LSE-listed Trident Resources has entered into a definitive purchase agreement to acquire a significant, cash-generative mining royalty.
The company says the acquisition will create a new, growth-focused diversified mining royalty and streaming company that will provide investors with exposure to a mix of base and precious metals, bulk materials (excluding thermal coal) and battery metals.
As the acquisition will constitute a change in strategic mandate and there is insufficient publicly available information about the proposed transaction, Trident’s shares will be suspended both from trading on the main market of the LSE and from listing on the official list (standard segment) of the Financial Conduct Authority (FCA) with immediate effect.
On completion, Trident intends to seek the cancellation of the admission of its ordinary shares from the official list of the FCA (standard segment) and its trading on the LSE’s main market, and seek admission to trading on the Aim market of the LSE which the directors consider to be a more suitable market and regulatory environment for a growth-focused royalty and streaming company.
Concurrent with the proposed admission to Aim, Trident intends to raise financing and change its corporate name to Trident Royalties.
Highlights of the acquisition relate to a 1.5% free on board revenue royalty over part of Koolyanobbing Iron Ore in Australia and another operation in Western Australia for a staged cash consideration totalling A$7-million.
The royalty is over an asset located in the mining-friendly jurisdiction of Australia, with an established production record.
The asset operator recently announced its intention to increase production from the whole Koolyanobbing operation, which is anticipated to deliver stronger cashflow to the royalty.
Trident’s board of directors considers mining royalty and streaming assets to represent an attractive opportunity for shareholders and new investors, providing exposure to commodity prices with a lower risk profile than mining equities, participating in growth from development and exploration expenditure without cost or dilution to the holder.
“Today’s announcement is the culmination of extensive work on the acquisition, as well as developing the strategy of creating a new, nimble and growth-focused diversified mining royalty and streaming company.
With most major players in the royalty and streaming space focused on larger transactions in precious metals and heavily weighted to the Americas, we believe there is a clear opportunity for a London-listed diversified royalty and streaming company with a global mandate to execute on smaller and midsized transactions,” says nonexecutive chairperson James Kelly.