Q3 2023 Activities Update

Trident Royalties PLC

06 November 2023

 

6 November 2023

Trident Royalties Plc

("Trident" or the "Company")

Q3 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 30 September 2023.

HIGHLIGHTS

·      Quarterly receipts of US$1.94 million from exposure to gold, copper, and iron ore.

·      Excluding the Mimbula copper royalty, where a minimum payment schedule concluded in Q2 2023 following full recovery of capital, receipts increased by 18% quarter-on-quarter. Trident retains a perpetual gross revenue royalty over Mimbula. 

·      Several key undertakings during a very active quarter for the Company, including:

§ The acquisition of an advanced stage lithium royalty in the U.S., which immediately benefited from a 45% increase in Mineral Resource estimate announced shortly after acquisition;

§ The acquisition of a major gold exploration royalty in Mali operated by industry leader B2Gold, the royalty covers a significant exploration tenure which hosts an existing gold resource and is within trucking distance of B2Gold's operating Fekola mine, which produced almost 600koz of gold in 2022;

§ Significant advancements within the existing portfolio, set out in more detail below, which includes significant ramp-up activities at the Mimbula Copper Project, the release of the second tranche of funding by General Motors toward construction at the Thacker Pass Lithium Project, and continued development across the gold offtake portfolio which has steadily increased in year-over-year production and revenue.

·      Trident held cash of circa US$25.6 million as of 3 November 2023, providing a strong platform for further acquisitions.

Royalty / Stream	Q3 2023 (US$M)	Q2 2023 (US$M)	% Change	Q3 2022 (US$M)
Gold offtakes portfolio	1.40	1.15	22%	1.31
Koolyanobbing iron ore royalty*	0.33	0.29	14%	0.40
Mimbula copper royalty**	0.06	0.75	-92%	0.50
Lincoln gold royalty	0.15	0.15	0.0%	0.17
Total	1.94	2.34	-17%	2.38

*Reserve Bank of Australia for 29 September 2023 (0.66458) and 30 September 2022 (0.6502)

** Reflects the step-down in royalty rate and conclusion of the minimum payment schedule as US$5m has been received

Adam Davidson, Chief Executive Officer of Trident commented:

"This has been another solid quarter for Trident, with two new transactions, good progress within our existing portfolio, and solid revenue generation. In the uncertain geopolitical environment, our diversified exposure has demonstrated its value, with our gold offtake revenue benefiting from higher gold prices and volatility. Our gold exposure will benefit further during the first half of 2024, with first gold expected at Equinox's Greenstone Project, alongside ramping of production at other assets.

"We continued to build our portfolio during the quarter with the acquisition of new royalties over the Paradox Lithium Project and the Dandoko Gold Project. Both projects have the potential to become significant contributors to revenue over the short to medium-term. With the conclusion of the minimum payment schedule at Mimbula, Trident now has direct exposure to the project which is maintaining its positive ramp-up towards becoming a mid-tier copper producer.  The Thacker Pass Lithium Project continues to reaffirm its status as a Tier 1 operation following the separation of Thacker into its own business unit, providing a rationalised structure for potential U.S. government transition material funding.

"Against the backdrop of weak equity markets and higher interest rates, we continue to see good levels of potential deal flow across a range of commodities and jurisdictions. With three material transactions since May, 2023 is shaping up to be another year of solid delivery for Trident. With cash in hand, and a maturing portfolio of high-quality assets, Trident is well positioned to continue to build into the diversified royalty company of choice."

Portfolio Update:

Paradox Lithium Royalty Transaction ^{1, 2}

·      In September, Trident acquired a 2.5% net smelter return royalty over projects owned by Anson Resources Ltd. in the Paradox Basin in Utah, USA. The Royalty covers Anson's flagship Paradox Lithium Project.

·      Anson released a Definitive Feasibility Study for Paradox in September 2022 outlining Phase 1 operations producing an initial 13,074 tonnes per annum of Lithium Carbonate (Li₂CO₃) for the first 10 years of a 23-year operation. 

·      Anson is well-funded to continue rapidly progressing Paradox, with A$38.6 million in cash-on-hand as of 30 June 2023.

·      Subsequent to quarter-end, Anson announced a 45% increase in its JORC 2012 compliant Mineral Resource estimate at Paradox (to a total contained 1.504Mt Lithium Carbonate Equivalent) ², directly benefiting Trident's royalty.

Dandoko Gold Royalty Transaction ³

·      Trident acquired an effective 1% net smelter return royalty over Dandoko Gold Project permit area in western Mali, owned and operated by B2Gold Corporation Limited.

·      Dandoko was the flagship asset of ASX-listed Oklo Resources, which was acquired by B2Gold in September 2022 for A$91.3 million. For 2023, B2Gold has budgeted US$63 million for Fekola Regional development area (which primarily includes the Anaconda area and Dandoko permit).

·      Dandoko is located 25km from B2Gold's operating Fekola mine. Fekola is B2Gold's largest asset, targeting production of 580-610 Koz at US$565-$625/oz cash cost for FY2023.

·      B2Gold has stated that it believes the metallurgical characteristics of mineralisation at Dandoko are similar to Fekola and will be amenable to processing at Fekola.

Thacker Pass Lithium Project ^{4, 5}

·      Lithium Americas announced that at its Annual General Meeting, shareholders overwhelmingly approved the separation of the company into Lithium Americas (Argentina) Corp. and Lithium Americas Corp., with the reorganisation completing on 3 October 2023. Thacker Pass is held within Lithium Americas Corp.

·      Following the separation, the second tranche of General Motor's US$650 million investment into the new Lithium Americas Corp occurred and General Motors is now the largest shareholder, holding approximately 9.4% of Lithium Americas Corp. shares. The new structure may also help in obtaining U.S. government assistance for transition material funding.

·      As previously noted, all permits for construction have been issued and Lithium Americas has commenced Phase 1 construction, with a H2 2023 construction budget of US$145 million⁸, targeting first production in H2 2026.

Gold Offtakes Portfolio

·      Gold deliveries increased by 10% year-over-year in the quarter, from 65,865 gold ounces in Q3 2022 to 72,642 in Q3 2023. Stronger deliveries were offset by a reduction in both spot gold price and volatility across Q3. The net result was a 7% year-over-year increase in quarterly revenue.

·      Various global geopolitical and macroeconomic factors emerging in October 2023 have led to an increase in gold price and volatility, both of which positively impact the gold offtakes.

Mimbula Copper Project ^{6, 7}

·      Royalty proceeds decreased as expected with the conclusion of the Minimum Payment Schedule upon Trident fully recovering its investment in Q2 2023, with the royalty rate adjusting to 0.3% of gross revenue. The project continues to perform well.

·      Mimbula Phase 1 project of 10,000 tonnes of copper cathode per annum was officially opened by His Excellency Hakainde Hichilema, President of the Republic of Zambia, in March 2023.

·      A bankable feasibility study for Phase 2 of the Mimbula Copper Project, to expand operations to 56,000 tonnes per annum was completed in August 2022.

·      Early works for Mimbula Phase 2 continue to progress with the design engineering for the long lead time items, construction of project offices and electrowinning circuit ("EW") foundations completed.

·      The initial part of Mimbula Phase 2, consisting of the construction of the first half of the EW, is planned to be implemented during the second half of 2023, and first production from the expanded EW capacity is expected shortly thereafter.

·      Moxico currently anticipates that full production from Mimbula Phase 2 will commence early-2025.

Koolyanobbing Iron Ore Project

·      Royalty proceeds increased from the previous quarter based on higher production tonnage but lower iron ore price and AUD exchange rate. Production tonnage for the quarter reflected typical variation in the mining sequencing as the royalty does not cover the entirety of the Deception deposit. Trident fully recovered its investment in the royalty following the Q2 2023 royalty payment.⁶

References

1:             Source: Trident Royalties announcement dated 4 September 2023

                ( https://polaris.brighterir.com/public/trident/news/rns/story/rgz8ljw )

2:             Source: Trident Royalties announcement dated 18 October 2023

                ( https://polaris.brighterir.com/public/trident/news/rns/story/xo8gg1w )

3:             Source: Trident Royalties announcement dated 21 August 2023

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

4:             Source: Lithium Americas Corp. announcement dated 3 October 2023

( https://lithiumamericas.com/files/doc_news/Lithium-Americas-Closes-Separation-to-Create-Two-Leading-Lithium-Companies-2023.pdf )

5:             Source: Trident Royalties announcement dated 18 May 2023

                ( https://polaris.brighterir.com/public/trident/news/rns/story/r778ojr )

6:             Source: Trident Royalties announcement dated 31 July 2023

                ( https://polaris.brighterir.com/public/trident/news/rns/story/rgze1jw )

7:             Source: Moxico Resources PLC corporate website

( https://www.moxicoresources.com/projects/republic-of-zambia/operations )

8:             Source: Lithium Americas corporate presentation, October 2023

( https://lithiumamericas.com/investor/events-and-presentations/default.aspx )

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 [phone] / [phone]
Grant Thornton (Nominated Adviser) Colin Aaronson / Samantha Harrison / Enzo Aliaj	www.grantthornton.co.uk [phone]
Liberum Capital Limited (Joint Broker) Scott Mathieson / Cara Murphy	www.liberum.com [phone]
Stifel Nicolaus Europe Limited (Joint Broker) Callum Stewart / Ashton Clanfield	www.stifelinstitutional.com [phone]
Tamesis Partners LLP (Joint Broker) Richard Greenfield	www.tamesispartners.com [phone]
St Brides Partners Ltd (Financial PR & IR) Susie Geliher / Zoe Briggs	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 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.

 

END