Acquisition of Advanced Stage Lithium Royalty

Trident Royalties Plc (AIM: TRR, OTCQB: TDTRF), the diversified mining royalty company, is pleased to announce that it has entered into a binding sale and purchase agreement to acquire an existing lithium royalty (the “Royalty”) from Atherton Resources LLC over projects owned by Anson Resources Ltd. (“Anson”, ASX:ASN, market capitalisation of circa A$175 million), in the Paradox Basin in Utah, USA. The Royalty notably covers Anson’s flagship Paradox Lithium Project (“Paradox”).

The Royalty is a 2.50% net smelter return (“NSR”) royalty tied to Anson’s ownership of the projects. Should Anson sell a property within the Paradox Basin, Trident will be entitled to 2.00% of the net sales proceeds and the royalty would no longer apply to the sold asset.

HIGHLIGHTS

Multi-project coverage, diversifying Trident’s lithium extraction exposure

• The Royalty covers all projects owned by Anson within the Paradox Basin, which includes Anson’s flagship Paradox Lithium Project. Paradox is an advanced stage lithium brine project, targeting use of direct lithium extraction (“DLE”).
• Anson released a Definitive Feasibility Study (“DFS”) for Paradox in September 2022 outlining a Phase 1 operation producing an initial 13,074 tonnes per annum of Lithium Carbonate (Li2CO3) for the first 10 years of a 23-year operation.1 Anson is currently targeting a Final Investment Decision at the end of 2023.2
• At spot prices of approximately US$35,000 per tonne of lithium carbonate equivalent (“LCE”), the Royalty would pay approximately US$11 million per annum for the first 10 years.
• Anson further highlighted that the Phase 1 economics are based solely on a JORC 2012 compliant Indicated Mineral Resource estimate (“MRE”) of 239,000 tonnes LCE.2 A subsequent MRE update significantly upgraded the Indicated resource tonnage to 346,109 tonnes LCE3 and the DFS economics are expected to be updated based on future MRE upgrades.1
• Additionally, Phase 2 development at Paradox is expected to comprise a further substantial increase in lithium production capacity, together with new bromine production capacity. 1
• Anson is well-funded to continue rapidly progressing Paradox, with A$38.6 million in cash-on-hand as of 30 June 2023.3 Anson has appointed global engineering firm Worley Group Inc. (“Worley”) for the Front-End Engineering and Design (“FEED”) Study for the proposed lithium carbonate processing plant, which is expected to be completed in Q4 2023.5
• The Paradox Basin hosts significant Mineral Resource expansion potential. Anson has outlined an Exploration Target at Paradox containing 1,294,000 to 3,096,000 tonnes LCE5; and an Exploration Target for the Green River project area containing 1,064,600 to 2,075,900 tonnes of LCE.6

In consideration, Trident shall pay up to US$10 million in three tranches as follows:

• US$1.5 million in cash on closing;
  • Upon (i) commencement of commercial production by Anson at Paradox, and (ii) receipt of the first payment under the Royalty, Trident shall pay up to US$3.5 million (“First Contingent Payment”), up to 50% of which may be paid in shares at the Company’s election; and
  • On the second anniversary of the First Contingent Payment, Trident shall pay up to US$5 million (“Second Contingent Payment”), up to 50% of which may be paid in shares at the Company’s election.

Adam Davidson, Chief Executive Officer of Trident commented:

“We are delighted to announce the acquisition of this royalty over the Paradox Lithium Project. For a modest initial cash outlay, we have secured exposure for shareholders to a well funded, highly attractive project with a pathway to cash generation and significant growth potential. The Paradox project reinforces our strong position in battery materials, and introduces exposure to direct lithium extraction, which could play a significant role in future lithium supply. The acquisition again demonstrates Trident’s ability to source innovative transactions to create shareholder value.”