Metals and materials investment firm Orion Resources Partners has announced the sale of a minority interest in private industrial minerals royalty Sweetwater Royalties to a Canadian pension fund.
Orion sold an 8% stake in Sweetwater for about $100-million, implying a $1.9-billion enterprise value for 100% of the royalty firm.
Orion will retain a 67% majority ownership share in the asset, having sold a 25% stake to Ontario Teachers' Pension Plan in March last year for about $220-million.
Sweetwater was established by Funds managed by Orion in 2020 to manage the long-term, stable cashflow generated from its mineral estate in Wyoming containing 10.5-billion tons of trona resources, the world's largest trona deposit.
Trona is a mineral that is processed into soda ash, an ingredient with an extensive and critical set of uses. An essential component in many industrial applications, particularly glass manufacturing, soda ash is also used to produce a vast range of everyday products. Natural, trona-based soda ash, such as that produced by Sweetwater, has a significantly lower environmental impact compared to synthetic soda ash.
The company's land grant extends to over 4.5-million mineral acres of surface and mineral estate holdings in Wyoming, Utah, Colorado and Michigan, providing an expansive royalty platform across industrial minerals, base metals and renewables.
Since establishment, Sweetwater has received over $280-million in royalty payments, with the potential for substantial further growth given the new mines under development by WE Soda and Sisecam Chemicals, the global dominance of the trona deposit, the scalability of capacity from existing operations, as well as long-term optionality from its large land and mineral estate holdings.
Under Orion's ownership, the management team at Sweetwater has implemented several value-creation initiatives, including setting up joint ventures with companies to pursue renewable-energy initiatives such as large-scale wind and solar projects and identifying two new world-class soda ash projects. With its production-linked revenue stream, capacity for co-investment, strong sustainability credentials and exceptionally large size allowing for economies of scale, Sweetwater exhibits many of the hallmarks of a classic Orion transaction.