TIDMTRR
RNS Number : 9975X
Trident Royalties PLC.
11 January 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN
ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR") AS IN
FORCE IN THE UNITED KINGDOM PURSUANT TO THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT,
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
11 January 2022
Trident Royalties Plc
("Trident" or the "Company")
Completion of Acquisition of Cash-flowing Gold Portfolio
Trident Royalties Plc (AIM:TRR), the growth-focused mining
royalty and streaming company, is pleased to announce that further
to the announcement of 13 December 2021 and following the admission
of the 20,471,151 Consideration Shares announced earlier today, its
acquisition of a portfolio of producing gold offtake streams (the
"Portfolio") from Orion Resource Partners ("Orion") for US$69.75
million (the "Acquisition") has now completed.
Acquisition Highlights
-- Highly accretive transaction providing immediate, significant
cash flow: Trident estimates revenue from the Portfolio of
approximately US$13.3 million in 2022 as ramp-up and expansions
occur at the Blyvoor and Los Filos gold mines respectively. This is
expected to increase to US$14.3 million per year between 2023-2026,
settling thereafter to expected average annual revenue of US$6.3
million from 2027-2035. [1]
-- Materially increases scale and asset diversification: The
Portfolio comprises offtakes covering seven producing gold mines
operated in six countries. Trident's entire portfolio now
encompasses a total of 20 assets, of which nine are delivering cash
flow.
-- First major portfolio transaction delivers on strategy:
Trident's largest deal to date represents a step-change transaction
and re-balances the portfolio towards precious metals and cash
generative assets, complementing Trident's existing base metals,
battery metals and iron ore exposure. This enhanced cash flow
profile is expected to support an appropriate dividend policy in
due course.
-- Acquired offtakes historically provide a 1.33% [2] net
smelter royalty ("NSR") equivalent return: The acquired offtakes
provide 'royalty-like' exposure with returns driven by gold price,
volatility, production profile, and exploration success. Between
February 2020 and June 2021, under Orion's ownership, the portfolio
generated a return equivalent to a 1.7% [3] NSR on revenue from the
underlying projects.
-- US$40 million debt facility significantly reduces cost of
capital: Trident has drawn a US$40 million secured debt facility
with Macquarie Bank Limited to part-fund the Acquisition and to
retire the previous US$10 million Tribeca debt facility,
significantly reducing borrowing costs.
-- Maintains strong balance sheet to execute on deal pipeline:
In addition to pending Q4 royalty receipts and ongoing revenue from
Trident's portfolio, following completion, the Company is very well
capitalised to continue to execute on pipeline transactions .
Adam Davidson, Chief Executive Officer of Trident commented:
"The completion of this transaction marks the biggest milestone
achievement to date for Trident, increasing our number of producing
assets by 350%. When coupled with our existing assets, the addition
of a portfolio of offtakes over seven producing mines located in
six countries materially increases Trident's scale and
diversification. Now, not only do we provide diversified exposure
to lithium, copper, gold and iron ore, but we do so with a
portfolio underpinned by assets which provide investors with
visibility on sustainable, well diversified cash flows far into the
future. With this, we can now look at the possibility of an
appropriate dividend policy in due course which will seek to
provide regular returns on investment to our shareholders.
"The completion of this transaction marks a new day for Trident,
propelling us to the next stage of accretive and highly cash
generative growth. I hope everyone shares in our excitement as we
look forward to continued growth during 2022."
$40 million Loan Facility and issue of warrants
Further to the announcement of 17 December 2021, Trident has
drawn the $40 million secured loan facility from Macquarie Bank
Limited ("Macquarie") to part-fund the Acquisition and to retire
the previous US$10 million Tribeca debt facility. The Tribeca
facility has now been repaid in full and the security granted to
Tribeca released so that the security can be put in place in favour
of Macquarie. In accordance with the previously announced terms,
the Company has issued warrants to Macquarie to subscribe for
14,840,517 ordinary shares in Trident exercisable at GBP0.51 per
share (the "Warrants"). The Warrants are exercisable immediately
and will expire 36 months from the date of issue.
** Ends **
Contact details:
Trident Royalties Plc www.tridentroyalties.com
Adam Davidson +1 (757) 208-5171
Grant Thornton (Nominated Adviser) www.grantthornton.co.uk
Colin Aaronson / Samantha Harrison / +44 020 7383 5100
Samuel Littler
--------------------------------------------------------
Tamesis Partners LLP (Financial Adviser www.tamesispartners.com
& Broker) +44 203 882 2868
Richard Greenfield
--------------------------------------------------------
St Brides Partners Ltd (Financial PR www.stbridespartners.co.uk
& IR) +44 20 7236 1177
Susie Geliher / Catherine Leftley
--------------------------------------------------------
Forward-looking Statements
This news release contains forward--looking information. The
statements are based on reasonable assumptions and expectations of
management and Trident provides no assurance that actual events
will meet management's expectations. In certain cases,
forward--looking information may be identified by such terms as
"anticipates", "believes", "could", "estimates", "expects", "may",
"shall", "will", or "would". Although Trident believes the
expectations expressed in such forward--looking statements are
based on reasonable assumptions, such statements are not guarantees
of future performance and actual results or developments may differ
materially from those projected. Mining exploration and development
is an inherently risky business. In addition, factors that could
cause actual events to differ materially from the forward-looking
information stated herein include any factors which affect
decisions to pursue mineral exploration on the relevant property
and the ultimate exercise of option rights, which may include
changes in market conditions, changes in metal prices, general
economic and political conditions, environmental risks, and
community and non-governmental actions. Such factors will also
affect whether Trident will ultimately receive the benefits
anticipated pursuant to relevant agreements. This list is not
exhaustive of the factors that may affect any of the
forward--looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on
forward-looking information.
Third Party Information
As a royalty and streaming company, Trident often has limited,
if any, access to non-public scientific and technical information
in respect of the properties underlying its portfolio of royalties
and investments, or such information is subject to confidentiality
provisions. As such, in preparing this announcement, the Company
often largely relies upon information provided by or the public
disclosures of the owners and operators of the properties
underlying its portfolio of royalties, as available at the date of
this announcement. No content of any third-party website nor the
content of any website accessible from hyperlinks on the Company's
website (or any other website) is incorporated into, or forms part
of, this Announcement.
This announcement is not for publication or distribution,
directly or indirectly, in or into the United States of America.
This announcement is not an offer of securities for sale into the
United States. The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold in the United States,
except pursuant to an applicable exemption from registration. No
public offering of securities is being made in the United
States.
[1] Illustrative revenues from offtake contacts are calculated
using a royalty equivalent rate of 1.33% (10-yr weighted average),
a gold price of US$1,800/oz and an internal Company estimate of the
production profile.
[2] NSR equivalent calculated by calculating the difference
between the closing daily spot gold price and the minimum closing
gold price across the QP period and dividing the margin by the
daily spot gold price over the last 10 or 15 years, as
applicable.
[3] Actual average NSR margin calculated as realized margin per
month divided by average gold price during that month.
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END
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