Ann: Strategic Investment by Lithium Royalty Corp, page-40

After a spectacular day at Milford Sound, it’s time to go over today’s announcements.

1. raising $8.1mil without dilution. This is a big tick from me. If we wanted to raise this much cash at the before open price of 4.8c it would have taken 169mil shares to do so. At the SPP price of 4c it would have taken over 200mil shares. So am very happy to avoid the dilution.

2. The 2.5% royalty of gross revenue from Finniss. Looking at the DFS, $501mil revenue was expected based on current reserves over the 3.5 year mine life. 2.5% of $501mil is $12.5mil, less the $8.1mil equals $4.4mil profit for LRC to make over 3.5 years. That’s not exactly the biggest payday...and given we have yet to receive environmental approval or have secured finance, it’s quite a risk LRC are taking on us. This gives me confidence that LRC have done their research and like what they see: they are confident we will be mining, confident more tonnage is on the way, and confident they will see quite a good return on investment (perhaps they are privy to a bit more info then we have seen ). Their $8.1mil will help us transition to mining and grow our resource base, so I am happy to give them $2.5mil out of every $100mil we make if it helps us get there.

I like how our offtake partner Yahua and potentially 2nd offtake partner (Ruifu), who are our number 1 and 2 shareholders respectively, are Chinese domestic competitors, and now we have a strategic investment from a North American co which has two brine projects in Nevada. A potential threat? Things could get really interesting if LRC take a direct investment in the co Also noteworthy is that one of the directors of LRC is James Brown of Altura (AJM) and Sayona (SYA).

3. SPP of $2mil. I am looking at this as management given us a final bite of the cherry before things kick into gear. With all the newsflow to come as stated in today’s announcement, 4 cents should really be in the rear view mirror once all of these events begin to happen. And given the $8.1mil from LRC, $2mil from the SPP and say $1.5mil current cash at bank (plus a potential $4.6mil from Hartleys if a miracle happens in the next 3 weeks), Cxo should have enough money into 2020, and by then tranche payment from Yahua and hopefully other monies from a second offtake partner/finance agreement/fines offtake will be available too, so I don’t see another CR coming for a long time. 4 cents is a bargain, and I will be participating.

4. Binding offtake along with Customer Finance Support for REMAINING lithium concentrate. Sounds like an offtake for our remaining 180,000t of uncontracted spod concentrate isn’t too far away. Does customer finance support mean prepayment? Or something else? If prepayment then, all things being equal to the Yahua deal I would guess 180,000t should get a prepayment facility of US$10mil to US$15mil. Add that to Yahua’s US$20mil and that would give us AUS$43mil to AUS$50mil, leaving us needing about an AUS$25-$30mil debt facility (or other form of finance) in order to meet our finance needs. Although...

5. Fine Lithium offtake agreements. I like how it’s plural . These could prove to be a great source of revenue for Cxo and could perhaps reduce/offset any debt facility.

6. Non-binding term sheets already in place for Project Financing. Things are starting to happen

7. A massive and exciting drilling program not too far away.

IMO

GLTAH