15 March
2024
Trident Royalties
Plc
("Trident" or the
"Company")
Thacker Pass Update:
Conditional Commitment for $2.3 billion DoE Loan
Trident Royalties Plc (AIM: TRR, OTC: TDTRF), the
diversified mining royalty company, is pleased to
note recent positive announcements by
Lithium Americas Corporation ("LAC", NYSE: LAC) in relation to its
Thacker Pass Lithium Project ("Thacker Pass"). Trident holds a net
1.05% gross revenue royalty over Thacker Pass (after expected
exercise of a partial royalty buyback, which would
see $13.2 million to Trident).
U.S. Government Advanced Technology Vehicles Manufacturing
Loan1
· LAC
has received a conditional commitment (the "Conditional
Commitment") from the U.S. Department of Energy ("DOE") for a $2.26
billion loan under the Advanced Technology Vehicles Manufacturing
("ATVM") Loan Program (the "Loan") for financing the construction
of the processing facilities at Thacker Pass.
· The
Loan is intended to help finance the construction of Thacker Pass,
targeted to produce an initial 40,000 tonnes per year ("tpa") of
battery grade lithium carbonate ("Phase 1").
· Thacker Pass supports the U.S. government's commitment to
securing a domestic supply chain for critical minerals to reduce
reliance on foreign materials. Phase 1 production could support
lithium needs for up to 800,000 electric vehicles
annually.
Construction Update2
· Approximately US$194 million was spent on Thacker Pass in
2023, with site preparation for the first phase of major earthworks
completed, including all site clearing, commissioning a water
supply system, site access improvements and site
infrastructure.
· General Motors released $320 million in funding in February
2023 in the largest investment publicly disclosed to date by an
automaker in a company to produce battery raw materials, with the
second tranche of $330 million expected before or in connection
with closing of the DOE loan.
· Lithium Americas is currently focused on advancing detailed
engineering, procurement and execution planning for the
construction of Thacker Pass Phase 1. Detailed engineering is
approximately 30% design complete to date. Lithium Americas plans
to continue to increase the level of detailed engineering in
advance of issuing full notice to proceed ("FNTP"), which is
expected in the second half of 2024.
· Estimated total capital cost for Phase 1 construction has been
revised to $2.93 billion to reflect updated quantities and
execution planning tied to increased engineering progress, use of
union labor through a PLA for construction of Thacker Pass,
development of an all-inclusive housing facility for construction
workers, updated equipment pricing and a larger project
contingency.
· Mechanical completion of Thacker Pass Phase 1 is targeted for
2027 following a three-year construction period, with full capacity
production targeted for 2028. Major construction is expected to
commence in the second half of 2024 following the anticipated
closing of the DOE Loan and issuance of FNTP.
Jonathan Evans, President and CEO of LAC, commented for the
purposes of their announcement1:
"The United States has an incredible opportunity to lead the
next chapter of global electrification in a way that both
strengthens our battery supply chains and ensures that the economic
benefits are directed toward American workers, companies and
communities. The ATVM Loan Conditional Commitment announced
today by the DOE is a significant milestone for Thacker Pass, which
will help meet the growing domestic need for lithium chemicals and
strengthen our nation's security.
"We are pleased to have completed the rigorous DOE due
diligence process. The Loan plus GM's strategic investment will
provide the vast majority of the capital necessary to fund Phase 1.
We deeply appreciate the U.S. government's support as we advance
the responsible development of Thacker Pass, and we are excited to
continue collaborating with all of our stakeholders to bring shared
success for America."
Adam Davidson, Chief Executive Officer of Trident
commented:
"Thacker Pass is a high priority asset
with considerable strategic value for the United States, and the
commitment of a $2.26 billion loan from the U.S. Department of
Energy underscores the level of support to bring this asset to
production. The DoE loan is expected to coincide with the
release of the second tranche of funding from General Motors of
$330 million, such that the capex for Phase 1 production is largely
secured.
"We anticipate first production from Thacker Pass within three
years and the associated royalty payments thereafter. As
previously disclosed, we expect Thacker Pass royalty receipts to
have a dramatic impact on our revenue, with $10.5 million generated
per year at Phase 1 production and a $25,000 lithium price,
increasing to $21 million per year at Phase 2."
References
1:
Source: Lithium Americas Corp news release, 14 March
2024
(
https://lithiumamericas.com/news/news-details/2024/Lithium-Americas-Receives-Conditional-Commitment-for-2.26-Billion-ATVM-Loan-from-the-U.S.-DOE-for-Construction-of-Thacker-Pass/default.aspx
)
2:
Source: Lithium Americas Corp news release, 14 March
2024
(
https://lithiumamericas.com/news/news-details/2024/Lithium-Americas-Provides-a-Thacker-Pass-Construction-Plan-Update/default.aspx
)
** Ends
**
Contact details:
Trident Royalties Plc
Adam Davidson / Richard
Hughes
|
www.tridentroyalties.com
+1 (757)
208-5171 / +44 7967 589997
|
Grant Thornton (Nominated
Adviser)
Colin Aaronson / Samantha Harrison /
Enzo Aliaj
|
www.grantthornton.co.uk
+44 020
7383 5100
|
Liberum Capital Limited (Joint
Broker)
Scott Mathieson / Cara
Murphy
|
www.liberum.com
+44 20
3100 2184
|
Stifel Nicolaus Europe Limited
(Joint Broker)
Callum Stewart / Ashton
Clanfield
|
www.stifelinstitutional.com
+44 20
7710 7600
|
Tamesis Partners LLP (Joint
Broker)
Richard Greenfield
|
www.tamesispartners.com
+44 20
3882 2868
|
St Brides Partners Ltd (Financial PR
& IR)
Susie Geliher
|
www.stbridespartners.co.uk
+44 20
7236 1177
|
About Trident
Trident is a growth-focused
diversified mining royalty and streaming company, providing
investors with exposure to a mix of base battery, precious, and
bulk metals.
Key highlights of Trident's strategy
include:
·
|
Building upon a royalty and streaming
portfolio which broadly mirrors the commodity exposure of the
global mining sector (excluding fossil fuels) 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
often largely relies 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.