TIDMTRR
RNS Number : 1870Y
Trident Royalties PLC.
03 May 2023
3 May 2023
Trident Royalties Plc
("Trident" or the "Company")
Q1 2023 Activities Update
Trident Royalties Plc (AIM: TRR, OTCQX: TDTRF), the diversified
mining royalty company, is pleased to provide an update on its
activities during the quarter ended 31 March 2023.
HIGHLIGHTS
Q1 royalty receipts & cash position
-- Record quarterly receipts of US$3.6 million from exposure to
gold, copper, and iron ore. A year-on-year increase of 63% over Q1
2022.
-- The gold offtakes portfolio saw particularly strong
performance with a 48% increase over Q1 2022 when compared on a
like-for-like basis (accounting for the disposal of the Mercedes
mine from the Premier Offtake, on 14 April 2022(1) ), while the
Koolyanobbing iron ore royalty delivered its highest quarterly
payment to-date.
-- Trident holds cash of c. US$37 million as at 28 April 2023,
providing a strong platform for further acquisitions. This cash
balance includes proceeds from the gold offtakes but excludes Q1
royalty receipts.
Royalty / Stream Q1 2023 (US$M) Q1 2022 (US$M) % Change
Koolyanobbing iron
ore royalty* 0.86 0.16 438%
-------------------------- -------------------------- --------------------
Mimbula copper royalty 0.75 0.50 50%
-------------------------- -------------------------- --------------------
Lincoln gold royalty 0.15 - -
-------------------------- -------------------------- --------------------
Gold offtakes portfolio 1.88 1.58 19%
-------------------------- -------------------------- --------------------
Total 3.64 2.23 63%
-------------------------- -------------------------- --------------------
*Reserve Bank of Australia for 31 March 2023 (0.6712) and 31
March 2022 (0.7482)
Adam Davidson, Chief Executive Officer of Trident commented:
"It has been a positive quarter for the existing portfolio, with
significant updates at the Thacker Pass Lithium Project, the
Mimbula Copper Project continuing to ramp production, and the gold
offtake portfolio delivering strong growth and cashflows.
Our pipeline of prospective transactions is attractive.
Following the highly profitable disposal of several gold royalties
in February, coupled with a further reduction of our cost of debt,
we have put our balance sheet in an excellent position to take
advantage of current market conditions. We look forward to
providing updates as the year progresses."
Portfolio Update:
Gold Royalties Sale Transaction (2)
-- Following a competitive sales process, Trident sold its
pre-production gold royalties over Rebecca, Spring Hill, and three
other projects acquired as a portfolio from Talga Group to
Franco-Nevada Corporation in exchange for cash proceeds of up to
US$15.55 million.
o The Royalties were acquired by Trident for approximately
US$6.25 million, representing a return on invested capital of over
140% in approximately two years.
o US$14.3 million of the consideration has been received, with
US$1.25 million to be paid upon first production from the Rebecca
Gold Project.
-- Reflecting the value unlocked by the transaction, Macquarie
agreed to restructure Trident's existing US$40 million debt
facility, to include a 2% reduction in coupon (reducing debt
service costs by up to US$800,000 per year), deferral of scheduled
quarterly payments, and a one-year extension of the loan term.
Thacker Pass Lithium Project (3,4)
-- Lithium Americas Corp., operator of Thacker Pass, announced
the commencement of construction following the receipt of notice to
proceed from the US Bureau of Land Management.
-- General Motors is investing US$650 million toward project
development and has entered into a 10-year offtake agreement to
purchase Phase 1 production to support production of up to 1
million electric vehicles per year.
-- Thacker Pass is targeting 80,000 tonnes per annum ("tpa") of
battery-quality lithium carbonate production capacity in two phases
of 40,000 tpa. Phase 1 production is expected to commence in the
second half of 2026.
Koolyanobbing Iron Ore Project (5)
-- Trident's quarterly royalty payment saw a marginal decrease
in production tonnage from the royalty zone, offset by materially
higher iron ore prices and realisations associated with the recent
shift to production of a higher proportion of lump product from
Koolyanobbing.
Offtakes Gold Portfolio
-- Gold deliveries decreased by 16% during the quarter, from
74,085 gold ounces in Q4 to 62,335 in Q1. This was largely
anticipated as production tends to spike in Q4 as operators seek to
maximize calendar year production. Year-over-year deliveries
increased by 31% over Q1 2022 when compared on a like-for-like
basis, while the gold spot price also increased by c. US$166 per
ounce over the course of Q1, positively impacting margins.
-- Allied Gold Corp Limited ("Allied"), operator of the Bonikro
gold mine over which Trident holds an uncapped gold offtake,
announced its public listing plans.(9) Allied highlighted drilling
focused on extending the mine life to over 10 years, well in excess
of Trident's initial estimate.
Sonora Lithium Project (6,7,8)
-- In its 2022 Annual Results, Ganfeng Lithium, operator of the
Sonora Lithium Project, confirmed that the project is under
construction while noting that planned Stage 2 production increased
by 43% to 50,000 tpa of lithium hydroxide.(6)
-- After the period end, the Alberta Court of Appeal overturned,
on appeal, a judgment which had summarily dismissed an action
brought by Bacanora Minerals Ltd. ("Bacanora") against the Estate
of Ian Colin Orr-Ewing ("Estate"). The lower Court of Queen's Bench
of Alberta had held that the dispute by Bacanora was time barred;
on appeal, this was overturned for technical reasons. Now the
matter will be resolved on the merits, which, if determined in the
Estate's favour, will definitively affirm the validity of the
royalty. Bacanora must now argue the merits of its case and
persuade the Alberta court that the royalty is invalid as a result
of it being created without consideration or by way of fraudulent
or other misrepresentation.(7)
-- The conditions requiring Trident to provide funding in
respect of the 50% Trident joint venture company Sonoroy Holdings
Ltd ("Sonoroy"), to facilitate completion of the acquisition of the
Sonora Gross Revenue Royalty, by Sonoroy remain at Trident's
discretion. If Trident elects to exit the joint venture, the
initial loan made by Trident to Sonoroy of US$2.5 million is due
six months of such election.(8) At the present time, Trident has no
intention of exiting the joint venture.
References
1: Source: Trident Royalties announcement dated 14 April 2022
(
https://polaris.brighterir.com/public/trident/news/rns/story/rmzg65w
)
2: Source: Trident Royalties announcement dated 23 February 2023
(
https://polaris.brighterir.com/public/trident/news/rns/story/rye8j8w
)
3: Source: Trident Royalties announcement dated 8 February 2023
(
https://polaris.brighterir.com/public/trident/news/rns/story/xzj2y7w
)
4: Source: Trident Royalties announcement dated 3 March 2023
(
https://polaris.brighterir.com/public/trident/news/rns/story/r773q1r
)
5. Source: Mineral Resources announcement dated 26 April 2023
(
https://clients3.weblink.com.au/clients/mineralresources/v2/headline.aspx?headlineid=61146475
)
6. Source: Ganfeng Lithium announcement dated 29 March 2023
( http://www.ganfenglithium.com/ir_detail_en/id/2598.html )
7. Source: Trident Royalties announcement dated 28 April 2023
(
https://polaris.brighterir.com/public/trident/news/rns/story/xel1zjr
)
8. Source: Trident Royalties announcement dated 27 January 2022
(
https://polaris.brighterir.com/public/trident/news/rns/story/x2kjzlx
)
9. Source: Allied Gold Corp, 27 April 2023
( https://www.newsfilecorp.com/release/163921 )
Competent Person's Statement
The technical information contained in this disclosure has been
read and approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM, MIMMM,
FGS), who is a qualified geologist and acts as the Competent Person
under the AIM Rules - Note for Mining and Oil & Gas Companies.
Mr O'Reilly is a Principal Consultant working for Mining Analyst
Consulting Ltd which has been retained by Trident to provide
technical support.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
** Ends **
Contact details:
Trident Royalties Plc www.tridentroyalties.com
Adam Davidson / Richard Hughes +1 (757) 208-5171 / +44 7967
589997
Grant Thornton (Nominated Adviser) www.grantthornton.co.uk
Colin Aaronson / Samantha Harrison +44 020 7383 5100
/ Samuel Littler
------------------------------
Stifel Nicolaus Europe Limited (Joint www.stifelinstitutional.com
Broker) +44 20 7710 7600
Callum Stewart / Ashton Clanfield
------------------------------
Liberum Capital Limited (Joint Broker) www.liberum.com
Scott Mathieson / Cara Murphy +44 20 3100 2184
------------------------------
Tamesis Partners LLP (Joint Broker) www.tamesispartners.com
Richard Greenfield +44 20 3882 2868
------------------------------
St Brides Partners Ltd (Financial www.stbridespartners.co.uk
PR & IR) +44 20 7236 1177
Susie Geliher / Catherine Leftley
------------------------------
About Trident
Trident is a growth-focused diversified mining royalty and
streaming company, providing investors with exposure to a mix of
base battery, precious, and bulk metals.
Key highlights of Trident's strategy include:
-- Building upon a royalty and streaming portfolio which broadly
mirrors the commodity exposure of the global mining sector
(excluding fossil fuels) with a bias towards production or
near-production assets, differentiating Trident from the
majority of peers which are exclusively, or heavily weighted,
to precious metals;
-- Acquiring royalties and streams in resource-friendly jurisdictions
worldwide, while most competitors have portfolios focused
on North and South America;
-- Targeting attractive small-to-mid size transactions which
are often ignored in a sector dominated by large players;
-- Active deal-sourcing which, in addition to writing new royalties
and streams, will focus on the acquisition of assets held
by natural sellers such as: closed-end funds, prospect generators,
junior and mid-tier miners holding royalties as non-core
assets, and counterparties seeking to monetise packages of
royalties and streams which are otherwise undervalued by
the market;
-- Maintaining a low-overhead model which is capable of supporting
a larger scale business without a commensurate increase in
operating costs; and
-- Leveraging the experience of management, the board of directors,
and Trident's adviser team, all of whom have deep industry
connections and strong transactional experience across multiple
commodities and jurisdictions.
The acquisition and aggregation of individual royalties and
streams is expected to deliver strong returns for shareholders as
assets are acquired on terms reflective of single asset risk
compared with the lower risk profile of a diversified, larger scale
portfolio. Further value is expected to be delivered by the
introduction of conservative levels of leverage through debt. Once
scale has been achieved, strong cash generation is expected to
support an attractive dividend policy, providing investors with a
desirable mix of inflation protection, growth and income.
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.
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END
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