular risks summarized under the “Risks Related to Mining Operations” heading. Forward-looking information is based on management’s beliefs and assumptions and on information currently available to management. These assumptions include, but are not limited to, the following: estimates of commodity prices, particularly lithium-related products; the accuracy of public statements and disclosures made by Power Metals Corp. as the owner, developer and operator of the Case Lake Project, including with respect to mineral resources, mineral reserves, construction timelines, production estimates and other related matters; the economic viability of the Case Lake Project; that the Case Lake Project will be developed, transitioned into production and successfully achieve production ramp up, in each case, in accordance with expectations; no adverse development relating to the Case Lake Project; and the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated, intended or implied. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, you are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained in this news release is provided as of the date of this news release, and we do not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.