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Elemental expects 40% increase in successive quarterly revenue from flagship Karlawinda mine royalty


VancouverElemental Royalties Corp. (TSXV: ELE) (OTCQX: ELEMF) (“Elemental” or the “Company”) today announced that it expects an increase of approximately 40% in successive quarterly revenues from production in Karlawinda Gold Mine in Australia (“Karlawinda”), Elemental’s flagship royalty asset.

Earnings from Karlawinda, one of the six elemental royalties on production assets, are estimated at $1.1 million for the quarter ended December 31, 2021, up about 40% from $0.8 million in the quarter ended September 30, 2021, which was Karlawinda’s first quarter of commercial production and sales.

Karlawinda’s Elemental Anticipated Earnings Based on Recently Leaked Information December 2021 quarterly report of Capricorn Metals Ltd. (“Capricorn”), owner and operator of the mine. Capricorn announced steady-state operations at Karlawinda after launching commercial production during the quarter ended September 30, 2021.

Karlawinda gold production for the quarter ended December 31, 2021 was 30,316 ounces, up approximately 25% from 24,329 ounces in the prior quarter. Gold sales totaled 30,835 ounces, up approximately 40% from 21,964 ounces in the prior quarter. Karlawinda had an additional 1,020 ounces of gold at the end of December 31, 2021 trimester. Elemental has an uncapped 2% net smelter return royalty on gold sales from Karlawinda.

Elemental expects to disclose fourth quarter and year-end business update in February December 31, 2021. These results will include revenue from its Karlawinda royalty and Elemental’s other production royalties.

Other Highlights of Karlawinda

Low cash costs1 of $607 per ounce and all in sustaining costs1 of $756 per ounce

Ore stockpiles doubled to 38,000 ounces in the December quarter and mining volumes are expected to increase during the March 2022 quarter with a third mining fleet now in place

The commissioning of two additional carbon leaching (“CIL”) tanks completed in the December quarter is expected to further positively impact recoveries, which are already in line with expectations at 91.3%


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On Elementary royalties

Elemental is a gold-focused royalty company listed on the TSX Venture Exchange (the “TSX-V”) in Canada and offers investors lower-risk precious metals exposure through a portfolio of nine high-quality royalties. This allows investors to benefit from continued royalty income, future exploration potential and low operating costs. Elemental’s experienced team seeks to earn royalties in advanced precious metals projects, managed by established operators, from its pipeline of identified opportunities.

Non-IFRS Measures

1 Elemental has included certain performance measures in this press release that do not have standardized meanings prescribed by International Financial Reporting Standards (“IFRS”). The Company’s royalty income is translated on an attributable gold equivalent ounce basis by dividing the royalty income received during a period by the average gold price for the same respective period. Presentation of this non-IFRS measure is intended to provide supplemental information and should not be considered in isolation or as a substitute for performance measures prepared in accordance with IFRS. Other companies may calculate these non-IFRS measures differently. The production forecasts were derived using information available in the public domain as of the date hereof, which included advice and estimates prepared and published by the management of the operators of the mining operations in which Elemental has an interest. Production forecasts are sensitive to the performance and operating status of the underlying mines. None of the information has been independently verified by Elemental and may be subject to uncertainty. There is no guarantee that this information is complete or accurate. Elemental used an exchange rate to convert Australian dollars (A$) to we dollars of $1.00 = CA$1.38.

Information about Karlawinda

This press release contains information relating to Karlawinda. This information comes from publicly disclosed information by Capricorn, the owner of Karlawinda. The Company has not independently verified, and assumes no responsibility for, the accuracy or completeness of any information about Karlawinda contained in such materials disclosed by Capricorn.

Caution Regarding Forward-Looking Statements

This press release contains certain “forward-looking statements” and certain “forward-looking information” as defined by applicable Canadian securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as “may”, “will”, “should”, “expect”, “intend”, “estimate”, ‘anticipates’, ‘believes’, ‘continues’, ‘plans’ or similar terminology (including negative and grammatical variations).

Forward-looking statements and information include, but are not limited to, statements regarding: successive quarterly revenue increases from production at Karlawinda; the Company’s business update schedule for the fourth quarter and fiscal year ended December 31, 2021; the increase in mining volumes at Karlawinda and the timing of such increase; the impact of CIL tanks on recoveries at Karlawinda; the Company’s recommendation to shareholders regarding golden royalty unsolicited conditional stock purchase offer; the availability of new royalties and other opportunities and their timing; the availability of alternative strategic options for the Company and whether such options represent greater value for Elemental shareholders; whether a takeover or change of control transaction involving the Company will take place and/or will be carried out and as to its timing. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions which, although considered reasonable by management, are inherently subject to significant commercial, economic and competitive uncertainties and contingencies, including assumptions regarding the continued mining operations at Karlawinda and the results of such operations and as to the mining operations at Karlawinda operating within the disclosed parameters. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond Elemental’s ability to control or predict, which may cause the actual results, performance or achievements of Elemental are materially different from those expressed or implied. so, and are developed based on assumptions regarding such risks, uncertainties and other factors set forth herein, including, but not limited to: the requirement of regulatory approvals and third party consents; the impact of general business and economic conditions; lack of control over mining operations from which Elemental will receive royalties, including risks relating to international operations, government relations and environmental regulation; the risks inherent in the exploration and development of mineral properties; uncertainties related to the interpretation of exploration data; the possibility of delays in exploration or development activities; the geology, grade and continuity of mineral deposits; the impact of the COVID-19 pandemic; the possibility that future exploration, development or mining results will not meet Elemental’s expectations; accidents, equipment failures, title issues, labor disputes or other unforeseen difficulties or interruptions to operations; fluctuating metal prices; unforeseen costs and expenses; uncertainties relating to the availability and costs of necessary financing in the future; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, fluctuations in commodity prices; currency fluctuations; regulatory restrictions, including environmental regulatory restrictions; potential liability; the impact of competition; the loss of key employees and other related risks and uncertainties. Elemental undertakes no obligation to update any forward-looking information except as required by applicable law. This forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are cautioned not to place undue reliance on any forward-looking statements or information.