REG - Trident Royalties. - Q4 2021 Activities Update

Trident RoyaltiesAnnouncement

03/02/2022 07:00

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RNS Number : 5348A  Trident Royalties PLC.  03 February 2022

3 February 2022

 

Trident Royalties Plc

("Trident" or the "Company")

 

Q4 2021 Activities Update

Trident Royalties Plc (AIM: TRR), is pleased to provide an update on its
activities undertaken during the quarter ended 31 December 2021, including Q4
royalty receipts.

Q4 saw the acquisition of a portfolio of immediately cash generative gold
offtakes, as well as substantial asset level progress across its portfolio

·      Trident announced the acquisition of a portfolio of immediately
cash generative gold offtake streams. Revenue from the offtakes attributable
to Trident commenced in Q1 2022 following completion, with Trident estimating
US$13.3 million in revenue from the acquired portfolio in 2022(1).

·      Successful fundraise of c.£30.2 million (approx. US$40 million)
by way of an institutional placing and retail offer with strong support from
existing and new blue-chip investors. In addition, a US$40 million debt
facility was secured with Macquarie Bank Limited, significantly reducing
borrowing costs.

·      Subsequent to quarter-end, Trident announced the acquisition of a
right to acquire an interest in the Sonora Lithium Royalty(2). The Sonora
Project is an advanced stage asset which recently commenced construction
activities, targeting plant commissioning, and therefore cash flows to
Trident, in Q4 2023.

·      Trident noted significant asset level progress in the quarter at
a number of projects over which it holds royalties; including:

§ Lithium Americas, the operator of the Thacker Pass lithium project,
released an update to the Thacker Pass Mineral Resource Estimate ("MRE") in Q4
2021, more than doubling the previous MRE. In addition, Lithium Americas
indicated an upsized feasibility study considering significantly larger Stage
1 and 2 operations, increasing both by +30%. Commencement of construction is
anticipated in the first half of 2022(3);

§ Mineral Resources, operator of the Koolyanobbing iron ore mine, stated that
mining operations commenced at the Claw Pit, located entirely on Trident's
royalty tenure(4). Trident notes a significant increase in ore mined from the
royalty zone in Q4 2021, which the Company anticipates will be sold in Q1
2022;

§ Apollo Consolidated, operator of the Lake Rebecca gold project, was
acquired by Ramelius Resources for a cash and share bid valuing Apollo at
approximately A$163.3m. Ramelius is an ASX listed mid-tier gold producer which
has indicated an intent to develop the project into "a mine life of 10 years
at a run rate of at least 100,000 ounces per annum"(5). Ramelius also noted
that metallurgical studies are ongoing alongside planning for infill,
exploration and sterilisation drilling programmes which will re-commence in
February 2022(6);

§ Seduli commenced processing plant commissioning and pre-production
activities at the Lincoln Gold Project(7), which is now targeting first gold
production in Q1 2022.

·      As of 31 January 2022, Trident's unaudited cash balance was
approx. US$17.2 million. This cash balance does not include Q4 royalty
receipts.

Q4 royalty payments of US$375,000, with Q1 poised for substantial increase

·      Mimbula copper royalty payment of US$375,000 for the quarter
based on the Minimum Payment Schedule ("MPS") under the royalty agreement. The
MPS on the Mimbula copper royalty increases to US$500,000 per quarter in 2022
and US$750,000 per quarter for the first two quarters of 2023(8).

·      Material ore tonnage was mined from the royalty zone at the
Koolyanobbing iron ore mine in Q4 2021(4), however, as noted by the operator,
this material has been stockpiled for sale over the coming quarters. As a
result, a nominal royalty payment was received for the quarter but with sales
anticipated to increase materially in Q1 2022.

·      Trident received its inaugural revenue under the acquired
portfolio of gold offtakes post-quarter end on 14 January 2022(9) following
the handover of operational control from Orion. Regular shipments and sales
are now occurring with the offtakes well positioned to capitalise on current
macroeconomic volatility.

·      Finally, following slight delays due to COVID related supply
chain issues, the Lincoln Gold Project anticipates pouring first gold in Q1
2022.

 

Adam Davidson, Chief Executive Officer of Trident commented:

 

"This has been Trident's most significant quarter to date and sets the company
up for what I am convinced will be an exciting year to come. The number of
producing assets within the portfolio increased by 350% in the quarter -
increasing not only the scale but, importantly, the diversification of our
portfolio. With the support of existing and a number of new blue-chip
shareholders as well as a significantly improved debt facility, we have gained
direct exposure to high-quality producing assets, adding to our precious
metals exposure while complementing the existing base and battery metals
exposure within our portfolio. Having already generated first revenue under
these recently acquired gold offtakes, regular gold deliveries and cash sales
have commenced.

 

"More recently, and just post-quarter end, the addition of the right to
acquire a 50% interest in the Sonora Lithium Royalty in Mexico(2) has added to
our already significant Tier 1 lithium exposure. With construction already
underway at this 19-year initial mine life project, if completed, this
acquisition is expected to add to our cash generation in the latter part of
next calendar year, with revenue visibility for many years to come.

 

"We are gaining scale with 21 assets now in the portfolio, 9 of which are
generating cash. Importantly, within the portfolio a number of assets are
approaching key milestones which provides the potential for near-term material
organic growth without the need to deploy additional capital. With a team well
versed in sourcing and completing high return transactions, we are in prime
position to continue to grow the size and quality of our asset base during
2022."

 

 

References

1:             Source: Trident Royalties announcement dated 13
December 2021

( https://polaris.brighterir.com/public/trident/news/rns/story/x52139x
(https://polaris.brighterir.com/public/trident/news/rns/story/x52139x) )

 

2:             Source: Trident Royalties announcement dated 27
January 2022

                (
https://polaris.brighterir.com/public/trident/news/rns/story/x2kjzlx
(https://polaris.brighterir.com/public/trident/news/rns/story/x2kjzlx) )

 

3:             Source: Trident Royalties announcement dated 8
October 2021

                (
https://polaris.brighterir.com/public/trident/news/rns/story/w3zyyzr
(https://polaris.brighterir.com/public/trident/news/rns/story/w3zyyzr) )

 

4:             Source: Mineral Resources announcement dated 26
October 2021

( https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02441185-6A1058220?access_token=83ff96335c2d45a094df02a206a39ff4
(https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02441185-6A1058220?access_token=83ff96335c2d45a094df02a206a39ff4)
 )

 

5:             Source: Ramelius Resources / Apollo Consolidated
announcement dated 18 October 2021

                (
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02436827-6A1056350?access_token=83ff96335c2d45a094df02a206a39ff4
(https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02436827-6A1056350?access_token=83ff96335c2d45a094df02a206a39ff4)
)

 

6:             Source: Ramelius Resources announcement dated 28
January 2022

                (
https://www.rameliusresources.com.au/wp-content/uploads/bsk-pdf-manager/2022/01/28.01.22-December-2021-Quarterly-Report.pdf
)

 

7.             Source: Trident Royalties announcement dated 1
December 2021

                (
https://polaris.brighterir.com/public/trident/news/rns/story/xo767dr
(https://polaris.brighterir.com/public/trident/news/rns/story/xo767dr) )

 

8.             Source: Trident Royalties announcement dated 29
June 2020

                (
https://polaris.brighterir.com/public/trident/news/rns/story/r73y4gx/export
(https://polaris.brighterir.com/public/trident/news/rns/story/r73y4gx/export)
)

 

9.             Source: Trident Royalties announcement dated 14
January 2022

                (
https://polaris.brighterir.com/public/trident/news/rns/story/rn984nw
(https://polaris.brighterir.com/public/trident/news/rns/story/rn984nw) )

 

 

Competent Person's Statement

 

The technical information contained in this disclosure has been read and
approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM, MIMMM, FGS), who is a
qualified geologist and acts as the Competent Person under the AIM Rules -
Note for Mining and Oil & Gas Companies. Mr O'Reilly is a Principal
Consultant working for Mining Analyst Consulting Ltd which has been retained
by Trident to provide technical support.

 

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

 

** Ends **

Contact details:

 

 Trident Royalties Plc                                 www.tridentroyalties.com

 Adam Davidson / Paul Smith                            +1 (757) 208-5171 / +41 79 947 1348
 Grant Thornton (Nominated Adviser)                    www.grantthornton.co.uk

                                                     (file:///C:/Users/afdav/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/GCSQ6WT9/www.grantthornton.com)
 Colin Aaronson / Samantha Harrison / Samuel Littler

                                                       +44 020 7383 5100
 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 / Catherine Leftley                     +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 and precious metals, bulk
materials (excluding thermal coal) and battery metals.

 

Key highlights of Trident's strategy include:

 

·      Building a royalty and streaming portfolio to broadly mirror the
commodity exposure of the global mining sector (excluding thermal coal) 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 has relied 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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