Warrawoona Gold Project, On-Track to Production
17 December 2020
Trident Royalties Plc
Royalty Portfolio Update: Warrawoona Gold Project, Western Australia,
On-Track to Production
Trident Royalties Plc ("Trident" or the "Company") (AIM:TRR, FSX:5KV), the growth-focused mining royalty and streaming company, is pleased to provide a technical update for the Warrawoona Royalty over exploration licence E45/3381, which forms part of the broader Warrawoona Gold Project, ("Warrawoona" or the "Project") owned and operated by ASX-listed Calidus Resources Limited ("Calidus"), which has successfully passed a number of important development and finance milestones.
Calidus has stated that it is fully funded to commence gold production at the Project, scheduled in early 2022, following the completion of a Definitive Feasibility Study ("DFS") in September 2020 1, 4.
Trident has a binding agreement to acquire a 1.5% Net Smelter Royalty over the eastern part of the planned Warrawoona mine through tenement E45/3381 (which is pending conversion to Mining Lease M45/1289 2). Trident announced the Warrawoona Royalty acquisition on 28 August 2020 in respect of which it has received a certificate of exemption from the requirement to seek approval by Australia's Foreign Investment Review Board and which is expected to complete early in 2021.
Adam Davidson, Chief Executive Officer and Executive Director of Trident commented:
"We are delighted to provide an update on mine development progress at the 1.5Moz Warrawoona Gold Project, over part of which Trident holds a 1.5% Net Smelter Royalty. Calidus has achieved a number of important financing and development milestones at Warrawoona subsequent to Trident announcing the acquisition of the royalty as part of a portfolio of four gold royalties on 28 August 2020.
"With the recent announcement that the Project is fully funded through to mine production, coupled with the pending conversion of part of Trident's royalty tenement E45/3381 to a Mining Lease, we believe that there has been a major de-risking of Trident's investment. We look forward to following developments at the project as main construction commences in Q1 2021."
WARRAWOONA DEVELOPMENTS
Mining Lease Application and Exploration Potential 2, 3
· Mining Lease (M45/1289) conversion pending for part of exploration tenement E45/3381 over which Trident holds a royalty. Conversion application dated 17 September 2020.
· M45/1289 hosts the eastward strike extension for the Project's Mineral Resource and is understood to host a minority part of the Ore Reserve2 which forms the basis of the Calidus Warrawoona Project DFS.
· A regional exploration review undertaken by Calidus in the Warrawoona area has identified 22 high-priority exploration targets, approximately half of which are interpreted to fall within E45/3381 and hence under the Trident royalty.
Warrawoona Project Financing 4, 6, 7
· Macquarie Bank Ltd ("Macquarie") providing A$110M debt finance facility for Warrawoona.
· Calidus has firm commitments to raise approximately A$32M via a share placement with institutional and sophisticated investors, by issuing 62.5M shares at a price of A$0.51/share.
· A$5M to be raised via a Share Purchase Plan available to eligible Calidus shareholders at the same price as the placement.
· Project gold price risk hedged through forward sales of 125,000oz Au, representing 19% of the Warrawoona DFS gold production at an achieved forward price of A$2,355/oz (approximately US$1,773/oz) (net of all costs), a margin of A$1,065/oz of the DFS AISC.
Project Construction 4, 5, 7
· Construction of 7km Project access road is complete.
· Orders placed for long lead items, including the Processing Plant's 4,500kW SAG Mill, in preparation for the commencement of the main Project construction scheduled in Q1/2021.
· Installation of a 240-room accommodation village is advancing well.
· Preferred Mining Contractor appointed.
Permitting 5
· Western Australian Department of Mines and Petroleum (DMP) has approved the Project Management Plan for Warrawoona. Calidus expects the remaining two approvals, being the Mining Proposal and Works Approval, to be granted shortly.
Project DFS Metrics 1,4
· Feasibility Pre-Tax Project Cashflow of A$629m, average EBITDA of A$110m pa, NPV8% of $408m, IRR 81% and payback of 13 months.
· Average gold production of 90,000oz/year over first 7 years, peaking at 105,000oz in year 5.
· Life of Mine All-in Sustaining Costs (AISC) of A$1,290/oz.
· Pre-production capital cost of A$120m including contingency and pre-production mining costs.
· Underground Reserve of 120,000oz with growth potential from planned Resource extensional and infill drilling.
References
1 Source: Calidus Resources press release dated 29 September 2020 ( https://www.investi.com.au/api/announcements/cai/33e116e0-6df.pdf )
2 Source: Government of Western Australia Mineral Titles Online search result. Search date 15 December 2020 ( https://emits.dmp.wa.gov.au/emits/enquiry/home2.xhtml ,and Tengraph system https://tgw.dmp.wa.gov.au/tgw/# )
3 Source: Calidus Resources press release dated 13 October 2020
( https://www.investi.com.au/api/announcements/cai/ee9ce6e5-8c2.pdf )
4 Source: Calidus Resources press release dated 10 December 2020 ( https://www.investi.com.au/api/announcements/cai/ab3a1651-07b.pdf )
5 Source: Calidus Resources press release dated 7 December 2020 ( https://www.investi.com.au/api/announcements/cai/3f34f05e-adc.pdf )
6 Source: Calidus Resources press release dated 30 November 2020 ( https://www.investi.com.au/api/announcements/cai/8e1539b3-e2f.pdf )
7 Source: Macmahon Holdings press release dated 17 September 2020
( https://www.investi.com.au/api/announcements/cai/0f59bf78-722.pdf )
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. 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 |
+1 (757) 208-5171 |
|
Grant Thornton (Nominated Adviser) Colin Aaronson / Samantha Harrison / Seamus Fricker |
+44 020 7383 5100 |
|
Tamesis Partners LLP (Financial Adviser and Joint Broker) Richard Greenfield |
+44 203 882 2868 |
|
Shard Capital Partners LLP (Joint Broker) Erik Woolgar / Isabella Pierre |
+44 207 186 9927 |
|
Yellow Jersey (Public Relations) Charles Goodwin |
+44 203 004 9512 |
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:
· Constructing 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 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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