Aim-listed Trident Royalties saw a significant increase in battery metals exposure in the first quarter ended March 31.
The company completed its most significant transaction to date with the acquisition of a 60% interest in a gross revenue royalty over the Thacker Pass project, for $28-million, comprising $26-million in cash and $2-million in shares.
Thacker Pass contains the largest defined lithium mineral reserve in the US.
A successful concurrent equity financing of about £20.7-million was conducted at no discount to the prevailing market price to execute the Thacker Pass lithium royalty transaction and strengthen the balance sheet.
Trident completed the Talga gold royalties transaction and, shortly after quarter-end, completed the previously announced Pukaqaqa copper royalties transaction, finalising the acquisition of these seven royalties.
With a portfolio inclusive of copper, iron-ore, gold and now lithium, Trident said it was increasingly reflective of the broader global mining sector, providing investors with an inflation hedge in the face of loose global monetary policy and direct exposure to a once-in-a-generation energy revolution.
First-quarter royalty payments totalled about $451 314 from royalties over producing assets, an increase of 55% over the previous quarter.
Trident had an unaudited cash balance of $7.4-million at period-end.
This substantial cash balance – coupled with ongoing projected revenues from two cash generative royalties and an ability to offer vendors publicly tradeable equity in Trident – supports capacity for future acquisitions, the company indicated.
Moreover, Trident entered into a term sheet with Tribeca Global Resources in the period in respect of a proposed debt facility up to an amount of $10-million. The facility is subject to the finalisation of definitive documents and satisfaction of customary conditions precedent.
The company said that, indicative of the strength of the pipeline, it currently has 11 active nondisclosure agreements under which it is reviewing a range of opportunities across commodities including mineral sands, lead, nickel, copper, gold, zinc, cobalt, potash and iron-ore.
"The first quarter of 2021 was perhaps the most significant for Trident since its admission to trading on Aim less than a year ago, with the $28-million acquisition of 60% of the Thacker Pass lithium royalty, coupled with a substantial equity raise.
“The fundraising was conducted at no discount to the prevailing share price, was significantly oversubscribed and resulted in a number of new institutional holders establishing a position in the company.
“In addition to funding our Thacker Pass transaction, we have a very healthy balance sheet to support the continued growth and diversification of our royalty portfolio – both through acquisitions, as well as positive asset-level progress.
“This bodes exceptionally well for Trident, particularly against a global macro backdrop that is increasingly supportive of growing demand for critical commodities,” CEO Adam Davidson said.
He also highlighted material positive updates at Lake Rebecca and Spring Hill in Australia and the Western Australian Gold Royalty package tenements.
“Revenue continues to remain volatile across Trident's two paying royalties, a factor which underpins the opportunity available to Trident by which it can acquire single asset royalties at attractive valuations from natural sellers, to ultimately construct a diversified portfolio of royalties with a more predictable payment profile.
“Trident remains focused on executing value accretive transactions across the commodity and development space, with a particular focus on enhancing near term revenue,” Davidson said.