Trident Royalties receipts jump in December quarter

The AIM-traded firm put the boost in revenue down to higher deliveries from the gold offtake portfolio, which saw seasonally improved performance.

Excluding the Mimbula copper royalty, quarterly receipts were slightly above those of the fourth quarter in 2022.

It said Mimbula had concluded a minimum payment schedule in the second quarter of 2023 after Trident Royalties fully recouped its initial investment.

Despite that, Trident still retained a 0.3% gross revenue royalty over Mimbula, which was showing growth as it ramped up.

During the quarter, Trident said it achieved the acquisition of a net smelter return royalty over the advanced stage, high-grade copper-zinc Antler deposit in Arizona.

The project was being advanced by the ASX-listed New World Resources.

It also entered into a commitment letter with BMO Capital Markets and CIBC for a new, more cost-effective $40m revolving credit facility.

The facility was expected to be finalised in the first quarter of 2024, and could result in interest savings of up to $1.3m per annum if fully utilised.

As of 31 December, Trident Royalties had an unaudited net debt position of $22m.

“We enjoyed a solid finish to the year with an attractive royalty acquisition, excellent progress within our existing portfolio, and the announcement of a significant debt refinancing which materially lowers our cost of capital,” said chief executive officer Adam Davidson.

“Against the backdrop of an increasingly complex and volatile geopolitical environment, our diversified portfolio - with exposure to gold, lithium, copper, silver, and other commodities - continues to demonstrate its value.

“In particular, our gold offtake assets again benefited from elevated volatility in gold prices.”

Davidson noted that in its 2022 annual report, the firm highlighted the significance of reducing its cost of capital to the business.

“During the quarter, we announced a new debt facility with global lenders BMO Capital Markets and CIBC.

“The new facility provides greater flexibility in managing our cash, increases our potential borrowing capacity to $60m, and delivers a lower cost of capital to the business.

“The support of institutions such as BMO and CIBC, leading financiers to the sector, validates our existing portfolio and the opportunity that exists.”

At 1537 GMT, shares in Trident Royalties were up 1.13% at 35.89p.

Reporting by Josh White for Sharecast.com.