Trident Royalties Share Discussion Threads

[the deacon] 07/11/2023 21:57

Listened in on the Sandstorm conference call today. They're looking to sell $40-100m worth of non core, non precious metals royalties over the next 6-12 months. I suspect some of these will be of interest to the likes of TRR and ECOR

[robertspc1] 07/11/2023 19:21

Orion selling is what is giving all us retail investors the chance to buy decent stakes for the longer term. They haven't got much left so the opportunity might not be there for too long

[robsy2] 07/11/2023 18:50

Thanks all for the great posts. It looks like we have to hunker down a bit here and wait for the tide to turn.

[the deacon] 07/11/2023 17:51

Nothing we didn't already know. The consequence of picking up assets by offering stock - but will be short-lived. Orion aren't natural holders of company shares - they need to constantly recycle capital

[mwj1959] 07/11/2023 17:31

And share price not helped by Orion continuing to reduce their holding...

[nickelmer] 07/11/2023 17:10

Orion Mining selling down their stake, reason for share price falls revealed

[riverman77] 07/11/2023 12:09

I understood the broker risked NAVs apply a discount rate of around 8% to come up with their discounted cashflow valuation. The gold alone is worth around 28p, and the lithium slightly higher than that. You also have some copper, silver and iron ore. I'd say undervalued at these levels as you're effectively getting all the non-gold assets thrown in for free.

[carcosa] 07/11/2023 11:07

GM is the largest shareholder in Lithium Americas. It has already been stated they will obtain lithium at below market prices (both from GM themselves and a reply to my question during an online presentation with TRR).

Substantial lithium production is years away and 100% of the processed lithium initial production is going to GM.

Since TRR are not providing a good dividend yet then the most logical way to value TRR is on a NPV basis. If I use a discount rate of 9% then I get a share price pretty much where it is now; and that is before adding a risk rate but assuming the $22m buyback is utilised. Should interest rates decline next year then a good increase in the share price can be expected (as with many other shares). So around the 25-30p could provide a useful entry point.

[the deacon] 07/11/2023 10:30

Yes, Trident modelled the TP purchase on a long term $12-15k lithium price. As far as the weakness is concerned, I agree with the majority of comments here. I'd also add that the cost of capital has really shot up in such a small space of time. The tried and tested path to growth for a royalty and streamer has traditionally been to pick up assets using cash/shares and lines of credit, then pay down that debt through earnings and equity issuance. What once were 6-8% rates on credit lines are now more akin to high teens - almost credit card-like rates. So for the smaller royalty companies, the bar for picking assets up using debt has raised dramatically. Compare this to some of the larger players such as Wheaton, whose rates sit at low-mid single digits, with significant cashflow coming in. I keep hearing that now should be a great time for royalty and streamers to pick up assets. That's largely true, but for many it makes more accretive sense to pay down debt and look for deals that will truly move the needle.

[wjccghcc] 07/11/2023 10:26

I think Liberum have a Li price of $18k in their NAV calculations.

[catabrit] 07/11/2023 10:03

I think the lack of yield here also hurts when you can get 9-12% yields at deep discounts elsewhere. Those were not available a year ago. So obviously the opportunity cost has widened.

[catabrit] 07/11/2023 10:02

Agree with last two posts. Interestingly, I am pretty sure I read in the docs somewhere that the NAV of Thacker Pass and all the Lithium exposure was priced at 12k lithium price or something like that - so still below where it trades currently.

[riverman77] 07/11/2023 08:54

I think you're right it's the fall in lithium price which have hit the share price, but as others pointed out the market cap is now roughly covered by the gold exposure alone, so you're now getting a free option on the lithium and other parts of the portfolio. I'm keen for some gold so recently added on that basis.

[robertspc1] 07/11/2023 08:46

I think a lot of the decline is due to the fall in lithium prices and the weakening EV demand as mentioned by Albemarle. Excitement re Thacker Pass has clearly waned. Still I like the gold exposure ST and think lithium will bounce before TP enters production. Hence will add to pension pot on weakness

[1knocker] 06/11/2023 19:27

Unclear to me how this business is only half as attractive as it was when the price was nudging 60. Or should I be looking through the other end of the telescope, and saying that the business was not twice as attractive then as it is now?

What is the fair value? Search me.

[sev22] 06/11/2023 08:24

Trident Royalties reports 'solid' quarter as portfolio matures.

[the deacon] 06/11/2023 07:59

Pretty much as expected. The hope was for Mimbula to be surpassing the now-expired minimum payment schedule. That's how looking like 2025.

[robertspc1] 06/11/2023 07:47

Statement seems fairly upbeat. Gold exposure handy in current environment

[robsy2] 04/11/2023 11:30

Gold 36% and silver 4%. We’ll see how the business is doing on Monday morning

[catabrit] 03/11/2023 12:10

Bought GBP 20k this morning and now cannot even get an electronic bid on 5k. I hope we have hit some sort of technical floor at 29.5p.

[catabrit] 02/11/2023 12:17

It might sound odd to say this but all of the above comments are valid; the good and the bad. There is a valid reason that we are down to 29p. And a valid reason why we shouldn’t stay there for long. I have just bought again at 30p.

[robertspc1] 02/11/2023 10:23

Cash, gold, lithium and a large seller depressing the price. Perfect time to add to the pension pot for me.

[riverswimmer] 02/11/2023 02:46

TRR is a growth stock so the market needs to be forward looking in terms of valuation. Focusing only on the 2023 EV/EBITDA ratio is to ignore the vast majority of value in the portfolio.

Here's the latest consensual TRR data from Marketscreener:

2023 EV/EBITDA 17x
2024 EV/EBITDA 8.8x
2025 EV/EBITDA 4.2x

2023 Sales $9.6m
2024 Sales $16.3m
2025 Sales $20.1m

The average price target for the stock is USD0.98 (which has remained relatively stable in recent months) which is up 167% from the current stock price. This is the most extreme difference between the consensual target price and the actual stock price since TRR was listed.

In my humble opinion, this is an extraordinary opportunity to buy a high quality junior royalty company at a ridiculous valuation which places little to no value on most of the portfolio.

[dead duck resources] 01/11/2023 23:04

Is a house broker note credible? They will go for 3x share price then work backwards.

29.5p would be a 50% retrace from the YTD high, overdone perhaps and may snap to 40p
on technicals alone, yet EV/EBITDA(adj) of x16 still gives room on the downside imho.

[riverman77] 01/11/2023 22:15

That certainly makes it more tempting if the gold is worth 28p. On top of the lithium in for free you're also getting some copper and a little bit of silver