Trident Royalties Plc (AIM: TRR, OTC: TDTRF), the diversified mining royalty company, has announced an offtake milestone by one of its key portfolio constituents, and discusses its FY23 results to 31 December 2023. Trident holds a 2.50% Net Smelter return royalty over ASX-listed Anson Resources’ lithium projects in the Paradox Basin. It’s a direct beneficiary of Anson’s (ASX: ASN) potential offtake agreement with lithium-ion battery maker LG Energy Solution, which is also considering an investment into the Australian listed enterprise. Adam Davidson, CEO of Trident Royalties explains that offtakes of this nature and the scope for projects to expand are value catalysts for Trident shareholders and ones that come free of charge. "We don't have to pay any more for that royalty. We own it. The royalty becomes more valuable as these events occur.” In this interview with focusIR, investors will also learn:
- How the basket of commodities in its portfolio shields investors from the volatility of spot prices - Why a strategy to seek and acquire royalties in companies that have near term value catalysts is key - Which assets are advancing towards positive cash flow - Why Trident has a lower cost of capital compared to others within the industry after securing a revolving debt facility in 1Q24 - The preservation of share capital and maintaining debt at manageable levels is the Company’s primary focus - Why a dividend is within Trident’s line of sight Davidson reminds investors about the company’s exposure to the Thacker Pass Lithium Mine in Nevada which is the largest known lithium deposit in the US and one of the largest in the world. “It's slated for first production in 2027 and then full production in 2028,” says Davidson. “It's now very de-risked in the sense that it's fully funded and it's entering construction. So, it's being de -risked materially over the last twelve months, but we want to get a little closer to cash flow before you want to start having cash flow out in the form of a dividend because there's no worse mistake you can make than to start a dividend and then have to frantically stop it.” He concludes that while he is ‘very, very happy with the results last year,’ he expects them to ‘be better this year.’ Reasons to add TRR to your Watchlist:
- Diversified portfolio of battery mineral & precious metal assets - Revenues expected to step up significantly in FY24 and beyond as mine projects come online and the 4 material acquisitions added in 2023 come onstream - Lowered cost of capital, now with a flexible revolver facility, to fund further non-dilutive acquisitions - The portfolio has been significantly derisked in 2023 - Market conditions still favour royalty funding over equity capital
