Significant Progress for Mimbula Copper Royalty
11 June 2021
Trident Royalties Plc
("Trident" or the "Company")
Significant Progress for Mimbula Copper Royalty
Trident Royalties Plc (AIM: TRR, FSX: 5KV), is pleased to note a significant development relating to its Mimbula Copper Royalty and the project operator, Moxico Resources Plc ("Moxico").
HIGHLIGHTS
· Moxico recently completed a US$73 million equity financing, the proceeds of which will be used to fast track the development of a standalone processing operation at the Mimbula copper mine in Zambia ("Mimbula").
· Copper production to date has been from the processing of ore from the Mimbula surface stockpiles via toll treatment at the nearby KCM Tailings Leach Plant.
· Moxico intends to significantly increase production by commencing construction of a self-operated solvent extraction and electrowinning processing facility to produce copper at an anticipated annual run-rate of 30,000 tonnes by late-2022.
· The early cash generated from the current toll treatment operation has allowed Moxico to commence preparatory activities for mining of the Mimbula Pit 2, including dewatering and blasting. Early site works have also commenced for the heap leach pads and plant area with over 350 Zambians currently working on the project.
· Mimbula has JORC (2012) compliant Measured and Indicated Resources1 of 69.8Mt grading 0.96% total copper ("TCu") for approximately 668,000 tonnes of contained copper and additional Inferred Resources of 14.2Mt grading 0.92% TCu for approximately 130,000 tonnes of contained copper as of August 2019. In addition, Mimbula has a non-compliant resource on the Zuka licence of 9.7Mt grading 1.14% TCu for 110,600 tonnes of contained copper.
· The financing underscores the robustness of the Mimbula copper mine, which is set to deliver a material increase in production against the backdrop of an exceptionally strong global market for base metals.
· The financing further highlights a key attribute of royalties as financial instruments; specifically, that Trident benefits from the continued funding and advancement of the underlying projects over which it holds royalties without exposure to equity dilution.
THE MIMBULA COPPER ROYALTY
The Mimbula Copper Royalty is a Gross Revenue Royalty ("GRR") which was acquired on 29 June 20202 for a total consideration of US$5 million. The GRR rate is 1.25%, decreasing to 0.3% upon US$5 million being paid on the royalty, with a subsequent decrease to 0.2% once the royalty has been paid on a total of 575,000 tonnes of copper.
In addition, the GRR is subject to a Minimum Payment Schedule in which the higher of the minimum amount, or the Gross Revenue Royalty amount, are due; specifically:
· Minimum payments of US$375,000 per quarter in 2021;
· Minimum payments of US$500,000 per quarter in 2022; and
· Minimum payments of US$750,000 in each of the first two quarters of 2023.
To date, Trident has received US$453,707 in royalty payments.
Adam Davidson, Chief Executive Officer of Trident commented:
"We are incredibly pleased to see such a significant development for a key asset within Trident's royalty portfolio. The financing conducted by Moxico to materially expand copper production at the Mimbula copper mine underscores the value of acquiring royalties over quality assets being advanced by experienced management teams. The Mimbula Copper Royalty provides Trident's investors with long-life copper exposure - a key base and battery metal - from an operating asset with further upside potential located in a prolific copper district."
References
1 Moxico Resource Plc https://www.moxicoresources.com/
2 Trident announcement dated 29 June 2020 https://polaris.brighterir.com/public/trident/news/rns/story/r73y4gx
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 |
+1 (757) 208-5171 |
|
Grant Thornton (Nominated Adviser) Colin Aaronson / Samantha Harrison / Lukas Girzadas |
+44 020 7383 5100 |
|
Tamesis Partners LLP (Joint Broker) Richard Greenfield |
+44 203 882 2868 |
|
Shard Capital Partners LLP (Joint Broker) Erik Woolgar / Isabella Pierre |
+44 207 186 9927 |
|
St Brides Partners Ltd (Financial PR & IR) Susie Geliher / Catherine Leftley / Charlotte Hollinshead |
www.stbridespartners.co.uk +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 and precious metals, bulk materials (excluding thermal coal) and battery metals.
Key highlights of Trident's strategy include:
· Building a royalty and streaming portfolio to broadly mirror 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 has relied 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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