TIDMTRR
RNS Number : 4299O
Trident Royalties PLC.
08 October 2021
8 October 2021
Trident Royalties Plc
("Trident" or the "Company")
Royalty Portfolio Update: Thacker Pass Lithium Resource
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Trident Royalties Plc (AIM:TRR, FSX:5KV), the growth-focused
mining royalty and streaming company, is pleased to note the recent
announcement(1) by Lithium Americas Corp. ("Lithium Americas" or
"LAC") regarding positive progress at the Thacker Pass Lithium
Project ("Thacker Pass" or the "Project"), in Nevada, USA. Trident
holds a 60% interest in a gross revenue royalty ("GRR")(2) over the
entirety of the Project, further details of which are set out below
(the " Thacker Pass Royalty " or the "Royalty").
Lithium Americas has released a significant update to the
Thacker Pass Mineral Resource Estimate ("MRE") - more than doubling
the size of the MRE - and set out technical inputs to the ongoing
Feasibility Study and Project timelines.
The Thacker Pass MRE has increased to 13.7Mt of lithium
carbonate equivalent ("LCE") grading 2,231 parts per million
lithium ("ppm Li") of Measured and Indicated ("M&I") Resources
and 4.4Mt of LCE grading 2,112ppm Li of Inferred Resources. The
Feasibility Study is now considering an optimised mine plan
targeting Phase 1 capacity of 40,000 tonnes per annum ("tpa")
lithium carbonate (+30% increase over the 30,000tpa LCE targeted
for Phase 1 in the original Pre-Feasibility Study ("PFS")) and a
Phase 2 total capacity of 80,000tpa LCE (+30% increase over the
60,000tpa LCE targeted for Phase 2 in the original PFS).
Adam Davidson, Chief Executive Officer of Trident commented:
"This latest update from Lithium Americas more than doubles to
the lithium Resource estimate for Thacker Pass which has a very
positive read through for Trident's potential future earnings from
this project, which is the largest lithium reserve in the United
States. The ongoing Feasibility Study is now considering an
optimised mine plan targeting an initial Phase 1 of 40,000tpa
lithium carbonate with a potential Phase 2 expansion to target
total capacity of 80,000tpa lithium carbonate - a significant
increase over the Pre-Feasibility targets of 30,000tpa and
60,000tpa for Phases 1 and 2 respectively. This comes at a time
when LCE prices have more than doubled over the course of 2021. In
addition, Lithium Americas reports the permitting process to be on
track, with a final decision expected in Q1/2022 and with the
planned pilot plant expected to become operational during
H1/2022.
"Under the revised production profile targets announced by LAC
(but retaining the PFS LCE price of US$12,000/tonne), Phase 1
royalty revenue attributable to Trident would increase from
approximately US$3.8 million per annum to +US$5 million, with Phase
2 royalty revenue increasing from approximately US$7.6 million per
annum to +US$10 million; noting that the current LCE price is now
>US$25,000 per tonne."
THACKER PASS UPDATE SUMMARY
The ongoing Thacker Pass Feasibility study considers an
optimised mine plan and the following key variables. Lithium
Americas expects to provide an update on timing of the Feasibility
Study by early 2022.
-- Updated Mineral Resource Estimate : Expanded M&I Resource
estimate to 13.7Mt LCE at 2,231ppm Li (see Table 1 and
comparison(3) Table 2). The updated MRE incorporates the Southwest
Basin, a change in cut-off grade, and additional drilling since the
2018 M&I Resource of 6.0Mt LCE at 2,917ppm Li(3) .
Figure 1: Thacker Pass Location and Mineral Resource Model
Compared to the Boundary of 2018 Resource Model: to view the image,
please click on the following link
http://www.rns-pdf.londonstockexchange.com/rns/4299O_1-2021-10-7.pdf
Table 1: Mineral Resource Estimate for the Thacker Pass Project,
announced 7 October 2021 (CIM NI43-101 compliant)
Resource Classification Tonnage Ave. Li Grade Lithium Carbonate
(million tonnes) (ppm) Equivalent
Mt (million tonnes)
Mt
------------------------- ------------------ -------------- ------------------
Measured 654.2 2,356 8.2
Indicated 499.4 2,067 5.5
Measured and
Indicated 1,153.6 2,231 13.7
Inferred 391.6 2,112 4.4
See Resource Mineral Estimate notes (2)
-- Phase 1 capacity increased to target 40,000tpa lithium
carbonate : Initial Phase 1 targeted capacity increased to reflect
the optimized mine plan and leaching efficiencies. Optimisation
work is focused on maximising lithium carbonate production in Phase
1 without increasing the size of the proposed 3,000 tonnes per day
("tpd") sulphuric acid plant or water usage. Improvements include a
mine plan focused on the illite clay and processing technologies to
increase yield.
-- Phase 2 to target additional 40,000tpa capacity for total
capacity of 80,000tpa lithium carbonate: Plans to include an
expansion scenario to target total capacity of 80,000tpa of lithium
carbonate. The addition of a 40,000tpa expansion ("Phase 2"), is
designed to demonstrate Thacker Pass' ability to scale production
and align with potential customer and partner longer-term demands.
The Phase 2 expansion scenario would entail additional time
required to amend and meet permitting requirements beyond Phase 1.
To meet potential customer and partner needs, LAC continues to also
advance engineering to consider an option for a 20,000tpa lithium
hydroxide chemical conversion plant.
-- Permitting process on track with final decision expected in
Q1 2022 : All key State permits(2) are expected to be released for
public comment in Q4/2021. At the Federal level, a court hearing on
the appeal of the Record of Decision(3) is expected to take place
in February 2022, with the ruling to follow shortly thereafter.
-- Developing integrated pilot plant to support increased scale:
Working on an integrated pilot plant, expected to be operational in
H1/2022, to support ongoing optimisation work, confirm certain
assumptions in the design and operational parameters and provide
product samples for potential customers. The existing process
testing facility will be relocated to a new facility in Reno and
expanded to run the full Thacker Pass flowsheet to produce lithium
carbonate samples.
-- Early-works construction expected to commence in H1/2022:
Early-works includes roads, site preparation, water line and
additional infrastructure to condense and de-risk the overall
construction schedule.
-- Discussions continue with potential strategic partners and
customers: LAC has retained Greenhill & Co. to act as financial
advisor for the Thacker Pass strategic partnership process.
-- Designed to minimise environmental footprint: Thacker Pass is
being designed to incorporate carbon-free power as its primary
energy source, state-of-the-art air emissions control technologies,
a zero-water discharge process, water recycling technologies to
reduce water consumption and adopt active reclamation to maintain
low footprint. Environmental impact analysis is underway by Golder
Associates to align with the proposed Feasibility Study design.
The technical details summarised in this announcement are based
on technical information compiled by the Qualified Persons in
compliance with Canadian National Instrument 43-101 as set out in
the referenced Lithium Americas announcements and reports.
Thacker Pass Royalty Information
Trident holds a 60% interest in the Thacker Pass GRR. The key
terms of the GRR are as follows:
-- A gross revenue royalty on all mineral products generated at
the mine of 8% (4.8% attributable to Trident) reducing to 4% (2.4%
attributable to Trident) after US$22 million is paid.
-- The right to reduce the GRR to 1.75% (1.05% attributable to
Trident) by the operator making a Buyback payment of US$22 million
at any time (US$13.2 million attributable to Trident).
-- Trident notes that the Prefeasibility Study ("PFS")(6)
assumes the Buyback is completed within the first year of operation
and, as such, Trident has assumed that it would benefit from a
1.75% GRR (1.05% attributable to Trident) through the life cycle of
the project.
-- Based on the PFS parameters and assuming the Buyback is
exercised before the commencement of production, the anticipated
Phase 1 steady-state royalty revenue attributable to Trident is
expected to be approximately US$3.8 million per annum, increasing
to approximately US$7.6 million per annum at Phase 2
steady-state(7) . Under the revised production profile targets
announced by LAC (but retaining the PFS LCE price of
US$12,000/tonne), Phase 1 royalty revenue attributable to Trident
would increase to +US$5 million per annum, with Phase 2 royalty
revenue increasing to +US$10 million per annum; noting that the
current LCE price is now >US$25,000 per tonne.
Notes & References
All of the technical information in this release has been
extracted from the publicly available source documents identified
below, the reader is advised that the appropriate CIM tables and
Qualified Persons Statements may be found in those documents.
1 Source: Lithium Americas Corp. (TSX: LAC, NYSE: LAC)
announcement. Lithium Americas Expands Resource at Thacker Pass and
Increases Phase 1 Capacity to Target 40,000 tpa Lithium Carbonate,
7 October 2021
(
https://www.lithiumamericas.com/news/lithium-americas-expands-resource-at-thacker-pass-and-increases-phase-1-capacity-to-target-40000-tpa-lithium-carbonate
)
2 Mineral Resource Estimate Notes for the 7 October 2021 update
produced in accordance with CIM Definition Standards along with
Mineral Resource and Mineral Reserve Estimation Best Practice
Guidelines (2019):
-- The Qualified Person who supervised the preparation of and
approved disclosure for the estimate is Randal Burns, B.Sc.Geology
and SME, VP Exploration at Lithium Nevada Corp., a wholly owned
subsidiary of Lithium Americas.
-- Mineral Resources are reported using an economic break-even
calculation formula: "Operating Cost per Resource Tonne"/"Price per
Recovered Tonne Lithium" * 10^6 = ppm Li Cut-off. "Operating Cost
per Resource Tonne" = US$58.58, "Price per Recovered Tonne Lithium"
is calculated: ("LCE Price" * 5.32 * (1 - "Royalties") *
"Recovery". Variables are "LCE Price" = US$12,000/tonne Li2CO3,
"Royalties" = 1.75% and "Recovery" = 70%.
-- A resource economical pit shell has been derived from
performing a pit optimization calculation using Vulcan
software.
-- The conversion factor for lithium metal (100%) to LCE is 5.323.
-- Applied density is 1.79 tonnes/m3.
-- Measured Mineral Resources are in blocks estimated using at
least six drill holes and eighteen samples within a 262 m × 262 m
search radius in the horizontal plane and 5 m in the vertical
direction; Indicated Mineral Resources are in blocks estimated
using at least two drill holes and six to eighteen samples within a
483 m × 483 m search radius in the horizontal plane and 5 m in the
vertical direction; and Inferred Mineral Resources are blocks
estimated with at least one drill hole and three to six samples
within a search radius of 722 m × 722 m in the horizontal plane and
5 m in the vertical plane.
-- Rounding errors may exist.
3 Mineral Resource Estimate comparison between 7 October 2021
MRE update and previous 5 April 2018 MRE. See referenced PFS for 5
April 2018 MRE assumptions.
Table 2: Comparison between 7 October 2021 MRE and 5 April 2018
MRE.
Category EFFECTIVE DATE OF 7 OCTOBER 2021 EFFECTIVE DATE OF 5 APRIL 2018
1,334 PPM LI CUT-OFF GRADE 2,000 PPM LI CUT-OFF GRADE
Measured 654.2 Mt 242.2 Mt
2,356 Average Li (ppm) 2,948 Average Li (ppm)
8.2 Mt LCE 3.8 Mt LCE
----------------------------------- ---------------------------------
Indicated 499.4 Mt 143.1 Mt
2,067 Average Li (ppm) 2,864 Average Li (ppm)
5.5 Mt LCE 2.2 Mt LCE
----------------------------------- ---------------------------------
Total Measured and Indicated 1,153.6 Mt 385.3 Mt
2,231 Average Li (ppm) 2,917 Average Li (ppm)
13.7 Mt LCE 6.0 Mt LCE
----------------------------------- ---------------------------------
Inferred 391.6 Mt 147.4 Mt
2,112 Average Li (ppm) 2,932 Average Li (ppm)
4.4 Mt LCE 2.3 Mt LCE
----------------------------------- ---------------------------------
4 State Permits: Three key state-level permits are expected to
be published in draft form by the Nevada Department of
Environmental Protection ("NDEP") for public comment in Q4 2021:
(1) Water Pollution Control Permit, (2) Mine Reclamation Permit and
(3) Class II Air Permit. LAC expects to have final versions of
these permits in December 2021. LAC expects that early-works on the
water line could begin as early as February 2022, once permits are
received. Other early-works are expected to begin in H1 2022,
including roads, site preparation and additional infrastructure, to
condense and de-risk overall construction schedule. A decision on
the water rights transfer application is anticipated by Q1
2022.
5 The Record of Decision ("ROD") was received in January 2021
from the Bureau of Land Management ("BLM"). In February 2021,
claims were filed against the BLM to appeal the issuance of the
ROD. Injunction requests over the Company's plan to begin
pre-construction work were denied in Q3 2021. A court hearing on
the appeal is expected to take place in February 2022, with the
ruling to follow shortly thereafter.
6 Technical Report on the Pre-Feasibility Study for the Thacker
Pass Project, Humboldt County, Nevada, USA, Effective Date 1 August
2018 , results announced 21 June 2018 Study link :
https://www.lithiumamericas.com/staging/lithiumamericas.com/_resources/pdf/investors/technical-reports/thacker-pass/Technical-Report-Thacker-Pass.pdf?v=0.228
7 Assuming that the Buyback of US$13.2 million attributable to
Trident is exercised to reduce the GRR rate. Note that the
steady-state cash flows exclude the Buyback payment.
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 +1 (757) 208-5171
Grant Thornton (Nominated Adviser) www.grantthornton.co.uk
Colin Aaronson / Samantha Harrison +44 020 7383 5100
/ Lukas Girzadas
---------------------------
Tamesis Partners LLP (Joint Broker) www.tamesispartners.com
Richard Greenfield +44 20 3882 2868
---------------------------
Shard Capital Partners LLP (Joint www.shardcapital.com
Broker) +44 20 7186 9927
Erik Woolgar / Isabella Pierre
---------------------------
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 and precious metals, bulk materials (excluding thermal coal)
and battery metals.
Key highlights of Trident's strategy include:
-- Expanding on a royalty and streaming portfolio which broadly
mirrors the commodity exposure of the global mining sector
(excluding thermal coal) 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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