Mining royalty and streaming company Trident Royalties has entered into an agreement to acquire an indirect royalty over the Sonora lithium project, in Mexico, from the estate of Colin Orr-Ewing.
Orr-Ewing, who passed away in 2016, was the founder of Bacanora, which jointly owns the Sonora project in a joint venture (JV) with Ganfeng Lithium.
Bacanora recently become a subsidiary of Ganfeng as a result of an £285-million cash offer for all Bacanora's ordinary shares. Sonoroy, a JV company in which Trident holds a 50% interest, has the right to acquire the royalty for a total of $52-million in cash.
The transaction is expected to be completed in early 2023, subject to a favourable resolution of a dispute between the estate and Bacanora.
At the current lithium carbonate equivalent spot price of about $55 000/t, following completion, Trident expects the Sonora project to deliver revenue of $14.4-million a year, which will double when the project advances to its second stage.
Trident will further benefit from potassium sulphate (potash) by-product revenues at Sonora, providing a new commodity exposure to a high-value fertiliser product.
Trident also holds a royalty over the Thacker Pass lithium project, in the US.