Trident Royalties. - Portfolio Update: Thacker Pass Lithium Royalty

Trident Royalties

17/02/2023 07:00

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RNS Number : 2218Q  Trident Royalties PLC.  17 February 2023

17 February 2023

 

Trident Royalties Plc

("Trident" or the "Company")

 

Portfolio Update: Thacker Pass Lithium Royalty

 

Trident Royalties Plc (AIM:TRR), the diversified mining royalty company, is
pleased to note a recent update on the Thacker Pass lithium project ("Thacker
Pass" or the "Project"), in Nevada, by the project operator, Lithium Americas
Corp. ("LAC")(1).

 

On 16 February 2023, LAC announced the closing of the initial tranche, an
investment of $320 million, of its previously announced $650 million
investment by General Motors Co. (NYSE: GM) ("GM") (2). Proceeds from GM's
investment are to be used to accelerate the development of Thacker Pass, the
largest known lithium resource in the United States that is fully permitted to
begin construction.

 

GM is now LAC's largest shareholder and offtake partner. LAC confirmed that it
continues to pursue a commitment from the U.S. Department of Energy's Advanced
Technology Vehicle Manufacturing Program, which will help scale lithium
production at Thacker Pass to support production of nearly one million EVs
annually.

 

Trident holds a 60% interest in a gross revenue royalty over the entirety of
Thacker Pass. Assuming LAC exercises the partial royalty buy-back (US$13.2
million attributable to Trident), then Trident will retain the equivalent of a
(net) 1.05% gross revenue royalty. At current lithium spot price of
approximately US$59,000 per tonne LCE, once at full production, the
(post-buyback) royalty will generate approximately US$50 million per year to
Trident.

 

Jonathan Evans, President and CEO of LAC, commented for the purposes of their
announcement(1):

""The beginning of construction at Thacker Pass is imminent following last
week's favorable ruling on the Record of Decision and the closing of GM's
initial investment. GM's investment is a landmark transaction that will help
put millions of drivers into electric vehicles while creating jobs and a
strong and secure U.S. supply chain for EV raw materials."

 

Adam Davidson, Chief Executive Officer of Trident commented:

"Thacker Pass is a long life mine of significant strategic importance in the
context of the United States' transition to net zero. Following last week's
ruling on the Record of Decision, and with this injection of capital from GM's
historic investment in LAC, construction can commence in short order with
first production expected in H2 2026."

 

References

1           Source: Lithium Americas Corp TSX announcement: Lithium
Americas announceds initial closing of $650 million investment from General
Motors, 16 February 2023:

(https://www.lithiumamericas.com/news/lithium-americas-announces-initial-closing-of-650-million-investment-from-general-motors
(https://www.lithiumamericas.com/news/lithium-americas-announces-initial-closing-of-650-million-investment-from-general-motors)
)

2              Source: Lithium Americas Corp announcement dated
31 January 2023:

 
 (https://www.lithiumamericas.com/news/lithium-americas-provides-general-motors-transaction-details-and-update-on-construction-plan-for-thacker-pass
)

 

** Ends **

Contact details:

 

 Trident Royalties Plc                                 www.tridentroyalties.com

 Adam Davidson / Richard Hughes                        +1 (757) 208-5171 / +44 7967 589997
 Grant Thornton (Nominated Adviser)                    (file:///C%3A/Users/afdav/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/GCSQ6WT9/www.grantthornton.com)

                                                     www.grantthornton.co.uk (https://www.grantthornton.co.uk/)
 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
 Liberum Capital Limited (Joint Broker)                www.liberum.com (http://www.liberum.com)

 Scott Mathieson / Cara Murphy                         +44 20 3100 2184
 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 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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