Q4 2021 Activities Update

RNS Number : 5348A

Trident Royalties PLC.

03 February 2022

 

3 February 2022

Trident Royalties Plc

("Trident" or the "Company")

Q4 2021 Activities Update

Trident Royalties Plc (AIM: TRR), is pleased to provide an update on its activities undertaken during the quarter ended 31 December 2021, including Q4 royalty receipts.

Q4 saw the acquisition of a portfolio of immediately cash generative gold offtakes, as well as substantial asset level progress across its portfolio

· Trident announced the acquisition of a portfolio of immediately cash generative gold offtake streams. Revenue from the offtakes attributable to Trident commenced in Q1 2022 following completion, with Trident estimating US$13.3 million in revenue from the acquired portfolio in 2022¹.

· Successful fundraise of c.£30.2 million (approx. US$40 million) by way of an institutional placing and retail offer with strong support from existing and new blue-chip investors. In addition, a US$40 million debt facility was secured with Macquarie Bank Limited, significantly reducing borrowing costs.

· Subsequent to quarter-end, Trident announced the acquisition of a right to acquire an interest in the Sonora Lithium Royalty². The Sonora Project is an advanced stage asset which recently commenced construction activities, targeting plant commissioning, and therefore cash flows to Trident, in Q4 2023.

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

§ Lithium Americas, the operator of the Thacker Pass lithium project, released an update to the Thacker Pass Mineral Resource Estimate ("MRE") in Q4 2021, more than doubling the previous MRE. In addition, Lithium Americas indicated an upsized feasibility study considering significantly larger Stage 1 and 2 operations, increasing both by +30%. Commencement of construction is anticipated in the first half of 2022³;

§ Mineral Resources, operator of the Koolyanobbing iron ore mine, stated that mining operations commenced at the Claw Pit, located entirely on Trident's royalty tenure⁴. Trident notes a significant increase in ore mined from the royalty zone in Q4 2021, which the Company anticipates will be sold in Q1 2022;

§ Apollo Consolidated, operator of the Lake Rebecca gold project, was acquired by Ramelius Resources for a cash and share bid valuing Apollo at approximately A$163.3m. Ramelius is an ASX listed mid-tier gold producer which has indicated an intent to develop the project into "a mine life of 10 years at a run rate of at least 100,000 ounces per annum"⁵. Ramelius also noted that metallurgical studies are ongoing alongside planning for infill, exploration and sterilisation drilling programmes which will re-commence in February 2022⁶;

§ Seduli commenced processing plant commissioning and pre-production activities at the Lincoln Gold Project⁷, which is now targeting first gold production in Q1 2022.

· As of 31 January 2022, Trident's unaudited cash balance was approx. US$17.2 million. This cash balance does not include Q4 royalty receipts.

Q4 royalty payments of US$375,000, with Q1 poised for substantial increase

· Mimbula copper royalty payment of US$375,000 for the quarter based on the Minimum Payment Schedule ("MPS") under the royalty agreement. The MPS on the Mimbula copper royalty increases to US$500,000 per quarter in 2022 and US$750,000 per quarter for the first two quarters of 2023⁸.

· Material ore tonnage was mined from the royalty zone at the Koolyanobbing iron ore mine in Q4 2021⁴, however, as noted by the operator, this material has been stockpiled for sale over the coming quarters. As a result, a nominal royalty payment was received for the quarter but with sales anticipated to increase materially in Q1 2022.

· Trident received its inaugural revenue under the acquired portfolio of gold offtakes post-quarter end on 14 January 2022⁹ following the handover of operational control from Orion. Regular shipments and sales are now occurring with the offtakes well positioned to capitalise on current macroeconomic volatility.

· Finally, following slight delays due to COVID related supply chain issues, the Lincoln Gold Project anticipates pouring first gold in Q1 2022.  

Adam Davidson, Chief Executive Officer of Trident commented:

"This has been Trident's most significant quarter to date and sets the company up for what I am convinced will be an exciting year to come. The number of producing assets within the portfolio increased by 350% in the quarter - increasing not only the scale but, importantly, the diversification of our portfolio. With the support of existing and a number of new blue-chip shareholders as well as a significantly improved debt facility, we have gained direct exposure to high-quality producing assets, adding to our precious metals exposure while complementing the existing base and battery metals exposure within our portfolio. Having already generated first revenue under these recently acquired gold offtakes, regular gold deliveries and cash sales have commenced.

"More recently, and just post-quarter end, the addition of the right to acquire a 50% interest in the Sonora Lithium Royalty in Mexico² has added to our already significant Tier 1 lithium exposure. With construction already underway at this 19-year initial mine life project, if completed, this acquisition is expected to add to our cash generation in the latter part of next calendar year, with revenue visibility for many years to come.

"We are gaining scale with 21 assets now in the portfolio, 9 of which are generating cash. Importantly, within the portfolio a number of assets are approaching key milestones which provides the potential for near-term material organic growth without the need to deploy additional capital. With a team well versed in sourcing and completing high return transactions, we are in prime position to continue to grow the size and quality of our asset base during 2022."

References

1:  Source: Trident Royalties announcement dated 13 December 2021  

( https://polaris.brighterir.com/public/trident/news/rns/story/x52139x )

2:  Source: Trident Royalties announcement dated 27 January 2022

  ( https://polaris.brighterir.com/public/trident/news/rns/story/x2kjzlx )

3:  Source: Trident Royalties announcement dated 8 October 2021

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

4:  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   )

5:  Source: Ramelius Resources / Apollo Consolidated announcement dated 18 October 2021

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

6:  Source: Ramelius Resources announcement dated 28 January 2022

  ( https://www.rameliusresources.com.au/wp-content/uploads/bsk-pdf-manager/2022/01/28.01.22-December-2021-Quarterly-Report.pdf )

7.  Source: Trident Royalties announcement dated 1 December 2021

  ( https://polaris.brighterir.com/public/trident/news/rns/story/xo767dr )

8.  Source: Trident Royalties announcement dated 29 June 2020

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

9.  Source: Trident Royalties announcement dated 14 January 2022

  ( https://polaris.brighterir.com/public/trident/news/rns/story/rn984nw )

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 / Paul Smith	www.tridentroyalties.com [phone] / [phone]
Grant Thornton (Nominated Adviser) Colin Aaronson / Samantha Harrison / Samuel Littler	www.grantthornton.co.uk [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 / 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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