TIDMTRR
RNS Number : 7027S
Trident Royalties PLC
08 November 2023
8 November 2023
Trident Royalties Plc
("Trident" or the "Company")
Acquisition of Copper Rich Polymetallic Royalty in USA
Trident Royalties Plc (AIM: TRR, OTC: TDTRF), the diversified
mining royalty company, is pleased to announce it has entered into
a binding royalty purchase agreement with ASX-listed New World
Resources Limited ("New World", ASX Ticker: NWC) to acquire a net
smelter return ("NSR") royalty (the "Royalty") on all metal
production from New World's flagship Antler Copper Project
("Antler", or "the Project"), a copper-zinc polymetallic deposit
located in Arizona, USA.
HIGHLIGHTS
The Transaction
Trident will pay A$11 million (approx. US$7 million) in cash for
the Royalty. The Royalty includes:
-- A 0.90% NSR royalty over the current tenement package which
covers the entire Project, including the Antler deposit and five
named exploration targets ("Project Area Royalty").
-- A 0.45% NSR royalty over any ground subsequently acquired by
New World within 5km of the Project Area Royalty boundary ("AOI
Royalty").
The Asset
-- Antler is an advanced stage, high-grade copper-zinc
polymetallic deposit in a secure mining supportive jurisdiction(1)
with a JORC (2012) compliant Mineral Resource estimate of 11.4Mt @
4.1% Cu-equivalent(2) for approximately 467,000 tonnes of
Cu-equivalent.
-- Enhanced Scoping Study published in May 2023(3) , highlighted:
o Strong project economics, with a pre-tax NPV@7% of US$835
million and a low capital expenditure of US$252 million, delivering
an IRR of 40.2%.
o 50% of expected revenue from copper and 38% from zinc, with
by-product credits from lead, gold and silver.
o 13-year mine life with average annual production of 32,700
tonnes copper equivalent (over years 2-11)
-- 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(4) .
-- A Pre-Feasibility Study on the Project is expected in Q4
2023, with commencement of pre-construction development works
targeted for Q1 2025(4) .
-- Trident considers there to be significant upside potential,
with New World actively targeting exploration opportunities across
its land holdings(5) .
-- New World recently attracted a A$5 million investment from a
leading US mining private equity firm(6) which, when coupled with
Trident's investment, leaves it well funded to advance the Project
through the remainder of its planned feasibility studies.
Adam Davidson, Chief Executive Officer of Trident commented:
"At the end of last year, we indicated that the market for
royalties was becoming more active as projects looked for funding
outside of traditional equity and debt markets. That has proven to
be the case, with Antler marking our fifth transaction this
year.
"This is a highly attractive royalty. The commodity mix
complements our existing portfolio, with future-facing base metals
to sit alongside our lithium, precious metals, and existing base
metals exposure. The location and management of the asset are both
excellent and we expect the royalty to deliver significant value
for Trident shareholders."
Antler Copper-Zinc Rich Polymetallic Project(4)
Antler is an advanced Scoping Study stage, copper-zinc
polymetallic (copper, zinc, lead, gold, silver) volcanic massive
sulphide deposit located in the mining friendly U.S. state of
Arizona. Arizona was recently ranked as the 7(th) most attractive
mining investment jurisdiction in the world (1) . The Project is
located 15km east of the town of Yucca and 40km to the south of
Kingman (Figure 1). New World acquired 100% of the Project in March
2020.
Figure 1 - Antler Location Map(4)
The deposit was originally identified in the late 1800s with
intermittent production reported between 1916-1970, but no activity
since 1975. The deposit outcrops over a strike length of 750 metres
and is open at depth. In addition, the wider Project area includes
a further five as yet undrilled exploration targets within a 6km
strike length, comprising coincident geophysical and geochemical
anomalies similar to Antler (Figure 2).
Figure 2 - Antler Location and Named Exploration Targets(4)
In November 2022, New World released an updated JORC 2012
compliant Mineral Resource estimate of 11.4Mt @ 2.10% Cu, 4.97% Zn,
0.89% Pb, 32.9 g/t Ag & 0.36 g/t Au gold at a 1.0% copper
equivalent cut-off.(2)
Table 1 - 2022 Resource Estimate(2)
Classification Tonnes Cu (%) Zn (%) Pb (%) Ag (g/t) Au (g/t)
Indicated 9,063,649 2.25 5.11 0.90 35.94 0.40
----------- ------- ------- ------- --------- ---------
Inferred 2,371,673 1.55 4.46 0.85 21.32 0.17
----------- ------- ------- ------- --------- ---------
Total 11,435,323 2.10 4.97 0.89 32.9 0.36
----------- ------- ------- ------- --------- ---------
The Project infrastructure is considered excellent, with road
access directly to the project site, electrical power to within 750
metres, and both an interstate highway and active railroad within
15 kilometres.
Scoping Study Delivers Strong Returns with Pre-Feasibility Study
Nearing Completion
In May 2023, New World published an Enhanced Scoping Study with
significantly improved project economics relative to a 2022 Scoping
Study. The mine life was increased to an initial 13-years, with
total production of 381,400 tonnes of copper equivalent metal. The
pre-tax NPV@7% and pre-tax IRR are estimated to be US$835 million
and 40.2%, respectively. The Project is based on a modest capital
cost expenditure of US$252 million (including US$44.2M
contingency)(3) .
Mine development and the location of all surface infrastructure
will be constrained to privately-owned land which New World already
owns/controls, which is expected to streamline the permitting
process.(4)
A comprehensive development programme has been created by New
World which is currently progressing a Pre-Feasibility Study due
for completion in Q4 2023, before progressing to a Definitive
Feasibility Study, with pre-construction development (commencement
of decline) targeted for Q1 2025 (see Figure 3).
Figure 3 : Forward Work Programme - Antler Copper Project(4)
Attractive Exploration Upside with Drilling Recently
Restarted
Exploration drilling resumed in mid-October 2023 with drilling
at the Project to date limited to just 600m of strike at the Antler
deposit itself. Mineralisation remains completely open at depth at
the Antler deposit (deepest hole intersected 21.3m @ 5.3%
Cu-equivalent). As yet undrilled shallower exploration targets
include the Antler Offset Target, Rattlesnake Ridge, Copper Knob,
Insulator and West World prospects (see Figure 2). With exploration
success at some or all of these targets, New World could
potentially expand the existing Mineral Resource and evaluate a
staged expansion of the processing facility it intends constructing
at the Project and/ or extending the life of the proposed
operation.
Buyback Provisions
The Royalty includes a Right of First Refusal providing Trident
the right to match any royalty or streaming transaction associated
with the Project, until 12 months following the declaration of
commercial production at Antler.
The Royalty also contains two separate buyback provisions:
-- The Project Area Royalty can be reduced from 0.90% to 0.60%
following the payment of A$9 million at any time within 3 months of
New World obtaining at least 75% of the funding required for the
development and construction of Antler.
-- The AOI Royalty can be reduced from 0.45% to 0.30% following
the payment of A$4 million at any time within 3 months of New World
obtaining at least 75% of the funding required for the development
and construction of Antler.
If both buybacks are exercised, Trident will have recovered 120%
of its investment prior to construction, whilst still retaining
two-thirds of its initial uncapped, perpetual royalty exposure.
References
(1) Source: Fraser Institute Annual Survey of Mining Companies
2022, published on 4 May 2023
(
https://www.fraserinstitute.org/studies/annual-survey-of-mining-companies-2022
)
(2) Source: New World Resources announcement dated 28 November
2022
(
https://newworldres.com/wp-content/uploads/IncreaseInAntlerMineralResourceTo11Point4MtAt4Point1PercentCuEq28Nov22.pdf
)
Mineral Resource Estimate for the Antler Copper Deposit above a
1.0% Cu-Equivalent cut-off grade
Classification Tonnes Cu (%) Zn (%) Pb (%) Ag (g/t) Au (g/t)
Indicated 9,063,649 2.25 5.11 0.90 35.94 0.40
----------- ------- ------- ------- --------- ---------
Inferred 2,371,673 1.55 4.46 0.85 21.32 0.17
----------- ------- ------- ------- --------- ---------
Total 11,435,323 2.10 4.97 0.89 32.9 0.36
----------- ------- ------- ------- --------- ---------
Notes: Mineral Resource stated at 1.0% Cu-equivalent cut-off.
Cu=copper, Zn=zinc, Pb=lead, Ag=silver, Au=gold
Reported in compliance with 2012 Edition of the Australasian
Code for Reporting of Exploration Results and Mineral Resources
(JORC, 2012). Metal prices applied for the copper equivalent
calculations were the spot prices prevailing on 10 October 2022,
namely: copper - US$7,507/t, zinc - US$3,011/t, lead - US$2,116/t,
silver - US$20.26/oz and gold - US$1,709/oz. Potential
metallurgical recoveries were used for the following formula to
calculate the copper equivalent grade, with results rounded to one
decimal point:
Cu equivalent (%) = (Cu% x 0.872) + (Zn% x 0.889 x 3,011/7,507)
+ (Pb% x 0.591 x 2,116/7,507) + (Ag oz/t x 0.503 x 20.26/7,507x
100) + (Au oz/t x 0.700 x 1,709/7,507x 100)
(3) Source: New World Resources announcement dated 2 May
2023
(
https://newworldres.com/wp-content/uploads/AntlerCopperProjectEnhancedScopingStudyPresentation02May23.pdf
)
(4) Source: New World Resources announcement dated 19 September
2023
(
https://newworldres.com/wp-content/uploads/ResourcesRisingStarsPresentation19Sep23.pdf
)
(5) Source: New World Resources announcement dated 18 September 2023
(
https://newworldres.com/wp-content/uploads/ExplorationDrillingToResumeAtTheAntlerCopperProject18Sep23.pdf
)
(6) Source: New World Resources announcement dated 31 July
2023
(
https://newworldres.com/wp-content/uploads/USPrivateEquityFirmMakesStrategicInvestment31Jul23.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 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 www.tridentroyalties.com
Adam Davidson / Richard Hughes +1 (757) 208-5171 / +44 7967
589997
Grant Thornton (Nominated Adviser) www.grantthornton.co.uk
Colin Aaronson / Samantha Harrison +44 020 7383 5100
/ Samuel Littler
------------------------------
Liberum Capital Limited (Joint www.liberum.com
Broker) +44 20 3100 2184
Scott Mathieson / Cara Murphy
------------------------------
Stifel Nicolaus Europe Limited www.stifelinstitutional.com
(Joint Broker) +44 20 7710 7600
Callum Stewart / Ashton Clanfield
------------------------------
Tamesis Partners LLP (Joint Broker) www.tamesispartners.com
Richard Greenfield +44 20 3882 2868
------------------------------
St Brides Partners Ltd (Financial www.stbridespartners.co.uk
PR & IR) +44 20 7236 1177
Susie Geliher / Catherine Leftley
------------------------------
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:
-- 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;
-- 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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