Lithium Royalty Corp. (TSX: LIRC) (“LRC”) announced today that it has entered into an agreement to acquire a 3.0% Gross Overriding Revenue (GOR) royalty on the Das Neves Lithium Project (“Das Neves Project”) and nearby claims in Minas Gerais, Brazil. The project is 100%-owned by Atlas Lithium (NASDAQ: ATLX).

Ernie Ortiz, President and CEO of Lithium Royalty Corp. commented: “This transaction adds our 31st royalty to the LRC portfolio and is our second since our March 15th, 2023 IPO transaction. On the back of Sigma Lithium entering production (LRC holds a 1% royalty on all Sigma claims and production), LRC is pleased to expand its presence in Brazil through our partnership with Atlas Lithium. The Das Neves project exhibits high grade coarse grain spodumene ore that should lend itself to simple processing. Brazil is quickly developing into an important and environmentally friendly lithium jurisdiction, and we are excited to support Atlas Lithium on its accelerated path to production.

Investment Highlights

  • Das Neves Underpins Mineral Resource Potential: Atlas Lithium is actively exploring the Das Neves property as part of its 40,000-metre drill campaign. At Das Neves, the company has outlined an important discovery at Anitta which has a strike length of at least 1.1 km while being open along strike and at depth. In February, the company estimated widths at Anitta of approximately 20 meters and commented in April that its best hole had widths over 25 meters close to surface. At Anitta, the company reported an intersection of 4.4% lithium oxide which is one of the highest grades reported at a spodumene deposit in Minas Gerais’ Lithium Valley.
  • Funding to Support Accelerated Timetable: Atlas Lithium anticipates releasing its maiden Mineral Resource in mid-2023 to be followed up by a Preliminary Economic Assessment (PEA) approximately two months following the resource report. The resource will support plans that are already in motion to mine and build/operate a 100%-owned plant to produce 150,000 tonnes per annum (tpa) of spodumene concentrate.
  • Strong Financial Backing: Atlas Lithium has signed a non-binding Memorandum of Understanding with Mitsui & Co., Ltd. for a funding arrangement of up to US$65 million, to support the capital expenditure of the 150,000 tpa plant.
  • Focused and Experienced Management Team: The company has formed a well-regarded team with several geologists with expertise in the Brazilian spodumene industry. Furthermore, the Founder and CEO of the company owns a substantial portion of the company’s equity, supporting aligned incentives for all stakeholders. In addition, his educational pedigree speaks to the results-oriented approach for the company and management. The same domestic team that led an Atlas subsidiary to receive its operational permit successfully and expeditiously for a quartzite project will oversee the permitting for the Das Neves project.
  • Favourable ESG Characteristics: Atlas Lithium will have access to 100% renewable hydro power for electricity. Furthermore, metallurgical testing from SGS Canada Inc. suggests that the company was able to produce commercial-grade spodumene concentrate using standard Dense Media Separation (“DMS”), a gravity-based approach which limits the use of harmful chemicals or flotation.
  • Exploration Potential: While the royalty covers the core Das Neves property, the royalty area covers over 104 km2, presenting considerable optionality especially given the proximity of these claims to Sigma Lithium’s nearby Grota do Cirilo project.

Transaction Details

  • LRC to acquire a 3.0% GOR royalty from Atlas Lithium for US$20 million on the key Das Neves claims and other associated claims totaling ~ 104 km2.
  • LRC also acquired an option for a 3.0% GOR royalty on other non-associated and non-contiguous claims for a period of 12 months for an exercise price of US$5 million. The optioned claims are in Minas Gerais, Brazil to the west of the Das Neves and Sigma Lithium claims.
  • The royalty is a perpetual royalty with no deductions or buyback provisions and is to be paid to LRC in US Dollars.
  • At prevailing market prices for spodumene concentrate, estimated annual royalty cash flows to LRC from Atlas’ 150,000tpa production plan would approximate USD$20 million.

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 31 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.

About Atlas Lithium Corporation

Atlas Lithium Corporation (NASDAQ: ATLX) is focused on advancing and developing its 100%-owned hard-rock lithium projects which consist of 64 mineral rights spread over approximately 75,040 acres (304 km2) located primarily in the Lithium Valley area of the state of Minas Gerais in Brazil. In total, Atlas Lithium has 100% ownership of mineral rights for almost all battery metals including lithium (304 km2), nickel (222 km2), rare earths (122 km2), titanium (89 km2), and graphite (56 km2), in addition to mining concessions for gold, diamonds, and sand. The Company also owns approximately 45% of Apollo Resources Corp. (private company; iron) and approximately 28% of Jupiter Gold Corp. (OTCQB: JUPGF; gold and quartzite).

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 Atlas Lithium Corporation. 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 Atlas Lithium Corporation as the owner, developer and operator of any lithium project based on the mining rights underlying the royalty acquired from Atlas Lithium (an “Atlas Lithium Project”), including with respect to mineral resources, mineral reserves, construction timelines, production estimates and other related matters; the economic viability of any Atlas Lithium Project; that any Atlas Lithium 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 any Atlas Lithium 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.

Contact Information for Inquiries: Jonida Zaganjori Investor Relations (647) 792-1100 jonida@lithiumroyaltycorp.com

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