LONDON - Trident Royalties Plc (AIM:TRR)(OTCQB:TDTRF), the diversified mining royalty company, is pleased to provide an update on its activities during the quarter ended 31 March 2024.
HIGHLIGHTS
Quarterly receipts of US$2.98 million, a 6% decrease from Q4 2023, driven by seasonally lower deliveries from the gold offtake portfolio, partially offset by exceptionally strong margin-per-ounce resulting from positive movements in gold volatility and price.
Lower receipts at Mimbula again reflect the conclusion of 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 expansion from 10,000 tonnes per annum to full Phase 2 production of 56,000 tonnes per annum in mid-2025.
The Company notes several key asset level events during the quarter, including: Thacker Pass lithium royalty advancing towards cash-flow, as U.S. Department of Energy makes a conditional commitment for a US$2.26 billion loan to fund construction of the processing facilities. Mechanical completion of Phase 1 production is targeted for 20271.
Exceptionally strong margins realised from Trident's gold offtake portfolio during Q1, which have continued in Q2 with net gold offtake revenues of over US$1 million thus far. Further increases in gold deliveries are expected as production seasonally increases following Q1, imminent first gold production from the Greenstone Project (May 2024), and Blyvoor Gold's recently announced go-public process to support funding of organic production growth up to 150k gold ounces per year in the medium term (from current 30koz).
Trident completed the acquisition of an incremental interest in an offtake over the Sugar Zone mine during Q1, increasing Trident's interest to 80% of gold dore production. The project operator, Silver Lake Resources, announced a merger with ASX-listed Red 5 Ltd to create a mid-tier gold company with a sector leading balance sheet. Silver Lake also confirmed the continuation of a 93km drill program, along with infrastructure improvements. Trident expects a restart of operations to follow completion of this program.
New World Resources, operator of the Antler Copper Project, received firm commitments for a placing to raise A$20.4 million, providing substantial funding to advance Antler towards first copper production.
Adam Davidson, Chief Executive Officer of Trident commented: 'Since listing just over three years ago, we have created a portfolio of 21 assets, many at development stage. In recent months we have seen important developments across a number of our assets. As these assets expand or move to first production, it reflects the growing maturity of our initial portfolio and the return on our initial investment. It also shows the clear path to future significant cash generation.
'The important asset level developments during the period include the imminent delivery of first gold from the Greenstone Project, the completion of funding for Phase 1 at Thacker Pass Lithium - including a U.S. Department of Energy's US$2.26 billion loan and a $275 million public offering - and commencement of stockpile processing at the Preciosa Silver Project.
'Trident has a diverse and exceptionally high-quality portfolio of royalties, which provide existing cash flow and the opportunity for substantial revenue growth. The revenue will enable shareholder returns and further investment and expansion of the portfolio. We look forward to updating investors over the rest of 2024.'
Thacker Pass Lithium Project 1
Lithium Americas Corporation ('LAC') received a conditional commitment from the U.S. Department of Energy ('DOE') for a $2.26 billion loan under the Advanced Technology Vehicles Manufacturing Loan Program (the 'Loan') for financing the construction of the processing facilities at Thacker Pass.
Post quarter-end, LAC announced completion of a $275 million underwritten public offering which is for the full funding of Thacker Pass Phase 1 construction.
General Motors released $320 million in funding in February 2023 in the largest investment publicly disclosed to date by an automaker in a company to produce battery raw materials, with the second tranche of $330 million expected before or in connection with closing of the DOE Loan.
Mechanical completion of Thacker Pass Phase 1 is targeted for 2027 following a three-year construction period, with full capacity production targeted for 2028. Major construction is expected to commence in the second half of 2024 following closing of the DOE Loan.
Gold Offtake Portfolio 2,3,4
Net revenue decreased 19% relative to Q1 2023, driven by a 24% decrease in gold deliveries from 62,335 gold ounces in Q1 2023, to 47,253 oz in Q1 2024. This was partially offset by very strong positive movements in both spot gold prices and volatility in the latter part of the quarter.
Trident expects margins-per-ounce to remain strong given the current gold market environment, with deliveries expected to increase, due in part to:
Aurous Resources, operator of the Blyvoor Gold Mine, recently announced it will go public via a business combination with Rigel Resources Acquisition Corp, a special purpose acquisition company sponsored by a fund managed by Orion Resource Partners. The transaction will help fund organic production growth at Blyvoor from the current 30koz gold per year run-rate, to an average of 150koz gold per year at an all-in-sustaining-cost of circa $815/oz.2
Equinox Gold recently announced that, after 2.5 years, construction of the Greenstone Gold Project remains on schedule and is anticipated to commence production in the first half of the year, with first gold expected in May 2024. Trident holds a gold offtake with an annual cap of 58,500 ounces on Greenstone, and previously secured a guarantee that any shortfall in deliveries for 2024 and 2025 will be compensated at a rate of $23.50 per ounce.3
Through a non-material purchase consideration, Trident acquired two further offtakes on the Sugar Zone Mine to increase exposure from 50% of gold dore production, to 80%. The second offtake is for 11.5% of gold dore production up to 86,250 ounces. The third offtake is for 18.5% of gold dore production up to 500,000 ounces. The total ounce cap associated with the offtakes has also increased from 375koz, to approximately 961koz gold (approximately 891koz remaining). The project operator Silver Lake Resources announced a board-supported merger with ASX listed Red 5 Ltd to create a leading mid-tier gold company with a sector leading balance sheet. Silver Lake confirmed that it is approximately 47km through a planned 93km drill program, along with infrastructure improvements. Trident expects a restart of operations to follow completion of this program.4
Antler Copper Project 5
The project operator, New World Resources, received firm commitments for a placing to raise approximately A$20.4 million, providing substantial funding to advance the Antler Copper Project. Near-term work will include expediting exploration drilling to continue to expand the resource base while 'rapidly advancing Antler to production'.
The longest lead-time mine permit application was submitted in January 2024, with the Pre-Feasibility study expected to be completed in H1-2024 and pre-construction development of the underground decline targeted for Q3-2025.
Against a backdrop of strong spot copper prices (>$9,500/tonne), the Antler project offers compelling project economics per its 2023 Scoping Study, with a 13-year mine life and average annual production of 32,700 tonnes copper-equivalent at a C1 production cost of $3,703/tonne (negative cost-per-tonne of $1,102 when including biproduct credits).
Sonora Lithium Project 6
In accordance with the terms of the agreement to acquire the royalty over the Sonora Lithium Project, Trident announced that the long-stop date to complete the acquisition has been extended to 31 December 2026. Trident has also agreed that other than in limited circumstances, the repayment date for its loan to Sonoroy is extended until the earlier of: (i) 31 December 2026; or (ii) completion of the Transaction.
In Trident's view, the Sonora royalty has the potential to become a Tier 1 royalty, providing exposure to a long-life lithium project with expansion optionality and operated by a world class lithium specialist. The revised transaction structure provides Trident with the ability to participate in the potential significant upside associated with the project from a low-cost and protected position, while allowing sufficient time to resolve the ongoing Alberta litigation, as well as the administrative review filed by Ganfeng Lithium against the Mexican government regarding the cancellation of nine lithium concessions.
Lincoln Gold Project 7
Seduli Gold recently noted that it is progressing toward an IPO on the Australian Stock Exchange, targeting H1 2024, with an associated capital raise to accelerate activities at the Lincoln Gold Project.
Trident successfully executed a strategic sell down of 50% of its existing royalty to a high-net-worth family office in line with Trident's focus on accelerating and de-risking cashflow. The acquirer brings access to capital and significant relevant mining experience, making an attractive partner for Trident.
Between the consideration for the partial royalty sale and payments received to-date under the Minimum Payment Schedule, Trident has seen a return of nearly $1.9 million on an initial $2.5 million investment and looks forward to continued progress at the Lincoln Project, buoyed by a favourable gold price environment.
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.
Contact:
Adam Davidson
Tel: +1 (757) 208-5171
TRIDENT ROYALTIES PLC 
