Source - LSE Regulatory
RNS Number : 1907K
Trident Royalties PLC.
04 May 2022
 

4 May 2022

 

Trident Royalties Plc

("Trident" or the "Company")

 

Q1 2022 Activities Update
 

Trident Royalties Plc (AIM: TRR), is pleased to provide an update on its activities undertaken during the quarter ended 31 March 2022, including Q1 royalty receipts.

 

Q1 HIGHLIGHTS

·     

A significant step-change in the Company's revenue profile, with Q1 revenue of US$2,234,988 from exposure to gold, copper, and iron ore.

 

 

Royalty / Stream

Q1 2022

Q4 2021

Q1 2021

Koolyanobbing iron ore royalty

A$209,877

-

A$100,479

Mimbula copper royalty

US$500,000

US$375,000

US$375,000

Gold offtakes portfolio

US$1,577,958

-

-

Total (USD)*

US$2,234,988

US$375,000

US$451,384

*Reserve Bank of Australia for 31 March 2021 (0.7602) and 31 March 2022 (0.7482)

·     

Record royalty receipts for the Company, including first contribution from gold offtakes portfolio acquired 11 January 2022, representing an increase of 496% vs Q4 2021 and an increase of 395% vs Q1 2021.

·     

Continued momentum through strong portfolio growth, with three acquisitions announced or completed during the period.

·     

Pleasing progress made at the Thacker Pass lithium project, where Lithium Americas received all final key Nevada state-level environmental permits. Finalisation of the Federal Record of Decision ("ROD") permitting process is expected in Q3 2022.

·     

Excellent performance of the gold offtakes portfolio, with two assets announcing first gold in the quarter and the Blyvoor mine accelerating production ramp-up in March.

·     

Recommencement of revenue from iron ore sales from Trident's royalty tenement at the Koolyanobbing Mine in Western Australia.

·     

Post the period end, a favourable restructure of the Premier Offtake, triggering a payment to Trident of US$3.7 million.

 

Adam Davidson, Chief Executive Officer of Trident commented:

"This has been an excellent start to the year for Trident. Completion of the gold offtakes acquisition coupled with positive advancements at several portfolio assets has significantly enhanced the quality of our portfolio. Most notably, Trident's year-on-year quarterly revenue has increased by almost 400%, with increasing internal cash generation providing us with further flexibility for financing and acquisitions. The progress in our assets demonstrates the success of our strategy and the importance of selecting the right assets and operating partners. In addition, we have continued to deliver on growth, with three transactions announced or completed during the quarter. We are confident regarding our outlook, with a strong pipeline of value accretive opportunities across a range of commodities and geographies."

 

Q1 Transactions:

·     

Acquisition of a cash generative gold offtakes portfolio from Orion Resource Partners1. Trident began to receive revenue from the offtakes on 11 January 2022.

·     

Trident acquired the right to buy a 50% share in a royalty on the Sonora Lithium Project, Mexico, subject to a favourable resolution of a dispute over the royalty2. Trident notes the recent changes in legislation in Mexico regarding lithium mining and processing. While this legislation does not currently relate to existing concessions, there is uncertainty over how the legislation will evolve. Trident will continue to monitor the situation in Mexico and, in the event of a failure to the project, the potential loss to the Company is a nominal break fee.

·     

Acquisition of a gold offtake stream over the producing Sugar Zone Mine in Canada, recently acquired by Silver Lake Resources, a well-funded ASX-listed mid-tier gold producer3. Revenue from the offtake attributable to Trident commenced on 21 March 2022.

 

 

Portfolio Update:

Royalties

·     

Recommencement of revenue from iron ore sales from Trident's royalty tenement at the Koolyanobbing iron ore mine in Western Australia as the operator, Mineral Resources Limited, resumed production from the Deception Pit (partially covered by the royalty) and commenced initial ore sales from the Claw Pit (entirely covered by the royalty).

·     

Ramelius Resources, operator of the Rebecca gold project (formerly Lake Rebecca), Western Australia, announced details of planned resource definition, extension and exploration drilling programmes, to comprise a combined total of 75,000 meters, with the objective of delivering an updated and expanded Mineral Resource in 2022 7. Ramelius completed the acquisition of Lake Rebecca from Apollo Consolidated Ltd in January 2022 and is intending to develop the project into "a mine life of 10 years at a run rate of at least 100,000 ounces per annum"4.

·     

Lithium Americas, operator of the Thacker Pass lithium project, Nevada, noted that the final key Nevada state-level environmental permits, including the Water Pollution Control Permit, Mine Reclamation Permit and Class II Air Quality Operating Permit, have now been received from the Nevada Division of Environmental Protection, thus enabling the company "to begin to advance Thacker Pass towards construction" 5. Finalisation of the ROD permit appeals process is expected in Q3 2022. It is Trident's expectation that the feasibility study incorporating increased project scale will be released after finalisation of the ROD permit, to be followed shortly thereafter by commencement of construction.

 

Offtakes

·     

Total of 59,193 ounces delivered, realising profits to Trident of US$1,577,958.  Deliveries set to increase over the coming quarters as production from key assets ramp-up.

·     

First gold delivery to Trident under the i-80 gold offtake from the Ruby Hill Mine, Nevada. In addition, the Granite Creek Mine (also covered under the i-80 gold offtake) is currently conducting test mining and targeting production ramp-up in 20226;

·     

First gold pour from the Santa Luz mine, Brazil, on 1 April. Santa Luz is expected to produce 70,000 to 90,000 ounces of gold in 20227.

·     

The Bonikro development in Cote d'Ivoire is underway, with full mining rates expected to be reached in Q2 2022. Based on latest drill results and the initial resource estimate, Dougbafla (an adjacent area also covered by the gold offtake) is showing strong potential for resource growth, with a potential mine life extension beyond that of the Bonikro and Hire pits8.

 

Post the period, on 14 April, Trident announced that it had reached an agreement with Equinox Gold Corp. regarding a favourable restructure of the Premier Offtake9. Subsequently, the sale of the Mercedes Mine by Equinox, which completed 21 April, triggered a payment of US$3.7 million to Trident, which will be included in Q2 revenues. The details of the continuing offtake arrangements are included in the 14 April 2022 announcement.

 

Cash Position

As of 30 April 2022, Trident's unaudited pro forma cash balance was approximately US$21.1 million. This includes revenue from the gold offtake streams, Q1 royalty receipts, and the Mercedes Transfer payment.

 

 

References

1:             Source: Trident Royalties announcement dated 14 January 2022 

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

 

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 21 March 2022

                ( https://polaris.brighterir.com/public/trident/news/rns/story/xz78llw )

 

4:             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 )

 

5.             Source: Lithium Americas announcement dated 25 February 2022

                ( https://www.lithiumamericas.com/news/lithium-americas-receives-final-key-state-permits-for-thacker-pass-provides-update-on-federal-permitting-timeline )

 

6.             Source: i-80 Gold Corp. April 2022 Corporate Presentation

                ( https://www.i80gold.com/wp-content/uploads/2022/04/i-80-Presentation-April-2022.pdf )

 

7.             Source: News Release dated 25 January 2022 (Equinox Gold Corp.)

( https://static1.squarespace.com/static/626dc8633fb4e21536cec21a/t/626dcf35df6cb02eb0bf40da/1651363638917/20220125-EQX-PR-2022Guidance.pdf )

 

8.             Source: News Release dated 11 April 2022 (Nomad Royalty)

                ( https://nomadroyalty.com/en/nomad-announces-preliminary-q1-2022-deliveries-and-provides-asset-updates/ )

 

9.             Source: New Release dated 12 April 2022 (Ramelius Resources)

                ( https://www.rameliusresources.com.au/wp-content/uploads/bsk-pdf-manager/2022/04/12.04.22-Rebecca-Gold-Project-Update.pd )               

 

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

+1 (757) 208-5171 / +41 79 947 1348

Grant Thornton (Nominated Adviser)

Colin Aaronson / Samantha Harrison / Samuel Littler

www.grantthornton.co.uk

+44 020 7383 5100

Stifel Nicolaus Europe Limited (Joint Broker)

Callum Stewart / Ashton Clanfield

www.stifelinstitutional.com

+44 20 7710 7600

Tamesis Partners LLP (Joint Broker)

Richard Greenfield

www.tamesispartners.com

+44 20 3882 2868

Hudson Sandler

Investor Relations: John Smelt

Public Relations: Charlie Jack / Harry Griffiths

+44 207 796 4133

js@tridentroyalties.com

Trident@hudsonsandler.com

 

 

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 forwardlooking 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, forwardlooking 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 forwardlooking 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 forwardlooking 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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