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Cloudbreak Discovery announces new focus on energy royalties

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Cloudbreak Discovery LON:CDL, the London listed royalty company and natural resources project generator, has announced details of a restructuring plan that is designed to refocus the business with the aim of enhancing shareholder value and shortening execution timelines. This will include a focus on energy royalty acquisitions in the United States and acquisitions of minority interests in international energy projects.

The mineral exploration segment of the business will be transferred to, and developed and operated through, a wholly owned Canadian subsidiary of Cloudbreak, to be named Cloudbreak Exploration Inc. The strategic realignment is intended to streamline ongoing initiatives, efficiently deploy capital and focus efforts in line with management’s expertise.

Cloudbreak said it has received its first royalty payment from the Masten Unit Energy project, after entering an agreement with G2 Energy Corp in May 2022. Drilling programmes have commenced at Silver Switchback and La Blache, with a preliminary economic assessment report on La Blache anticipated in Q2 2023.

Soil sample surveys have been conducted on the Rupert and South Timmins projects. The drilling programme at Klondike has concluded and the permitting process is underway for drilling at Stateline.

Kyler Hardy, President and CEO of Cloudbreak, said yesterday that the proposed restructuring of Cloudbreak will provide a transformational opportunity for the company, allowing him to allocate capital and expertise in the most effective and efficient manner. “Through this, we will aim to drive shareholder value, targeting greater returns on our investments,” he explained. “We are delighted to be receiving payments from the Masten Unit energy royalty, which, coupled with our strong stream of potential royalty acquisitions in the pipeline, gives us confidence that Cloudbreak can achieve its goal of becoming cashflow positive in the near-term.”

Why the corporate restructuring?

Since listing on the London Stock Exchange in 2021, Cloudbreak has been successfully implementing its project generator and royalty acquisition model in the natural resources sectors. In order to streamline its ongoing initiatives, Cloudbreak has elected to reorganise its corporate structure. The restructuring will facilitate the enhanced allocation of capital and the strategic focus of efforts in line with management expertise. It is intended that the restructuring will be completed by late November 2022.

Moving forward, it is intended that Cloudbreak will be focused on energy royalty acquisitions aimed at bringing near-term cashflow to the company. Its primary operating jurisdiction will be the United States, where Cloudbreak Discovery currently holds the Masten Unit and Butte Strawn assets. Cloudbreak is activelysourcing and reviewing additional royalty opportunities.

In addition to its active royalty acquisition programme, Cloudbreak Discovery will continue to acquire minority interests and implement its project generation model in international energy projects such as in Namibia, where Cloudbreak has partnered with several experienced technical and management teams.

The future for the mineral exploration business

The mineral exploration and project generation segment of the business will be developed and operated through a wholly owned subsidiary of Cloudbreak, to be named Cloudbreak Exploration. This independently operated subsidiary will continue advancing its diverse portfolio of mineral exploration projects, including the ongoing core strategies of bauxite project acquisition in West Africa, as well as the lithium brine strategy focused on the United States.

Cloudbreak Exploration will be led by Rory Kutluoglu as Chief Executive Officer, Cam Bartsch as Vice President of Exploration, David Robinson as Chief Financial Officer and Kyler Hardy as Executive Chairman. The Board will be augmented with additional independent directors as required from time to time. Both Kutluoglu and Bartsch will resign from Cloudbreak to focus full time on Cloudbreak Exploration.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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