Trident Royalties PLC on Monday said it entered into a binding sale and purchase agreement to acquire an existing lithium royalty from Atherton Resources LLC over projects owned by Anson Resources Ltd.
The London-based diversified mining royalty company also said it completed the acquisition of a royalty for the Dandoko gold project in western Mali.
Trident Royalties said the $10 million deal with Atherton Resources notably covers the latter’s flagship Paradox Lithium project in the Paradox basin in the US state of Utah.
The royalty is a 2.5% net smelter return royalty tied to Anson’s ownership of the projects. Should Anson sell a property within the Paradox basin, Trident said it will be entitled to 2.0% of the net sales proceeds and the royalty would no longer apply to the sold asset.
Trident Royalties will pay Atherton up to $10 million in three tranches: $1.5 million in cash on closing; up to $3.5 million, of which up to 50% may be paid in shares, upon commencement of commercial production by Anson at Paradox and receipt of the first payment under the royalty; and on the second anniversary of the first contingent payment, up to $5 million of which up to 50% may be paid in shares.
‘We are delighted to announce the acquisition of this royalty over the Paradox lithium project. For a modest initial cash outlay, we have secured exposure for shareholders to a well funded, highly attractive project with a pathway to cash generation and significant growth potential,’ said Trident Royalties Chief Executive Officer Adam Davidson.
‘The Paradox project reinforces our strong position in battery materials, and introduces exposure to direct lithium extraction, which could play a significant role in future lithium supply. The acquisition again demonstrates Trident’s ability to source innovative transactions to create shareholder value.’
Trident Royalties also said it has completed the acquisition of Dandoko Royalty, after satisfying and completing all pre-conditions.
It noted its announcement in late August that it had entered into a binding agreement to acquire a 50% interest in a 2% net smelter royalty over the Dandoko Gold Project permit area in western Mali, owned by B2Gold Corporation Ltd.
Trident Royalties said the Royalty was acquired for up to $6.3 million. Trident has paid $3.0 million in cash and will pay $0.75 million via the issue of 1.4 million new Trident shares worth 41.9213 pence each.
Shares in Trident Royalties were up 1.2% to 41.00p each in London on Monday afternoon.
In addition to the above, Trident said it will pay $1.3 million in cash on first royalty receipt from the royalty area and $1.3 million in cash on receipt of payment on 500,000 ounces gold sold from the royalty area.
‘The Dandoko Gold Royalty is an important addition to our portfolio as the asset has the potential to provide near-term cashflow to Trident. B2Gold is a senior producer with invaluable operational experience with a long operating history in Mali. The Fekola mine is a cornerstone asset for B2Gold and is expected to produce approximately 600,000 ounces in 2023 at cash operating costs of between $565 and $625 an ounce,’ said Chief Executive Officer Adam Davidson.
‘Trident considers that significant exploration upside exists at Dandoko, with B2Gold currently deploying material capital towards exploration of the area. We remain focussed on delivering value accretive deals which broaden and diversify our portfolio to promote long-term growth.’
On Friday last week, Trident Royalties noted Ganfeng Lithium Co Ltd’s cancellation of lithium concessions at the Sonora lithium project in Mexico.
It said Ganfeng Lithium reported that the General Directorate of Mines in Mexico issued a formal decision notice to Ganfeng’s Mexican subsidiaries that nine lithium concessions were cancelled.
Ganfeng noted that the cancellations are not final but that the cancellation may result in an asset impairment loss.
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