Trident Royalties Plc (AIM:TRR, OTCQX: TDTRF), the diversified mining royalty company, notes a recent update relating to the Sonora lithium royalty (“Sonora Royalty”).

The Alberta Court of Appeal overturned, on appeal, a judgment which had summarily dismissed the action brought by Bacanora Minerals Ltd. (“Bacanora”) against the Estate of Ian Colin Orr-Ewing (“Estate”) on the basis that it was time barred under the statute of limitations. This decision relates to a specific point of law and no determination has been made in relation to the merits of the underlying claim. The case will now be referred back to the Court of King’s Bench of Alberta to consider the merits of the claim and they will determine the timetable for this process and the timing for future hearings. Bacanora alleges that Mr. Orr-Ewing obtained the Sonora Royalty either by misrepresentation or without consideration. The Estate disputes the allegations and intends to rigorously defend itself in the action.

Transaction Summary

On 27 January 2022, Trident announced that Sonoroy, a 50%-held joint venture between Trident and Marmottes Capital Limited, entered into an agreement to acquire a 3.0% Gross Revenue Royalty (1.5% attributable to Trident) over the Sonora Lithium Project from the Estate. In accordance with the terms of the agreement, the long-stop date to complete the acquisition of the royalty is the earlier of 31 January 2025, or the date which is 6 months after the first Royalty payment.

The conditions requiring Trident to provide funding in respect of Sonoroy to enable it to complete the acquistion remain at Trident’s discretion and includes a provision that at the time of funding, no changes in Mexico’s regulatory regime materially affects the Sonora project and that the litigation by Bacanora is favourably resolved for the Estate. If Trident elects to exit the joint venture, the repayment date of an initial loan made by Trident to Sonoroy of $2.5 million is due six months from notification of termination of the Sale and Purchase Agreement or Joint Venture Agreement.