Portfolio Update: Los Filos Gold Offtake
21 October 2022
Trident Royalties Plc
("Trident" or the "Company")
Portfolio Update: Los Filos Gold Offtake
Trident Royalties Plc (AIM:TRR), the diversified mining royalty company, is pleased to note Equinox Gold's ("Equinox") recent news release announcing an updated Feasibility Study for an expansion at its Los Filos Mine Complex ("Los Filos"). Trident holds an offtake agreement for 50% of all refined gold production up to a cap of 1,100,000 ounces from Los Filos (approx. 770,000 ounces remaining).1
HIGHLIGHTS
· The Feasibility Study contemplates the construction of a carbon-in-leach ("CIL") processing plant beginning in H2 2023 to process higher grade ore from Los Filos' six mines, commencing in mid-2024.2 Trident notes that, while the Feasibility Study estimates are predicated on this timeline, Equinox has not yet approved the expansion.
· With construction of the CIL processing plant and continued development of the Bermejal Underground mine, the Feasibility Study outlines peak gold production averaging 360,000 ounces per year from 2025-2030, including production in excess of 400,000 ounces in 2025. By comparison, Equinox's latest guidance for 2022 production at Los Filos is 155,000 to 170,000 ounces.3
· The expansion would extend the Los Filos mine life to 14.5 years at an all-in sustaining cost of US$1,081 per ounce of gold. The Feasibility Study calculates an NPV5% of US$625 million and an after-tax IRR of 26% at a gold price of US$1,675 per ounce.
Adam Davidson, Chief Executive Officer of Trident commented:
"Equinox continues to deliver on its growth plans with the release of this updated feasibility study, which highlights the tremendous potential at Los Filos. The potential expansion at Los Filos underscores the organic growth within Trident's gold offtakes portfolio; which includes underlying assets such as Equinox's Santa Luz mine, Blyvoor Gold, and i-80 Gold Corp's Ruby Hill and Granite Creek projects. In addition to this organic growth, delivered at no incremental cost to Trident, we have an attractive pipeline of potential transactions which will deliver further significant value to shareholders."
References
1 Source: Trident Royalties announcement dated 13 December 2021
( https://polaris.brighterir.com/public/trident/news/rns/story/x52139x )
2 Source: Equinox Gold announcement dated 19 October 2022
3 Source: Equinox Gold announcement dated 3 August 2022
** Ends **
Contact details:
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Trident Royalties Plc Adam Davidson / Richard Hughes |
www.tridentroyalties.com +1 (757) 208-5171 / +44 7967 589997 |
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Grant Thornton (Nominated Adviser) Colin Aaronson / Samantha Harrison / Samuel Littler |
+44 020 7383 5100 |
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Stifel Nicolaus Europe Limited (Joint Broker) Callum Stewart / Ashton Clanfield |
+44 20 7710 7600 |
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Tamesis Partners LLP (Joint Broker) Richard Greenfield |
+44 20 3882 2868 |
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Hudson Sandler Investor Relations: John Smelt Public Relations: Charlie Jack / Harry Griffiths |
+44 207 796 4133 |
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:
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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;
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Acquiring royalties and streams in resource-friendly jurisdictions worldwide, while most competitors have portfolios focused on North and South America;
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Targeting attractive small-to-mid size transactions which are often ignored in a sector dominated by large players;
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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;
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Maintaining a low-overhead model which is capable of supporting a larger scale business without a commensurate increase in operating costs; and
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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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