Trident Royalties results highlight significant progress in portfolio diversification

“Portfolio diversification is a key pillar of our growth strategy as we look to broadly mirror the commodity exposure of the global mining sector,” James Kelly highlighted.
Trident Royalties PLC (LON:TRR) has, in its financial results statement, highlighted significant progress in its portfolio diversification efforts over the 2020 and the early months of 2021.

Now, the royalties portfolio now comprises interests in copper, iron ore, gold and lithium.

The recent addition of lithium interests to the portfolio is described as “enormously valuable and strategically important” for its business.

The company pointed towards rising demand created by the rapid growth of electric vehicles in particular as a factor for stronger metal prices seen through 2020 and 2021.

It is the company’s first annual results statement since joining London’s AIM market in May 2020, following a £16mln funding.

In terms of financial results, the company reported a US$1.7mln profit after tax versus a US$0.69mln loss in the prior year. It noted that earnings per share amounted to 2.45 cents. The company had US$2.32mln of net cashflow, and it ended the financial year with US$6.97mln of cash and equivalents.

During the year it generated US$1.67mln of royalty income from its Koolyanobbing asset, covering some 35% of the acquisition cost.

Trident in 2020 acquired royalty interests in Koolyanobbing, an iron ore mine in Western Australia, the Mimbula copper project, plus the Spring Hill and Lake Rebecca gold operations. It also agreed deals for the Pukaqaqa copper project and West Australian gold projects though these deals did not close before the end of the financial year.

In March 2021, it completed the acquisition of 60% of the existing gross royalty revenue over the Thacker Pass lithium project which is a development stage asset.

“Trident is a company which, over the past 12 months, has formulated and executed its new business model and strategy thus enabling investors to capitalise on the new commodities ‘supercycle’ being forecast by many analysts and commentators,” said chairman James Kelly.

“Our business model has not simply evolved by being in the right place at the right time; its strength lies in careful and considered value-building through the acquisition of royalties and streams to deliver exposure to commodity prices as a percentage of mining turnover, with multiple upside opportunities.”

He added: “Portfolio diversification is a key pillar of our growth strategy as we look to broadly mirror the commodity exposure of the global mining sector, while competitors are predominately precious metals focused.

“During the year under review, and in the first months of 2021, we have made significant progress to this end and now have royalties spanning copper, iron ore, gold and most recently, lithium, a key battery metal.

“This adds an enormously valuable and strategically important dimension to our business as we ultimately look to establish a balanced, diversified portfolio to represent the exposure of the global mining sector.”