Trident Royalties: Portfolio Update – Mercedes Gold Mine

15th April 2022 | Trident Royalties plc

Portfolio Update: Mercedes Gold Mine

Trident Royalties Plc (AIM:TRR), the diversified mining royalty and streaming company, is pleased to announce that it has reached an agreement with Equinox Gold Corp. (“Equinox”) regarding the sale of the Mercedes Gold-Silver Mine in Sonora, Mexico (“Mercedes Mine”) pursuant to which Bear Creek Mining Corporation is acquiring a 100% interest in the Mercedes Mine from Equinox (“Mercedes Sale”). The Mercedes Sale is expected to close in April 2022. Trident acquired the Premier Gold Mines Limited Offtake Agreement (the “Premier Offtake”), which covers both the Mercedes Mine and the Greenstone Project in Ontario, Canada (“Greenstone”), in January 2022 as part of a broader transaction to acquire a portfolio of gold offtakes first announced on 13 December 2021.1

Highlights

  • The Mercedes Sale will trigger an approx. US$3.75 million payment from Equinox to Trident, significantly improving upon Trident’s modelled returns for the Premier Offtake at the time of acquisition. Following this payment, the Mercedes Mine will be removed from the Premier Offtake.
  • This payment is in addition to revenues received since the original acquisition, amounting to US$307,604 from ounces delivered from the Mercedes Mine to date.
  • Following the sale of the Mercedes Mine, the Premier Offtake will remain in place over Greenstone, which has commenced construction with the first gold pour targeted for H1 2024.2
  • Trident has also secured a guarantee from Premier Gold Mines Limited (a subsidiary of Equinox) that the original annual offtake cap of 58,500 ounces will be delivered in full in 2024 and 2025, when Greenstone is expected to be operating. Any shortfall in deliveries will be compensated at a rate of US$23.50 per ounce.
  • The tenure of the Premier Offtake remains unchanged, through to March 1st, 2027.

Adam Davidson, Chief Executive Officer and Executive Director of Trident commented:

“While the Mercedes Mine was only a small part of the gold offtake portfolio acquisition in January 2022, this agreement represents excellent value for Trident shareholders on the proposed sale of the Mercedes Mine. Within a few months, we will have more than recovered our initial investment for the entire Premier Offtake whilst retaining exposure to the world class Greenstone asset, coupled with increased certainty over future revenue. This agreement highlights the value which can be unlocked by holding a diversified portfolio and the importance of entering well-structured agreements with reliable partners.

The transaction therefore increases our expected returns from the Premier Offtake, increases the certainty of those returns, and significantly accelerates the expected cash generation with the Mercedes Sale payment of approximately US$3.75 million soon to be added to our already strong treasury, available for future acquisitions.”

News in full

CEO Adam Davidson provides an overview of the business and its strategy below (Filmed May 2021)

Trident Royalty Investors Videos

Trident Royalties Investor Videos On Five Minute Pitch TV

Click here to view Trident Royalty’s Investor Videos