Trident Royalties - Q3 2023 Activities Update

Trident Royalties

06/11/2023 07:00

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RNS Number : 4077S  Trident Royalties PLC  06 November 2023

6 November 2023

 

Trident Royalties Plc

("Trident" or the "Company")

 

Q3 2023 Activities Update

Trident Royalties Plc (AIM: TRR, OTC: TDTRF), the diversified mining royalty
company, is pleased to provide an update on its activities during the quarter
ended 30 September 2023.

 

HIGHLIGHTS

·      Quarterly receipts of US$1.94 million from exposure to gold,
copper, and iron ore.

·      Excluding the Mimbula copper royalty, where a minimum payment
schedule concluded in Q2 2023 following full recovery of capital, receipts
increased by 18% quarter-on-quarter. Trident retains a perpetual gross revenue
royalty over Mimbula.

·      Several key undertakings during a very active quarter for the
Company, including:

§ The acquisition of an advanced stage lithium royalty in the U.S., which
immediately benefited from a 45% increase in Mineral Resource estimate
announced shortly after acquisition;

§ The acquisition of a major gold exploration royalty in Mali operated by
industry leader B2Gold, the royalty covers a significant exploration tenure
which hosts an existing gold resource and is within trucking distance of
B2Gold's operating Fekola mine, which produced almost 600koz of gold in 2022;

§ Significant advancements within the existing portfolio, set out in more
detail below, which includes significant ramp-up activities at the Mimbula
Copper Project, the release of the second tranche of funding by General Motors
toward construction at the Thacker Pass Lithium Project, and continued
development across the gold offtake portfolio which has steadily increased in
year-over-year production and revenue.

·      Trident held cash of circa US$25.6 million as of 3 November 2023,
providing a strong platform for further acquisitions.

 

 Royalty / Stream                 Q3 2023 (US$M)  Q2 2023 (US$M)  % Change  Q3 2022 (US$M)
 Gold offtakes portfolio          1.40            1.15            22%       1.31
 Koolyanobbing iron ore royalty*  0.33            0.29            14%       0.40
 Mimbula copper royalty**         0.06            0.75            -92%      0.50
 Lincoln gold royalty             0.15            0.15            0.0%      0.17
 Total                            1.94            2.34            -17%      2.38

*Reserve Bank of Australia for 29 September 2023 (0.66458) and 30 September
2022 (0.6502)

** Reflects the step-down in royalty rate and conclusion of the minimum
payment schedule as US$5m has been received

Adam Davidson, Chief Executive Officer of Trident commented:

"This has been another solid quarter for Trident, with two new transactions,
good progress within our existing portfolio, and solid revenue generation. In
the uncertain geopolitical environment, our diversified exposure has
demonstrated its value, with our gold offtake revenue benefiting from higher
gold prices and volatility. Our gold exposure will benefit further during the
first half of 2024, with first gold expected at Equinox's Greenstone Project,
alongside ramping of production at other assets.

 

"We continued to build our portfolio during the quarter with the acquisition
of new royalties over the Paradox Lithium Project and the Dandoko Gold
Project. Both projects have the potential to become significant contributors
to revenue over the short to medium-term. With the conclusion of the minimum
payment schedule at Mimbula, Trident now has direct exposure to the project
which is maintaining its positive ramp-up towards becoming a mid-tier copper
producer.  The Thacker Pass Lithium Project continues to reaffirm its status
as a Tier 1 operation following the separation of Thacker into its own
business unit, providing a rationalised structure for potential U.S.
government transition material funding.

 

"Against the backdrop of weak equity markets and higher interest rates, we
continue to see good levels of potential deal flow across a range of
commodities and jurisdictions. With three material transactions since May,
2023 is shaping up to be another year of solid delivery for Trident. With cash
in hand, and a maturing portfolio of high-quality assets, Trident is well
positioned to continue to build into the diversified royalty company of
choice."

 

Portfolio Update:

Paradox Lithium Royalty Transaction (1, 2)

·      In September, Trident acquired a 2.5% net smelter return royalty
over projects owned by Anson Resources Ltd. in the Paradox Basin in Utah, USA.
The Royalty covers Anson's flagship Paradox Lithium Project.

·      Anson released a Definitive Feasibility Study for Paradox in
September 2022 outlining Phase 1 operations producing an initial 13,074 tonnes
per annum of Lithium Carbonate (Li(2)CO(3)) for the first 10 years of a
23-year operation.

·      Anson is well-funded to continue rapidly progressing Paradox,
with A$38.6 million in cash-on-hand as of 30 June 2023.

·      Subsequent to quarter-end, Anson announced a 45% increase in its
JORC 2012 compliant Mineral Resource estimate at Paradox (to a total contained
1.504Mt Lithium Carbonate Equivalent) (2), directly benefiting Trident's
royalty.

 

Dandoko Gold Royalty Transaction (3)

·      Trident acquired an effective 1% net smelter return royalty over
Dandoko Gold Project permit area in western Mali, owned and operated by B2Gold
Corporation Limited.

·      Dandoko was the flagship asset of ASX-listed Oklo Resources,
which was acquired by B2Gold in September 2022 for A$91.3 million. For 2023,
B2Gold has budgeted US$63 million for Fekola Regional development area (which
primarily includes the Anaconda area and Dandoko permit).

·      Dandoko is located 25km from B2Gold's operating Fekola mine.
Fekola is B2Gold's largest asset, targeting production of 580-610 Koz at
US$565-$625/oz cash cost for FY2023.

·      B2Gold has stated that it believes the metallurgical
characteristics of mineralisation at Dandoko are similar to Fekola and will be
amenable to processing at Fekola.

 

Thacker Pass Lithium Project (4, 5)

·      Lithium Americas announced that at its Annual General Meeting,
shareholders overwhelmingly approved the separation of the company into
Lithium Americas (Argentina) Corp. and Lithium Americas Corp., with the
reorganisation completing on 3 October 2023. Thacker Pass is held within
Lithium Americas Corp.

·      Following the separation, the second tranche of General Motor's
US$650 million investment into the new Lithium Americas Corp occurred and
General Motors is now the largest shareholder, holding approximately 9.4% of
Lithium Americas Corp. shares. The new structure may also help in obtaining
U.S. government assistance for transition material funding.

·      As previously noted, all permits for construction have been
issued and Lithium Americas has commenced Phase 1 construction, with a H2 2023
construction budget of US$145 million(8), targeting first production in H2
2026.

 

Gold Offtakes Portfolio

·      Gold deliveries increased by 10% year-over-year in the quarter,
from 65,865 gold ounces in Q3 2022 to 72,642 in Q3 2023. Stronger deliveries
were offset by a reduction in both spot gold price and volatility across Q3.
The net result was a 7% year-over-year increase in quarterly revenue.

·      Various global geopolitical and macroeconomic factors emerging in
October 2023 have led to an increase in gold price and volatility, both of
which positively impact the gold offtakes.

 

Mimbula Copper Project (6, 7)

·      Royalty proceeds decreased as expected with the conclusion of the
Minimum Payment Schedule upon Trident fully recovering its investment in Q2
2023, with the royalty rate adjusting to 0.3% of gross revenue. The project
continues to perform well.

·      Mimbula Phase 1 project of 10,000 tonnes of copper cathode per
annum was officially opened by His Excellency Hakainde Hichilema, President of
the Republic of Zambia, in March 2023.

·      A bankable feasibility study for Phase 2 of the Mimbula Copper
Project, to expand operations to 56,000 tonnes per annum was completed in
August 2022.

·      Early works for Mimbula Phase 2 continue to progress with the
design engineering for the long lead time items, construction of project
offices and electrowinning circuit ("EW") foundations completed.

·      The initial part of Mimbula Phase 2, consisting of the
construction of the first half of the EW, is planned to be implemented during
the second half of 2023, and first production from the expanded EW capacity is
expected shortly thereafter.

·      Moxico currently anticipates that full production from Mimbula
Phase 2 will commence early-2025.

 

Koolyanobbing Iron Ore Project

·      Royalty proceeds increased from the previous quarter based on
higher production tonnage but lower iron ore price and AUD exchange rate.
Production tonnage for the quarter reflected typical variation in the mining
sequencing as the royalty does not cover the entirety of the Deception
deposit. Trident fully recovered its investment in the royalty following the
Q2 2023 royalty payment.(6)

 

References

 

1:             Source: Trident Royalties announcement dated 4
September 2023

                (
https://polaris.brighterir.com/public/trident/news/rns/story/rgz8ljw
(https://polaris.brighterir.com/public/trident/news/rns/story/rgz8ljw) )

 

2:             Source: Trident Royalties announcement dated 18
October 2023

                (
https://polaris.brighterir.com/public/trident/news/rns/story/xo8gg1w )

 

3:             Source: Trident Royalties announcement dated 21
August 2023

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

 

4:             Source: Lithium Americas Corp. announcement dated 3
October 2023

(
https://lithiumamericas.com/files/doc_news/Lithium-Americas-Closes-Separation-to-Create-Two-Leading-Lithium-Companies-2023.pdf
)

 

5:             Source: Trident Royalties announcement dated 18 May
2023

                (
https://polaris.brighterir.com/public/trident/news/rns/story/r778ojr )

 

6:             Source: Trident Royalties announcement dated 31
July 2023

                (
https://polaris.brighterir.com/public/trident/news/rns/story/rgze1jw )

 

7:             Source: Moxico Resources PLC corporate website

( https://www.moxicoresources.com/projects/republic-of-zambia/operations
(https://www.moxicoresources.com/projects/republic-of-zambia/operations) )

 

8:             Source: Lithium Americas corporate presentation,
October 2023

( https://lithiumamericas.com/investor/events-and-presentations/default.aspx
(https://lithiumamericas.com/investor/events-and-presentations/default.aspx) )

 

 

Competent Person's Statement

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

 

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

 

** Ends **

 

Contact details:

 

 Trident Royalties Plc                             www.tridentroyalties.com

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

                                                 (file:///C%3A/Users/afdav/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/GCSQ6WT9/www.grantthornton.com)
 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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