Last checked at 31 Jul 2023 07:00
31 July 2023
Trident Royalties Plc
("Trident" or the "Company")
Q2 2023 Activities Update
Trident Royalties Plc (AIM: TRR, OTCQX: TDTRF), the diversified mining royalty company, is pleased to provide an update on its activities during the quarter ended 30 June 2023.
HIGHLIGHTS
· Quarterly receipts of US$2.34 million from exposure to gold, copper, and iron ore. A year-on-year increase of 18% over Q2 2022.
· Several key initiatives undertaken in the quarter, including the $8 million acquisition of a near-production silver royalty, admission to trading on the OTCQX in the U.S., and significant advancements within the royalty portfolio.
· Post quarter-end, further validation of the environmental standing of the Thacker Pass lithium project was received with the rejection of arguments to the 9th U.S. Circuit Court of Appeals regarding an appeal of the approval of Thacker Pass, noting that the U.S. Bureau of Land Management, which approved the project, had acted "reasonably and in good faith".
· Trident held cash of c. US$29 million as of 28 July 2023, providing a strong platform for further acquisitions.
Royalty / Stream | Q2 2023 (US$M) | Q2 2022 (US$M) | % Change |
Koolyanobbing iron ore royalty* | 0.29 | 0.45 | -35% |
Mimbula copper royalty | 0.75 | 0.50 | 50% |
Lincoln gold royalty | 0.15 | - | - |
Gold offtakes portfolio | 1.15 | 1.03 | 12% |
Total | 2.34 | 1.98** | 18% |
*Reserve Bank of Australia for 30 June 2023 (0.6630) and 30 June 2022 (0.6889)
** Excludes Premier Gold Offtake amendment included in 2022.
Adam Davidson, Chief Executive Officer of Trident commented:
"Trident has enjoyed another positive quarter which saw significant progress at key assets, as well as the announcement of a new acquisition. Completion of the La Preciosa acquisition, an attractive long-life silver asset in Mexico, provides Trident with exposure to a new commodity well positioned to benefit from the energy transition and further adds to the diversity of Trident's portfolio.
"The dismissal of the appeal of approval of the Thacker Pass lithium project further validates the robustness of the environmental standing of the project and reaffirms the importance of the asset for US battery manufacturing. Trident undertook a site visit to Thacker Pass during the quarter and was impressed both by the calibre of the operating team and progress achieved to date.
"The existing portfolio continues to generate cash, and our balance sheet is in a strong position to act on a robust pipeline of prospective transactions. Royalties have a particular attraction to operators at present, as both debt and equity become more relatively expensive. We look forward to providing updates as the year progresses."
Portfolio Update:
La Preciosa Silver Royalty Transaction 1
· Trident acquired two royalties and an associated US$8.75 million milestone payment from Coeur Mining Inc. over the La Preciosa Silver Project in Mexico.
· La Preciosa is one of the largest undeveloped primary silver resources in Mexico, being advanced by Avino Silver & Gold Mines, which operates the Avino mine and mill located 19km from La Preciosa.
· Avino intends to begin processing stockpiled material from La Preciosa in late-2023 at its existing mill, before commencing production from fresh ore in 2024, with the intent of ramping production to circa 3.5 million ounces by 2028.
· In consideration, Trident paid US$7 million in cash, and a further US$1 million in cash or shares upon receipt of the US$8.75 million milestone payment, which is payable by Avino 12-months from first silver production at La Preciosa.
Thacker Pass Lithium Project 2,3
· Lithium Americas Corp., operator of Thacker Pass, announced early works at Thacker Pass are progressing, including water pipelines, construction ponds, site fencing and access roads. Major earthworks are expected to commence in H2 2023 and support the target to commence lithium production in the second half of 2026.
Koolyanobbing Iron Ore Project 4
· Following receipt of the Q2 payment, Trident has now fully recovered its investment in the royalty.
· Lower royalty proceeds for the quarter based on lower production tonnage, iron ore price and AUD exchange rate. Lower tonnage for the quarter reflects typical variation in the mining sequencing as the royalty does not cover the entirety of the Deception deposit.
Mimbula Copper Project
· Following receipt of the Q2 payment, Trident has now fully recovered its investment in the royalty and as a result, the royalty rate will adjust to 0.30% of gross revenue.
· Trident will retain life-of-mine exposure to Mimbula, which recently announced first cathode production, and previously noted the completion of a Bankable Feasibility Study contemplating an expanded 56,000 tpa alongside a capital raise of US$135 million to progress development of the project.
Offtakes Gold Portfolio
· Gold deliveries increased by 34% year-over-year in the quarter, from 55,186 gold ounces in Q2-2022 to 65,261 in Q2-2023. Stronger deliveries were offset by a reduction in both spot gold price and volatility across Q2. The net result was a 12% year-over-year increase in quarterly revenue.
OTCQX in the U.S. (Ticker: TDTRF)5
· Trident's Ordinary Shares were approved to trade on the OTCQX Market in the U.S., with the first trades having occurred post-quarter end. The cross-trading of Trident's shares will provide enhanced investor benefits, including easier trading access for investors located in the U.S., and greater liquidity due to a broader geographic pool of potential investors.
References
1: Source: Trident Royalties announcement dated 15 May 2023
( https://polaris.brighterir.com/public/trident/news/rns/story/xzj8glw http://www.ganfenglithium.com/ir_en.htmlhttps://polaris.brighterir.com/public/trident/news/rns/story/xo1pnmr)
2: Source: Trident Royalties announcement dated 18 May 2023
( https://polaris.brighterir.com/public/trident/news/rns/story/r778ojr )
3: Source: Trident Royalties announcement dated 19 July 2023
( https://polaris.brighterir.com/public/trident/news/rns/story/ryj879r )
4: Source: Mineral Resources Ltd. Announcement dated 26 July 2023
(https://s3.ap-southeast-2.amazonaws.com/assets.mineralresources.com.au/app/uploads/2023/07/26100505/FY23-Q4-Quarterly-Activities-Report.pdf )
5: Source: Trident Royalties announcement dated 5 April 2023
( https://polaris.brighterir.com/public/trident/news/rns/story/xle8z7w )
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 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 |
Liberum Capital Limited (Joint Broker) Scott Mathieson / Cara Murphy | www.liberum.com +44 20 3100 2184 |
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 |
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.