Trident Royalties. - 67% increase in Koolyanobbing royalty payment

20 July 2020

Trident Royalties Plc

67% increase in Koolyanobbing royalty payment

Q2 Activities Update

Trident Royalties Plc ("Trident" or the "Company") (AIM: TRR), is pleased to provide an update on its activities undertaken during the quarter ended June 30, 2020, including the Q2 Koolyanobbing royalty payment.

HIGHLIGHTS

Completion of re-listing and admission onto AIM, £16M equity raise and name change

·      Successful cancellation of shares from the Official List (standard segment) and the Main Market of the London Stock Exchange plc and subsequent admission to AIM Market of the London Stock Exchange plc

·      Completion of a successful placing to raise gross proceeds of £16M to support near-term deal execution and general working capital

·      Commencement of trading on 6 July 2020 under the Company's new name, Trident Royalties Plc

Q2 royalty payment received from royalty over Koolyanobbing

·      Iron ore royalty payment for the second quarter of 2020 is A$903,215 (US$632,250¹), an increase of 67% from the first quarter 2020 payment;

·      Increased payment a result of strong iron ore prices, as well as continued ramp-up of operations at Koolyanobbing;

·      Iron ore price increased significantly over the quarter, rising 19% from US$83.3/t to US$99.4/t with an intra month high of $105.7 per tonne. Price trend has continued into Q3 with spot prices reaching US$112/t in mid July.

Acquisition of an immediately cash generative copper royalty over Mimbula Mine

·      Structured as a gross revenue royalty ("GRR") of 1.25%, decreasing to 0.3% upon US$5 million being paid on the royalty, with a subsequent decrease to 0.2% once the royalty has been paid on 575,000 tonnes of copper;

·      The GRR is subject to a minimum payment schedule which guarantees that a minimum of US$5 million will be paid within three years;

·      The asset is currently ramping-up production, having sold its first London Metal Exchange registered Grade A copper with a 99.99% purity in June 2020;

·      The Mimbula Mine has a large, well-defined JORC (2012) compliant Total Mineral Resource of 84 million tonnes of ore grading 0.95% copper for a total of 798,000 tonnes of contained copper at a 0.3% cut-off;

·      Copper was one of the best performing commodities during Q2 increasing from US$4,797/t to US$6,038/t (26% increase).

Transaction completed early in Q3, with strong pipeline

·      Subsequent to quarter-end, Trident has executed on the acquisition of the Spring Hill royalty, a strategically located development-stage gold asset in Australia;

·      Indicative of the strength of the pipeline, Trident currently has 15 active NDAs under which it is reviewing a range of opportunities across the breadth of commodities including base and precious metals, as well as battery minerals;

·      Pipeline opportunities include assets located in the Americas, Europe, Africa, and Australia.

Strong balance sheet to support future acquisitions

·      When accounting for the US$5 million Mimbula Mine copper royalty acquisition and prior to the receipt of the Koolyanobbing second quarter payment, Trident's 30 June cash balance is approximately US$15 million;

·      This substantial cash balance, when coupled with projected revenues from two cash generative royalties and an ability to offer vendors publicly tradeable equity in Trident, supports significant capacity for future acquisitions;

·      In addition, Trident continues to advance debt discussions as a means to unlock additional funding capacity and provide shareholders with levered returns.

Adam Davidson, Chief Executive Officer of Trident commented:

"We are very pleased with Trident's progress over the second quarter of 2020. In a short period of time, we have executed on the AIM listing and £16 million fundraise, as well as the acquisition of our first two cash generative royalties, followed by the acquisition of our first development stage royalty early in Q3. We are particularly pleased with the second quarter payment from the Koolyanobbing Operation, which benefited from materially increased production from the tenement following the ongoing expansion of operations at Koolyanobbing. The increase was also supported by the continued outperformance of iron ore price which recently recorded one-year highs and has been one of the best performing commodities of 2020 to-date.

The conclusion of the Mimbula royalty acquisition toward the end of the quarter was also a welcome addition to the portfolio. Mimbula is a long-life copper asset with favourable production and cost profiles. The royalty was sourced during a period of weak copper prices and will provide exposure to a commodity which has risen to over US$6,300 per tonne as a result of supply disruptions, low inventories and solid demand. Revenues from Mimbula will start accruing to Trident beginning in the third quarter of 2020. Trident continues to execute on our strategy into the third quarter and I look forward to reporting on our progress as we continue to assemble a strong portfolio of royalties and streams."

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. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

¹ AUD = 0.70 USD (20^th July 2020)

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About Trident

Trident is a growth-focused diversified mining royalty and streaming company, aiming to provide investors with exposure to a mix of base and precious metals, bulk materials (excluding thermal coal) and battery metals.

Key highlights of Trident's strategy include:

·      Constructing a royalty and streaming portfolio to broadly mirror the commodity exposure of the global mining sector (excluding thermal coal) 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 has relied 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.