Last checked at 8 Feb 2023 07:00
8 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 the announcement by Lithium Americas Corp.1 ("LAC") that it has received a favourable ruling from the US District Court, District of Nevada ("Federal Court") for the appeal filed against the Bureau of Land Management ("BLM") for the issuance of the Record of Decision ("ROD") relating to LAC's Thacker Pass lithium project ("Thacker Pass").
The favourable ruling by the Federal Court confirms the permitting process for Thacker Pass was conducted thoroughly and responsibly, and results in there being no impediment to commencing construction. The Federal Court ordered the BLM to consider whether LAC possessed adequate mining-claim rights to the lands over the area designated for waste storage and tailings, but did not impose any restrictions expected to impact the construction timeline. LAC has indicated that it expects to work closely with BLM to satisfy the outstanding requirement.
Thacker Pass continues to develop into a world class lithium asset following the recent $650 million equity investment from General Motors and appointment of Bechtel as engineering, procurement, construction and management contractor for the construction of Thacker Pass. Lithium Americas envisages a 40-yr mine life at Thacker Pass, producing 80,000 tonnes per annum of battery-quality lithium carbonate in two phases of 40,000 tonnes per annum2, making it a lithium producer of global significance. The first phase of production is expected to commence in H2 2026.
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$66,000 per tonne LCE, once at full production, the (post-buyback) royalty will generate over US$55 million per year to Trident.
Jonathan Evans, President and CEO of LAC, commented to LAC for the purposes of their announcement1:
"We are pleased that the Federal Court has recognized the BLM's decision to issue the Federal Permit, reflecting our considerable efforts to ensure Thacker Pass is developed responsibly and for the benefit of all stakeholders," "The favorable ruling leaves in place the final regulatory approval needed in moving Thacker Pass into construction."
Adam Davidson, Chief Executive Officer of Trident commented:
"We are very pleased with the ruling from the Federal Court and that there is now no impediment to commencing construction. Thacker Pass is a critical project for the USA to establish a robust battery metal supply chain, further endorsed by General Motors' recent $650 million equity investment in LAC. As a cornerstone asset within our portfolio, Thacker Pass provides exposure to a tier 1 lithium project and significant future revenues to Trident. We look forward to updating the market further on Thacker Pass' progress and development in due course."
References
1 Source: Lithium Americas Corp TSX announcement: Lithium Americas receives favourable ruling on record of decision for Thacker Pass, 7 February 2023:
(https://www.lithiumamericas.com/news/lithium-americas-receives-favorable-ruling-on-record-of-decision-for-thacker-pass)
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 )
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Contact details:
Trident Royalties Plc Adam Davidson / Richard Hughes | www.tridentroyalties.com +1 (757) 208-5171 / +44 7967 589997 |
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 |
Liberum Capital Limited (Joint Broker) Scott Mathieson / Cara Murphy | www.liberum.com +44 20 3100 2184 |
Tamesis Partners LLP (Joint Broker) Richard Greenfield | www.tamesispartners.com +44 20 3882 2868 |
St Brides Partners Ltd (Financial PR & IR) Susie Geliher / Catherine Leftley | www.stbridespartners.co.uk +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;
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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.