REG - Trident Royalties - Portfolio Update: Sonora Lithium Royalty

Trident RoyaltiesAnnouncement

19/02/2024 07:00

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RNS Number : 5201D  Trident Royalties PLC  19 February 2024

19 February 2024

 

Trident Royalties Plc

("Trident" or the "Company")

 

Portfolio Update: Sonora Lithium Royalty

 

Trident Royalties Plc (AIM: TRR, OTC: TDTRF), the diversified mining royalty
company, is pleased to provide an update in respect of Sonoroy Holdings
Limited ("Sonoroy"), its 50%-held joint venture which agreed to acquire a 3.0%
Gross Revenue Royalty (1.5% attributable to Trident) (the "Royalty", and the
acquisition thereof, the "Transaction") over the Sonora Lithium Project in
Mexico ("Sonora") from the Estate of Colin Orr-Ewing (the "Estate").

 

In accordance with the terms of the agreement to acquire the Royalty, the
long-stop date to complete the Transaction has been extended to 31 December
2026. Trident has also agreed that other than in limited circumstances, the
repayment date for its loan to Sonoroy is extended until the earlier of: (i)
31 December 2026; or (ii) completion of the Transaction.

 

As previously notified, the Royalty is the subject of litigation between the
Estate and Bacanora, which is being adjudicated by the Court of King's Bench
of Alberta. Trident may terminate the JV if the litigation is finally resolved
in favor of Bacanora, or if it is unresolved by the long-stop date. In
addition, the project operator Ganfeng Lithium Co, Ltd., and its Mexican
subsidiaries, have filed administrative review recourses before the Secretary
of Economy in relation to the cancellation of nine lithium concessions by the
Mexican Government, which comprise the Sonora project. Ganfeng notes the
cancellation as violating both Mexican and international law.(1) Trident is
not required to provide funding in respect of Sonoroy to enable it to complete
the acquisition, if at the time of funding there are changes to Mexico's
regulatory regime which, in Trident's reasonable opinion, materially affects
the Sonora project.

 

Adam Davidson, Chief Executive Officer of Trident commented:

"The Sonora royalty has the potential to become a Tier 1 royalty, providing
exposure to a long-life lithium project with expansion optionality and
operated by a world class lithium specialist. The transaction structure
provides Trident with the ability to participate in the potential significant
upside associated with the project from a low-cost and protected position.

 

This extension to complete the Sonora royalty acquisition gives sufficient
time to allow a resolution to both the Alberta litigation, as well as the
administrative review filed by Ganfeng regarding the cancellation of the
project concessions. The Estate and its advisors continue to be excellent
partners, and we look forward to continued work alongside them as the
situation evolves."

 

 

References

1:             Source: Ganfeng Lithium 30 June 2023 Interim
Results dated 29 August 2023

 
(https://www.ganfenglithium.com/ir_detail_en/id/2640.html
(https://www.ganfenglithium.com/ir_detail_en/id/2640.html) )

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.

 

** Ends **

 

Contact details:

 

 Trident Royalties Plc                             www.tridentroyalties.com

 Adam Davidson / Richard Hughes                    +1 (757) 208-5171 / +44 7967 589997
 Grant Thornton (Nominated Adviser)                www.grantthornton.co.uk (http://www.grantthornton.co.uk)

 Colin Aaronson / Samantha Harrison / Enzo Aliaj   +44 020 7383 5100
 Liberum Capital Limited (Joint Broker)            www.liberum.com (http://www.liberum.com)

 Scott Mathieson / Cara Murphy                     +44 20 3100 2184
 Stifel Nicolaus Europe Limited (Joint Broker)     www.stifelinstitutional.com (http://www.stifelinstitutional.com)

 Callum Stewart / Ashton Clanfield                 +44 20 7710 7600
 Tamesis Partners LLP (Joint Broker)               www.tamesispartners.com (http://www.tamesispartners.com)

 Richard Greenfield                                +44 20 3882 2868
 St Brides Partners Ltd (Financial PR & IR)        www.stbridespartners.co.uk (http://www.stbridespartners.co.uk)

 Susie Geliher / Zoe Briggs                        +44 20 7236 1177

 

 

About Trident

 

Trident is a growth-focused diversified mining royalty and streaming company,
providing investors with exposure to a mix of base battery, precious, and bulk
metals.

 

Key highlights of Trident's strategy include:

 

 ·             Building upon a royalty and streaming portfolio which broadly mirrors the
               commodity exposure of the global mining sector (excluding fossil fuels) with a
               bias towards production or near-production assets, differentiating Trident
               from the majority of peers which are exclusively, or heavily weighted, to
               precious metals;

 ·             Acquiring royalties and streams in resource-friendly jurisdictions worldwide,
               while most competitors have portfolios focused on North and South America;

 ·             Targeting attractive small-to-mid size transactions which are often ignored in
               a sector dominated by large players;

 ·             Active deal-sourcing which, in addition to writing new royalties and streams,
               will focus on the acquisition of assets held by natural sellers such as:
               closed-end funds, prospect generators, junior and mid-tier miners holding
               royalties as non-core assets, and counterparties seeking to monetise packages
               of royalties and streams which are otherwise undervalued by the market;

 ·             Maintaining a low-overhead model which is capable of supporting a larger scale
               business without a commensurate increase in operating costs; and

 ·             Leveraging the experience of management, the board of directors, and Trident's
               adviser team, all of whom have deep industry connections and strong
               transactional experience across multiple commodities and jurisdictions.

 

 

The acquisition and aggregation of individual royalties and streams is
expected to deliver strong returns for shareholders as assets are acquired on
terms reflective of single asset risk compared with the lower risk profile of
a diversified, larger scale portfolio. Further value is expected to be
delivered by the introduction of conservative levels of leverage through debt.
Once scale has been achieved, strong cash generation is expected to support an
attractive dividend policy, providing investors with a desirable mix of
inflation protection, growth and income.

 

Forward-looking Statements

 

This news release contains forward‐looking information. The statements are
based on reasonable assumptions and expectations of management and Trident
provides no assurance that actual events will meet management's expectations.
In certain cases, forward‐looking information may be identified by such
terms as "anticipates", "believes", "could", "estimates", "expects", "may",
"shall", "will", or "would". Although Trident believes the expectations
expressed in such forward‐looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those projected.
Mining exploration and development is an inherently risky business. In
addition, factors that could cause actual events to differ materially from the
forward-looking information stated herein include any factors which affect
decisions to pursue mineral exploration on the relevant property and the
ultimate exercise of option rights, which may include changes in market
conditions, changes in metal prices, general economic and political
conditions, environmental risks, and community and non-governmental actions.
Such factors will also affect whether Trident will ultimately receive the
benefits anticipated pursuant to relevant agreements. This list is not
exhaustive of the factors that may affect any of the forward‐looking
statements. These and other factors should be considered carefully and readers
should not place undue reliance on forward-looking information.

 

Third Party Information

 

As a royalty and streaming company, Trident often has limited, if any, access
to non-public scientific and technical information in respect of the
properties underlying its portfolio of royalties and investments, or such
information is subject to confidentiality provisions. As such, in preparing
this announcement, the Company often largely relies upon information provided
by or the public disclosures of the owners and operators of the properties
underlying its portfolio of royalties, as available at the date of this
announcement.

 

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