Trident Royalties Share Discussion Threads

[husbod] 01/9/2023 09:14

Couldn't agree more.I can understand that countries might seek to get more from their resources but this sort of arbitrary and I would have thought unlawful behaviour won't achieve anything other than putting off investors.Something similar I suspect is happening in Ghana where I hold ALL another lithium miner where the government declared it wanted to be the second biggest mineral producer on the continent but has continuously failed to grant the necessary consents to enable production to commence.Back to Sonora - I wonder if behind the scenes the the US is putting pressure on the Mexican government to stop the Chinese from accessing the resource. If so I would have no sympathy for the company as they should never have been able to pick it up so cheaply in the first place.

[mwj1959] 01/9/2023 09:10

Thx melody. So share price move, all other things being equal, now puts a negative value on Sonora!

[888icb] 01/9/2023 09:06

This is as said above a strange reaction as there is essentially no value in the share price for Sonora. One imagines this should correct fairly quickly one the market appreciates the reality of the situation. I feel sure the CEO will be giving interviews to fully explain the situation. Looks like a great top up opportunity imho.

[melody9999] 01/9/2023 08:51

they revised their risk multiple down from 0.2 to 0.1 which meant a reduction in risked NAV for Sonora from 4p to 2p per share. so 2p reduction

[mwj1959] 01/9/2023 08:46

What was the revised value attributed to Sonora by Liberum in their recent note?

[melody9999] 01/9/2023 08:07

surprised at mark down. there was little value factored into Sonora by analysts in any case. and the liberum note 2 days ago said it all.

[the deacon] 01/9/2023 08:07

Strange reaction. Nothing in the TRR valuation for Sonora. On a wider point, it looks like Mexico are determined to shoot themselves in the foot as far as their lithium industry is concerned. Trying to go it alone won't end well.

[zho] 01/9/2023 07:46

Yes:

Adam Davidson, Chief Executive Officer of Trident commented:

"Trident is disappointed by the recent developments in Mexico announced by Ganfeng, which add risk to the transaction in addition to the ongoing litigation in Alberta, whereby the validity of the royalty is being challenged. We were cognizant of these risks at the time of the original transaction and structured the deal accordingly to protect against both political and litigation risk, such that we may recover our initial $2.5 million secured loan. We will continue to monitor the situation carefully and, at the present time, intend to maintain our rights in respect of the asset."

[porsche boxster] 31/8/2023 15:05

Any relevance here to Trident's Sonora investment?

[mwj1959] 30/8/2023 17:25

I would be amazed if management invested here just to be associated with one of the majors (if B2G can really be described as a major). They're investment banking types with significant leverage to delivering a rising share price. Doing deals that have few merits would be counter to that.

[dead duck resources] 30/8/2023 15:25

AyJay12, it would be more useful to see TRR's calculations than my own but I'll try.

The first point is that B2Gold have de-emphasised plans for Dandoko in the mid-term;

Fekola Regional: potential 80,000-100,000 oz/year from Regional sources
Initial saprolite production to commence from Bantako North permit in 23/24
Haulage of select higher-grade saprolite material from Anaconda Area to Fekola mill.
The base-case mine plan is for a combined Fekola Mine, Cardinal Zone, Anaconda Area. The Bakalobi and Dandoko permits are not included in base case production schedules.
There's a reasonable chance of it being used as a satellite deposit in the long-term but production levels would be relatively low (30,000-60,000oz?) and some years away.

Using a basic online NPV calculator and applying some best guesses;
Production 60,000oz a year (optimistic for a satellite deposit but was imagining how TRR may have priced it up) starting in year 4 with a 12 year mine life. A gold price based on B2Gs forecast scaling up with inflation, offsetting the haulage costs which come out of net smelter royalties making satellite deposits a little less attractive for a royalty company. At NPV10, it is around zero. At NPV15, arguably more suitable for Mali in the current climate, it comes to -$1m. And year 4 is probably too early.

At 30,000oz and NPV10 / NPV15, it's -$2.5m / -$3m. Applying a much higher gold price can get a positive figure but that doesn't really justify the price paid. All things considered I think TRR was drawn to the B2Gold name here and wanted to be associated with one of the majors regardless of the merits of the acquisition. In any case it's not a large amount to throw away but does raise a question mark over the deal-making.

[melody9999] 30/8/2023 13:40

Priced in already I would have thought. I wonder what the actual share price was when Liberum put out their 80p target?

[someuwin] 30/8/2023 13:07

Liberum downgrade TRR price target from 80p to 76p.

"...In our valuation, we had risk multiple of 0.2x for Sonora. We have lowered this to 0.1x. We have also adopted a more conservative view on ounces from the gold offtake portfolio, taking a 30koz haircut to our forecast profile, and included the recent Dandoko acquisition. Together, this results in a downgrade to our price target, to 76p."

[the deacon] 28/8/2023 10:31

Agreed. Every royalty company needs to replace ounces sold, and good quality exploration assets/targets do that. Back in 1986 Franco paid £1m for a royalty over a small heap leach mine - assuming it'd cover their G&A. Well, that turned out to be a great move, with the resulting exploration eventually proving up the Goldstrike asset as a 50moz monster, and a company maker for both Franco and Barrick.I'm not for one minute likening this asset to Goldstrike, but one shouldn't underestimate the potential resource expansion. Many of the better quality royalty companies are proving up more ounces than they're depleting year after year - and at no cost to them, as their counterparties continue to drill the assets.

[ay_jay12] 28/8/2023 08:42

Big names create big royalties, the royalty sector is filled with stories of small resources growing into big things. Better to back someone who has the capacity to grow the asset.

RNS says "exploration royalty", no mention of the word "mine" in the RNS title that I can see?

What IRR do you calculate on the deal to decide they've overpaid and what assumptions?

[dead duck resources] 26/8/2023 12:39

'good deal' 'I'm topping up'... but no reason given as to why it's good other than B2G being a big name.

B2G only issued 1% of their equity for Dandoko so it's small fry for them (they issued 17% for another deal this year). Resource estimate downgraded post-acquisition and not included in its mine plan, which likely led to the vendor looking to sell the royalty. Regional exploration as TRR indicates in the RNS title.

$3.75M paid upfront and $2.5M payable out of royalty proceeds, they've paid top whack.

[the deacon] 26/8/2023 10:27

I'm not fond of Mali either. But I'd rather hold the royalty vs operator. Ultimately it's Africa (and other less than favourable jurisdictions) where the big discoveries of the future will be made. It's having a well established counterparty that's important, and B2 are undoubtedly that.

[1knocker] 25/8/2023 12:21

My limit order triggered at 41.87, for a 25% top up to my TRR holding. Now I need to exercise patience, so probably best not to look at the share price too often. 'A watched pot' and all that.

I don't much like the sound of Mali, and TRR seems to get itself involved directly or indirectly in more litigation than I like, but in their deals they do seem to cover themselves pretty well against things not running to plan and/or timetable. That I DO like.

[melody9999] 21/8/2023 10:23

Did you see this tucked away in the RNS:

Given current weakness in the traditional capital markets, Trident continues to see elevated deal flow and looks forward to updating the market on further opportunities."

Cash of US$29M at 280723 and US$5.5M committed today. Could be more news in the not too distant.

[mwj1959] 21/8/2023 09:45

I agree the deal looks good, but also that the geopolitical backdrop is hardly encouraging. Probably why the deal was good!!

[ccpag] 21/8/2023 07:47

Very strong operator. Financially and operationally.

[kaos3] 21/8/2023 07:37

Shares sold. Now we can go up.

Good deal. Production soon.the only thing i do not like is geopolitics in Mali. French are loosing control and unfeiendly forces are filling the void.

[glimmergold] 21/8/2023 01:59

hxxps://www.investments.halifax.co.uk/research-centre/news-centre/article/?id=8669972&type=bsm

LAC never appealed.

[carcosa] 18/8/2023 07:52

Should Orion give Lithium Royalty the 40-per-cent stake in the Thacker Pass royalty the asset manager still owns, then strike an agreement that compensates Lithium Royalty for the remaining 45 per cent then that figure could support the valuation of the Royalty that TRR maintains over Thacker Pass.

[shanklin] 17/8/2023 12:12

Worth reading the original TRR Thacker Pass RNS from 19-Mar-21,

It does mention the dispute which resulted in this court case