Portfolio Update: Sonora Lithium Royalty

Trident Royalties Plc (AIM: TRR, OTC: TDTRF), the diversified mining royalty company, is pleased to provide an update in respect of Sonoroy Holdings Limited (“Sonoroy”), its 50%-held joint venture which agreed to acquire a 3.0% Gross Revenue Royalty (1.5% attributable to Trident) (the “Royalty”, and the acquisition thereof, the “Transaction”) over the Sonora Lithium Project in Mexico (“Sonora”) from the Estate of Colin Orr-Ewing (the “Estate”).

In accordance with the terms of the agreement to acquire the Royalty, the long-stop date to complete the Transaction has been extended to 31 December 2026. Trident has also agreed that other than in limited circumstances, the repayment date for its loan to Sonoroy is extended until the earlier of: (i) 31 December 2026; or (ii) completion of the Transaction.

As previously notified, the Royalty is the subject of litigation between the Estate and Bacanora, which is being adjudicated by the Court of King’s Bench of Alberta. Trident may terminate the JV if the litigation is finally resolved in favor of Bacanora, or if it is unresolved by the long-stop date. In addition, the project operator Ganfeng Lithium Co, Ltd., and its Mexican subsidiaries, have filed administrative review recourses before the Secretary of Economy in relation to the cancellation of nine lithium concessions by the Mexican Government, which comprise the Sonora project. Ganfeng notes the cancellation as violating both Mexican and international law* Trident is not required to provide funding in respect of Sonoroy to enable it to complete the acquisition, if at the time of funding there are changes to Mexico’s regulatory regime which, in Trident’s reasonable opinion, materially affects the Sonora project.

Adam Davidson, Chief Executive Officer of Trident commented:

“The Sonora royalty has the potential to become a Tier 1 royalty, providing exposure to a long-life lithium project with expansion optionality and operated by a world class lithium specialist. The transaction structure provides Trident with the ability to participate in the potential significant upside associated with the project from a low-cost and protected position.

This extension to complete the Sonora royalty acquisition gives sufficient time to allow a resolution to both the Alberta litigation, as well as the administrative review filed by Ganfeng regarding the cancellation of the project concessions. The Estate and its advisors continue to be excellent partners, and we look forward to continued work alongside them as the situation evolves.”

References

*Source: Ganfeng Lithium 30 June 2023 Interim Results dated 29 August 2023

(https://www.ganfenglithium.com/ir_detail_en/id/2640.html )