25th Mar 2020 11:56
(Alliance News) - Trident Resources PLC on Wednesday announced a move into mining royalties, which will lead to a name change.
Trident was formed in 2018 to look for mining assets in either the advanced exploration, pre-production, or production stage, and joined the LSE in October that year.
Trident is buying a 1.5% free-on-board mining royalty at the Koolyanobbing iron ore mine in Western Australia for AUD7.0 million.
The asset, Trident said, has an established production track record. It is operated by Australian miner Mineral Resources Ltd, which Trident said has recently announced a plan to increase production from the mine.
In 2018, Koolyanobbing production six million tonnes of iron ore, but this has ramped up to a run-rate of 11 million tonnes a year as of February this year. MinRes wants to increase this to 15 million tonnes by the end of 2020 with an AUD120 million capital expenditure.
Trident Chief Executive Adam Davidson commented: "We are delighted to announce our first transaction which represents the initial step in our strategy to build a diversified portfolio of mining royalties and streams.
"With a large secondary market of existing assets ripe for consolidation as well as strong growth in alternative financing in the mining sector, we believe this represents an excellent opportunity for Trident's shareholders and incoming investors."
"Trident will be well-positioned to execute on its strategy with an initial cash-generative asset secured, a strong leadership team and supportive shareholder base."
"The acquisition fit squarely with our initial priority of acquiring existing royalties, which are often available on attractive terms, and represents an ideal platform asset as we seek to execute on our extensive pipeline of opportunities and our longer-term growth strategy," Davidson added.
Shares in Trident have been suspended from trading in London on Wednesday, as the acquisition is deemed a change in strategic mandate.
Trident also wants to move from the Main Market to AIM, and will be renaming itself to Trident Royalties PLC at the same time.
By George Collard; [email protected]
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