Lithium Royalty Corp.

Lithium Royalty Corp. is a junior lithium royalty and streaming company headquartered in Toronto, Canada, operating primarily in Canada and South America. Key assets include Finniss and Grota Do Cirilo. Portfolio composition includes 4 cash-flowing royalties, 3 development royalties, and 26 exploration royalties. The organization operates as a pure-play royalty company with a portfolio focused on assets expected to supply raw materials for global electrification and decarbonization. The business model provides passive cash flows with limited exposure to direct operating costs, capital expenditures, and environmental liabilities, which reduces exposure to cost inflation and operational risk at the project level. This structure is designed to yield more stable cash flows compared to underlying project operators. The portfolio is diversified across various asset stages, from production to early-stage exploration, and includes exposure to different chemical compounds and co-located valuable elements like cesium and tantalum. Management believes this differentiated exposure provides a distinct investment opportunity compared to precious or base metal royalty companies, capitalizing on a perceived disconnect between long-term consensus and spot pricing for the underlying commodity. The company shares in the upside from exploration success, asset life extensions, and operational expansions on properties covered by its interests without typically incurring the associated capital costs.

The overarching objective is to develop a diverse portfolio of royalty interests aligned with the electrification and decarbonization macroeconomic theme. Investment criteria target opportunities characterized by low operating costs, low capital intensity, high grade, long asset life, and favorable legislative and geopolitical environments. Strategic focus centers on leveraging an extensive industry network to generate a high proportion of internally-sourced deal flow, which is considered a key competitive advantage. The approach involves partnering with owners and operators post-investment to assist with further financing and development. Portfolio construction is deliberately managed to ensure economic and geographic diversification, avoiding material over-weighting to any single royalty interest. Royalty arrangements are structured to secure life-of-asset cash flows, with a preference for interests that run with the title to the property or include other protections such as mortgages. The entity seeks to invest in operators with strong execution track records, conservative balance sheets, and credible financing plans.

Board composition includes 7 directors, 4 of whom are independent. Governance is administered through 3 primary committees: Audit, Compensation, Nominating and Governance, and Technical. The Audit Committee is composed of 3 independent and financially literate members. Executive leadership is headed by a President and Chief Executive Officer with 13 years of experience in capital markets, including specialized commodity research and investment at firms such as Credit Suisse and Tide Point Capital. The Executive Chair, who has 25 years of experience in finance, is also the Co-Founder, President, and Chief Executive Officer of Waratah Capital Advisors Ltd. The Vice Chair and Executive Vice President, Technical, contributes over 30 years of experience in the mining industry and mining finance, having co-founded the corporate finance mining practice at GMP Securities L.P. An Investor Rights Agreement grants a major shareholder group the right to nominate a number of directors based on its ownership percentage, which currently allows for the nomination of a majority of the board.

The investment process formally integrates environmental, social, and governance factors as a key component of analysis and due diligence. As a signatory to the United Nation’s Principles for Responsible Investing, the organization evaluates specific criteria during its investment process, including the use of renewable power, water usage and recycling practices, surface disruption and remediation plans, and tailings management. The diligence process also assesses potential infrastructure benefits and positive economic impacts for remote and local communities. The business model is strategically aligned with global decarbonization, based on the view that battery technology and the electrification of transportation are critical to reducing emissions. The enterprise also considers factors such as regional development, job creation, and engagement with local communities through social programs as part of its origination, investment, and risk management framework. The company has established procedures for the receipt, retention, and treatment of complaints regarding accounting, internal controls, or auditing matters, ensuring confidential and anonymous submission channels for employees.

A significant ownership stake of approximately 55% of equity shares is controlled by the Waratah Group, which holds board nomination rights under an Investor Rights Agreement established in 2023 with the company and Riverstone. The company maintains a Services Agreement with Waratah Capital Advisors Ltd., dated March 2023, for the provision of certain executive officer services on a cost-recovery basis. A key structural component is LRC LP I, a limited partnership in which the company holds a 90% interest and Altius Royalty Corporation holds a 10% interest; this entity holds certain royalty assets. A Pre-IPO Reorganization was executed in March 2023, which involved divesting non-core assets, including portfolio securities, offtakes, and working interests, to pre-IPO shareholders. The company announced the partial sale of a royalty asset to Triple Flag Precious Metals Corp. in December 2024, with the transaction expected to be completed in March 2025. In March 2025, Rio Tinto completed its acquisition of Arcadium Lithium plc, an operator of properties on which the company holds royalties.