Last checked at 17 Feb 2023 07:00
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 announcement1:
""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)
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.