Trident buys interest in Mali gold project royalty

Mining royalty investor Trident Royalties announced the acquisition of a 50% interest in a 2% net smelter royalty over the Dandoko Gold Project in western Mali on Monday.

The AIM-traded firm said the project is owned by B2Gold Corporation - a mining conglomerate listed on TSX and NYSE, with a market capitalisation nearing $3.9bn.

It described Dandoko as a promising exploration area with the potential for near-term production.

Dandoko was previously the lead asset of Oklo Resources - an ASX-listed company, which B2Gold acquired in September last year for AUD 91.3m (£45.89m).

In terms of location, Trident said Dandoko enjoys proximity benefits, situated 25 kilometres away from B2Gold's operational Fekola Mill.

The board said the Fekola Mill is B2Gold's most substantial asset, with production targets set between 580,000 and 610,000 ounces, at a cash cost ranging from $565 to $625 per ounce for the 2023 fiscal year.

B2Gold had indicated that the mineral qualities at Dandoko were akin to those at Fekola, making the former suitable for processing at the Fekola facility.

A recently-completed study by B2Gold validated the opportunity for imminent production, Trident added, with a strategy involving transporting saprolite material to the Fekola Mill.

B2Gold had earmarked $79m for the initiative, with the first phase focusing on saprolite mining from both the Anaconda and Dandoko regions.

Within that budget, $16m had been specifically set aside for constructing a haul road linking Fekola to the Anaconda and Dandoko projects.

On another front, B2Gold was reportedly progressing with an engineering study titled the 'Fekola Regional Development Plan'.

The study aimed to evaluate the feasibility of erecting a new standalone four million tonnes-per-annum processing facility at Anaconda.

If realised, the plan could pave the way for heightened production in the medium-term phase, with resources from both Anaconda and Dandoko underpinning the engineering investigation.

In the first half of 2023, B2Gold invested $6.6m in exploration activities within the Dandoko permit.

“The acquisition of the Dandoko royalty again demonstrates Trident's ability to identify undervalued royalties covering high-quality assets and delivering significant shareholder value,” said chief executive officer Adam Davidson.

“Dandoko is a highly attractive royalty on an asset operated by a senior producer, close to existing processing infrastructure, with a demonstrated pathway to production and significant exploration upside.

“The potential for nearterm production, alongside the conservative structure of the transaction, which defers 40% of the consideration until meaningful milestones are achieved at the project, provides a compelling exposure for Trident.”

Davidson said the company was looking forward to regular news flow from B2Gold as it continued to advance Dandoko towards production.

“Given current weakness in the traditional capital markets, Trident continues to see elevated deal flow and looks forward to updating the market on further opportunities.”

At 1121 BST, shares in Trident Royalties were up 0.52% at 42.47p.

Reporting by Josh White for Sharecast.com.