5 February
2024
Trident Royalties
Plc
("Trident" or the
"Company")
Q4 2023 Activities
Update
Trident Royalties Plc (AIM: TRR, OTC: TDTRF), the diversified
mining royalty company, is pleased to provide an update on its
activities during the quarter ended 31 December 2023.
HIGHLIGHTS
· Quarterly receipts of US$3.2 million from exposure to gold,
copper, and iron ore, a 63% increase from Q3 2023, driven
principally by seasonally higher deliveries from the gold offtake
portfolio.
· Excluding the Mimbula copper royalty, receipts were slightly
above Q4 2022. Mimbula concluded a minimum payment schedule in Q2
2023 following full recovery of Trident's initial investment.
Trident retains a 0.3% gross revenue royalty over Mimbula,
which is continuing its ramp-up as noted in more detail
below.
· The
Company delivered several key undertakings during the quarter,
including:
§ Acquisition of a net smelter return royalty over the advanced
stage, high-grade copper-zinc Antler deposit in Arizona, USA, being
advanced by ASX-listed New World Resources1;
§ Entered
into a commitment letter with BMO Capital Markets and CIBC for a
new, lower-cost US$40 million revolving credit facility, which is
expected to close in Q1 2024. If fully drawn, the facility would
deliver interest savings of up to US$1.3 million per
annum.2
· As of
31 December 2023, the Company had an unaudited net debt position of
US$22 million.
Royalty /
Stream
|
Q4 2023
(US$M)
|
Q4 2022
(US$M)
|
% Change
|
Q3 2023
(US$M)
|
Gold
offtakes portfolio
|
2.39
|
2.23
|
7%
|
1.40
|
Koolyanobbing iron ore royalty*
|
0.57
|
0.53
|
8%
|
0.33
|
Mimbula
copper royalty**
|
0.06
|
0.50
|
-88%
|
0.06
|
Lincoln
gold royalty***
|
0.15
|
0.17
|
-12%
|
0.15
|
Total
|
3.17
|
3.50
|
-9%
|
1.94
|
*
Calculated using Reserve Bank of Australia FX rates: 29 September
2023 (0.646), 30 December 2022 (0.678), and 30 December 2023
(0.684)
** Reflects
the step-down in royalty rate and conclusion of the minimum payment
schedule as US$5m has been received
*** Partial
payment received, with the balance expected by the 12 February 2024
extension date
Adam Davidson, Chief Executive Officer of Trident
commented:
"We enjoyed a solid finish to the year with an attractive
royalty acquisition, excellent progress within our existing
portfolio, and the announcement of a significant debt refinancing
which materially lowers our cost of capital.
Against the backdrop of an increasingly complex and volatile
geopolitical environment, our diversified portfolio - with exposure
to gold, lithium, copper, silver, and other commodities - continues
to demonstrate its value. In particular, our gold offtake assets
again benefited from elevated volatility in gold
prices.
Asset level developments across the portfolio continue to
enhance the value and cash generation potential of Trident. The
commencement of production at the Greenstone gold project is
expected to deliver up to 58.5koz of additional gold to Trident
over the course of 2024. Construction activities continue to
progress at the Thacker Pass lithium project, whilst on-going
ramp-up and recently completed equipment upgrades are expected to
double capacity at the Mimbula copper project in 2024. We also
expect the first payment from our La Preciosa silver royalty, as
the operator announced in January that it anticipates commencing
the processing of surface stockpiles following the signing of a
long-term land use agreement with the local communities for the
development of the project.
"In our 2022 Annual Report we highlighted the significance of
reducing our cost of capital to our business. During the quarter,
we announced a new debt facility with global lenders BMO Capital
Markets and CIBC. The new facility provides greater flexibility in
managing our cash, increases our potential borrowing capacity to
US$60 million, and delivers a lower cost of capital to the
business. The support of institutions such as BMO
and CIBC, leading financiers to the sector, validates our existing
portfolio and the opportunity that exists.
Portfolio Update:
Antler Copper Royalty Transaction
1
· In
November 2023, Trident acquired a 0.90% net smelter return royalty
over the current tenement package at New World Resources' Antler
Copper Project. Trident also has the right to a 0.45% net smelter
return royalty over any ground subsequently acquired by New World
within 5km of the project boundary.
· Antler
is an advanced stage, high-grade copper-zinc polymetallic deposit
in a secure mining supportive jurisdiction with a JORC (2012)
compliant Mineral Resource estimate of 11.4Mt @ 4.1% Cu-equivalent
for approximately 467,000 tonnes of Cu-equivalent.
· Mine
development and surface infrastructure will be located on privately
owned land, which is currently owned or controlled by New World,
thereby streamlining the permitting process.
· New
World submitted its Mine Plan of Operations to the Bureau of Land
Management following the end of the quarter, marking a significant
milestone in the permitting process for Antler. Further technical
studies will also continue in parallel with exploration and mine
permitting to continue to de-risk and enhance the development of
Antler.
Gold Offtakes Portfolio 3,4
· Net
revenue increased 7% relative to Q4 2022, driven principally by an
increase in both spot gold price and volatility across the quarter.
Gold deliveries decreased slightly from 74,085 gold ounces in Q4
2022 to 72,410 in Q4 2023.
· Equinox Gold provided an update on construction and
commissioning progress at its Greenstone Project in Ontario,
Canada, reporting:
§ The
project is 96% complete, with pre-commissioning activities ongoing
in most of the main process plant areas. More than 15 million
tonnes of material have been moved to date and build-up of the ore
stockpile is ahead of plan, with first gold pour anticipated in H1
2024.3
§ Trident
holds a gold offtake with an annual cap of 58,500 ounces and
previously secured a guarantee from Premier Gold Mines Limited (a
subsidiary of Equinox) that any shortfall in deliveries for 2024
and 2025 will be compensated at a rate of $23.50 per ounce. The
commissioning at Greenstone should lead to higher gold offtake
deliveries in 2024.4
Thacker Pass Lithium Project 5
· As
previously noted, all permits for construction have been issued and
Lithium Americas has commenced Phase 1 construction, targeting
first production in H2 2026. The construction budget for the second
half of 2023 was $145 million.
· Lithium Americas announced that earthworks and detailed
engineering continues to advance in preparation for major
construction in 2024.
· Lithium Americas continues to work closely with the U.S.
Department of Energy ("DOE") Loan Programs Office to advance
confirmatory due diligence and term sheet negotiations for the
Advanced Technology Vehicles Manufacturing Loan Program ("ATVM Loan
Program"), following the receipt of a Letter of Substantial
Completion on 22 February 2023.
o Lithium Americas expects the DOE ATVM Loan Program conditional
approval process to be completed in early-2024 and, if approved, to
fund up to 75% of capital costs for construction of Phase
1.
Paradox Lithium Project 6,7
· In
October, ASX-listed Anson Resources announced a 45% increase in its
JORC 2012 compliant Mineral Resource estimate at Paradox (to a
total contained 1.504Mt Lithium Carbonate Equivalent), directly
benefiting Trident's royalty.
· The
upgrade was attributable to Anson's successful acquisition of the
Green Energy Lithium Project immediately adjacent to
Paradox.
· Upgraded Mineral Resource estimate represents a 45% increase
to the previously reported contained Lithium Carbonate Equivalent,
including:
o 6%
increase in Indicated Resource
o 117%
increase in Inferred Resource
Mimbula Copper Project 8
· Phase
1 production of 10,000 tonnes of copper cathode per annum commenced
in early 2023.
· An
additional 80 electrowinning cells were commissioned in 2023, which
have begun producing copper cathode and have capacity to double
production to 20,000 tonnes per year.
· The
full Phase 2 expansion to 56,000 tonnes of annual copper production
is underway, with Moxico Resources targeting full Phase 2
production to commence in mid-2025.
References
1:
Source: Trident Royalties announcement dated 8 November
2023
(
https://polaris.brighterir.com/public/trident/news/rns/story/xop679r
)
2:
Source: Trident Royalties announcement dated 29 November
2023
(
https://polaris.brighterir.com/public/trident/news/rns/story/rn4mvkx
)
3:
Source: Equinox Gold Corp. announcement dated 20 November
2023
(
https://www.equinoxgold.com/news/equinox-golds-greenstone-project-96-complete-commissioning-underway/
)
4:
Source: Trident Royalties announcement dated 14 April
2022
(
https://polaris.brighterir.com/public/trident/news/rns/story/rmzg65w
)
5:
Source: Lithium Americas announcement dated 9 November
2023
(
https://lithiumamericas.com/news/news-details/2023/Lithium-Americas-Provides-Thacker-Pass-Update-with-Q3-2023-Carve-Out-Financials-and-MDA/default.aspx
)
6:
Source: Trident Royalties announcement dated 18 October
2023
(
https://polaris.brighterir.com/public/trident/news/rns/story/xo8gg1w
)
7:
Source: Anson Resources Ltd announcement dated 2 November
2022
( https://wcsecure.weblink.com.au/pdf/ASN/02592902.pdf
)
8:
Source: Moxico Resources Plc website
(
https://www.moxicoresources.com/projects/republic-of-zambia/operations
)
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. In relation to the mineral
resource estimates, the company confirms that the
material assumptions and technical parameters
underpinning the estimates in the relevant market announcements
continue to apply and have not materially changed, and
it is not aware of any new information or data
that materially affects the estimates.
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 /
Enzo Aliaj
|
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 / Zoe
Briggs
|
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;
|
·
|
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.