Elemental Royalty signs option deals to sell projects

Executive Summary

• Elemental Royalty Corp. (via subsidiary Bronco Creek Exploration) executed four option agreements with Ivanhoe Electric Inc. to sell exploration rights for four porphyry copper projects in Arizona: Dragon's Tail, Copper King, Sleeping Beauty-Jasper Canyon, and Lomitas Negras.
• Ivanhoe Electric can earn 100% interest in the projects over an eight-year period by making execution payments, option payments, and incurring cumulative exploration expenditures.
• Upon earning in, Elemental Royalty retains a 2.5% Net Smelter Return (NSR) royalty on each project, with buydown rights and entitlement to annual preproduction and milestone payments.

Key Details

• Counterparties: Elemental Royalty Corp. (via wholly owned subsidiary Bronco Creek Exploration Inc.) and Ivanhoe Electric Inc. (NYSE American: IE; TSX: IE).
• Assets: Four projects in Arizona’s Laramide porphyry copper belt:
  1. Dragon's Tail
  2. Copper King
  3. Sleeping Beauty-Jasper Canyon
  4. Lomitas Negras
• Earn-In Structure (Per Project Basis): Ivanhoe Electric may earn 100% interest over an eight-year option period by providing:
  • Execution Payment: Totaling $240,000 (USD).
  • Option Payments: Totaling up to $2,325,000 (USD).
  • Exploration Expenditures: Cumulative expenditures of up to $10.8 million (USD) over the eight-year term.
• Royalty Terms:
  • Elemental retains a 2.5% NSR royalty on each applicable project upon earn-in.
  • Buydown Rights: Elemental has the right to buy back 0.5% of the royalty for a total of $4 million (USD) per project, payable over two designated tranches.
• Additional Cash Flow:
  • Annual preproduction payments.
  • Milestone payments upon announcement of an initial resource and upon completion of the earlier of a prefeasibility or feasibility study.
• Drop Rights: Ivanhoe Electric may drop an option at any time without further payment.
• Project Specifics:
  • Dragon's Tail: Located 8km north of Resolution deposit; targets concealed porphyry copper/skarn; permitted for initial reconnaissance drill test.
  • Copper King: Adjacent to Dragon's Tail; targets porphyry copper/skarn; previous drilling intercepted high-temperature alteration and mineralization at depth.
  • Sleeping Beauty-Jasper Canyon: Targets fault-displaced zones in the Globe-Miami district; potential for supergene enrichment due to fault displacement.
  • Lomitas Negras: Located 20km SE of San Manuel-Kalamazoo; targets dismembered/tilted porphyry system beneath cover; previous drilling intercepted sericite-altered Precambrian granite.

Notable Quotes

• "Elemental is excited to see Ivanhoe Electric advance these highly prospective properties. The agreement with Ivanhoe Electric serves to reinforce our belief in the royalty generation model through exploration driven growth, progressing new potential royalties in the Laramide belt in Arizona with a Tier 1 operator." — David Cole, Chief Executive Officer of Elemental Royalty.