Q3 2021 Activities Update

RNS Number : 8208Q

Trident Royalties PLC.

01 November 2021

 

1 November 2021

Trident Royalties Plc

("Trident" or the "Company")

Q3 2021 Activities Update
 

Trident Royalties Plc (AIM: TRR, FSX: 5KV), is pleased to provide an update on its activities undertaken during the quarter ended 30 September 2021, including Q3 2021 royalty receipts.

HIGHLIGHTS

Q3 saw the acquisition of a near-term cash generative gold royalty, substantial asset level progress, and further significant Board additions

· The acquisition of a fully secured, perpetual royalty over the Lincoln Gold Project centred in California's prolific 'Mother Lode'. The royalty funding provided working capital to facilitate the restart of the project with first production anticipated during Q4 2021.

· Trident noted significant asset level progress at a number of projects over which it holds royalties; including:

§ Shortly post quarter end, Lithium Americas, the operator of the Thacker Pass lithium project, released a significant update to the Thacker Pass Resource estimate as well as an indication of an upsized feasibility study considering significantly larger Phase 1 and 2 operations relative to the original Pre-Feasibility study;

§ Trident notes recent commentary by Mineral Resources on 26 October 2021 in relation to the Koolyanobbing iron ore mine, stating: "… our [mining] fleet mobilised to our northern operations, with Claw pit commencing in September. During the quarter significant overburden removal activity was also undertaken across Deception, Parker Range, Altair and Claw Pits"¹. The Claw pit and part of the Deception pit are situated within Trident's royalty tenure (click here for an aerial video showing recent development of the Claw Pit: https://bit.ly/3bvMWh7 );

§ Apollo Consolidated Limited received competing takeover offers earlier this month for the company from Gold Road Resources and Ramelius Resources. Both parties are well capitalised, ASX listed mid-tier producers seeking to acquire Apollo Consolidated for its cornerstone Lake Rebecca Gold Project;

§ Commencement of dry commissioning activities at the Lincoln Gold Project, along with mobilisation of key personnel and mining equipment to site during the quarter, targeting first gold production during Q4 2021;

§ Continued construction activities at the Warrawoona Gold Project, with first gold production for the project targeted by the end of June 2022;

§ Positive initial drill intercepts at Talga Talga Gold Project, including two shallow 3m wide high-grade gold intercepts of over 20g/t.

· During the period, Trident welcomed Peter Bacchus to the board as a Non-Executive Director. Mr Bacchus brings 25 years of experience as a leading global M&A advisor having held senior roles at Morgan Stanley and Jefferies prior to his current role as Chairman and Chief Executive of Bacchus Capital. Mr Bacchus currently sits on the boards of Gold Fields Limited, Kenmare Resources Plc and Galaxy Resources Limited.

Q3 royalty payments totalling US$375,000 from royalties over producing assets

Royalty / Stream	Q3 2021 Payment	Q3 2020 Payment
Koolyanobbing iron ore royalty	-	A$652,073
Mimbula copper royalty	US$375,000	US$21,967

· Mimbula copper royalty payment of $375,000 based on the Minimum Payment Schedule ("MPS") under the royalty agreement. The MPS on the Mimbula copper royalty continues in 2021 ($375,000 per quarter in 2021, increasing to $500,000 per quarter in 2022 and $750,000 per quarter for the first two quarters of 2023)².

· No royalty payment was received from Koolyanobbing as the operator mined from an adjacent tenement at Deception during the quarter.

· Trident notes recent commentary by Mineral Resources stating that the Claw pit at Koolyanobbing commenced in September 2021, which is contained entirely on Trident's royalty tenure, along with overburden removal at Deception pit, which is partially covered by Trident's royalty. Trident anticipates the recommencement of cashflow from its royalty imminently¹.

Positive asset-level progress by project operators

· Thacker Pass Lithium Project: Lithium Americas Corp, the project operator, more than doubled the size of the Thacker Pass Mineral Resource Estimate and outlined an optimised Feasibility Study which would consider a +30% increase to both Phase 1 and 2 production targets⁴. Lithium prices have recently reached a 3-year high on increasing demand and supply shortfalls⁵. On 3 September 2021, a U.S. federal judge ruled that Lithium Americas Corp. may conduct excavation work at Thacker Pass, denying an injunction request by opponents of the project⁶.  

· Lake Rebecca Gold Project:   Apollo Consolidated Ltd, the project operator, noted the receipt of two takeover offers from Gold Road Resources and Ramelius Resources immediately following the quarter end, underscoring the quality of the asset ^{7, 8}. Both suitors are existing operators in Western Australia, with strong balance sheets capable of aggressively pursuing the development of Lake Rebecca should a takeover be completed.

· Mimbula Copper Project: Ramp up and construction activities continue at the Mimbula Copper Mine in Zambia following the project operator, Moxico Resource Plc, having raised US$73M earlier in 2021 to fund an expansion to 30k tpa of copper production. Reuters subsequently reported that a debt fundraise targeting between US$65-70M is underway in advance of a London initial public offering⁹.

· Lincoln Gold Project: Seduli, the project operator, noted the mobilisation of key personnel during the quarter and continuation of refurbishment and dry commissioning activities at the processing plant and mine. First gold production is targeted to occur prior to 2021 year-end.

· Warrawoona Gold Project: Calidus Resources Ltd, the project operator, reports that the construction of the Warrawoona Gold Project continues to advance in line with budget and schedule with first gold scheduled for June 2022 ¹⁰. Trident holds a 1.5% NSR royalty on tenement M45/1290 which covers the eastward strike extension of Warrawoona, and notes recent information attached to the Mining Lease application which indicates a Mineral Resource Estimate on the tenement for 138,530oz contained gold, and mining scheduled to commence on the tenement in 2023 ¹¹.

· Talga Talga Gold Project: Novo Resources Corp, the project operator, has reported the results of a maiden Reverse Circulation ("RC") drilling program at Talga Talga. During July and August 2021, 65 shallow RC holes were drilled for a total of 3,240 m, testing three targets along the mineralised corridor. Drilling at the NW Australian prospect, within the Talga Gold Project, intersected 3 m at 25.5 g/t Au from 28 m and 3 m at 23.3 g/t Au from 11 m in the upper shear horizon in two adjacent sections. The high-grade gold results are supported up and down dip with intersections showing the same target position. Follow up drilling, planned for early 2022, will directly target these high-grade gold plunging shoots to better determine strike extent and depth potential ¹².

Strong balance sheet to support future acquisitions

· As of 30 September 2021, Trident's unaudited cash balance was US$14.4 million. This cash balance does not include Q3 royalty receipts.

· Trident is currently evaluating numerous royalty and stream opportunities, with 11 active NDAs covering a breadth of commodities including gold, iron ore, zinc, nickel, lead and a number of battery and industrial minerals.

Adam Davidson, Chief Executive Officer of Trident commented:

"It has been another busy quarter for Trident with a number of significant developments related to assets held in Trident's existing portfolio, as well as the acquisition of a new, imminently paying, fully secured gold royalty centred in one of the most historically prolific mining jurisdictions globally. The emergence of two potential suitors for Apollo's Lake Rebecca Gold Project, the progression of the Warrawoona Gold Project towards construction, and the prospect of first gold production by year end at the Lincoln Gold Project, highlight a portfolio of precious metal royalties rivalling many of our exclusively precious metal focused peers.

"Our largest asset currently is our Thacker Pass lithium royalty. The doubling of the size of the Thacker Pass resource and consideration of a materially larger Phase 1 and Phase 2 operation represents a significant increase in the value of Trident's royalty since acquisition, especially when coupled with lithium prices that are currently double the original pre-feasibility study assumptions. Given the current outlook for lithium, Thacker Pass is set to continue to be a source of significant and growing value for Trident.

"It is very pleasing to note the announcement by Mineral Resources that the commencement of the Claw Pit at the Koolyanobbing iron ore mine is imminent. This reiterates the attractiveness of the royalty model, with Claw excluded from Trident's original economic analysis. With overburden removed during the quarter, we also anticipate the resumption of revenues from the Deception pit. Trident retains a strong balance sheet, and an attractive pipeline of advanced stage opportunities with the potential to add significant value to Trident's growing portfolio of royalties. We look forward to sharing additional newsflow in the coming months"

References

1:  Source: Mineral Resources announcement dated 26 October 2021

( https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02441185-6A1058220?access_token=83ff96335c2d45a094df02a206a39ff4   )

2:  Source: Trident Royalties announcement dated 29 June 2020

( https://polaris.brighterir.com/public/trident/news/rns/story/r73y4gx/export   )

3:  AUD = 0.7179 USD (30 September 2021)

4:  Source: Trident Royalties announcement dated 8 October 2021

( https://polaris.brighterir.com/public/trident/news/rns/story/w3zyyzr   )

5:  Source: Reuters Article published 13 September 2021

( https://www.reuters.com/business/autos-transportation/surge-electric-vehicle-sales-power-lithium-prices-shortages-loom-2021-09-13/   )

6:  Source: Reuters: Native Americans lose bid to halt digging at Nevada lithium mine site published 4 September 2021

( https://www.reuters.com/legal/litigation/native-americans-lose-bid-halt-digging-nevada-lithium-mine-site-2021-09-03/   )

7:    Source: Gold Road Resources announcement 21 October 2021

( https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02438753-6A1057203?access_token=83ff96335c2d45a094df02a206a39ff4   )

8:    Source: Ramelius Resources announcement 18 October 2021

( https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02436827-6A1056350?access_token=83ff96335c2d45a094df02a206a39ff4   )

9:  Source: Reuters article published 13 July 2021

( https://www.reuters.com/article/moxicoresources-ipo-idCNL8N2OO4X6 )

10:  Source: Calidus Resources Ltd ASX announcement 21 October 2021

( https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02438569-6A1057130?access_token=83ff96335c2d45a094df02a206a39ff4   )

11:  Source: Government of Western Australia Department of Mines, Industry Regulation and safety: Resource Reports filing for tenement M45/1290 : Supporting Statement dated 17 September 2020

( https://geodocs.dmirs.wa.gov.au/Web/documentlist/8/ML_NUM/M45%2F1290 )

12:  Source: Novo Resources Corporation announcement 27 September 2021: High Grade Gold Intersected in First Drill Program at Talga Talga Gold Project

( https://www.novoresources.com/_resources/news/2021-09-27.pdf )

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	www.tridentroyalties.com [phone]
Grant Thornton (Nominated Adviser) Colin Aaronson / Samantha Harrison / Lukas Girzadas	www.grantthornton.co.uk [phone]
Tamesis Partners LLP (Joint Broker) Richard Greenfield	www.tamesispartners.com [phone]
Shard Capital Partners LLP (Joint Broker) Erik Woolgar / Isabella Pierre	www.shardcapital.com [phone]
St Brides Partners Ltd (Financial PR & IR) Susie Geliher / Catherine Leftley	www.stbridespartners.co.uk [phone]

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:

· Building a royalty and streaming portfolio to broadly mirror 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 has relied 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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