Q4 2023 Activities Update
5 February 2024
Trident Royalties Plc
("Trident" or the "Company")
Q4 2023 Activities Update
Trident Royalties Plc (AIM: TRR, OTC: TDTRF), the diversified mining royalty company, is pleased to provide an update on its activities during the quarter ended 31 December 2023.
HIGHLIGHTS
· Quarterly receipts of US$3.2 million from exposure to gold, copper, and iron ore, a 63% increase from Q3 2023, driven principally by seasonally higher deliveries from the gold offtake portfolio.
· Excluding the Mimbula copper royalty, receipts were slightly above Q4 2022. Mimbula concluded a minimum payment schedule in Q2 2023 following full recovery of Trident's initial investment. Trident retains a 0.3% gross revenue royalty over Mimbula, which is continuing its ramp-up as noted in more detail below.
· The Company delivered several key undertakings during the quarter, including:
§ Acquisition of a net smelter return royalty over the advanced stage, high-grade copper-zinc Antler deposit in Arizona, USA, being advanced by ASX-listed New World Resources1;
§ Entered into a commitment letter with BMO Capital Markets and CIBC for a new, lower-cost US$40 million revolving credit facility, which is expected to close in Q1 2024. If fully drawn, the facility would deliver interest savings of up to US$1.3 million per annum.2
· As of 31 December 2023, the Company had an unaudited net debt position of US$22 million.
|
Royalty / Stream |
Q4 2023 (US$M) |
Q4 2022 (US$M) |
% Change |
Q3 2023 (US$M) |
|
Gold offtakes portfolio |
2.39 |
2.23 |
7% |
1.40 |
|
Koolyanobbing iron ore royalty* |
0.57 |
0.53 |
8% |
0.33 |
|
Mimbula copper royalty** |
0.06 |
0.50 |
-88% |
0.06 |
|
Lincoln gold royalty*** |
0.15 |
0.17 |
-12% |
0.15 |
|
Total |
3.17 |
3.50 |
-9% |
1.94 |
* Calculated using Reserve Bank of Australia FX rates: 29 September 2023 (0.646), 30 December 2022 (0.678), and 30 December 2023 (0.684)
** Reflects the step-down in royalty rate and conclusion of the minimum payment schedule as US$5m has been received
*** Partial payment received, with the balance expected by the 12 February 2024 extension date
Adam Davidson, Chief Executive Officer of Trident commented:
"We enjoyed a solid finish to the year with an attractive royalty acquisition, excellent progress within our existing portfolio, and the announcement of a significant debt refinancing which materially lowers our cost of capital.
Against the backdrop of an increasingly complex and volatile geopolitical environment, our diversified portfolio - with exposure to gold, lithium, copper, silver, and other commodities - continues to demonstrate its value. In particular, our gold offtake assets again benefited from elevated volatility in gold prices.
Asset level developments across the portfolio continue to enhance the value and cash generation potential of Trident. The commencement of production at the Greenstone gold project is expected to deliver up to 58.5koz of additional gold to Trident over the course of 2024. Construction activities continue to progress at the Thacker Pass lithium project, whilst on-going ramp-up and recently completed equipment upgrades are expected to double capacity at the Mimbula copper project in 2024. We also expect the first payment from our La Preciosa silver royalty, as the operator announced in January that it anticipates commencing the processing of surface stockpiles following the signing of a long-term land use agreement with the local communities for the development of the project.
"In our 2022 Annual Report we highlighted the significance of reducing our cost of capital to our business. During the quarter, we announced a new debt facility with global lenders BMO Capital Markets and CIBC. The new facility provides greater flexibility in managing our cash, increases our potential borrowing capacity to US$60 million, and delivers a lower cost of capital to the business. The support of institutions such as BMO and CIBC, leading financiers to the sector, validates our existing portfolio and the opportunity that exists.
Portfolio Update:
Antler Copper Royalty Transaction 1
· In November 2023, Trident acquired a 0.90% net smelter return royalty over the current tenement package at New World Resources' Antler Copper Project. Trident also has the right to a 0.45% net smelter return royalty over any ground subsequently acquired by New World within 5km of the project boundary.
· Antler is an advanced stage, high-grade copper-zinc polymetallic deposit in a secure mining supportive jurisdiction with a JORC (2012) compliant Mineral Resource estimate of 11.4Mt @ 4.1% Cu-equivalent for approximately 467,000 tonnes of Cu-equivalent.
· Mine development and surface infrastructure will be located on privately owned land, which is currently owned or controlled by New World, thereby streamlining the permitting process.
· New World submitted its Mine Plan of Operations to the Bureau of Land Management following the end of the quarter, marking a significant milestone in the permitting process for Antler. Further technical studies will also continue in parallel with exploration and mine permitting to continue to de-risk and enhance the development of Antler.
Gold Offtakes Portfolio 3,4
· Net revenue increased 7% relative to Q4 2022, driven principally by an increase in both spot gold price and volatility across the quarter. Gold deliveries decreased slightly from 74,085 gold ounces in Q4 2022 to 72,410 in Q4 2023.
· Equinox Gold provided an update on construction and commissioning progress at its Greenstone Project in Ontario, Canada, reporting:
§ The project is 96% complete, with pre-commissioning activities ongoing in most of the main process plant areas. More than 15 million tonnes of material have been moved to date and build-up of the ore stockpile is ahead of plan, with first gold pour anticipated in H1 2024.3
§ Trident holds a gold offtake with an annual cap of 58,500 ounces and previously secured a guarantee from Premier Gold Mines Limited (a subsidiary of Equinox) that any shortfall in deliveries for 2024 and 2025 will be compensated at a rate of $23.50 per ounce. The commissioning at Greenstone should lead to higher gold offtake deliveries in 2024.4
Thacker Pass Lithium Project 5
· As previously noted, all permits for construction have been issued and Lithium Americas has commenced Phase 1 construction, targeting first production in H2 2026. The construction budget for the second half of 2023 was $145 million.
· Lithium Americas announced that earthworks and detailed engineering continues to advance in preparation for major construction in 2024.
· Lithium Americas continues to work closely with the U.S. Department of Energy ("DOE") Loan Programs Office to advance confirmatory due diligence and term sheet negotiations for the Advanced Technology Vehicles Manufacturing Loan Program ("ATVM Loan Program"), following the receipt of a Letter of Substantial Completion on 22 February 2023.
o Lithium Americas expects the DOE ATVM Loan Program conditional approval process to be completed in early-2024 and, if approved, to fund up to 75% of capital costs for construction of Phase 1.
Paradox Lithium Project 6,7
· In October, ASX-listed Anson Resources announced a 45% increase in its JORC 2012 compliant Mineral Resource estimate at Paradox (to a total contained 1.504Mt Lithium Carbonate Equivalent), directly benefiting Trident's royalty.
· The upgrade was attributable to Anson's successful acquisition of the Green Energy Lithium Project immediately adjacent to Paradox.
· Upgraded Mineral Resource estimate represents a 45% increase to the previously reported contained Lithium Carbonate Equivalent, including:
o 6% increase in Indicated Resource
o 117% increase in Inferred Resource
Mimbula Copper Project 8
· Phase 1 production of 10,000 tonnes of copper cathode per annum commenced in early 2023.
· An additional 80 electrowinning cells were commissioned in 2023, which have begun producing copper cathode and have capacity to double production to 20,000 tonnes per year.
· The full Phase 2 expansion to 56,000 tonnes of annual copper production is underway, with Moxico Resources targeting full Phase 2 production to commence in mid-2025.
References
1: Source: Trident Royalties announcement dated 8 November 2023
( https://polaris.brighterir.com/public/trident/news/rns/story/xop679r )
2: Source: Trident Royalties announcement dated 29 November 2023
( https://polaris.brighterir.com/public/trident/news/rns/story/rn4mvkx )
3: Source: Equinox Gold Corp. announcement dated 20 November 2023
4: Source: Trident Royalties announcement dated 14 April 2022
( https://polaris.brighterir.com/public/trident/news/rns/story/rmzg65w )
5: Source: Lithium Americas announcement dated 9 November 2023
6: Source: Trident Royalties announcement dated 18 October 2023
( https://polaris.brighterir.com/public/trident/news/rns/story/xo8gg1w )
7: Source: Anson Resources Ltd announcement dated 2 November 2022
( https://wcsecure.weblink.com.au/pdf/ASN/02592902.pdf )
8: Source: Moxico Resources Plc website
( https://www.moxicoresources.com/projects/republic-of-zambia/operations )
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. In relation to the mineral resource estimates, the company confirms that the material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed, and it is not aware of any new information or data that materially affects the estimates.
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 / Richard Hughes |
www.tridentroyalties.com +1 (757) 208-5171 / +44 7967 589997 |
|
Grant Thornton (Nominated Adviser) Colin Aaronson / Samantha Harrison / Enzo Aliaj |
+44 020 7383 5100 |
|
Liberum Capital Limited (Joint Broker) Scott Mathieson / Cara Murphy |
+44 20 3100 2184 |
|
Stifel Nicolaus Europe Limited (Joint Broker) Callum Stewart / Ashton Clanfield |
+44 20 7710 7600 |
|
Tamesis Partners LLP (Joint Broker) Richard Greenfield |
+44 20 3882 2868 |
|
St Brides Partners Ltd (Financial PR & IR) Susie Geliher / Zoe Briggs |
+44 20 7236 1177 |
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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