TIDMTRR
RNS Number : 0316L
Trident Royalties PLC
01 September 2023
1 September 2023
Trident Royalties Plc
("Trident" or the "Company")
Portfolio Update: Sonora Lithium Royalty
Trident Royalties Plc (AIM: TRR, OTCQX: TDTRF), the diversified
mining royalty company, notes the recent announcement by Ganfeng
Lithium Co, Ltd ("Ganfeng") regarding the Sonora Lithium Project,
in Mexico.
Ganfeng stated that the General Directorate of Mines ("DGM") in
Mexico issued a formal decision notice to Ganfeng's Mexican
subsidiaries in August 2023 indicating that nine lithium
concessions, which comprise the Sonora Lithium Project, were
cancelled.(1) Ganfeng indicated that it believes that its Mexican
subsidiaries have complied with their obligations as required by
Mexican law, and further notes that the cancellations issued by the
DGM are not final, but that the cancellation may result in an asset
impairment loss.
Ganfeng's position is that the DGM resolutions cancelling the
concessions violate both Mexican law and international law as they
are arbitrary, unsubstantiated in both fact and law, and infringe
upon Ganfeng's and its subsidiaries' fundamental due process
rights. Therefore, Ganfeng and its Mexican subsidiaries have filed
administrative review recourses before the Secretary of Economy
against the aforementioned resolutions.
Transaction Background
On 27 January 2022, Trident announced that Sonoroy, a 50%-held
joint venture between Trident and Marmottes Capital Limited,
entered into an agreement to acquire a 3.0% Gross Revenue Royalty
(1.5% attributable to Trident) over the Sonora Lithium Project. In
accordance with the terms of the agreement, the long-stop date to
complete the acquisition of the royalty is the earlier of 31
January 2025, or the date which is 6 months after the first Royalty
payment.
The conditions requiring Trident to provide funding in respect
of Sonoroy to enable it to complete the acquisition remain at
Trident's discretion and includes a provision that, at the time of
funding, no changes in Mexico's regulatory regime materially
affects the Sonora project and that ongoing litigation regarding
the royalty is favorably resolved. If Trident elects to exit the
joint venture, the repayment date of an initial loan made by
Trident to Sonoroy of $2.5 million is due six months from
notification of termination of the Sale and Purchase Agreement or
Joint Venture Agreement.
Adam Davidson, Chief Executive Officer of Trident commented:
"Trident is disappointed by the recent developments in Mexico
announced by Ganfeng, which add risk to the transaction in addition
to the ongoing litigation in Alberta, whereby the validity of the
royalty is being challenged. We were cognizant of these risks at
the time of the original transaction and structured the deal
accordingly to protect against both political and litigation risk,
such that we may recover our initial $2.5 million secured loan. We
will continue to monitor the situation carefully and, at the
present time, intend to maintain our rights in respect of the
asset."
References
1: Source: Ganfeng Lithium 30 June 2023 Interim Results dated 29 August 2023
( https://www.ganfenglithium.com/ir_detail_en/id/2640.html )
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.
** Ends **
Contact details:
Trident Royalties Plc www.tridentroyalties.com
Adam Davidson / Richard Hughes +1 (757) 208-5171 / +44 7967
589997
Grant Thornton (Nominated Adviser) www.grantthornton.co.uk
Colin Aaronson / Samantha Harrison +44 020 7383 5100
/ Samuel Littler
------------------------------
Liberum Capital Limited (Joint Broker) www.liberum.com
Scott Mathieson / Cara Murphy +44 20 3100 2184
------------------------------
Stifel Nicolaus Europe Limited (Joint www.stifelinstitutional.com
Broker) +44 20 7710 7600
Callum Stewart / Ashton Clanfield
------------------------------
Tamesis Partners LLP (Joint Broker) www.tamesispartners.com
Richard Greenfield +44 20 3882 2868
------------------------------
St Brides Partners Ltd (Financial www.stbridespartners.co.uk
PR & IR) +44 20 7236 1177
Susie Geliher / Catherine Leftley
------------------------------
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;
-- Acquiring royalties and streams in resource-friendly jurisdictions
worldwide, while most competitors have portfolios focused
on North and South America;
-- Targeting attractive small-to-mid size transactions which
are often ignored in a sector dominated by large players;
-- 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;
-- Maintaining a low-overhead model which is capable of supporting
a larger scale business without a commensurate increase in
operating costs; and
-- 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.
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END
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