TIDMTRR
RNS Number : 5705B
Trident Royalties PLC
05 June 2023
5 June 2023
Trident Royalties Plc
("Trident" or the "Company")
2022 Full Year Results
and Notice of Annual General Meeting
Trident Royalties Plc (AIM: TRR, OTCQX: TDTRF), the diversified
mining royalty company, today announces its full year results for
the year ended 31 December 2022. The Annual Report and Accounts for
the year ended 31 December 2022 and Notice of the 2023 Annual
General Meeting will be made available to download from the
Company's website at www.tridentroyalties.com later today.
These two documents, together with a Form of Proxy, will be
mailed to those shareholders who have elected to receive paper
copies on 7 June 2023.
The Company's AGM is to be held at 30 Finsbury Square, London,
EC2A 1AG on 29 June 2023 at 11:00 a.m.
The Company further announces that with effect from the
beginning of the Annual General Meeting on 29 June 2023 Paul Smith
has requested to step down as Chairman of the Board, given his
other business interests. He is being retained as a special advisor
to the Company. Al Gourley will assume the role as Chair of the
Board. The Board expresses its thanks to Paul for his significant
contribution as Chairman and is pleased that the Company will
continue to benefit from his considerable industry experience.
Chairman's Statement
Trident shares saw an increase of 37% during 2022. This increase
compared to declines of 32% and 44% for the AIM and the All-Share
Mining Index respectively. The outperformance reflected 3 factors;
the inherent resilience of the royalty model, the evolution of
Trident's portfolio; and further improvements in analyst coverage
and our shareholder register.
2022 was light in terms of transactions, which partly reflected
the economic backdrop and pressure on commodity prices. Many
operators chose to postpone capital raising, in anticipation of
improved conditions. We commenced the year with the completion of
the gold offtake portfolio acquisition. This transaction materially
increased the cash generation from within our portfolio, which in
turn enables us to internally fund a larger proportion of future
growth.
The sale of our Lake Rebecca royalty to Franco Nevada
highlighted several key themes which underpin the reasons for
owning Trident Royalties' shares. Firstly, Trident's ability to
access world class assets. Secondly, our willingness to lock-in
value and recycle capital when we feel this to be in shareholders'
best interests. The transaction was at a value which was not
reflected in our share price prior to sale. Thirdly, the cash
proceeds from the disposal allowed us to renegotiate our debt
facility and deliver a significant reduction in our cost of
debt.
2022, also saw major improvements in the quality of our register
and trading liquidity, which was principally due to management's
active engagement with investors.
The Board recognises the importance of cash returns to
shareholders. We ourselves are significant shareholders. Many of
our major assets are not yet in production and our priority remains
to invest in new royalties whilst further reducing our cost of
capital. As we add more cash generating assets and our existing
portfolio matures, we expect to pay a dividend based on a
sustainable percentage of free cash flow.
Trident seeks to invest in royalties or streams where the asset
owner runs safe, efficient, cost-effective mines and projects and
demonstrates a commitment to the responsible management of their
ESG impacts.
Looking forward, our priorities for 2023 are to further reduce
our cost of capital (as this directly improves our competitiveness)
and deploy capital for value. We are well resourced based on our
existing cash on hand and debt facility. We continue to see base
and battery metals as most prospective in terms of demand for
royalty finance.
2023 is looking more prospective in terms of potential new
transactions. The widespread postponement of capital raising by
mining companies during 2022 has created a backlog of project
funding. The combination of higher interest rates and continued
depressed equity prices for mining companies are making royalties
an increasingly attractive funding alternative.
With our strong management team and balance sheet, we are well
positioned to deploy capital and continue to create shareholder
value.
Chief Executive Officer's Statement
2022 has seen Trident's business grow significantly in terms of
both revenue, as well as portfolio scale and diversification. The
investment strategy that we implemented at the inception of Trident
is yielding results and providing a solid foundation for
considerable growth over the medium and long term. Importantly, the
royalty model has proven to be a resilient investment approach, as
highlighted in performance through 2022, a year in which a
confluence of inflationary pressures had a significant impact on
mine operators' capital and operating costs. As shareholders will
be aware, as royalty holders, Trident is largely insulated from
these capex overruns and operating margin squeezes, with our
portfolio benefitting from exposure to top line revenue.
This strategy delivered for us in 2022 and is expected to
continue as we expand and diversify our portfolio, offering
shareholders superior returns through commodity cycles. Royalty
receipts and offtake revenue for the year increased nearly ninefold
to US$13.6 million, reflecting the significant asset-level progress
of several of our royalties, in addition to the expansion of our
portfolio with new, cash generative and value accretive
transactions.
The completion of the acquisition of a portfolio of gold
offtakes presented a strong start to 2022. It was our largest
transaction to date and increased the number of producing assets in
our portfolio significantly. This was a defining moment for
Trident, which resulted in an immediate and significant boost to
our revenue for the year.
This transactional momentum continued in late-January, as
Trident entered into an agreement to acquire, subject to certain
conditions and at its election, an indirect 1.5% gross revenue
royalty over the Sonora Lithium Project in Mexico. Like the Thacker
Pass Lithium Project, over which Trident acquired a gross revenue
royalty in 2021, Sonora is a globally significant lithium asset. In
the year, Ganfeng announced an expanded planned production profile,
with Stage 2 production increasing by 43% to 50,000 tonnes per
annum of lithium hydroxide, while noting that early construction
works are underway.
Trident's transactional creativity was further evidenced in
December with the agreement to sell its pre-production, exploration
stage gold royalties over Rebecca, Spring Hill and three other
projects to Franco-Nevada in exchange for cash proceeds of up to
US$15.55 million. This portfolio of royalties was acquired by
Trident for approximately US$6.5 million, representing a return on
invested capital of over 140% in approximately two years. Not only
was this transaction a clear demonstration of the potential returns
from acquiring royalties over quality assets, but it also provided
Trident with a significant increase in available capital for future
acquisitions at a time of current weakness in traditional debt and
equity markets. This disciplined investment approach will continue
to define Trident's strategy as it targets accretive
opportunities.
The sale of the pre-production gold royalties also precipitated
the restructuring of the Group's existing debt facility with
Macquarie Bank Limited on more favourable terms, reducing the
coupon by up to 2%, deferring principal repayments, and extending
the term by one year. This restructuring illustrates the
longer-term downward direction of the Group's cost of capital, with
the cost of debt nearly halving from the previous year.
Since the period end, Lithium Americas, the operator of the
Thacker Pass Lithium Project, announced its intention to jointly
develop the project alongside General Motors, as part of a landmark
investment and offtake partnership valued at US$650 million. This
is the largest-ever investment by an automaker to produce battery
raw materials and is clear evidence of the automotive industry's
desire to mitigate concerns relating to critical minerals supply
chains over the long-term.
Lithium Americas subsequently announced the positive
confirmation of the Record of Decision appeals process which, with
all final key Nevada state-level environmental permits received,
has allowed the project to move forward in earnest; reporting in
early March that construction has commenced ahead of targeted first
production in H2 2026.
The recent acquisition of the La Preciosa royalty, provides
exposure to an exciting asset, with expected near term cash flows,
along with diversifying the portfolio further with the addition of
silver.
The numerous asset-level and transactional developments that we
have reported during the year have had a marked impact on our value
proposition and revenue generation potential. In addition, the
board has also assessed additional corporate activities through
which to grow the Group. One such undertaking was the decision to
cross-trade Trident's shares on the OTCQX post period end. We
believe this listing will provide enhanced investor benefits,
including easier trading access for investors located in the US,
and greater liquidity due to a broader geographic pool of potential
investors.
In 2022, we have also been working to evaluate and develop our
approach to ESG in order to lay strong foundations for future
reporting, increase transparency and performance.
I would like to take this opportunity to thank our shareholders
and reiterate my genuine enthusiasm and confidence in both our
portfolio and wider investment strategy. 2022 proved to be highly
significant for Trident, and I believe this will continue to build
throughout 2023 and over the coming years.
Operational Review
Producing Royalties
KOOLYANOBBING IRON ORE PROJECT
Location: Australia
Operator: Mineral Resources Ltd (ASX: MIN)
Commodity: Iron ore
Mine Type: Open pit, Direct Ship Ore
Stage: Production
Royalty: 1.5% Free on Board
Total Reserves & Resources:
9.3Mt @ 59.9% Fe Reserves (Deception Pit)
19.5Mt @59.9% Fe Resources (Deception Pit)
40.8Mt @ 58.2% Fe Reserves (Yilgarn)
108.6Mt @ 56.8% Fe Resources (Yilgarn)
Trident owns a 1.5% Free on Board revenue royalty covering part
of the producing Koolyanobbing Iron Ore Operation in Western
Australia. The royalty is over tenements which covers part of the
Deception Pit and all of the Claw Pit at Koolyanobbing.
The royalty provides Trident with attractive exposure to a
significant and growing iron ore asset, operated by an innovative
and renowned operator with a strong balance sheet in a worldclass
jurisdiction. As a royalty over an operating asset, the royalty
provides access to cashflow which will assist in bringing scale and
diversification to Trident's growing royalty portfolio.
During the year Trident received US$1.55m (2021: US$0.08m) in
royalty income. The significant increase was due to the operator,
Mineral Resources, recommencing activity at the Deception Pit and
beginning mining operations at the Claw deposit.
MIMBULA COPPER PROJECT
Location: Zambia
Operator: Moxico Resources Plc (private)
Commodity: Copper
Mine Type: Open Pit
Stage: Production
Royalty: Gross Revenue Royalty 1.25%
Total Reserves and Resources
93.7Mt @ 0.97% Total Copper ("TCu") Resources
67.5Mt @ 0.92% TCu Reserves
Trident owns a 1.25% GRR over all copper produced from the
Mimbula Mine in Zambia, which is operated by Moxico Resources PLC.
The GRR will decrease to 0.3% upon US$5.0m being paid on the
royalty, which is expected to occur in Q3 2023, with a subsequent
decrease to 0.2% once the royalty has been paid on 575,000 tonnes
of copper. In addition, the GRR is subject to a Minimum Payment
Schedule in which the higher of the minimum amount, or the GRR
amount, are due; specifically:
-- Minimum payments of US$375,000 per quarter in 2021;
-- Minimum payments of US$500,000 per quarter in 2022; and
-- Minimum payments of US$750,000 in each of the first two quarters of 2023.
During the year Trident received US$2.0m (2021: US$1.5m) of
payments from Mimbula in line with the minimum payment
schedule.
KWALE MINERAL SANDS PROJECT
Location: Kenya
Operator: Base Resources
Commodity: Mineral Sands
Mine Type: Open Pit
Stage: Production
Royalty: 0.25% Free on Board
Total Reserves and Resources
40Mt @ 2.7% Heavy Mineral ("HM") Reserves
205Mt @ 1.7% HM Resources
Trident acquired a 0.25% Free On Board royalty over the Kwale
mineral sands project with an effective acquisition date of 1
October 2022. Kwale commenced production in 2013, with operator
Base Resources extending the scheduled mine life to the end of
2024. Though a non-material purchase consideration and limited
remaining mine life on the current schedule, Trident considers
there to be potential for further mine life extensions.
During the year Trident received US$0.06m of payments from
Kwale, relating to the Q4 period post-acquisition of the
royalty.
LINCOLN GOLD PROJECT
Location: California, USA
Operator: Seduli Holdings Pty (private)
Commodity: Gold
Mine Type: Underground
Stage: Production
Royalty: 1.5% net smelter return royalty (over down dip
extension zone)
Total Resource: 958Kt @ 9.29g/t Au for 286koz gold
In 2021, Trident acquired a 1.5% NSR gold royalty covering the
entire Lincoln gold project in California. The royalty includes a
5-mile area of interest which spans the majority of the exploration
area. The Lincoln Gold Mine is the only permitted project and
processing plant on the Californian Mother Lode, providing it with
significant leverage to aggressively explore and acquire additional
tenure for further upside.
The royalty is fully secured by the project assets and reduces
to a 0.75% NSR in perpetuity once the royalty has paid US$3m. The
operator, Seduli Holdings Pty, completed its first gold pour in
March 2022, however the ramp up did not occur as planned and the
operator suspended operations to focus on resource expansion.
Trident agreed to revise to provide various waivers in relation to
its security position in exchange for the implementation of a
minimum payment schedule, which will replace the revenue expected
from deferred Stage 1 production.
During the year Trident received US$0.35m of payments from
Lincoln under the minimum payment schedule, relating to the Q3 and
Q4 periods.
Royalties Advancing towards Production
THACKER PASS LITHIUM PROJECT
Location: USA
Operator: Lithium Americas Corp.
Commodity: Lithium
Mine Type: Open pit
Stage: Advanced
Royalty: 60% interest in a 1.75% gross revenue royalty (1.05%
net to Trident), assuming the buyback is completed, as detailed
below
Total Reserves: 3.1 million tonnes of Lithium Carbonate
Equivalent ("LCE") at 3,283ppm Li
In 2021 Trident acquired a 60% interest in a GRR over the
Thacker Pass Lithium Project for US$28.0 million, with the
remaining 40% retained by Orion Resource Partners.
The project is the largest known lithium reserve and resource in
North America and currently contains CIM compliant Mineral Reserves
of 3.7Mt LCE, the largest lithium reserve in the United States,
with a mine life of 40 years based on Reserves. There is
significant additional resource upside to potentially provide
further reserve conversion to increase the mine life or support a
production expansion leading to increased royalty revenues.
Post year-end, in February 2023, General Motors Co. (NYSE: GM)
and Lithium Americas announced their intention to jointly invest to
develop Thacker Pass. Under this agreement, General Motors will
make a US$650 million equity investment in Lithium Americas.
General Motors has also entered into a 10-year offtake agreement,
to purchase the Phase 1 production from Thacker Pass. The price
within the offtake agreement will be based on an agreed upon price
formula linked to prevailing market prices.
The key terms of the royalty are as follows:
-- A gross revenue royalty on all mineral products generated at
the mine of 8% (4.8% attributable to Trident) until US$22.0m is
paid, after which the GRR drops to 4%.
-- The GRR may be reduced to 1.75% (1.05% attributable to
Trident) at any time by the operator making a one-time payment of
US$22.0m (US$13.2m attributable to Trident).
-- Trident notes that the PFS assumes the US$22.0m buyback is
completed within the first year of operation.
SONORA LITHIUM PROJECT
Location: Lithium
Operator: Ganfeng Lithium
Commodity: Lithium
Mine Type: Open pit
Stage: Advanced
Royalty: 50% interest in a 3.0% indirect gross revenue royalty
(1.5% net to Trident)
Total Reserves: 244Mt @ 3,480ppm - 4,515kt LCE
A deposit of US$2.5 million has been paid by Sonoroy Holdings
Ltd ("Sonoroy"), a joint venture company in which Trident holds a
50% interest, with the balance to be paid upon completion of the
royalty acquisition transaction, pending several issues including a
favourable resolution of a dispute between the seller of the
royalty and Bacanora. If the dispute is found against the vendor of
the royalty, Trident's funding is fully repayable by Sonoroy.
The project currently has Measured & Indicated Resources
exceeding 5Mt LCE, and an additional 3.8Mt LCE Inferred Resource.
Per the Feasibility Study published by Bacanora Lithium in 2018,
the mine is expected to produce 17,500 tpa LCE in Stage 1 and
35,000 tpa at Stage 2. Subsequently, the project was acquired by
Ganfeng Lithium which, in its 2022 Interim Report, noted a larger
planned production profile relative to the Feasibility Study,
increasing Stage 1 to 20,000 tpa of lithium hydroxide, with Stage 2
production increasing by 43% to 50,000 tpa of lithium hydroxide.
Construction is underway. The project is also expected to generate
potassium sulphate (potash), a high value fertiliser, as a
by-product which would be covered by the royalty.
PUKAQAQA COPPER PROJECT
Location: Peru
Operator: Nexa Resources SA (TSX:NEXA)
Commodity: Copper, Molybdenum
Mine Type: Open pit
Stage: Advanced
Royalty (sliding scale NSR): Three royalties
Total Resources: 349.1Mt @ 0.40% Cu
Trident holds a portfolio of three royalties over the Pukaqaqa
Copper Project, an advanced stage copper/molybdenum asset located
in the Huancavelica region in Peru. The Pukaqaqa Project has NI
43-101 compliant Measured and Indicated Resources of 309m tonnes at
0.41% Cu (approximately 1.26m tonnes of contained copper), with an
additional Inferred Resource of 40.1m tonnes at 0.34% Cu (for
136,340 tonnes contained copper and related molybdenum
credits).
The project is held by NYSE- and TSX-listed Nexa Resources, an
established South America-focused mid-tier producer with six
operating base metals mines and three operating smelters in Peru
and Brazil. The most recent technical report contemplates an
open-pit mining operation to feed a 30,000 tonne-per-day processing
plant to produce copper and molybdenum concentrates over an initial
19-year mine life.
LA PRECIOSA SILVER PROJECT
Location: Mexico
Operator: Avino Silver & Gold mines Ltd (TSX:ASM)
Commodity: Silver
Mine Type: Underground
Stage: Advanced
Royalty: 1.25% NSR and 2.00% gross value return royalty
Total Resources: 137Moz Ag Equivalent - Indicated 17.4Mt @ 202
g/t AgEq & Inferred 4.4Mt @ 170 g/t AgEq
Trident holds a 1.25% NSR Royalty over the area covering the
Gloria and Abundancia veins and a 2.00% GVR Royalty over the
surrounding area. Additionally, Trident is entitled to a milestone
payment of US$8.75 million from Avino within 12 months of first
production. The milestone payment may be paid up to 50% in shares
of Avino.
The project is held by TSX-listed Avino Silver & Gold Mines
Ltd, an established silver producer with other assets in Peru.
Avino intends to begin processing stockpiled material from La
Preciosa in late H2 2023 at its mill, before commencing production
from fresh ore in 2024. Avino intends to ramp up annual silver
production from La Preciosa to circa 3 million ounces by 2027,
increasing to 3.5 million ounces in 2028. With a current total
Mineral Resource estimate of 120Moz of silver and 224,000 ounces of
gold, La Preciosa is expected to be a long-life asset with further
expansion potential.
Royalties Sold During the Year
In December 2022, Trident announced the sale of a portfolio of
pre-production, exploration stage gold royalties to Franco-Nevada
Corporation for cash proceeds of up to US$15.8 million. The
transaction crystallised a return on invested capital of 143%,
providing additional capital for redeployment into new
transactions.
One early-stage royalty was removed from the portfolio prior to
closing and the transactions proceeds were adjusted to be up to
US$15.6 million. The sale of this gold portfolio was completed in
February 2023.
The royalties sold to Franco-Nevada Corporation were as
follows:
Lake Rebecca Gold Royalty
Location: Western Australia
Operator: Ramelius Resources Ltd (ASX: RMS)
Commodity: Gold
Mine Type: Open pit
Stage: Pre-development
Royalty: 1.5% net smelter return royalty
Total Resource: 29.1Mt @ 1.2g/t Au for 1.1Moz
Spring Hill Gold Royalty
Location: Australian Northern Territory
Operator: PC Gold Pty (private)
Commodity: Gold
Mine Type: Open pit
Stage: Pre-development
Royalty: fixed rate A$13.30 per oz (where the gold price is >
A$1,500/oz)
Total Resource: 8.8Mt @ 1.26g/t Au for 355koz.
Warrawoona Gold Royalty
Location: Western Australia
Operator: Calidus Resources Ltd (ASX: CAI)
Commodity: Gold
Mine Type: Open pit
Stage: Pre-development
Royalty: 1.5% net smelter return royalty (over down dip
extension zone)
Total Resource: 13.6Mt @ 1.2g/t Au for 519koz
Western Australian Gold Royalties
Project: Talga Talga and Bullfinch
Location: Western Australia
Stage: Pre-development
Operator: various
Royalty (NSR): various
Financial Review
During 2022, Trident made significant progress in a number of
areas. The newly acquired gold offtake portfolio was integrated
effectively and provided a solid cash flow base for the business.
The innovative transaction to acquire an option over a royalty on
the Sonora lithium project provides exposure to a second high
quality lithium asset, complimenting the existing portfolio. The
sale of the Australian gold royalty portfolio delivered an over
140% return in approximately 2 years, allowing capital to be
recycled into new opportunities.
From a capital structuring perspective 2022 has been a
transformational year, with the new US$40.0m debt facility with
Macquarie Bank drawn down in January to facilitate the gold offtake
portfolio acquisition. In conjunction with the Australian gold
royalty sale announced in December, the facility was subsequently
extended by a year to December 2025 and the interest coupon was
reduced by 2%. Trident ended the year with a diverse portfolio of
royalty assets, combined with a strong cash position to pursue
future growth opportunities.
Royalty and Offtake Transactions
The Group acquired the following royalties and offtake contracts
during the year:
-- A portfolio of 7 producing gold offtake contracts from Orion
Resource Partners for US$69.75m;
-- Gold offtake contract over 50% of the production from the
Sugar Zone mine in Canada for US$3.75m;
-- The payment of a US$2.5m cash deposit (treated as an interest
free loan - in trade and other receivables) to secure the right to
acquire an indirect 1.5% Gross Revenue Royalty over the Sonora
Lithium Project in Mexico, through a joint venture company Sonoroy
Holdings Limited in which Trident has a 50% shareholding; and
-- Following the acquisition of the gold offtake portfolio, the
Mercedes mine (which was included in one of the offtake contracts)
was disposed of by the operator. This triggered a fee payable to
Trident of US$3.7m and the Mercedes mine was removed from its
obligations under the contract.
In addition, on 9 December 2022 the Group entered into a
conditional agreement to sell several pre-production exploration
stage gold royalties over assets in Australia for cash proceeds of
up to US$15.8 million. A non-material royalty was removed from the
transaction consideration reducing the previously announced total
consideration from US$15.8 million to US$15.6 million and the
transaction completed on 23 February 2023 .
Statement of Financial Position
Royalty intangible assets consist of US$116.58m cost, less
US$4.86m amortisation and US$6.75m relating to the Australian gold
royalties which were reclassified as assets held for sale,
resulting in a total net book value of US$104.98m representing the
Thacker Pass, Pukaqaqa, Koolyanobbing and Lincoln projects together
with the acquisitions described.
Royalty financial instruments were valued at US$7.65m
representing the fair value of the Mimbula copper project in
Zambia. The royalty financial instrument has been designated as
fair value through profit and loss with the fair value gains and
losses recognised in 'revaluation of royalty financial assets' line
item in the income statement. The value at the beginning of the
financial year was US$7.46m, US$2.00m royalty income was received
in the year and a fair value increase of US$2.19m was recognised in
the income statement.
Trade and other receivables totalling US$12.05m (2021: US$1.21m)
includes US$6.41m receivable from Macquarie bank relating to gold
offtake trades which settled after the year end, US$0.99m in
respect of 4(th) quarter 2022 royalty income due from Koolyanobbing
and Mimbula receivable after the year-end. Other receivables also
include US$2.50m in respect of the Sonora lithium project described
above.
Trade and other payables totalling US$2.28m (2021: US$1.04m)
consisted predominantly of US$1.29m payables relating to the gold
received under the offtake contracts, which had been sold but not
yet settled with the operators, trade payables, social security and
taxation and accruals with all amounts within agreed payment
terms.
At the year-end the net gold receivable amount was US$5.12m.
Deferred contingent consideration of US$0.41m represents A$0.60m
contingent payment due on the Spring Hill project based on the
operator meeting certain production targets. The amount has been
treated as due > 1 year representing managements' assessment of
when the project will become operational and the targets achieved.
The Spring Hill royalty, along with the contingent consideration
obligation was sold to Franco Nevada in February 2023.
Total cash at the end of the year was US$16.58m (US$21.70m
including the net gold trading receivables) and total debt was
US$40.00m.
Total net assets increased to US$104.87m during the year from
US$88.07m at 31 December 2021 largely due to the gold offtake
portfolio acquisition.
Statement of Comprehensive Income and EBITDA
The Group reported a gross profit of US$2.99m (2021: US$0.06m)
from reported net revenues of US$7.85m (2021: US$0.08m). The
increase in net revenue was from the new gold offtake contracts
acquired in January 2022 and the return of production at the
Koolyanobbing royalty tenement. The fair value gain on the Mimbula
copper project was US$2.19m (2021: US$1.51m) predominantly due to
the payment of the minimum payment schedule in lieu of the mine
currently in ramp up and therefore not materially depreciating in
value.
A profit on disposal of US$1.86m was made on amendment to one of
the gold offtake contracts - with gross proceeds of US$3.70m. The
Group made a foreign exchange loss totalling US$1.01m (2021:
US$0.52m loss) mainly as a result of the strengthening of the US
dollar against the Australian dollar. Finance charges totalled
US$6.24m including US$3.77m in interest payments and US$2.47m of
amortised finance arrangement fees and other finance charges. Loss
after taxation was US$ 3.68 m (2021: US$3.54m loss) and basic loss
per share of 1.28c (2021: 2.15c).
The Group generated net revenue from its gold offtake contracts
of US$6.07m and its Koolyanobbing iron ore asset of US$1.43m (2021:
US$0.08m). The amortisation charge was US$4.86m (2021: US$0.02m)
and total Group overheads of US$4.67m (2021: US$3.74m) including
US$0.47m (2021: $0.34m) non-cash share-based payments and other
charges; resulting in an operating loss of US$1.67m (2021:
US$3.68m). The gold offtakes and Koolyanobbing asset are amortised
on a units of production basis over the life of the assets
depleted.
EBITDA and Adjusted EBITDA
The below table summarises EBITDA and adjusted EBITDA:
Year ended Year ended
31 December 31 December
2022 2021
US$'000 US$'000
------------------------------------------ ------------------- ----------------------
Loss after tax (3,684) (3,538)
Income tax (945) (863)
Amortisation 4,857 21
Finance costs net of finance income 6,002 1,707
------------------------------------------- ------------------- ----------------------
EBITDA 6,230 (2,673)
------------------------------------------- ------------------- ----------------------
Net foreign exchange losses 1,007 523
Income from financial instrument through
profit and loss 2,000 1,500
Revaluation of royalty financial assets (2,193) (1,511)
Share-based payments charge and other
non-cash items 474 396
Profit on disposal of intangible asset (1,862) -
------------------------------------------ ------------------- ----------------------
Adjusted EBITDA 5,656 (1,765)
------------------------------------------- ------------------- ----------------------
The following table shows total royalty receipts for the period
for royalty intangible assets, net offtake interests, disposals and
financial assets:
Year ended Year ended
31 December 31 December
2022 2021
US$'000 US$'000
---------------------------------------- ----------------- ----------------------
Royalty interests 1,780 83
Offtake interests (net proceeds)* 6,070 -
Proceeds from Mercedes gold offtake
amendment - (gross) 3,706 -
Royalties due or received from royalty
financial assets 2,000 1,500
----------------------------------------- ----------------- ----------------------
13,556 1,583
* Offtake interests
An offtake contract is a contract pursuant to which the operator
agrees to sell, and the purchaser (Trident) agrees to buy, refined
gold produced from the mine or mines over which the offtake is
granted. The key commercial terms include those relating to the
amount of gold to be purchased, the duration of the contract, and
the payment terms. Trident has the right to purchase gold at the
lowest reference price in a defined quotation period, which is
typically 6-8 days. The revenue from these contracts is disclosed
net of the purchase costs in the income statement. Net proceeds
comprises gross offtake revenue of US$446.1m less purchase costs of
US$440.0m.
Cashflow and Borrowings
Net cash decreased in the period by US$29.06m (2021: US$38.46m
increase). Financing inflows were US$36.17m (2021: US$70.25m) from
an equity fund raise in January and the new loan facility with
Macquarie Bank along with the repayment of the Tribeca facility; of
which US$60.52m (2021: US$29.07m) was invested into acquiring those
assets noted above, and US$3.53m (2021: US$2.93m) was used in
operating activities. Note that the reduction in cash and use in
operating activities includes a US$5.12m increase in net gold
trading receivables, which is a function of the gold offtake trades
settling open over the year end with Macquarie Bank. Depending on
the timing and settlement of gold trades and the payments to
operators this figure fluctuates and can be a receivable or payable
item. The Group has a separate US$5.00m short term overdraft
facility with Macquarie Bank entered into on 21 March 2022, to
provide funding for the gold trading receivable over the 2-day
settlement period if required. Given the cash balance on hand
throughout 2022 the overdraft facility was not used.
The cash figure (excluding the net gold trading receivable) at
31 December 2022 was US$16.58m (31 December 2021: US$45.64m) with
the majority held in US dollars with HSBC Bank plc and Macquarie
Bank Limited. On 10 January 2022, Trident entered into a US$40.00m
secured loan facility agreement with Macquarie Bank, US$10m of
which was used to retire the debt held with a syndicate managed by
Tribeca Investment Partners.
Taxation
During the period the Group paid nil (2021: US$0.03m) in respect
of tax due. A deferred tax asset was recognised totalling US$2.01m
(2021: US$1.04m) primarily in relation to taxable losses incurred
in the Australian subsidiary. Given the increase in activity on the
Australian royalty tenements these losses are expected to be fully
utilised and accordingly have been recognised in full; resulting in
a deferred tax credit to the income statement of US$0.68m (2021:
US$0.71m).
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
Year ended Year ended
31 December 31 December
Continuing operations Notes 2022 2021
US$'000 US$'000
------------------------------------- ------ ------------- -------------
Royalty and offtake related
revenue 3 7,850 83
Amortisation of royalty intangible
assets 12 (4,857) (21)
------------------------------------- ------ ------------- -------------
Gross profit 2,993 62
Administrative expenses 4 (4,667) (3,744)
------------------------------------- ------ ------------- -------------
Operating loss (1,674) (3,682)
------------------------------------- ------ ------------- -------------
Revaluation of royalty financial
assets 13 2,193 1,511
Profit on disposal of intangible
asset 12 1,862 -
Finance income 7 241 -
Other finance costs 8 (6,244) (1,707)
Net foreign exchange (losses)/gains (1,007) (523)
(Loss)/profit before taxation (4,629) (4,401)
Income tax 9 945 863
------------------------------------- ------ ------------- -------------
(Loss)/profit attributable
to owners of the parent (3,684) (3,538)
------------------------------------- ------ ------------- -------------
Other comprehensive income
Items that may be subsequently
reclassified to profit and
loss:
Deferred tax 9 - -
Exchange gains on translation
of foreign operations 141 29
------------------------------------- ------ ------------- -------------
Other comprehensive income
for the period, net of tax 141 29
------------------------------------- ------ ------------- -------------
Total Comprehensive income
attributable to owners of the
parent (3,543) (3,509)
------------------------------------- ------ ------------- -------------
Earnings per share:
Basic and diluted earnings
per share (U.S. cents) 10 (1.28) (2.15)
------------------------------------- ------ ------------- -------------
Consolidated Statement of Financial Position
As at 31 December 2022
31 December 31 December
Notes 2022 2021
US$'000 US$'000
---------------------------------------- ------ ------------ ------------
Non-current assets
Royalty intangible assets 12 104,975 44,900
Royalty financial assets at fair value
through profit and loss 13 7,653 7,461
Deferred tax asset 9 2,005 1,043
---------------------------------------- ------ ------------ ------------
Total non-current assets 114,633 53,404
---------------------------------------- ------ ------------ ------------
Current assets
Trade and other receivables 17 12,047 1,212
Assets classified as held for sale 14 6,750 -
Cash and cash equivalents 18 16,577 45,637
---------------------------------------- ------ ------------ ------------
Current assets 35,374 46,849
---------------------------------------- ------ ------------ ------------
Total assets 150,007 100,253
---------------------------------------- ------ ------------ ------------
Current liabilities
Trade and other payables 19 2,277 1,039
Current tax liabilities 9 - -
Borrowings 20 7,500 10,536
---------------------------------------- ------ ------------ ------------
Total current liabilities 9,777 11,575
Non-current liabilities
Contingent consideration 19 408 436
Borrowings 20 32,500
Derivative financial liability 20 2,452 172
---------------------------------------- ------ ------------ ------------
Total non-current liabilities 35,360 608
---------------------------------------- ------ ------------ ------------
Total liabilities 45,137 12,183
---------------------------------------- ------ ------------ ------------
Net Assets 104,870 88,070
---------------------------------------- ------ ------------ ------------
Equity attributable to owners of
the parent
Share Capital 21 3,835 3,307
Share Premium 21 106,387 87,046
Share-based payments reserve 22 511 403
Foreign exchange reserve 259 118
Retained Earnings (6,122) (2,804)
---------------------------------------- ------ ------------ ------------
Total Equity 104,870 88,070
---------------------------------------- ------ ------------ ------------
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Share
based Foreign
Share Share payments exchange Retained
capital Premium reserve reserve earnings Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------- --------- ---------- ----------- ---------- --------
Balance at 1 January
2021 1,335 23,288 63 89 734 25,509
--------- --------- ---------- ----------- ---------- --------
Loss for the year - - - - (3,538) (3,538)
Other comprehensive
income:
Exchange gains on translation
of foreign operations - - - 29 - 29
--------- --------- ---------- ----------- ---------- --------
Total comprehensive
income - - - 29 (3,538) (3,509)
Transaction with owners
in their capacity as
owners:
Issue of share capital 1,972 66,993 - - - 68,965
Share issue costs - (3,235) - - - (3,235)
Share-based payment
charge - - 340 - - 340
--------- --------- ---------- ----------- ---------- --------
Total transactions
with owners, recognised
directly in equity 1,972 63,758 340 - - 66,070
Balance at 31 December
2021 3,307 87,046 403 118 (2,804) 88,070
--------- --------- ---------- ----------- ---------- --------
Loss for the year - - - - (3,684) (3,684)
Other comprehensive
income:
Exchange gains on translation
of foreign operations - - - 141 - 141
--------- --------- ---------- ----------- ---------- --------
Total comprehensive
income - - - 141 (3,684) (3,543)
--------- --------- ---------- ----------- ---------- --------
Transaction with owners
in their capacity as
owners:
Issue of share capital 528 19,613 - - - 20,141
Share issue costs - (272) - - - (272)
Share options lapsed - - (366) - 366 -
Share-based payment
charge - - 474 - - 474
Total transactions
with owners, recognised
directly in equity 528 19,341 108 - 366 20,343
Balance at 31 December
2022 3,835 106,387 511 259 (6,122) 104,870
--------- --------- ---------- ----------- ---------- --------
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
Notes Year to Year to
31 December 31 December
2022 2021
US$'000 US$'000
------------------------------------------------ ------ ------------- -------------
Cash flow from Operating Activities
(Loss)/profit before taxation (4,629) (4,401)
Revaluation of royalty financial assets 13 (2,193) (1,511)
Profit on sale of intangible asset (1,862) -
Finance income (241) -
Other finance costs 6,244 1,707
Net foreign exchange losses 1,442 523
Amortisation of royalty intangible asset 12 4,857 21
Other non-cash items - 56
Share-based payments charge 474 340
------------------------------------------------ ------ ------------- -------------
Net cash generated/(used) before changes
in working capital 4,092 (3,265)
Increase in payables 1,424 684
Increase in receivables (9,048) (195)
------------------------------------------------ ------ ------------- -------------
Net cash used in operating activities
before tax (3,532) (2,776)
------------------------------------------------ ------ ------------- -------------
Corporate income tax paid - (153)
------------------------------------------------ ------ ------------- -------------
Net cash used in operating activities (3,532) (2,929)
------------------------------------------------ ------ ------------- -------------
Cash flows from investing activities
Payments for acquisition of royalty intangible
assets (60,518) (29,072)
Cash received from sale of intangible
asset 3,528 -
Cash received from royalty financial asset 1,875 1,182
Finance income 215 -
Net cash used in investing activities (54,900) (27,890)
------------------------------------------------ ------ ------------- -------------
Cash flows from financing activities
Issue of share capital 6,438 63,489
Share issue costs and AIM listing fees (272) (3,235)
Proceeds from borrowings 20 40,000 10,000
Repayment of borrowings 20 (10,000) -
Issue costs of credit facility (1,576) -
Finance costs (4,529) (979)
------------------------------------------------ ------
Net cash generated from financing activities 30,061 69,275
------------------------------------------------ ------ ------------- -------------
Net (decrease)/increase in cash and cash
equivalents during the year (28,371) 38,456
Cash at the beginning of year 45,637 6,971
Effect of foreign exchange rate on cash
and cash equivalents (689) 210
------------------------------------------------ ------ ------------- -------------
Cash and cash equivalents at the end
of the year 16,577 45,637
------------------------------------------------ ------ ------------- -------------
Company Statement of Financial Position
As at 31 December 2022
31 December 31 December
Notes 2022 2021
US$'000 US$'000
-------------------------------- ------ ------------ ------------
Non-current assets
Investment in subsidiaries 15 113 113
Royalty financial assets at
fair value through profit
and loss 13 7,653 7,461
Amount due from subsidiary
undertakings 16 90,553 47,609
Deferred tax asset 9 221 93
-------------------------------- ------ ------------ ------------
Total non-current assets 98,540 55,276
-------------------------------- ------ ------------ ------------
Current assets
Trade and other receivables 17 4,041 1,176
Cash and cash equivalents 18 9,537 34,480
-------------------------------- ------ ------------ ------------
Current assets 13,578 35,656
-------------------------------- ------ ------------ ------------
Total assets 112,118 90,932
-------------------------------- ------ ------------ ------------
Current Liabilities
Trade and other payables 19 322 439
Current tax liabilities 9 - -
-------------------------------- ------ ------------ ------------
Current liabilities 322 439
-------------------------------- ------ ------------ ------------
Non-current Liabilities
Derivative financial liability 20 2,452 172
-------------------------------- ------ ------------ ------------
Total liabilities 2,774 611
-------------------------------- ------ ------------ ------------
Net Assets 109,344 90,321
-------------------------------- ------ ------------ ------------
Equity
Share Capital 21 3,835 3,307
Share Premium 21 106,387 87,046
Share-based payments reserve 22 511 403
Foreign exchange reserve (23) (23)
Retained Earnings (1,366) (412)
-------------------------------- ------ ------------ ------------
Total Equity 109,344 90,321
-------------------------------- ------ ------------ ------------
The Company has elected to take the exemption under section 408
of the Companies Act 2006 not to present the Parent Company
Statement of Comprehensive Income. The loss for the Parent Company
for the year was US$1.32m (2021: US$0.20m).
Company Statement of Changes in Equity
For the year ended 31 December 2022
Share
based Foreign
Share Share payments exchange Retained
capital Premium reserve reserve earnings Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------- --------- ---------- ----------- ---------- --------
Balance at 1 January
2021 1,335 23,288 63 (23) (216) 24,447
--------- --------- ---------- ----------- ---------- --------
Loss for the year - - - - (196) (196)
Total comprehensive
income for the year - - - - (196) (196)
Issue of share capital 1,972 66,993 - - - 68,965
Share issue costs - (3,235) - - - (3,235)
Share-based payment
charge - - 340 - - 340
--------- --------- ---------- ----------- ---------- --------
Total transactions
with owners, recognised
directly in equity 1,972 63,758 340 - - 66,070
Balance at 31 December
2021 3,307 87,046 403 (23) (412) 90,321
--------- --------- ---------- ----------- ---------- --------
Loss for the year - - - - (1,320) (1,320)
Total comprehensive
income for the year - - - - (1,320) (1,320)
--------- --------- ---------- ----------- ---------- --------
Issue of share capital 528 19,613 - - - 20,141
Share issue costs - (272) - - - (272)
Share options lapsed - - (366) - 366 -
Share-based payment
charge - - 474 - - 474
Total transactions
with owners, recognised
directly in equity 528 19,341 108 - 366 20,343
Company Statement of Cash Flows
for the year ended 31 December 2022
Notes Year to Year to
31 December 31 December
2022 2021
US$'000 US$'000
---------------------------------------------- ------ ------------- -------------
Cash flows from Operating Activities
(Loss)/profit before taxation (1,364) (255)
Revaluation of royalty financial asset 13 (2,193) (1,511)
Finance income (113) -
Intercompany interest received (831) (510)
Other finance costs 1,694 51
Net foreign exchange losses/(gains) 127 (239)
Other non-cash items - 56
Share-based payments charge 474 340
---------------------------------------------- ------ ------------- -------------
Net cash used before changes in working
capital (2,206) (2,068)
Increase in payables 86 462
Increase in receivables (2,154) (277)
---------------------------------------------- ------ ------------- -------------
Net cash used in operating activities
before tax (4,274) (1,883)
---------------------------------------------- ------ ------------- -------------
Corporate income tax paid - (33)
---------------------------------------------- ------ ------------- -------------
Net cash used in operating activities (4,274) (1,916)
---------------------------------------------- ------ ------------- -------------
Cash flows from investing activities
Cash received from royalty financial
asset 1,875 1,182
Finance income 113 -
Net foreign exchange gains 7 -
Finance costs - (51)
Loans granted to subsidiary undertakings (28,696) (38,589)
Loan repayments from subsidiary undertakings - 7,000
---------------------------------------------- ------ ------------- -------------
Net cash used in investing activities (26,701) (30,458)
---------------------------------------------- ------ ------------- -------------
Cash flows from financing activities
Issue of share capital 6,438 63,489
Share issue costs and AIM listing fees (272) (3,235)
---------------------------------------------- ------
Net cash generated from financing activities 6,166 60,254
---------------------------------------------- ------ ------------- -------------
Net (decrease)/increase in cash and cash
equivalents during the year (24,809) 27,880
Cash at the beginning of year 34,480 6,547
Effect of foreign exchange rate on cash
and cash equivalents (134) 53
---------------------------------------------- ------ ------------- -------------
Cash and cash equivalents at the end
of the year 9,537 34,480
---------------------------------------------- ------ ------------- -------------
Notes to the financial statements
1. GENERAL INFORMATION
Trident Royalties plc is a company incorporated and domiciled in
the United Kingdom. The Company is a public limited company, which
is listed on AIM of the London Stock Exchange, incorporated and
domiciled in England and Wales. The address of the registered
office is 6(th) Floor 60 Gracechurch Street, London, United
Kingdom, EC3V 0HR.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
these financial statements are set out below. The policies have
been consistently applied throughout the year presented, unless
otherwise stated.
Basis of preparation
The Group's consolidated financial statements and the Parent
Company financial statements have been prepared in accordance with
UK-adopted international accounting standards and the requirements
of the Companies Act 2006.
The financial statements have been prepared under the historical
cost convention except for financial assets at fair value through
profit and loss account and contingent consideration which are
measured at fair value. The principal accounting policies adopted
are set out below. The Group financial statements are presented in
US Dollars ($) and rounded to the nearest thousand.
The preparation of the Group financial statements in conformity
with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in
the process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the consolidated
financial statements are explained below.
Going Concern
The financial position of the Group and cash flows as at 31
December 2022 are set out on pages 55 and 57 of the annual report.
The Group meets its day-to-day working capital and other funding
requirements with its current cash, raised through equity placings,
proceeds from the disposal of assets and revenue from its cash
generating royalties. The Group actively manages its financial
risks as set out in note 23 and operates Board-approved financial
policies, that are designed to ensure that the Group maintains an
adequate level of headroom and effectively mitigates financial
risks.
On the basis of current financial projections (at least 12
months from the date of approval of the financial statements), the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence, and meet its
liabilities as they fall due, for the foreseeable future.
Accordingly, the Directors consider it appropriate to adopt the
going concern basis in preparing these financial statements.
Standards, interpretations and amendments to published standards
not yet effective
The Directors have considered those standards and
interpretations, which have not been applied in the financial
statements, that are in issue but not yet effective and do not
consider that they will have a material impact on the future
results of the Group or Company.
Basis of consolidation
The consolidated financial statements present the results of the
Company and its subsidiaries as if they formed a single entity.
Intercompany transactions and balances between group companies are
therefore eliminated in full.
At 31 December 2022, the consolidated financial statements
combine those of the Company with those of its subsidiaries.
Subsidiaries are entities over which the Group has control. Control
is achieved when the Group is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee.
Generally, there is a presumption that a majority of voting
rights result in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
-- The contractual arrangement with the other vote holders of the investee;
-- Rights arising from other contractual arrangements; and
-- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
Assets, liabilities, income and expenses of a subsidiary acquired
or disposed of during the year are included in the Group financial
statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
Investments in subsidiaries are accounted for at cost less
impairment within the Company financial statements. Where
necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used in line with
those used by other members of the Group
Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker
which is considered to be the Board.
Foreign currency
Transactions entered into by Group entities in a currency other
than the currency of the primary economic environment in which they
operate (their "functional currency") are recorded at the rates
ruling when the transactions occur. Foreign currency monetary
assets and liabilities are translated at the rates ruling at the
reporting date. Exchange differences arising on the retranslation
of unsettled monetary assets and liabilities are recognised
immediately in profit or loss.
Exchange gains and losses arising on the retranslation of
monetary financial assets are treated as a separate component of
the change in fair value and recognised in profit or loss. Exchange
gains and losses on non-monetary OCI financial assets form part of
the overall gain or loss in OCI recognised in respect of that
financial instrument.
Translation into presentation currency
The Group presents its financial information in US Dollars
(US$). The functional currency of all the Company's subsidiaries is
US$ except for TRR Services Australia Pty Ltd which has an AUD
functional currency.
-- Assets and liabilities for each financial reporting date
presented (including comparatives) are translated at the closing
rate of that financial reporting period.
-- Income and expenses for each income statement (including
comparatives) is translated at exchange rates at the dates of
transactions. For practical reasons, the Company applies average
exchange rates for the period.
-- All resulting changes are recognised as a separate component of equity.
-- Equity items are translated at exchange rates at the dates of transactions.
The following exchange rates were used in the retranslation of
these financial statements.
At 31 December At 31 December
2022 2021
--------------------------------------------- --------------- ---------------
US$/AUD closing rate at financial reporting
date 0.6806 0.7263
--------------------------------------------- --------------- ---------------
US$/AUD average exchange rate during
the reporting period 0.6926 0.7483
--------------------------------------------- --------------- ---------------
Intangible assets
Royalty arrangements
Royalty arrangements which are identified and classified as
intangible assets are initially measured at cost, including any
transaction costs, less provision for impairment where
required.
Upon commencement of production at the underlying mining
operation intangible assets are amortised on a units of production
basis matching the depletion of the ore body over the life of the
mine. Amortisation rates are adjusted on a prospective basis for
all changes to estimates of the life of mine reserves.
Impairment
At each reporting date, the Group reviews the carrying amounts
of its intangible assets to determine whether there is any
indication that those assets are impaired. If such an indication is
identified, the recoverable amount of the asset is estimated in
order to determine the extent of any impairment. The recoverable
amount is the higher of fair value (less costs of disposal) and
value in use. In assessing value in use, the estimated cash flows
are discounted to their present value using a pre-tax discount
rate. If the recoverable amount of the asset is estimated to be
less than its carrying value, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is also
recognised in the income statement. Should an impairment loss
subsequently reverse, the carrying amount of the asset is increased
to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment been recognised. A
reversal of an impairment loss is also recognised in the income
statement.
Assets held for sale
Non-current assets classified as held for sale are measured at
the lower of carrying amount and fair value less costs to sell.
Non-current assets are classified as held for sale if their
carrying amount will be recovered through a sale transaction rather
than through continuing use. This condition is regarded as met only
when the sale is highly probable, and the asset is available for
immediate sale in its present condition. Management must be
committed to the sale which should be expected to qualify for
recognition as a completed sale within one year from the date of
classification.
Investments
Investment in subsidiaries are recorded at cost less provision
for impairment.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Current tax
Current tax is calculated at the tax rates (and laws) that have
been enacted or substantively enacted in the countries in which the
Group operates by the Statement of Financial Position date and is
based on taxable profit or loss for the year.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit or loss and is accounted for
using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to
apply in the year when the liability is settled, or the asset is
realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt
with in equity. Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income
taxes levied by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on a net
basis.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss,
except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the
current and deferred tax are also recognised in other comprehensive
income or directly in equity respectively.
Share-based payments
The fair value of the employee services received in exchange for
the grant of the options is recognised as an expense. The total
amount to be expensed is determined by reference to the fair value
of the options granted, excluding the impact of any non-market
service and performance vesting conditions. Non-market vesting
conditions are included in assumptions about the number of options
that are expected to vest. The total amount expensed is recognised
over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At each reporting
date, the entity revises its estimates of the number of options
that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original
estimates, if any, in profit and loss, with a corresponding
adjustment to equity.
Financial Instruments
Financial instruments comprise royalty financial assets, cash
and cash equivalents, borrowings, financial assets and liabilities
and equity instruments. Financial assets and financial liabilities
are recognised when the Group becomes a party to the contractual
provisions of the financial instrument and comprise trade and other
receivables and trade and other payables respectively.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and
deposit balances at banks.
Borrowings
Interest bearing debt facilities are initially recognised at
fair value, net of directly attributable transaction costs.
Transaction costs are recognised in the income statement on a
straight-line basis over the term of the facility.
Trade and other receivables
Trade and other receivables are accounted for under IFRS 9 using
the expected credit loss model and are initially recognised at fair
value and subsequently measured at amortised cost less any
allowance for expected credit losses.
Royalty financial assets at fair value through profit and
loss
Royalty financial assets are recognised or derecognised on
completion date where a purchase or sale of the royalty is under a
contract, and are initially measured at fair value, including
transaction costs.
All of the Group's royalty financial assets have been designated
as at fair value through profit and loss ("FVTPL").
The royalty financial assets at FVTPL are measured at fair value
at the end of each reporting period, with any fair value gains or
losses recognised in the 'revaluation of royalty financial assets'
line item of the income statement. Fair value is determined in the
manner described in note 13.
Impairment provisions for receivables from related parties and
loans to related parties are recognised based on a forward-looking
expected credit loss model.
Trade and other payables
Trade and other payables are recognised initially at their fair
value and subsequently measured at amortised cost using the
effective interest method.
Warrant liability at fair value through profit and loss
The warrant liability is initially measured at fair value,
including transaction costs. The liability is measured at fair
value at the end of each reporting period, with any gains or losses
recognised as other finance costs in the income statement. Fair
value is determined by the calculation described in note 22.
Equity instruments and reserves description
An equity instrument is any contract that evidences a residual
interest in the assets of the Company after deducting all of its
liabilities. Equity instruments issued by the Company are recorded
at the proceeds received net of direct issue costs.
Ordinary shares are classified as equity.
Deferred shares are classified as equity but have restricted
rights such that they have no economic value.
Share capital account represents the nominal value of the
ordinary and deferred shares issued.
The share premium account represents premiums received on the
initial issuing of the share capital. Any transaction costs
associated with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Share based payment reserve represents equity-settled
share-based employee remuneration until such share options are
exercised.
Foreign exchange reserve represents
-- differences arising on the opening net assets retranslation
at a closing rate that differs from opening rate; and
-- differences arising from retranslating the income statement
at exchange rates at the dates of transactions at average rates and
assets and liabilities at the closing rate.
Retained earnings include all current and prior period results
as disclosed in the Statement of Comprehensive Income.
Revenue recognition
The revenue of the Group comprises mainly royalty income. It is
measured at the fair value of the consideration received or
receivable after deducting discounts, value added tax and other
withholding tax. The royalty income becomes receivable on
extraction and sale of the relevant underlying commodity, and by
determination of the relevant royalty agreement.
Trident adopts IFRS 15 revenue from contracts with customers
("IFRS 15") - except in the case of the offtake contract revenue.
The strict legal interpretation of IFRS 15 deems Trident to be
principal in the transaction (and not agent) and accordingly should
disclose revenue and costs gross. However, management considers
that the substance of these instruments (and revenue and cost) is
such that Trident will always sell the gold within the quotation
period, does not intend to hold gold for long term trading and will
not make a gross loss. As a result of the above judgement, revenue
in the income statement is stated net. The gross revenue, and
related costs, are disclosed in note 3 - Business and Geographical
Reporting.
Interest income is accrued on a time basis, by reference to the
carrying value and at the effective interest rate applicable.
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the
obligation, and a reliable estimate can be made of the amount of
the obligation. The Group's estimate in respect of contingent
consideration that may be payable following the acquisition of
Royalty Intangible Assets, is capitalised as an asset acquisition
cost. The value of the provision is determined by the amounts
deemed payable by management at the balance sheet date.
Critical accounting estimates and judgements
The preparation of the financial statements in conformity with
IFRS requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of expenses during
the reporting period. Although these estimates are based on
management's best knowledge of the amounts, events or actions,
actual results ultimately may differ from these estimates.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Critical accounting judgements
Classification of royalty arrangements: initial recognition and
subsequent measurement
The Directors must decide whether the Group's royalty
arrangements should be classified as:
-- Intangible assets in accordance with IAS 38 Intangible Assets; or
-- Financial assets in accordance with IFRS 9 Financial Instruments
The Directors use the following selection criteria to identify
the characteristics which determine which accounting standard to
apply to each royalty arrangement:
Type 1 - Intangible assets: Royalties, are mainly classified as
intangible assets by the Group. The Group considers the substance
of a simple royalty to be economically similar to holding a direct
interest in the underlying mineral asset. Existence risk (the
commodity physically existing in the quantity demonstrated),
production risk (that the operator can achieve production and
operate a commercially viable project), timing risk (commencement
and quantity produced, determined by the operator) and price risk
(returns vary depending on the future commodity price, driven by
future supply and demand) are all risks which the Group
participates in on a similar basis to an owner of the underlying
mineral licence. Furthermore, in a royalty intangible, there is
only a right to receive cash to the extent there is production and
there are no interest payments, minimum payment obligations or
means to enforce production or guarantee repayment. These are
accounted for as intangible assets under IAS 38.
Type 2 - Financial royalty assets (royalties with additional
financial protection): In certain circumstances where the risk is
considered too high, the Group will look to introduce additional
protective measures. This has taken the form of minimum payment
terms. Once an operation is in production, these mechanisms
generally fall away such that the royalty will display identical
characteristics and risk profile to the intangible royalties;
however, it is the contractual right to enforce the receipt of cash
which results in these royalties being accounted for as financial
assets under IFRS 9.
Accounting Substance Accounting treatment Examples
classification of
contractual
terms
Royalty Simple
intangible royalty * Investment is presented as an intangible asset and * Koolyanobbing
assets and with carried at cost less accumulated amortisation and any
offtake no right to impairment provision
interests receive * Spring Hill
cash other
than * Royalty or offtake income is recognised as revenue in
through the income statement * Lake Rebecca
a royalty
related
to * Intangible asset is assessed for indicators of * Thacker Pass
production impairment at each period end
An offtake * Lincoln gold
contract
is a
contract * WA Gold
where
an operator
agrees * Sugar Zone offtake
to sell,
and the
purchaser * Equinox Gold offtake
agrees
to buy,
refined * Allied Gold offtake
metal
produced
from the
mine or
mines over
which the
offtake
is granted.
The key
commercial
terms
include
those
relating
to the
amount of
metal to be
purchased,
the
delivery
mechanics,
and the
payment
terms.
------------ ------------------------------------------------------------ ---------------------------
Royalty Royalty * Mimbula
financial arrangement * Financial asset is recognised at fair value on the
instruments with a balance sheet
contractual
right to
receive * Fair value movements taken through the income
cash (e.g. statement (FVTPL)
through
a minimum
payment * Royalty income is not recognised as revenue in the
profile) income statement and instead reduces the fair value
of the asset
------------ ------------------------------------------------------------ ---------------------------
Going concern
The Group and Company financial statements have been prepared on
a going concern basis as the Directors have assessed the Group's
and Company's ability to continue in operational existence for the
foreseeable future. The operations are currently being funded
through existing cash reserves and royalty income.
The financial statements do not include the adjustments that
would result if the Group or Company were not to continue as a
going concern. See Going Concern section for more details.
Loans to subsidiaries
Loans to subsidiaries have a carrying value at 31 December 2022
of US$90.6m (2021: US$47.6m). The Directors have assessed the
carrying value to be equal to fair value on the basis that the
loans will be recovered from the subsidiaries as they generate cash
flow from their underlying investments in royalty assets. In the
event that the underlying value of the royalty asset becomes
impaired, and the loans are not considered to be recoverable, an
impairment charge will then be recognised in the Statement of
Comprehensive Income.
Key sources of estimation uncertainty
Assessment of fair value of royalty arrangements held at fair
value
The Mimbula royalty is held at fair value. Fair value is
determined based on discounted cash flow models (and other
valuation techniques) using assumptions considered to be reasonable
and consistent with those that would be applied by a market
participant. The determination of assumptions used in assessing
fair values is subjective and the use of different valuation
assumptions could have a significant impact on financial
results.
In particular, expected future cash flows, which are used in
discounted cash flows models, are inherently uncertain and could
materially change over time. They are significantly affected by a
number of factors including commodity prices, exchange rate changes
and reserves and resources and timing/likelihood of mines entering
production if not already generating income.
The key assumptions relating to the Group's royalty financial
asset classified as fair value through profit or loss is set out in
note 13.
Impairment review of intangible assets
Intangible assets are assessed for indicators of impairment at
each reporting date with the assessment considering variables such
as the production profiles, production commissioning dates where
applicable, forecast commodity prices and guidance from the mine
operators.
Where indicators are identified, the starting point for the
impairment review will be to measure the expected future cash flows
expected from the royalty arrangement should the project
continue/come into production. A pre-tax nominal discount rate is
applied to the future cash flows. The discount rate of each royalty
arrangement is specific to the underlying project, making reference
to the risk-free rate of return expected on an investment with the
same time horizon as the expected mine life, together with the
country risk associated with the location of the operation. Changes
in discount rate are most sensitive to changes in the risk-free
rate, country risk premiums and the expected mine life.
The outcome of this net present value calculation is then risk
weighted to reflect management's current assessment of the overall
likelihood and timing of each project coming into production and
royalty income arising. This assessment is impacted by news flow
relating to the underlying operation in the year, in conjunction
with management's assessment of the economic viability of the
project based on commodity price projections.
Amortisation
The Group's amortisation policy is based on a depletion method
using units of production. Management regularly review the life of
its assets, the amortisation rates and methodology, and
amortisation rates may be adjusted for changes to the
estimates.
3. BUSINESS AND GEOGRAPHICAL REPORTING
The Group's chief operating decision maker is considered to be
the Executive Board. The Executive Board evaluates the financial
performance of the Group by reference to its diversified portfolio
- split between precious, bulk, battery and base metal assets - its
reportable segments.
The following individual royalty arrangements are aggregated
into the reportable segments:
Precious: Lake Rebecca, Spring Hill, Lincoln Gold Mine, Western
Australia gold, Gold Offtake Contracts
Bulk: Koolyanobbing
Battery Metals: Thacker Pass
Base: Mimbula, Pukaqaqa
Below is a summary of the Group's results, assets and
liabilities by reportable segment as presented to the Executive
Board. Operating profit/(loss) is stated before revaluation of
royalty financial instruments, one off costs, finance income and
expense foreign exchange gains and taxation.
Segmental information as at 31 December 2022:
Battery
Precious Bulk metals Base Other Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
-------------------------- --------- -------- ---------- -------- -------- ---------
Royalty related
revenue 6,418 1,432 - - - 7,850
Amortisation of
royalty intangible
assets (3,796) (1,061) - - - (4,857)
-------------------------- --------- -------- ---------- -------- -------- ---------
Gross profit 2,622 371 - - - 2,993
Operating expenses - - - - (4,667) (4,667)
-------------------------- --------- -------- ---------- -------- -------- ---------
Total segment
operating profit/(loss) 2,622 371 - - (4,667) (1,674)
-------------------------- --------- -------- ---------- -------- -------- ---------
Total segment
assets 84,381 2,445 28,234 11,714 23,233 150,007
Total segment
liabilities (41,730) - - - (3,956) (45,686)
As at 31 December 2022 the Group was receiving royalty income
from the Gold Offtake portfolio and Lincoln gold (precious
segment), Koolyanobbing (bulk segment) and Mimbula (base segment)
which is accounted for as a financial asset (see note 13). A fair
value gain of US$2.2m (2021: US$1.5m) was recognised in the base
segment. US$6.1m of the Precious revenue relates to net proceeds
from gold offtake contracts - gross revenue was US$446.1m with
US$440.0m costs.
Segmental information as at 31 December 2021:
Battery
Precious Bulk metals Base Other Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------------- --------- -------- -------- -------- -------- --------
Royalty related
revenue - 83 - - - 83
Amortisation of
royalty intangible
assets - (21) - - - (21)
--------------------------- --------- -------- -------- -------- -------- --------
Gross profit - 62 - - - 62
Operating expenses - - - - (3,744) (3,744)
--------------------------- --------- -------- -------- -------- -------- --------
Total segment operating
result - 62 - - (3,744) (3,682)
--------------------------- --------- -------- -------- -------- -------- --------
Total segment assets 9,869 3,722 28,234 10,535 47,893 100,253
Total segment liabilities 436 - - - 11,747 12,183
4. EXPENSES BY NATURE
Year ended
Year ended 31 31 December
December 2022 2021
US$'000 US$'000
----------------------------------- --------------- -------------
Employee benefit expense (note 6) 2,472 2,093
Share based payments 474 340
Legal and professional 1068 788
Other operating expenses 653 523
----------------------------------- --------------- -------------
Total operating expenses 4,667 3,744
----------------------------------- --------------- -------------
5. AUDITOR REMUNERATION
During the year the Company obtained the following services from
the auditor:
Year ended
Year ended 31 31 December
December 2022 2021
US$'000 US$'000
------------------------------------------- --------------- -------------
Fees payable to the auditor for the audit
of the Company 69 62
-------------------------------------------
Total auditor's remuneration 69 62
------------------------------------------- --------------- -------------
Other assurance services pursuant to
legislation - 6
------------------------------------------- --------------- -------------
Details of the Company's policy on the use of auditors for
non-audit services, the reasons why the auditor was used rather
than another supplier and how the auditor's independence and
objectivity are safeguarded are set out in the Audit Committee
Report.
6. EMPLOYEE BENEFIT EXPENSE
Group Company Group Company
Year ended Year ended Year ended Year ended
31 December 31 December 31 December 31 December
2022 2022 2021 2021
US$'000 US$'000 US$'000 US$'000
Directors' salary and fees 1,185 585 899 447
Employee costs 1,103 455 1,011 358
Social security costs 184 90 183 85
Total employee benefit
expense 2,472 1,130 2,903 890
---------------------------- ------------- ------------- ------------- -------------
All the wages and salaries were paid to the Directors and senior
management. There were no employees in the year other than the
Directors and senior management. Further disclosures in respect of
Directors' remuneration are included within the Directors'
Remuneration Report. The average number of employees (including
Directors) during the year was 9 (2021: 8).
7. FINANCE INCOME
Year ended
Year ended 31 31 December
December 2022 2021
US$'000 US$'000
---------------------------- --------------- -------------
Interest from bank deposits 241 -
241 -
---------------------------- --------------- -------------
8. FINANCE EXPENSE
Year ended
Year ended 31 31 December
December 2022 2021
US$'000 US$'000
-------------------------------------------- --------------- -------------
Interest paid 3,774 801
Amortisation of financing costs (including
warrant charge) 2,220 906
Other finance charges 250 -
6,244 1,707
-------------------------------------------- --------------- -------------
9. INCOME TAX
Year ended Year ended
31 December 31 December
2022 2021
US$'000 US$'000
------------------------------------------------ ------------- -------------
Analysis of charge for year:
United Kingdom corporation tax - -
Overseas taxation 84 -
Adjustments in respect of prior years - 2
------------------------------------------------ ------------- -------------
Current tax expense 84 2
Deferred tax credit in current year (1,317) (914)
Adjustments in respect of prior years 318 49
Effect of changes in tax rates (30) -
------------------------------------------------ ------------- -------------
Deferred tax (1,028) (865)
Income tax credit (945) (863)
Year ended Year ended
31 December 31 December
2022 2021
US$'000 US$'000
------------------------------------------------ ------------- -------------
Factors affecting the tax charge for the
year:
Profit/(loss) before taxation (4,629) (4,401)
Tax on result calculated at UK Corporation
tax of 19% (2019: 19%) (880) (836)
Tax effects of:
Items non-taxable/deductible for tax purposes:
Non-deductible expenses 107 87
Non-taxable income - 157
Temporary and other differences:
Foreign tax credits 83 -
Effect of differences between local and UK
tax rates (420) (257)
Prior year adjustment to current and deferred
tax 319 51
Deferred tax not recognised (27) 37
Remeasurement of deferred tax for changes (127) -
in tax rates
Other adjustments - (102)
------------------------------------------------ ------------- -------------
Income tax (945) (863)
------------------------------------------------ ------------- -------------
The Group is subject to taxation in United Kingdom, USA and
Australia with applicable tax rates of 25.00%, 21.00% and 30.00%
respectively. The Group does not have any unresolved tax matters or
disputes with the tax authorities in the jurisdictions in which it
operates.
DEFERRED TAXATION
The following are the deferred tax assets and liabilities
recognised by the Group and the movements during the year:
Group Tax losses Other Total
US$000 US$000 US$000
------------------------------------- ----------- ------- -------
At 1 January 2021 220 (10) 210
Credit/(charge) to income statement 1,262 (397) 865
Exchange differences - (32) (32)
31 December 2021 1,482 (439) 1,043
Credit/(charge) to income statement 1,317 (289) 1,028
Exchange differences - (66) (66)
------------------------------------- ----------- ------- -------
At 31 December 2022 1,317 (355) 2,005
------------------------------------- ----------- ------- -------
The deferred tax asset predominantly relates to losses incurred
in the Australian subsidiary (as partially offset by accelerated
capital allowances). Based on forecast future cashflows on those
royalty assets held by the Australian subsidiary these losses are
expected to be fully utilised, accordingly the deferred tax asset
has been recognised in full.
Company Tax losses Other Total
US$000 US$000 US$000
---------------------------- ----------- ------- -------
At 1 January 2021 - 29 29
Credit to income statement - 64 64
At 31 December 2021 - 93 93
Credit to income statement 98 30 128
At 31 December 2022 98 123 221
10. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Year ended Year ended
31 December 31 December
2022 2021
US$'000 US$'000
NET (LOSS)/PROFIT ATTRIBUTABLE TO SHAREHOLDERS
Loss (3,684) (3,538)
------------------------------------------------ ------------- -------------
The weighted average number of shares in issue for the purpose
of calculating basic and diluted earnings per share and basic and
diluted adjusted earnings per share are as follows:
2022 2021
--------------------------------------------
WEIGHTED AVERAGE NUMBER OF SHARES IN ISSUE
-------------------------------------------- ------------ ------------
Basic number of shares outstanding 288,853,068 164,638,648
Dilutive effect of Employee Share Option
Scheme - -
-------------------------------------------- ------------ ------------
Diluted number of shares outstanding 288,853,068 164,638,648
-------------------------------------------- ------------ ------------
Earnings per share - basic (1.28) c (2.15) c
-------------------------------------------- ------------ ------------
Earnings per share - diluted (1.28) c (2.15) c
-------------------------------------------- ------------ ------------
The Company has outstanding warrants and options as disclosed
under Note 22 which may be dilutive in future periods. The effect
in respect of the current year would have been anti-dilutive
(reducing the loss per share) and accordingly is not presented.
In addition, the effect of the issue of ordinary shares shortly
after year end, would also have been anti-dilutive, and accordingly
is not considered. The issue, however, may be dilutive in future
periods.
11. DIVIDS
There were no dividends paid or proposed by the Company in
either period.
12. ROYALTY INTANGIBLE ASSETS
Royalty Offtake
Interests Interests Total
Group US$000s US$000s US$'000
------------------------------- ----------- ----------- ---------
Cost
------------------------------- ----------- ----------- ---------
At 1 January 2021 12,346 - 12,346
Acquisitions 34,606 - 34,606
Exchange differences (785) - (785)
------------------------------- ----------- ----------- ---------
At 31 December 2021 46,167 - 46,167
------------------------------- ----------- ----------- ---------
Acquisitions - 74,018 74,018
Disposals - (1,833) (1,833)
Reclassified as assets held
for sale (6,750) - (6,750)
Exchange differences (768) - (768)
------------------------------- ----------- ----------- ---------
At 31 December 2022 38,649 72,185 110,834
------------------------------- ----------- ----------- ---------
Accumulated Amortisation
At 1 January 2021 (1,328) - (1,328)
Amortisation (21) - (21)
Exchange differences 82 - 82
------------------------------- ----------- ----------- ---------
At 31 December 2021 (1,267) - (1,267)
------------------------------- ----------- ----------- ---------
Amortisation (1,061) (3,795) (4,611)
Disposal - 166 166
Exchange differences 98 - 98
------------------------------- ----------- ----------- ---------
At 31 December 2022 (2,230) (3,629) (5,614)
------------------------------- ----------- ----------- ---------
Net book value at 31 December
2021 44,900 - 44,900
------------------------------- ----------- ----------- ---------
Net book value at 31 December
2022 36,419 68,556 104,975
------------------------------- ----------- ----------- ---------
Amortisation
Amortisation is charged on a units of production basis (over
initial estimated reserves) on those assets in production. In the
case of Koolyanobbing it is estimated that circa 52% (2021:70%) of
the original acquired reserve remains.
Acquisitions
Gold Offtake Portfolio
On 11 January 2022 the Group completed the acquisition of a
portfolio of gold offtake contracts from funds managed by Orion
Resource Partners for total consideration of US$69.75m of which
US$60.00m was payable in cash and US$9.75m in new ordinary
shares.
On 23 March 2022 the Group completed the acquisition of a gold
offtake contract over the Sugar Zone Mine in Canada from funds
managed by Orion Resource Partners for total consideration of
US$3.75m payable in new ordinary shares.
Sonora Lithium Project
On 27 January 2022, the Group entered into an agreement to
acquire, subject to certain conditions, an indirect 1.5% Gross
Royalty over the Sonora Lithium Project in Mexico, through a joint
venture company called Sonoroy Holdings Limited ("Sonoroy").
Sonoroy holds a 3.0% Gross Royalty over the project. The
transaction was structured so as to result in Trident holding a 50%
shareholding in Sonoroy in consideration of an initial deposit of
US$2.5m and a further payment, at Trident's sole election, of
US$23.5m. The second payment is due on or before 31 January 2025.
If Trident elects to withdraw from the joint venture, its initial
deposit is to be returned. As such, the initial deposit is treated
as an interest free loan and included in trade and other
receivables.
Disposals
On 14 April 2022, the Group reached an agreement with Equinox
Gold Corp ("Equinox") following the sale of the Mercedes gold mine
in Mexico by Equinox to Bear Creek Mining Corporation. Under the
terms of the gold offtake contract (which was part of the portfolio
acquisition described above) the sale of the mine triggered a
payment from Equinox to Trident of US$3.75m and the mine was
removed from the offtake contract. The payment was received on 22
April 2022. The agreement resulted in a profit on disposal of
US$1.86m.
Reclassified as assets held for sale
In December 2022 the Group agreed to sell certain pre-production
gold royalties. As the sale had not been completed at 31 December
2022 these royalties were re-classified to assets held for sale.
See note 14 for further information.
13. ROYALTY FINANCIAL ASSETS
In July 2020 the Group acquired the Mimbula Royalty from Moxico
Resources plc a staged GRR over production from the operating
Mimbula copper mine and associated stockpiles located in Zambia's
prolific Copperbelt Province. The GRR was acquired for cash
consideration of US$5.00m. Trident is entitled to royalty payments
on production which commenced on 1 July 2020 and extend in
perpetuity. This royalty asset is classified as FVTPL.
Trident will receive either a Minimum Payment ("MP") or royalty
payment, whichever is higher until June 2023. Thereafter, Trident
will only receive royalty payments. The royalty payments are
calculated as a percentage of the gross revenue derived from sale
of finished copper and copper concentrate. Per the terms of the
agreement, the royalty percentage is calculated as follows:
a. During the MP period, 1.25% of gross revenue;
b. During the period commencing on the day after the expiry of
MP period and ending on the date on which royalty payments have
been made to Trident in respect of a total aggregate quantity of no
less than 575,000 tonnes of copper cathode or other finished copper
product, 0.3% of gross revenue; and
c. during the period commencing on the day after the expiry of
the MP period and continuing for the duration of the agreement,
0.2% of gross revenue.
Group and Company
2022 2021
Fair Value US$'000 US$'000
--------------------------------------------------- ---------- ---------
At 1 January 7,461 7,453
Royalties due or received (2,000) (1,503)
Revaluation of royalty financial asset recognised
in profit or loss 2,192 1,511
At 31 December 7,653 7,461
--------------------------------------------------- ---------- ---------
As at 31 December 2022 the Group determined the fair value of
Mimbula by calculating the discounted future cash flows of the
royalty with a 12% pre-tax nominal discount rate, resulting in a
valuation of US$7.65m (2021: US$7.46m). This results in a fair
value gain in the income statement of US$2.19m (2021: US$1.51m).
The key input assumptions are discount rate and commodity
price.
If the discount rate used were to increase or decrease by 2% the
valuation effect would be a US$0.59m (2021: US$0.39m) reduction and
a US$0.68m (2021: US$0.43m) increase, respectively.
If the commodity price used was to increase or decrease by 10%
the valuation effect would be a US$0.62m (2021: US$0.5m) increase
and a US$0.62m (2021: US$0.1m) reduction, respectively.
14. ASSETS HELD FOR SALE
2022 2021
Group US$'000 US$'000
------------------------------------------ ---------- ---------
At 1 January - -
Royalty intangible assets reclassified as 6,750 -
held for sale
At 31 December 6,750 -
------------------------------------------ ---------- ---------
In December 2022 the Group agreed to sell its pre-production
gold royalties over Lake Rebecca, Spring Hill and four other
projects acquired as a portfolio from Talga Resources to
Franco-Nevada in exchange for cash proceeds of up to US$15.8
million. One early-stage royalty was removed from the portfolio
prior to closing and the transactions proceeds were adjusted to be
up to US$15.6 million . The sale of these investments was completed
in February 2023. See note 26 for further information.
There were no assets held for sale in the Company (FY2021:
nil)
15. INVESTMENTS IN SUBSIDIARIES
Company US$'000
----------------------------------- --------
Cost
At 31 December 2021 and 1 January
2022 113
Investment in subsidiary -
At 31 December 2022 113
------------------------------------ --------
As at 31 December 2022 the Company held interests in the
following subsidiary and joint venture companies:
Country Proportion
Company of registration held Registered Office Nature of
business
TRR Services, USA 100% 7233 S.Kellerman Way, Service company
LLC Aurora, CO 80016
----------------- ----------- ---------------------------- ----------------
TRR Services Australia 100% Service company
Australia Pty Floor 2, 44A Kings Park
Limited Road, West Perth, WA
6005
----------------- ----------- ---------------------------- ----------------
TRR Services Switzerland 100% Service company
Schweiz AG Grafenauweg 8, 6300 Zug
----------------- ----------- ---------------------------- ----------------
TRR Services United 6th Floor 60 Gracechurch Service company
UK Ltd Kingdom 100% Street, London, United
Kingdom, EC3V 0HR
----------------- ----------- ---------------------------- ----------------
TRR Holdings USA 100% 251 Little Falls Drive, Service company
LLC Wilmington, DE 19808
----------------- ----------- ---------------------------- ----------------
TRR Offtakes USA 100% 251 Little Falls Drive, Service company
LLC Wilmington, DE 19808
----------------- ----------- ---------------------------- ----------------
Tiomin Peru S.A.C Peru 100% Parque las Leyendas MZA, Dormant
13 Lote,deg902A Al Costado
de Metro De La Av La
Marina, Lima, Peru
----------------- ----------- ---------------------------- ----------------
TRR Sonora Limited United 100% 6th Floor 60 Gracechurch Dormant
Kingdom Street, London, United
Kingdom, EC3V 0HR
----------------- ----------- ---------------------------- ----------------
Sonoroy Holdings United 50% Lynton House 7-12 Tavistock Dormant
Limited Kingdom Square, London, England,
WC1H 9BQ
----------------- ----------- ---------------------------- ----------------
16. AMOUNT DUE FROM SUBSIDIARY UNDERTAKINGS
2022 2021
Company US$'000 US$'000
----------------------------------------- --------- ---------
Loans and contributions to subsidiaries 90,553 47,609
90,553 47,609
----------------------------------------- --------- ---------
During the year ended 31 December 2022 the maximum amount owed
by the subsidiaries to the Parent Company was US$90.6m (2021:
US$47.6). The related party loans are unsecured, repayable upon
demand and have a 6% interest rate where applicable. The fair value
of loans to subsidiaries is the same as their carrying values
stated above.
17. TRADE AND OTHER RECEIVABLES
Group Company Group Company
2022 2022 2021 2021
US$'000 US$'000 US$'000 US$'000
---------------------------- --------- --------- --------- ---------
Trade receivables 9,938 3,015 - -
Prepayments and accrued
income 2,043 989 1,040 1,033
Current tax asset 29 - 29 -
Indirect taxes recoverable 37 37 143 143
---------------------------- --------- --------- --------- ---------
12,047 4,041 1,212 1,176
---------------------------- --------- --------- --------- ---------
Due to the short-term nature of the current receivables, their
carrying amount is considered to be approximate to their fair
value.
18. CASH AND CASH EQUIVALENTS
Group Company Group Company
2022 2022 2021 2021
US$'000 US$'000 US$'000 US$'000
--------------------- --------- --------- --------- ---------
Cash at bank and on
hand 16,577 9,537 45,637 34,480
--------------------- --------- --------- --------- ---------
All of the Company's cash and cash equivalents are held in
accounts which bear interest at floating rates and the Directors
consider their carrying amount approximates to their fair value.
Details of the credit risk associated with cash and cash
equivalents is set out in note 23.
19. TRADE AND OTHER PAYABLES
Group Company Group Company
2022 2022 2021 2021
US$'000 US$'000 US$'000 US$'000
--------------------------- --------- --------- --------- ---------
Trade payables 1,556 85 203 199
Other taxation and social
security 113 - 49 -
Accrued expenses 608 237 787 240
--------------------------- --------- --------- --------- ---------
2,277 322 1,039 439
--------------------------- --------- --------- --------- ---------
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs. The Company has
financial risk management policies in place to ensure that all
payables are paid within the pre-agreed credit terms. The Directors
consider that the carrying amount of trade payables approximates to
their fair value.
CONTINGENT CONSIDERATION
Group US$'000
---------------------------------- ---------------------- ------------
At 31 December 2021 436
Exchange differences (28)
---------------------------------------------------------- ------------
At 31 December 2022 408
---------------------------------------------------------- ------------
Contingent consideration relates to the acquisition of the
Spring Hill royalty. A total of A$600k remains payable to the
vendor on the operator meeting certain production milestones. The
above amount is managements estimate of the amounts due assuming
the operation meets those production limits that trigger payment of
the additional consideration. The amount is discounted and expected
to fall due after more than one year.
On 23 February 2023 the Spring Hill royalty was sold see note 26
for more details.
20. BORROWINGS
2022 2021
Group US$'000 US$'000
------------------------------------ --------- ---------
At 1 January 10,536 -
Secured loan facility at amortised
cost 40,000 10,000
Repayment of debt facility (10,536) -
Accrued finance charges - 536
------------------------------------ --------- ---------
At 31 December 40,000 10,536
------------------------------------ --------- ---------
On 1 July 2021 the Group entered into a US$10m secured loan
facility agreement with a syndicate managed by Tribeca Investment
Partners. The Facility was drawdown on 3 August 2021.
The facility had an initial term of 1 year from drawdown, with
an option to extend for a further year subject to certain
conditions. The facility had a coupon of 10% plus Libor per annum.
On 6 January 2022 the Tribeca loan facility was repaid in full
including redemption interest to ensure a minimum cash return of
7%, which was accrued in full. All associated finance and
arrangement costs were expensed in the year.
On 10 January 2022, a new fully secured US$40m loan facility was
entered into with Macquarie Bank Limited. The facility has a 3-year
term and interest is charged at 7.75% plus SOFR. On 23 February
2023, the facility was restructured, with a one-year extension to
December 2025 and a reduction in the coupon to 5.75% plus SOFR
(subject to maintaining certain leverage ratios).
Maturity analysis
2022 2021
Group US$'000 US$'000
-------------------------------------- --------- ---------
Amounts due within one year 7,500 10,536
Amounts due after more than one year 32,500 -
40,000 10,536
-------------------------------------- --------- ---------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2022 2021
Group US$'000 US$'000
---------------------------------------------- --------- ---------
Cash and cash equivalents 16,577 45,637
Borrowings (40,000) (10,536)
---------------------------------------------- --------- ---------
Net debt (23,423) 35,101
---------------------------------------------- --------- ---------
Net (decrease)/increase in cash and cash
equivalents in the year (28,371) 38,456
Cash inflow from increase in borrowings (29,464) (10,000)
Other non-cash changes - (536)
Exchange differences (689) 210
---------------------------------------------- --------- ---------
Change in net debt resulting from cash flows (58,524) 28,130
Net debt at the start of the year 35,101 6,971
---------------------------------------------- --------- ---------
Net debt at the end of the year (23,423) 35,101
---------------------------------------------- --------- ---------
The net gold receivable amount of US$5.12m is not included in
the net debt reconciliation shown above.
WARRANT LIABILITY
As part of the Tribeca facility, 3,500,000 share warrants to
subscribe for shares in the Company were issued exercisable at
GBP0.5166 per share ('Tribeca Warrants'). The Tribeca Warrants were
exercisable immediately on issue and will expire 24-months from
drawdown. As the US$ value of the Tribeca Warrant exercise price is
a variable amount they have been treated as a derivative financial
liability and are classified as fair value through profit and loss.
The inputs used to calculate the fair value of the Warrants on
initial recognition is shown in note 22.
As part of the Macquarie facility, 14,840,517 share warrants to
subscribe for shares in the Company were issued exercisable at
GBP0.51 per share ('Macquarie Warrants'). The Macquarie Warrants
were exercisable immediately on issue and will expire 36-months
from drawdown. As the US$ value of the Macquarie Warrant exercise
price is a variable amount they have been treated as a derivative
financial liability and are classified as fair value through profit
and loss. The inputs used to calculate the fair value of the
Warrants on initial recognition is shown in note 22.
Group and Company
Fair Value US$'000
--------------------------------------------- --------
At 1 January 2022 172
Fair value of Macquarie Warrants on initial
recognition 879
Revaluation of derivative financial asset
recognised in profit or loss 1,401
At 31 December 2022 2,452
---------------------------------------------- --------
21. SHARE CAPITAL AND SHARE PREMIUM
Group and Company Number Number Share Share
of ordinary of deferred capital premium
shares of shares US$'000 US$'000
1p of 1p
------------------------------------ ------------- ------------- --------- ---------
At 1 January 2021 105,362,556 - 1,335 23,288
------------------------------------ ------------- ------------- --------- ---------
Share issue - placing 134,181,943 - 1,806 61,683
Share issue - royalty acquisitions 11,939,806 - 164 5,256
Share issue - non-executive
directors' fees 108,108 - 2 54
Share issue expenses - - - (3,235)
At 31 December 2021 251,592,413 - 3,307 87,046
------------------------------------ ------------- ------------- --------- ---------
Share issue - placing 13,118,057 - 179 6,259
Share issue - royalty acquisitions 26,013,903 - 344 13,156
Share issue - to employees and
directors 406,227 - 5 198
Share issue expenses - - - (272)
------------------------------------ ------------- ------------- --------- ---------
At 31 December 2022 291,130,600 - 3,835 106,387
------------------------------------ ------------- ------------- --------- ---------
Share issues during the year:
On 11 January 2022, 13,118,057 ordinary shares were issued for
cash at 36p per share.
On 11 January 2022, 20,471,151 ordinary shares were issued at
36p as part of the part of the consideration for the gold offtake
stream portfolio.
On 17 January 2022, of the 406,227 shares issued, including
126,070 ordinary shares issued at 37.02p per shares to the
non-executive directors of the Company in lieu of directors
fees.
On 23 March 2022, 5,542,752 ordinary shares were issued at
51.43p as consideration for the acquisition of the Sugar Zone gold
offtake stream.
Shares issued subsequent to the year-end
On 17 January 2023, 174,366 ordinary shares were issued at
48.84p per shares to the non-executive directors of the Company in
lieu of directors fees.
22. SHARE BASED PAYMENTS
Share options
During 2022 and the previous year share options were granted to
Directors and Senior Management of the Company. Under IFRS 2
"Share-based Payments", the Company considers these to be equity
settled share-based payments and determines the fair value of the
options issued to Directors and employees as remuneration and
recognises the amount as an expense in the statement of income with
a corresponding increase in equity.
At 31 December 2022, the Company had outstanding options to
subscribe for Ordinary shares as follows:
Fair
Option value expired
exercise Expiry Vesting of individual or
price date date option At 01/01/2022 Issued lapsed At 31/12/2022
GBP0.2000 02/06/2030 02/06/2021 GBP0.0630 1,041,666 - 1,041,666
GBP0.2400 02/06/2030 02/06/2022 GBP0.0608 1,041,667 - 1,041,667
GBP0.2800 02/06/2030 02/06/2023 GBP0.0605 1,041,667 - 1,041,667
GBP0.2965 20/12/2030 20/12/2022 GBP0.1260 533,334 (333,333) 200,001
GBP0.3558 20/12/2030 20/12/2023 GBP0.1180 533,333 (333,333) 200,000
GBP0.4551 20/12/2030 20/12/2024 GBP0.1060 533,333 (333,334) 199,999
GBP0.3700 20/04/2028 20/12/2024 GBP0.1068 610,000 (100,000) 510,000
GBP0.4000 17/06/2022 18/06/2021 GBP0.0720 2,500,000 (2,500,000) -
GBP0.5000 01/02/2029 01/02/2023 GBP0.1010 - 1,600,000 (320,000) 1,280,000
GBP0.5000 01/02/2029 31/12/2023 GBP0.0910 - 1,600,000 (320,000) 1,280,000
GBP0.5000 01/02/2029 31/12/2024 GBP0.0830 - 1,600,000 (320,000) 1,280,000
GBP0.5000 01/02/2029 31/12/2025 GBP0.0740 - 1,600,000 (320,000) 1,280,000
GBP0.5000 01/02/2029 31/12/2026 GBP0.0650 - 1,600,000 (320,000) 1,280,000
GBP0.5000 20/09/2029 20/09/2023 GBP0.1690 - 320,000 - 320,000
GBP0.5000 20/09/2029 31/12/2023 GBP0.1610 - 320,000 - 320,000
GBP0.5000 20/09/2029 31/12/2024 GBP0.1510 - 320,000 - 320,000
GBP0.5000 20/09/2029 31/12/2025 GBP0.1440 - 320,000 - 320,000
GBP0.5000 20/09/2029 31/12/2026 GBP0.1310 - 320,000 - 320,000
7,835,000 9,600,000 (5,200,000) 12,235,000
------------------------------------------------------ -------------- ---------- ------------ --------------
For the year ended 31 December 2022 the share options granted
are subject to two vesting conditions. The options vest upon the
occurrence of both the earliest vesting date and upon the
remuneration committee determining the Hurdle volume-weighted
average price less the total dividend per share (excluding any tax
credit) ("VWAP") has been achieved for at least a period of 365
days consecutively at any time between the grant date to the
seventh anniversary of the grant date ("Performance Period"). There
are five hurdles and subsequent vesting dates, with 20% of the
total options granted vesting once these are achieved.
The fair value of the share options was determined using a Monte
Carlo model that can simulate a range of possible outcomes. The
Monte Carlo model uses a normal distribution of outcomes and is
capable of capturing the market-based performance conditions which
should be included in the option fair value, by allowing the
simulation of daily VWAP share price. The Monte Carlo model used
the following inputs:
Grant date 1 February 20 September
2022 2022
--------------------------------- ----------- -------------
Weighted average share price GBP0.409 GBP0.497
on date of grant
Exercise price GBP0.50 GBP0.50
Expected volatility,% 36% 36%
Expected dividend growth rate,% 0% 0%
Risk-free interest rate (5-year
bond),% 1.29% 3.24%
--------------------------------- ----------- -------------
For the year ended 31 December 2021 the following information is
relevant in the determination of the fair value of options granted
using the Black Scholes model:
Grant date 20 April 18 June
2021 2021
--------------------------------- -------------- --------------
Option exercise price GBP0.37 GBP0.40
Fair value of one option, GBP 0.1068 0.072
Option pricing model used Black Scholes Black Scholes
Weighted average share price
at grant date, GBP 0.36 0.40
Weighted average contractual
life, years 8 1
Expected volatility,% 45% 45%
Expected dividend growth rate,% 0% 0%
Risk-free interest rate (5-year
bond),% 0.29% 0.29%
--------------------------------- --------------
Share-based remuneration expense related to the share options
granted is included in the administration expenses line in the
consolidated income statement in the amount of US$0.47m
(31/12/2021: US$0.34m). Volatility was determined by reference to
historic share price data and comparison to peer groups where
historic data is limited to a short time period.
Share warrants
On 11 January 2022, 14,840,517 share warrants to subscribe for
shares in the Company were issued to Macquarie Bank Limited. See
note 20 for further information.
Warrant exercise price GBP0.51
------------------------------------ --------------
Fair value of one option, GBP 0.044
Option pricing model used Black Scholes
Weighted average share price at
grant date, GBP 0.352
Weighted average contractual life,
years 3
Expected volatility,% 35%
Expected dividend growth rate,% 0%
Risk-free interest rate (5-year
bond),% 0.73%
------------------------------------ --------------
The fair value on initial recognition of the warrants was
US$879,000.
On 3 August 2021, 3,500,000 share warrants to subscribe for
shares in the Company were issued to Tribeca.
The following information is relevant in the determination of
the fair value of the Warrants on initial recognition:
Warrant exercise price GBP0.5166
------------------------------------ --------------
Fair value of one option, GBP 0.052
Black Scholes
Option pricing model used
Weighted average share price at
grant date, GBP 0.3974
Weighted average contractual life,
years 2
Expected volatility,% 35%
Expected dividend growth rate,% 0%
Risk-free interest rate (5-year
bond),% 0.29%
------------------------------------ --------------
The fair value on initial recognition of the warrants was
US$181,000.
23. FINANCIAL RISK MANAGEMENT
The Group's activities expose it to a variety of financial risks
which result from its operating and investing activities; market
risk (foreign currency exchange risk and commodity price risk),
liquidity risk, capital risk and credit risk. These risks are
mitigated wherever possible by the Group's financial management
policies and practices described below. The Group's financial risk
management is carried out by the finance team led by the Chief
Financial Officer and under policies approved by the Board. Group
finance identifies, evaluates and mitigates financial risks in
close co-operation with the Group's senior management team.
Capital risk
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going
concern, so that it continues to provide returns and benefits for
shareholders;
-- to support the Group's growth; and
-- to provide capital for the purpose of strengthening the
Group's risk management capability
The Group actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure and equity holder
returns, taking into consideration the future capital requirements
of the Group and capital efficiency, prevailing and projected
profitability, projected operating cash flows, projected capital
expenditures and projected strategic investment opportunities.
Management regards total equity as capital and reserves, for
capital management purposes. The Group is not subject to externally
imposed capital requirements.
Commodity price risk
The royalty portfolio exposes the Group to commodity price risk
through fluctuations in commodity prices of its royalty investments
particularly the prices of iron ore, gold and copper. The Board
consider that the strategy of the Group to build a diversified
portfolio of royalty assets that mirrors the global natural
resources sector is sufficient mitigation with regard to the
exposure to commodity price risk. Prior to committing to royalty
acquisitions the Board obtain independent price forecasts to ensure
that such investments are priced in accordance with consensus
pricing. The Group does not hedge against commodity price
movements
Credit risk
Credit risk refers to the risk that the Group's financial assets
will be impaired by the default of a third party (being non-payment
within the agreed credit terms). The Group is exposed to credit
risk primarily on its cash and cash equivalent balances as set out
in note 18 and on its trade and other receivable balances as set
out in note 17. The Group's credit risk is primarily attributable
to its other receivables, being royalty receivables. It is the
policy of the Group to present the amounts in the balance sheet net
of allowances for doubtful receivables, estimated by the Group's
management based on prior experience and the current economic
environment. In certain cases, the Group has the right to audit the
reported royalty income.
For banks and financial institutions, only parties with a
minimum credit rating of BBB are accepted. The majority of cash is
held with HSBC Bank plc in the UK and household names in the US and
Australia.
The Directors have considered the credit exposures and do not
consider that they pose a material risk at the present time. The
credit risk for cash and cash equivalents is managed by ensuring
that all surplus funds are deposited only with financial
institutions with high quality credit ratings. There are currently
no expected credit losses.
Liquidity risk
Liquidity risk relates to the ability of the Group to meet
future obligations and financial liabilities as and when they fall
due. The Group currently has sufficient cash resources to pay the
trade and other payables and contingent consideration when they
fall due.
Future expected payments
2022 2021
Group US$'000 US$'000
--------------------------------- --------- ---------
Trade and other payables within
one year 2,277 1,039
Current tax liabilities within
one year - -
Contingent consideration due >
one year 408 436
Borrowings due within one year 7,500 10,536
Borrowings due > one year 32,500 -
--------------------------------- --------- ---------
The $40m of borrowings, as at 31 December 2022 was restructured
in February 2023, with the first repayment not due until mid-2024.
The Group has sufficient resources to service the borrowings and
meet related financial covenants.
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from
currency exposures, primarily with respect to the United States
Dollar, British Pound (GBP) and the Australian Dollar.
The following table highlights the major currencies the Group
operates in and the movements against the US Dollar during the
course of the year:
Average rate Reporting spot rate
------------------------- --------------------------
2022 2021 Movement 2022 2021 Movement
------------------- ----- ----- ----------- ------ ----- -----------
British Pound 1.23 1.37 (0.14) 1.21 1.35 (0.14)
Australian Dollar 0.69 0.75 (0.06) 0.68 0.73 (0.05)
The Group's exposure to foreign currency risk based on US Dollar
equivalent carrying amounts of monetary items at the reported
date:
2022 2021
US$'000 US$'000
-------------------------- -------------------------
US$ GBP Other US$ GBP Other
----------------------------- -------- ------ -------- ------- ------ --------
Cash and cash equivalents 15,383 280 914 44,496 852 289
Trade and other receivables 9,436 - 486 375 - 7
Trade and other payables (1,585) (321) (259) (238) (438) (314)
Contingent consideration - - (408) - - (436)
Net exposure 23,234 (41) 733 44,633 414 (454)
----------------------------- -------- ------ -------- ------- ------ --------
The royalty financial asset is denominated in US dollar.
The Group does not hedge against foreign exchange movements.
Exchange rate sensitivity
The Group is mainly exposed to foreign exchange risk on the cash
balances and trade and other payables denominated in currencies
other than US$ as detailed above. A +/- 10% change in the USD:GBP
and USD:AUD rate and the impact of a +/- 10% change on the exchange
rates on the translation of foreign subsidiaries into the Group's
presentation currency would result in the following changes:
2022 2021
US$'000 US$'000
Profit/(loss) Equity Profit/(loss) Equity
------------------- -------------- ---------- -------------- ---------
British Pound (32) - (99) -
Australian Dollar 145 314 265 183
------------------- -------------- ---------- -------------- ---------
24. FINANCIAL INSTRUMENTS
The Group and Company held the following investments in
financial instruments:
Group Company Group Company
2022 2022 2021 2021
US$'000 US$'000 US$'000 US$'000
------------------------------- --------- --------- --------- ---------
Fair value through profit and loss
Royalty financial assets 7,653 7,653 7,461 7,461
Cash and cash equivalents 16,577 9,537 45,637 34,480
------------------------------- --------- --------- --------- ---------
Financial assets at amortised
cost
Trade and other receivables 9,922 93,553 381 47,984
------------------------------- --------- --------- --------- ---------
Financial liabilities at
amortised cost
Trade and other payables 2,165 321 990 439
Contingent consideration 408 - 436 -
Borrowings 40,000 - 10,536 -
------------------------------- --------- --------- --------- ---------
Financial liabilities at
fair value through profit
and loss
Warrant liability 2,452 2,452 172 172
------------------------------- --------- --------- --------- ---------
Trade and other receivables and trade and other payables
excludes all amounts considered to be statutory arrangements (such
as VAT recoverable and corporation tax) and prepayments.
Fair value hierarchy
The Group and Company only has one asset that is measured at
fair value - the Mimbula investment that is recognised as a royalty
financial asset at fair value through profit and loss totalling
US$7.65m (2021: US$7.46m). The asset is deemed to be a level 3
asset under the fair value hierarchy criteria - some of the inputs
for the fair value determination are not based on observable market
data (mainly private resource data).
25. RELATED PARTY TRANSACTIONS
Paul Smith the non-executive Chairman provided US$0.5m of the
US$10.0m loan facility syndicated by Tribeca Investment Partners
which was repaid in January 2022. Paul Smith also received 175,000
warrants, which were issued in connection with the US$10.0m loan
facility, as disclosed in note 22.
Paul Smith, Al Gourley, Adam Davidson and Helen Pein, agreed to
subscribe for new ordinary shares in December 2021 in the
conditional placing on 20 December 2021, which was completed on 11
January 2022, for 839,842 ordinary shares,1,035,000 ordinary
shares, 52,490 ordinary shares and 69,444 ordinary shares
respectively at a price of 36 pence per ordinary share.
During the year legal fees totalling US$0.33m (2021: US$0.18m)
to Fasken Martineau DuMoulin LLP ("Fasken") and its worldwide
affiliates. Fasken is a legal firm in which Al Gourley is a senior
partner.
During the year the Group paid US$0.01m to Bacchus Capital
Advisers Limited, for the provision of office space and meeting
facilities. Bacchus Capital Advisers Limited is a company
controlled by Peter Bacchus.
There are no other related party transactions, or transactions
with Directors that require disclosure except for the remuneration
items disclosed in note 6. The disclosures in note 6 include the
compensation of key management personnel as all employees are
considered to be key. The Company's related parties consist of its
subsidiaries and the transactions and amounts due from them are
disclosed in note 15.
26. EVENTS OCCURING AFTER THE REPORTING DATE
On 17 January 2023, 174,366 ordinary shares were issued at
48.84p per shares to the non-executive directors of the Company in
lieu of directors fees.
On 23 February 2023 the Company completed the sale of several
pre-production gold royalties for gross proceeds of up to
US$15.55m. Following completion, the Company has restructured its
US$40m debt facility with Macquarie Bank Limited including:
-- 2% reduction in coupon (dependant on maintaining leverage
ratio), reducing debt service costs by up to US$800,000 per
year.
o Extension of the loan term by one year, to December 2025
o Deferral of scheduled quarterly payments until June 2024
-- In lieu of a cash restructuring fee, the Company has agreed
to an extension of the term of the warrants held by Macquarie by 12
months.
27. ULTIMATE CONTROLLING PARTY
The company does not have a single controlling party.
2023 Annual General Meeting ("AGM")
The Company's AGM is to be held at 30 Finsbury Square, London,
EC2A 1AG on 29 June 2023 at 11:00 a.m.
If you wish to attend the AGM physically or appoint a person as
your proxy other than the Chairman of the Meeting, you are asked to
register your intention to attend by email to ben.harber@shma.co.uk
with reasonable notice, to allow the Company, if practical, to make
appropriate arrangements. If you do not register your intention to
attend in this way, this could result in either you or your proxy
(if a person other than the Chairman of the Meeting) not being
permitted entry to the AGM.
Shareholders wishing to vote on any of the matters of business
at the AGM or ask any questions are encouraged to:
1. Submit their votes as soon as possible in advance of the
meeting and, in any case, by 11:00 a.m. on 27 June 2023 through the
proxy and electronic voting facilities and to appoint the Chairman
of the meeting as their proxy for this purpose. See the notice of
meeting for full details.
2. Submit any questions in connection with the business of the
meeting in advance to Ben.Harber@shma.co.uk .
The results of the AGM will be announced as soon as practically
possible following conclusion of the meeting.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
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END
FR ZZGGVNDKGFZG
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