Positive Asset-Level Progress by Project Operators
12 May 2021
Trident Royalties Plc
("Trident" or the "Company")
Positive Asset-Level Progress by Project Operators
Trident Royalties Plc (AIM: TRR, FSX: 5KV) is pleased to note significant asset-level progress by operators of several projects over which the Company holds royalties.
Thacker Pass Lithium Royalty1: In its first quarter results, the project operator Lithium Americas Corp. ("LAC") highlighted several key milestones at Thacker Pass, including:
· Results of a Feasibility Study targeting an initial 30,000-35,000 tonnes per annum lithium carbonate equivalent ("LCE") of capacity ("Phase 1") is expected by year end. Note that this is an increase on the 2018 Pre-Feasibility Study which originally contemplated up to 30,000 tonnes of Phase 1 LCE capacity2.
· In addition, LAC is advancing engineering to consider a 20,000 tonnes per annum lithium hydroxide chemical conversion plant to have flexibility to meet potential customer and partner needs. Lithium hydroxide typically commands a price premium over lithium carbonate and is an increasingly prevalent component in rechargeable battery designs.
· LAC continues to expand the engineering and technical team at Thacker Pass, with over 30 professionals focusing on start of construction, expected to begin in early 2022. As of 31 March 2021, LAC had US$514 million in cash and cash equivalents.
· Trident acquired a 60% interest in a Gross Revenue Royalty over the Thacker Pass Project for US$28m (with US$13.2m million expected to be returned to Trident under an operator buy-back right) and, based on the Pre-Feasibility Study, would anticipate life-of-mine royalty revenues attributable to Trident over the 46-year mine life of US$341.2 million (inclusive of the operator buy-back)3.
Lake Rebecca Gold Royalty4: Apollo Consolidated Ltd ("Apollo"), the project operator, has announced further encouraging exploration, step-out and infill drilling results at the Lake Rebecca Gold Project ("Lake Rebecca"), providing the possibility for further royalty up-side when the project is put into production;
· Step-out drilling: Reverse circulation ("RC") drilling on a step-out traverse to the south of the Duchess deposit (195koz Au) pit shell boundary has shown a 15-20m true-width mineralised structure that remains open southwards. Two RC holes intersected the disseminated mineralisation in this structure: RCLR0747: 18m @ 1.39g/t Au from 79m; and RCLR0748: 23m @ 1.33g/t Au from 114m.
The results demonstrate potential for resource growth around the margins of the Duchess deposit which has the potential for providing supplementary feed to a future Lake Rebecca mining operation.
· Infill drilling: RC drilling within the northern part of the Rebecca deposit (840koz Au) pit shell has added confidence to mineralised structures which provides scope for resource estimation updates and which provide important near-surface mineralisation for any future mine scheduling purposes. New RC drilling intercepts include: RCLR0755: 5m @ 6.33g/t Au from 15m; RCLR0756: 7m @ 4.29g/t Au from 55m; and RCLR0750: 12m @ 1.04g/t Au from 73m and 7m @ 2.55g/t Au from 93m.
· Exploration drilling: Further exploration focused RC drilling is ongoing in a number of locations within the royalty area with the assay results for 27 RC holes currently awaited. Exploration results reported include:
o New gold mineralised structure identified 1.3km northwest of the Duchess deposit by a RC hole on a auger sampling anomaly, RCLR0743 intersected 4m @ 1.60g/t Au from 46m.
o Drilling on east side of the Rebecca deposit has shown several locations where mineralised structures splay into the footwall geology. Work is ongoing with initial results including: RCLR0765: 5m @ 3.10g/t Au from 80m and RCLR0775: 9m @ 2.13g/t Au from 193m.
· Trident holds a 1.5% net smelter royalty over the entire Lake Rebecca Resource
Bullfinch Gold Royalty5: Torque Metals Limited, the project operator, has published a prospectus to underpin a listing on the Australian Stock Exchange and undertake a capital raise of between A$5,000,000 and A$7,000,000 with a proposed listing date of 20 May 20216.
· Torque owns the Paris Gold Project as well as the Bullfinch Gold Project, both located in Western Australia.
· Torque has proposed to allocate a portion of funds raised to progress the evaluation and exploration of the Bullfinch Gold Project.
· Trident retains a 1% net smelter royalty over the Bullfinch Gold Project which can be repurchased by the operator for A$1,700,000 once production of 5,000oz of gold from the tenements has been achieved.
· Trident acquired the royalty as part of a broader package alongside several other attractive gold royalties for A$800,000 (comprised of A$250,000 in cash and A$550,000 in Trident equity issued at 35.98p).
Warrawoona Gold Project7: Calidus Resources Ltd ("Calidus"), the project operator, has provided a construction update for the Warrawoona Gold Project ("Warrawoona") in the East Pilbara of Western Australia.
· Construction is advancing in line with budget and timeline with 80 personnel working onsite.
· Warrawoona is now fully permitted with the receipt of Works Approval and Water Abstraction Licence.
· Mining is set to commence mid-year 2021 with processing plant commissioning scheduled within a year.
· Trident holds a 1.5% net smelter royalty which covers the eastward strike extensions of the main resource at Klondyke
Adam Davidson, Chief Executive Officer of Trident commented:
"It is very encouraging to be able to report some significant progress at a number of our royalty companies. One of the key benefits of royalties is that the holder of the royalty enjoys the upside from positive progress of the underlying assets, but without the exposure to dilution and cost overruns which can negatively impact equity investments. Although in our infancy still, Trident is already benefiting in this regard given key assets within our portfolio are either materially progressing toward production, expanding their anticipated production profiles, or growing the underlying mineral resources. With exposure to well-funded projects in a number of key commodities showing increasing levels of demand, we look forward to continued progress."
1 Source: Lithium Americas Corp Consolidated Interim Financial Statements for three months ended March 31, 2021
2 Source: Technical Report on the Pre-Feasibility Study for the Thacker Pass Project, Humboldt County, Nevada, USA
3 Source: Trident Royalties Plc announcement dated 19 March 2021. The PFS used a US$12,000/tonne LCE price, while current spot price is US$12,756/tonne.
4 Source: Apollo Consolidated Ltd announcement dated 4 May 2021
5 Source: Torque Metals Prospectus dated 14 April 2020
6 Source: ASX Website as of 7 May 2021
7 Source: Calidus Resources Ltd announcement dated 4 May 2021
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.
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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.
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.