Last checked at 2 Sep 2022 07:00
2 September 2022
Trident Royalties Plc
("Trident" or the "Company")
Portfolio Update: Lincoln Gold Project
Trident Royalties Plc (AIM: TRR), the diversified mining royalty company, is pleased to provide an update on the Lincoln Gold Project ("Lincoln"). Following the completion of mine and plant refurbishment and commissioning activities, Seduli Sutter Operations Corporation ("Seduli") intends to prioritise Mineral Resource1 expansion and study activities in the near term in order to facilitate the funding and development of Stage 2 production (1,000 tonnes-per-day for ~80,000+ ounces gold per year2) and suspend Stage 1 production.
Trident has agreed to provide various waivers in relation to its security position in exchange for the implementation of a Minimum Payment Schedule ("MPS"), which will replace the revenue expected from deferred Stage 1 production. First payment of US$173,500 required under the MPS was received on 1 September 2022, with additional payments scheduled on a quarterly basis until Trident has received a total of US$3,000,000, at which point the MPS ceases and only the residual net smelter return royalty rate will apply, as per the terms of the existing agreement2.
Adam Davidson, Chief Executive Officer of Trident commented:
"Trident is supportive of the proposed re-focus on resource expansion and fast-track plans for Stage 2 production. Indeed, Trident's original investment thesis was centred on the exploration potential of the highly prospective Mother Lode, with Seduli owning the only permitted processing plant in the region. Seduli is now able to focus on maximising the value of Lincoln with additional exploration and study work to support a larger operation in due course. With the implementation of the minimum payment schedule, which has been sized to replace the delayed revenues expected from Stage 1, we have clearer line of sight to revenue from the royalty whilst retaining full exposure to future value added by the proposed strategy."
LINCOLN PROJECT UPDATE SUMMARY
Trident has agreed to a variation to the existing Royalty Agreement with the following key points:
· Seduli to pay the higher of the royalty rate of 1.50%, or the MPS
· US$173,500 due on September 1, 2022 (received)
· US$173,500 due on December 1, 2022
· Minimum ongoing quarterly payments of US$150,000 commencing in 2023
· Payments made quarterly until US$3,000,000 has been received by Trident
· After US$3,000,000 has been received, security is released and only the royalty rate of 0.75% going forward applies for future payments
In exchange for the MPS, Trident has provided various waivers and standstills in relation to potential future events of default under the existing royalty deed. The royalty retains senior security over all key assets of the Project and terms remains unchanged from the initial investment, excepted as noted in this release.
References
1: The Lincoln Gold Project has a NI 43-101 and 2014 Canadian Institute of Mining Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves ("CIM") compliant Mineral Resource estimate as set out in Table 1:
Table 1: Mineral Resource Estimate for Lincoln Mine Project (metric unit conversion)
Deposit | Resource Classification | Tonnes | Gold Grade (g/t) | Contained Gold (Koz) |
Lincoln-Comet# | Indicated | 137,893 | 13.75 | 61 |
Lincoln-Comet# | Inferred | 459,038 | 8.71 | 128 |
Keystone* | Inferred | 361,969 | 8.33 | 97 |
Total | - | 958,900 | 9.29 | 286 |
Gold cut-off grade of 4.11g/t Au.Converted from Imperial Resource Table set out in below linked report. Figures subject to rounding. # Lincoln-Comet Mineral Resource Estimate dated 14 December 2010 based on 15 February 2010 data * Keystone Mineral Resource Estimate dated 22 June 2015 based on 15 June 2010 drill data. | ||||
Technical Report available via Canadian System for Electronic Document Analysis and Retrieval ("SEDAR"), filed under 'Sutter Gold Mining Inc.', see https://www.sedar.com/homepage_en.htm
2: Trident Royalties Plc announcement dated 31 August 2021
( https://polaris.brighterir.com/public/trident/news/rns/story/wklj8ox )
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.
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Contact details:
Trident Royalties Plc Adam Davidson / Paul Smith | www.tridentroyalties.com +1 (757) 208-5171 / +41 79 947 1348 |
Grant Thornton (Nominated Adviser) Colin Aaronson / Samantha Harrison / Samuel Littler | www.grantthornton.co.uk +44 020 7383 5100 |
Stifel Nicolaus Europe Limited (Joint Broker) Callum Stewart / Ashton Clanfield | www.stifelinstitutional.com +44 20 7710 7600 |
Tamesis Partners LLP (Joint Broker) Richard Greenfield | www.tamesispartners.com +44 20 3882 2868 |
Hudson Sandler Investor Relations: John Smelt Public Relations: Charlie Jack / Harry Griffiths | +44 207 796 4133 js@tridentroyalties.com Trident@hudsonsandler.com |
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;
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· | Acquiring royalties and streams in resource-friendly jurisdictions worldwide, while most competitors have portfolios focused on North and South America;
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· | Targeting attractive small-to-mid size transactions which are often ignored in a sector dominated by large players;
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· | 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;
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· | Maintaining a low-overhead model which is capable of supporting a larger scale business without a commensurate increase in operating costs; and
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· | 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.