Royalty Portfolio Update: Offer for Apollo Consol.

RNS Number : 4247P

Trident Royalties PLC.

19 October 2021

 

19 October 2021

Trident Royalties Plc

("Trident" or the "Company")

Royalty Portfolio Update: Recommended Takeover Offer for Apollo Consolidated

Trident Royalties Plc (AIM:TRR, FSX:5KV), the growth-focused mining royalty and streaming company, is pleased to note announcements^{1, 2} made on the 18 October 2021 by Apollo Consolidated Ltd. ("Apollo") and ASX listed Ramelius Resources ("Ramelius") relating to the proposed acquisition of Apollo by Ramelius (the "Transaction").

Trident holds a 1.5% NSR gold royalty over Apollo's flagship Lake Rebecca Gold Project ("Lake Rebecca" or the "Project"), in Western Australia.  The royalty (the "Lake Rebecca Gold Royalty" or the "Royalty") covers the entirety of the Project and its 1.1Moz Mineral Resource³.

Adam Davidson, Chief Executive Officer of Trident commented:

"Trident is pleased to note the announcement of the Transaction, which would see the Lake Rebecca Project acquired by Ramelius, a well capitalised, ASX listed mid-tier gold company with substantial existing producing gold centres in Western Australia. Ramelius views Lake Rebecca as a potential cornerstone asset and has indicated its intent to identify a pathway to a mine life of 10 years at a run rate of at least 100,000 ounces per annum, which is in excess of Trident's original economic assessment. Ramelius has the in-house expertise within its established workforce to progress Lake Rebecca towards production, as well as the requisite operational expertise to maximise the value of the Project.

"Since Trident acquired the Royalty in September 2020, a significant number of activities have been undertaken which have added material value to Trident's royalty. Such activities include upgrading of the Mineral Resource to its current 1.1Moz size, the discovery of additional, but yet to be classified material through numerous drilling programs, the acquisition of additional tenure to support mine planning and now the potential acquisition of Apollo by a well-funded mid-tier producer. Trident, via its royalty holding, enjoys the significant value added by these activities, with no further capital commitment. 

"Trident identified Lake Rebecca as an attractive but under-appreciated development stage project with significant potential as part of its due diligence process. We are pleased to note the potential acquisition of Apollo which validates the attractiveness of Lake Rebecca, and Trident's royalty. We look forward to completion of the Transaction and further advancement of Lake Rebecca under Ramelius' stewardship."

Ramelius Managing Director , Mark Zeptner, said of the offer:

"Lake Rebecca is an outstanding opportunity for Ramelius to add a key growth asset to its portfolio of producing assets at Mount Magnet and Edna May. The Apollo team has done an excellent job advancing Lake Rebecca to its current stage of development and have clearly demonstrated its potential for development into a high-quality gold mine in a tier-one gold mining jurisdiction.

"Subject to the Offer being successful, Ramelius is looking forward to ramping up the drilling program across the tenement package to expand the existing resource and ultimately developing Lake Rebecca into a cornerstone producing asset within our portfolio. Our strategic target for the Project is to identify a pathway to a mine life of 10 years at a run rate of at least 100,000 ounces per annum.

"We also look forward to welcoming Apollo shareholders as Ramelius shareholders and encourage Apollo shareholders to accept the Offer as soon as possible."

PROPOSED TRANSACTION

Apollo and Ramelius have entered into a Bid Implementation Agreement ("BIA"), pursuant to which Ramelius will offer to acquire all the issued ordinary shares of Apollo by way of an off-market takeover offer. The offer, comprised of A$0.34 cash per share and 0.1375 Ramelius shares per Apollo share, represents an implied offer price of A$0.56 per share and a 35.9% premium to Apollo's 10-day volume weighted average price.

The offer has been unanimously recommended by the Board of Directors of Apollo, in the absence of a superior offer, who have entered into binding agreements to accept the offer in respect of all Apollo shares they own or control. The offer is subject to terms and conditions standard for a transaction of this nature.

ABOUT RAMELIUS

Ramelius is an ASX listed gold producer (Ticker Code: RMS) with a market capitalisation of A$1.32B, cash and equivalents of A$234.0M and no debt. Ramelius operates two production centres at Mt Magnet and Edna May which produced a total of 272koz in FY21, with FY22 operating guidance set at 260-300koz.

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 JORC tables and Competent Persons Statements may be found in those documents.

1  Source: Ramelius Resources ASX announcement: Ramelius Makes Recommended Takeover Offer for Apollo Consolidated, 18 October 2021

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

2  Source: Apollo Consolidated ASX announcement: Ramelius Makes Recommended Takeover Offer for Apollo Consolidated, 18 October 2021

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

3   Source: Apollo Consolidated ASX announcement. Resource Update, 20 April 2021

( https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02365043-6A1029007?access_token=83ff96335c2d45a094df02a206a39ff4 )

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 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:

· 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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