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I think that's a major aspect Sam. I wasn't convinced of the CEO appointment, and since JT left he's done very little to change my mind. Had JT still been at the helm I'd likely be adding plenty at this valuation, but unfortunately that isn't the case and I've held off. The occasional interview telling us what we want to hear isn't going to cut it. What investors really want to know is how the income gap between Kestrel running off and commencement of full ops at Piaui/West Musgrave/Santo Domingo will be filled. Where's the dealflow we were assured was coming? I appreciate not every deal meets the criteria or gets over the line, but MBL has said many times that the next deal is close.
Currently, the perception is that the board don't give a damn about the falling share price. The occasional director buy generally ignored. I see little in the way of proper PR - especially in the US and Canada to a market that's well versed in the royalty and streaming business.
Why on earth would they want to sell the royalty? TP is a company making asset, and one that'll underpin the future dividend for a long time. Selling the crown Jewels would be akin to Franco selling Goldstrike in the early days, or Osisko selling Canadian Malartic today. Makes absolutely no sense. Pick up the $30-40m per year, grow the business, pay the dividend and everyone is happy.
That's the big question isn't it.
When writing a royalty over a project, most royalty co's make sure the royalty is recognised by the relevant authorities - in most cases the local government/state. Im aware of plenty of royalties on mines/projects in Mexico, but their stance on lithium (at this present time) seems a little different. Threats of nationalisation usually eventually ends up as a bigger royalty for the government - we've seen that many times before (especially on the African continent). But Mexico seem adamant on their lithium deposits, and we also know the Chinese like to play hardball when it comes to recognising royalties (example being Zijin and EMX in Serbia, over the Timok asset). But we also know Ganfeng have acknowledged the royalty held by TNR on theit Mariana lithium project in Argentina.
For what it's worth, I think Thacker Pass gets over the line, but I think even 2026 is optimistic there. I just feel there's a lot more hoops to be jumped through beforehand. With Sonora, Ganfeng will reach an agreement with the Mexicans, but how that plays out for TRR remains to be seen
https://mininggrade.com/r/5iBepW4ZwDdLqKHhvRSy/gm-and-lithium-americas-to-develop-u-s-sourced-lithium-production-through-650-million-equity-investment-and-supply-agreement
General Motors Co. (NYSE: GM) and Lithium Americas Corp. (TSX: LAC and NYSE: LAC) announced today they will jointly invest to develop the Thacker Pass mine in Nevada , which is the largest known source of lithium in the United States and the third largest in the world.
Under the agreement, GM will make a $650 million equity investment in Lithium Americas, which represents the largest-ever investment by an automaker to produce battery raw materials. Lithium Americas estimates the lithium extracted and processed from the project can support production of up to 1 million EVs per year.
Yes that's generally the case MS.
In the case of Sonora, Baconora are challenging the validity of the royalty. Baconora stated a while back that "the Company maintains that the royalty is invalid on the grounds of misrepresentation and a lack of consideration..."
Yes, I agree it's a little murky - and without Ganfeng being more forthcoming it's difficult to know the real situation there. Then there's the issue with Mexico and their desire to own all lithium rights there.
I've also been refreshing the appeal court decisions very regularly to see what the outcome of the Ewing-Orr vs Bacanora appeal was. I saw it listed on the daily proceedings but haven't yet seen any decision. Frustratingly all the other cases that took place around the same time have had the outcomes published. So yeah, it's difficult to know what to think - especially with the portential that both Sonora and Thacker Pass have for the TRR portfolio.
Ganfeng have reported that the project is 'under construction '.
What I have found over the years is that royalty companies in particular will assign an 'advanced stage' label to anything that has been through feasibility. Prior to feasibility they'll assign 'early stage'. I assume that is what TRR have some in this case.
It's simply deferred ounces. We might see some weaker quarters in H1 23, but ultimately the ounces will eventually turn into revenue for ECOR. It does provide a bit of a longer/smoother run off for Kestrel too.
Any disruption is frustrating, but that's all it is.
That's right. Both Thacker Pass and Sonora are appeal stage hearings. Judge Du initially found in favour of LAC and BLM with regards Thacker Pass. Similarly, the judge found in favour of the Orr-Ewing estate in the dispute on the validity of the royalty. In that case Bacanora/Ganfeng appealed that decision, and that appeal was heard (I believe) last week. I've not been able to find details of how that went as yet.
I think you're right about Thacker Pass. Although I'm confident that it'll eventually become a producing asset, I suspect there'll be more hoops to jump through before that's the case.
Sonora is a lot more straightforward. It's in construction right now, and assuming the appeal fails and TRR exercise their right to purchase the royalty, it'll be a paying asset within the next 12-18 months.
Most companies that I'm invested in or follow -and have an interest in the lithium sector, are forecasting $20-35k as a longer term price. Most are modelling sub $20k as a low end benchmark for investment decisions.
Agree they'll come down from these lofty levels, but what is inevitable isn't necessarily imminent...
https://seekingalpha.com/article/4567938-top-5-mining-stocks-to-watch-in-2023
Good to hear MS. A happy New Year to you too. Similarly to you, I'm fond of royalty co's, both precious metals focused and diversified. In fact, the vast majority of my portfolio is royalty and streamers.
I do agree with you - TRR is doing just fine. Nobody would be happier than I for me to be reading the Thacker Pass situation totally wrong.
Anyhow, it'll be interesting to see what comes down the pipe next for TRR.
Hey MS. Hope you're well.
To be honest I'm not expecting the decision to be overturned. What troubles me is the potential for the judge to send LAC/BLM back through the permitting/review process - and the time it takes for everything to ultimately get ironed out. It's been 2 years since Thacker Pass was approved, and it's still getting kicked around in the courts.
I just think TRR need to focus on bringing in further accretive deals. Less focus on what will be (and when) for Thacker Pass. With such a chunky % NAV assigned to Thacker Pass I think TRR need to look to dilute the risk.
Do I see TP eventually getting into production? Probably yes. Do I see that happening in 2025/26? Highly unlikely. Trident, as a diversified royalty and streamer, need to build a sustainable portfolio - irrespective of what happens.