Electric Royalties Ltd.

(the “Company”)

FORM 51-102F6V

FOR THE YEAR ENDED DECEMBER 31, 2022

STATEMENT OF EXECUTIVE COMPENSATION

The following information, dated as of June 29, 2023, is provided as required under Form 51-102F6V Statement of Executive Compensation (Venture Issuers) and is prepared as at and for the year ended December 31, 2022 (except as otherwise indicated).

This Statement of Executive Compensation should be read in conjunction with the Company’s information circular (the “Information Circular”) dated October 19, 2022 as publicly filed on SEDAR at www.sedar.com on October 27 2022. All monetary amounts herein are expressed in Canadian Dollars (“$”), unless stated otherwise.

NAMED EXECUTIVE OFFICERS

In this section "Named Executive Officer" (or " NEO ") means each of the following individuals:

a) the Chief Executive Officer (" CEO ");
b) the Chief Financial Officer (" CFO ");
c) in respect of the Company and its subsidiaries, the most highly compensated executive officer other than the CEO and CFO at the end of the most recently completed financial year whose total compensation was more than $150,000, as determined in accordance with subsection 1.3(5) of Form 51-102F6V for that financial year; and
d) each individual who would be an NEO under paragraph (c) but for the fact that the individual was neither an executive officer of the company, nor acting in a similar capacity, at December 31, 2022.

The NEOs of the Operating Entity as at December 31, 2022 are as follows:

Brendan Yurik – CEO of the Company; and
Luqman Khan – CFO of the Company

Electric Royalties Ltd./Form 51-102F6V/December 31, 2022

DIRECTOR AND NAMED EXECUTIVE OFFICER COMPENSATION, EXCLUDING COMPENSATION SECURITIES

The following table sets out a summary of compensation (excluding compensation securities) paid, awarded to or earned by the NEOs, or by Companies controlled by them, and any non-NEO directors of the Company for the periods noted therein:

The following table sets out a summary of compensation (excluding compensation securities) paid, awarded to or earned by the NEOs, or by Companies controlled by them, and any non-NEO directors of the Company for the periods noted therein:	The following table sets out a summary of compensation (excluding compensation securities) paid, awarded to or earned by the NEOs, or by Companies controlled by them, and any non-NEO directors of the Company for the periods noted therein:	The following table sets out a summary of compensation (excluding compensation securities) paid, awarded to or earned by the NEOs, or by Companies controlled by them, and any non-NEO directors of the Company for the periods noted therein:	The following table sets out a summary of compensation (excluding compensation securities) paid, awarded to or earned by the NEOs, or by Companies controlled by them, and any non-NEO directors of the Company for the periods noted therein:	The following table sets out a summary of compensation (excluding compensation securities) paid, awarded to or earned by the NEOs, or by Companies controlled by them, and any non-NEO directors of the Company for the periods noted therein:	The following table sets out a summary of compensation (excluding compensation securities) paid, awarded to or earned by the NEOs, or by Companies controlled by them, and any non-NEO directors of the Company for the periods noted therein:	The following table sets out a summary of compensation (excluding compensation securities) paid, awarded to or earned by the NEOs, or by Companies controlled by them, and any non-NEO directors of the Company for the periods noted therein:	The following table sets out a summary of compensation (excluding compensation securities) paid, awarded to or earned by the NEOs, or by Companies controlled by them, and any non-NEO directors of the Company for the periods noted therein:

		Table of compensation excluding compensation securities
Name and position	Year	Salary, consulting fee, retainer or commission ($)	Bonus ($)	Committee or meeting fees ($)	Value of perquisites ($)	Value of all other compensation ($)	Total compensation ($)
Brendan Yurik (1) CEO and Director	2022 2021	200,000 160,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	200,000 160,000
Luqman Khan (2) CFO	2022 2021	33,000 35,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	33,000 35,000
Marchand Snyman Chairman (3)	2022 2021	120,000 104,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	120,000 104,000
Craig Lindsay Director (3)	2022 2021	21,000 16,250	Nil Nil	9,000 9,000	Nil Nil	Nil Nil	30,000 25,250
Robert Schafer Director (3)	2022 2021	21,000 16,250	Nil Nil	9,000 9,000	Nil Nil	Nil Nil	30,000 25,250

Notes:

(1) Mr. Yurik was appointed as a CEO of the Company in July 2019. Effective January 1, 2020, Mr. Yurik entered into an employment agreement with the Company whereby he was entitled to receive a base salary of $150,000 per year. Effective October 16, 2021, the base salary for Mr. Yurik was increased to $200,000 per year.
(2) Mr. Khan was appointed as CFO of the Company in July 2019. Mr. Khan provides services through a private consulting firm. Services of Mr. Khan are not received on a full-time basis; instead, his services are received on an as-needed basis.
(3) The Company initiated directors’ fees effective July 1, 2020; accordingly, for the year 2020, the amounts of fees earned, as presented in the table above, represent fees for only half year. Effective October 16, 2021, the Company increased fees for its non-management directors.

Mr. Snyman, in his capacity as Chairman of the Board, receives an annual fee and no committee fees. Other non-management directors of the Company receive an annual retainer fee in their capacity as directors, and additional fees for each committee served. The following table summaries various fees paid to non-management directors for the periods noted therein:

Fee	From October 16, 2021 to December 31, 2022	From January 1, 2021 to October 15, 2021
Annual retainer – Chairman of the Board	$120,000 per year	$100,000 per year
Annual retainer – other non-management directors	$21,000 per year	$15,000 per year
Committee chair’s fee	$5,000 per year	$5,000 per year
Committee member’s fee	$2,000 per year	$2,000 per year

The following table sets out various Board Committees and their members:

Members		Board Committees
	Audit and Risk Committee	Compensation Committee	Nominating and Governance Committee.
Marchand Snyman	Member	Member	Chair
Craig Lindsay	Chair	Member	Member
Robert Schafer	Member	Chair	Member

Electric Royalties Ltd./Form 51-102F6V/December 31, 2022

STOCK OPTIONS AND OTHER COMPENSATION SECURITIES

During the financial year ended December 31, 2022, there were no compensation securities granted or issued to NEOs or non-NEO directors, for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries.

The following table lists the number of stock options held by NEOs or non-NEO directors at December 31, 2022:

Name	Number of securities underlying unexercised options (#)	Option exercise price ($)	Option expiration date
Brendan Yurik Total	800,000 0.29 July 15, 2025 800,000 0.42 October 14, 2026 1,600,000
Luqman Khan	300,000 0.29 July 15, 2025 300,000 0.42 October 14, 2026 600,000
Marchand Snyman Total	500,000 0.29 July 15, 2025 500,000 0.42 October 14, 2026 1,000,000
Craig Lindsay Total	300,000 0.29 July 15, 2025 300,000 0.42 October 14, 2026 600,000
Robert Schafer Total	150,000 0.29 July 15, 2025 300,000 0.42 October 14, 2026 450,000

During the financial year ended December 31, 2022, no compensation securities were exercised by NEOs or non-NEO directors.

At December 31, 2022, there were 7,197,500 outstanding stock options and 93,601,509 issued and outstanding common shares of the Company. The Company’s stock options typically vest in three equal tranches within one year of grant dates.

PENSION PLAN BENEFITS

The Company has no pension or deferred compensation plans for its directors, officers or employees.

TERMINATION AND CHANGE OF CONTROL BENEFITS

The Company has a change of control agreement in place between the Company and each of its NEOs. Under the terms of the change of control agreements, if a termination without cause or a resignation within 12 months following a change of control (as defined under the change of control agreement) NEOs will receive the following compensation:

The Company’s CEO, will receive a lump sum amount equal to two times the annual salary payable under the terms of his employment agreement.
Notwithstanding the terms of any stock option plan or agreement, all non-vested stock options held by the Company’s CEO shall vest and become exercisable until their normal expiry date.
The Company’s CFO will receive a lump sum amount of $50,000.
Mr. Snyman will receive a lump sum amount equal to his annual retainer fee, currently set at $120,000 per year.

Except as otherwise outlined herein and in accordance with the Employment Standards Act (British Columbia), there are no compensatory plan(s) or arrangement(s), with respect to any NEO resulting from the resignation, retirement or any other termination of employment of the officer’s employment or from a change of the NEO’s responsibilities following a change in control.

Electric Royalties Ltd./Form 51-102F6V/December 31, 2022

COMPENSATION COMMITTEE AND GOVERNANCE

In July 2020, the Compensation Committee of the Board was constituted to assist the Board in carrying out its responsibilities relating to executive and director compensation, including: reviewing and recommending director compensation, overseeing the Company's base compensation structure and equity-based compensation program, recommending compensation of the Company's officers and employees, evaluating performance of officers generally and in light of annual goals and objectives. The charter for the Compensation Committee is included in the Corporate Governance Policies and Procedures Governance Manual and is available for viewing from the Company’s website under Corporate Governance.

The current members of the Compensation Committee of the Company as stated above are Robert Schafer (Chair), Marchand Snyman and Craig Lindsay, all of whom are independent directors. The Compensation Committee assists the Board in carrying out its responsibilities relating to executive and director compensation.

The members of the Compensation Committee possess the skills and experience that enable the committee to make decisions on the suitability of the Company’s compensation policies and practices.

As a result of their education and experience, each member of the Compensation Committee has familiarity with, an understanding of, or experience in:

(a) reviewing compensation philosophy including base compensation structures & incentive programs;
(b) reviewing specific executive and director compensation;
(c) administering of share options and other equity based compensation plans and the determination of share option grants; and
(d) reviewing performance goals and the assessments of corporate officers.

All members of the Compensation Committee serve on other boards of publicly traded companies and have experience in the area of compensation and related issues. For relevant education and experience of the members of the Compensation Committee, see disclosure under " Election of Directors " in the Company’s Information Circular filed on SEDAR on October 27 2022.

The Compensation Committee has, among other things, the following duties, responsibilities and authority:

(a) to recommend to the Board the form and amount of compensation to be paid by the Company to directors for service on the Board and on its committees. The Compensation Committee shall review director compensation at least annually.
(b) to annually review the Company’s base compensation structure and the Company's incentive compensation, share option and other equity-based compensation programs and recommend changes in or additions to such structure and plans to the Board as needed.
(c) to recommend to the Board the annual base compensation of the Company's executive officers and senior managers (collectively the "Officers").
(d) to recommend to the Board annual corporate goals and objectives under any incentive compensation plan adopted by the Company for Officers, and recommend incentive compensation participation levels for Officers under any such incentive compensation plan. In determining the incentive component of compensation, the Compensation Committee will consider the Company’s performance and relative shareholder return, the values of similar incentives at comparable companies and the awards given in past years.
(e) to evaluate the performance of Officers generally and in light of annual corporate goals and objectives under any incentive compensation plan.
(f) to periodically review with the Chairman and CEO their assessments of corporate officers and senior managers and succession plans and make recommendations to the Board regarding appointment of officers and senior managers.
(g) to administer the Company's share option and other equity based compensation plans and determine the annual grants of share options and other equity based compensation.

Electric Royalties Ltd./Form 51-102F6V/December 31, 2022

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(h) to recommend to the Nominating and Governance Committee the qualifications and criteria for membership on the Compensation Committee.

Due to the small size of the Company and the current level of the Company's activities, the Compensation Committee is able to closely monitor and consider any risks which may be associated with the Company's compensation policies and practices. Risks, if any, may be identified and mitigated through regular meetings of the Board during which financial and other information of the Company are reviewed. No risks have been identified arising from the Company's compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.

Executive compensation is comprised of short-term compensation in the form of a base salary and long-term ownership through the Company's share option plan. This structure ensures that a significant portion of executive compensation (stock options) is both long-term and "at risk" and, accordingly, is directly linked to the achievement of business results and the creation of long-term shareholder value. As the benefits of such compensation, if any, are not realized by officers until a significant period of time has passed, the ability of officers to take inappropriate or excessive risks that are beneficial to their compensation at the expense of the Company and the shareholders is extremely limited. Furthermore, the short-term component of the executive compensation (base salary) represents a relatively small part of the total compensation. As a result, it is unlikely that an officer would take inappropriate or excessive risks at the expense of the Company or the shareholders that would be beneficial to their short-term compensation when their long-term compensation might be put at risk from their actions.

Report on Executive Compensation

This report on executive compensation has been authorized by the Compensation Committee. The Board assumes responsibility for reviewing and monitoring the long-range compensation strategy for the Company’s senior management, although the Compensation Committee guides it in this role. As part of its mandate, the Board determines the type and amount of compensation for the Company’s executive officers. In addition, the Board reviews the methodology utilized by the Company for setting salaries of employees throughout the organization.

The Company’s compensation policies and programs are designed to be competitive with similar companies and to recognize and reward executive performance consistent with the success of the Company’s business.

Philosophy and Objectives

The Company’s senior management compensation program is designed to ensure that the level and form of compensation achieves certain objectives, including:

(a) attracting and retaining talented, qualified and effective executives;
(b) motivating the short and long-term performance of these executives; and
(c) better aligning their interests with those of the Company’s Shareholders.

In compensating its senior management, the Company employs a combination of base salary, bonus compensation and equity participation through its share option plan and other equity participation plans.

The main objective of director compensation is to attract and retain directors with the relevant skills, knowledge and abilities to carry out the Board’s mandate.

Base Salary

In the Board’s view, paying base salaries that are competitive in the markets in which the Company operates is a first step to attracting and retaining talented, qualified and effective executives. The NEOs are paid a salary in order to ensure that the compensation package offered by the Company is in line with that offered by other companies in our industry, and as an immediate means of rewarding the NEO for efforts expended on behalf of the company.

The salary to be paid to a particular NEO is determined by gathering competitive salary information from a variety of sources, including surveys conducted by independent consultants and national and international publications, such as the Mercer Benchmark Database. Payment of a cash salary fits within the objective of the compensation program since it rewards each NEO for performance of his duties and responsibilities.

Electric Royalties Ltd./Form 51-102F6V/December 31, 2022

Bonus Compensation

The Board considers performance, shareholder benefits achieved, competitive factors and other matters in awarding bonuses, including if sufficient cash resources are available for the granting of bonuses.

All Other Fees

There were no other fees paid to any consultants or advisors relating to executive compensation.

Executive Compensation-Related Fees

No compensation was paid to any compensation consultants in respect of executive compensation studies for the Company’s two most recently completed financial years.

Equity Participation – Option Based Awards

The Company has a share option plan (the "Option Plan"). The Option Plan was established to provide incentive to qualified parties to increase their proprietary interest in the Company, encourage the alignment of interests with its shareholders, and foster their continued association with the Company.

Long term incentives are comprised of share options. The Compensation Committee is delegated the authority to grant share options. The Compensation Committee reviews the grants of share options to directors, management, employees and consultants. Share options are generally granted annually, and at other times of the year to individuals commencing employment with the Company. Share option exercise prices are set in accordance with policies of the TSX Venture Exchange and are based on the closing trading price prior to the date of grant.

The Company believes that encouraging its executives, employees and directors to become shareholders is the best way of aligning their interests with those of its Shareholders. Equity participation is accomplished through the Option Plan. Share options are granted taking into account a number of factors, including the amount and term of options previously granted, base salary and bonuses, and competitive factors. Share options vest on terms established by the Compensation Committee.

The Company’s long-term incentives are designed to foster and promote the long-term financial success of the Company by strengthening the ability of the Company to attract and retain highly competent employees, motivating performance through incentive compensation, promoting greater alignment of interests between employees and shareholders in creating long-term shareholder value, and enabling employees to participate in the long-term growth and financial success of the Company. Share options provide employees with the opportunity to participate in the growth of the Company’s share price as well as benefit from the favourable tax treatment applicable to this form of compensation.

For material terms of the Option Plan, see disclosure in the Company’s Information Circular filed at SEDAR on October 27 2022.

Equity Participation – Restricted Share Unit Plan and Deferred Share Unit Plan

The Company has a Restricted Share Unit Plan (the "RSU Plan") and a Deferred Share Unit Plan (the "DSU Plan").

The RSU Plan and DSU Plan were established to provide incentive to qualified parties to increase their proprietary interest in the Company, encourage the alignment of interests with its shareholders, and foster their continued association with the Company.

Long term incentives are comprised of share awards. The Compensation Committee is delegated the authority to grant share awards. The Compensation Committee reviews the grants of share awards to directors, officers, management, employees and consultants. Share awards are generally granted annually, and at other times of the year to individuals commencing employment with the Company.

The Company believes that encouraging its executives, employees and directors to become shareholders is the best way of aligning their interests with those of its Shareholders. Equity participation is accomplished through both the RSU Plan and DSU Plan. Share awards are granted taking into account a number of factors, including the amount and

Electric Royalties Ltd./Form 51-102F6V/December 31, 2022

term of options previously granted, base salary and bonuses, and competitive factors. Share awards vest on terms established by the Compensation Committee.

The Company’s long term incentives are designed to foster and promote the long-term financial success of the Company by strengthening the ability of the Company to attract and retain highly competent employees, motivating performance through incentive compensation, promoting greater alignment of interests between employees and shareholders in creating long-term shareholder value, and enabling employees to participate in the long-term growth and financial success of the Company. Share awards provide employees with the opportunity to participate in the growth of the Company’s share price as well as benefit from the favourable tax treatment applicable to this form of compensation.

General

The Compensation Committee considered the implications of the risks associated with the Company’s compensation policies and practices and concluded that, given the nature of the Company’s business and the role of the Compensation Committee in overseeing the Company’s executive compensation practices, the compensation policies and practices do not serve to encourage any non executive officer NEO or individual at a principal business unit or division to take inappropriate or excessive risks, and no risks were identified arising from the Company’s compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.

The Company has adopted a policy restricting its NEOs and directors from purchasing financial instruments including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the NEO or director. For the years ended December 31, 2022 and 2021, no NEO or director, directly or indirectly, employed a strategy to hedge or offset a decrease in market value of equity securities granted as compensation or held.

COMPENSATION ACTIONS, DECISIONS OR POLICIES MADE AFTER DECEMBER 31, 2022.

Given the evolving nature of the Corporation’s business, the Board continues to review and redesign the overall compensation plan for senior management so as to continue to address the objectives identified above.

There were no compensation actions, decisions or policies made after December 31, 2022 and before the date hereof.

Electric Royalties Ltd./Form 51-102F6V/December 31, 2022

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Electric Royalties Ltd. Remuneration Information 2023

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