A GROWTH-
FOCUSED
DIVERSIFIED
MINING ROYALTY
AND STREAMING
COMPANY
Trident Royalties plc
Annual Report & Accounts 2021
TRIDENT IS FAST
BECOMING A LEADING
MINING ROYALTY
COMPANY WITH A
PORTFOLIO OF HIGH
QUALITY INVESTMENTS
ACROSS THE GLOBAL
MINING SECTOR
Financial Statements
48 Independent Auditor’s report
54 Consolidated statement of
comprehensive income
55 Consolidated statement of
financial position
56 Consolidated statement of
changes in equity
57 Consolidated statement of cash flows
58 Company statement of financial position
59 Company statement of changes in equity
60 Company statement of cash flows
61 Notes to the financial statements
IBC Company information
Overview
01 Our performance
02 Our portfolio
04 Our strategy
05 Our business model
Strategic Report
08 Chairman’s statement
10 Chief Executive Officer’s statement
12 Operational review
28 Environmental, social and
governance report
29 Section 172 statement
30 Risk management
32 Financial review
Corporate Governance
36 Board of Directors
37 Senior management
38 Directors’ report
40 Corporate governance statement
44 Remuneration report
45 Directors’ responsibility statement
For more information please visit
https://www.tridentroyalties.com
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OVERVIEW
Our Perfomance
TRANSFORMATIONAL
ACQUISITIONS DURING 2021
AND INTO 2022 ADDING CASH-
FLOW AND VALUE ACCRETION
FOR OUR SHAREHOLDERS
US$125m
4
DEPLOYED CAPITAL SINCE JUNE 2020
COMMODITIES
12
22
PRODUCING ASSETS
ASSETS IN HIGH QUALITY JURISDICTIONS
TRIDENT PORTFOLIO BY COMMODITY
BY ACQUISITION PRICE (AT 30 APRIL 2022)
Battery Metals - Lithium
Base Metals - Copper
Precious Metals - Gold
Bulks and Industrial - Iron Ore
3%
25%
6%
66%
HIGHLY DISCIPLINED
INVESTMENT APPROACH
TARGETING MID-TEENS
RETURNS
Trident Royalties plc Annual Report & Financial Statements 2021
01
OVERVIEW
Our Portfolio
A DIVERSIFIED PORTFOLIO
OF COMMODITIES, GEOGRAPHICAL
LOCATIONS AND STAGES OF
DEVELOPMENT
12
PRODUCING ROYALTIES
4
COMMODITIES
9
COUNTIRES
Canada
USA
TRIDENT PORTFOLIO BY STAGE
Mexico
14%
31%
55%
Producing
Pre-development
Exploration
Peru
Brazil
Producing Royalties Operator Location Commodity Status
Sugar Zone Offtake Silver Lake Resources Canada Gold Production
Los Filos Offtake Equinox Gold Mexico Gold Production
RDM Offtake Equinox Gold Brazil Gold Production
Fazenda Offtake Equinox Gold Brazil Gold Production
Bonikro Gold Offtake Allied Gold Cote d’Ivoire Gold Production
Santa Luz Offtake Equinox Gold Brazil Gold Production
Blyvoor Gold Offtake Blyvoor Gold South Africa Gold Production
Victoria Gold Offtake Victoria Gold Canada Gold Production
Koolyanobbing Iron Ore Royalty Mineral Resources Australia Iron ore Production
Mimbula Copper Royalty Moxico Resources Plc Zambia Copper Production
i-80 Gold Offtake i-80 Gold USA Gold Production
Lincoln Gold Mine Royalty Seduli Holdings USA Gold Production
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OVERVIEW
Our Portfolio continued
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Côte d’Ivoire
Zambia
South Africa
Australia
Pre-development Royalties Operator Location Commodity Status
Greenstone Offtake Equinox Gold Canada Gold Advanced
Sonora Lithium Royalty Ganfeng Lithium Mexico Lithium Advanced
Thacker Pass Lithium Royalty Lithium Americas Corp USA Lithium Advanced
Spring Hill Gold Royalty PC Gold Pty Ltd Australia Gold Advanced
Lake Rebecca Gold Royalty Ramelius Resources Australia Gold Advanced
Pukaqaqa Copper Royalty Nexa Resources Peru Copper, Molybdenum Advanced
Warrawoona Gold Royalty Calidus Resouces Australia Gold Advanced
Exploration Royalties Operator Location Commodity Status
Talga Talga Gold Royalty Novo Resources Australia Gold Exploration
Bullfinch Gold Royalty Torque Metals Australia Gold Exploration
Mosquito Creek Gold Royalty Nimble Resources Australia Gold Exploration
Trident Royalties plc Annual Report & Financial Statements 2021
03
OVERVIEW
Our Strategy
DELIVERING
VALUE FOR OUR
SHAREHOLDERS
Trident continues to deliver
value for our shareholders – in
less than 2 years after having
established itself as a
diversified mining royalty
company, providing investors
with exposure to base,
precious, and battery metals,
as well as bulk materials. The
current portfolio includes
lithium, gold, copper,
molybdenum and iron ore
assets. The mandate explicitly
excludes fossil fuels and
prioritises partnerships with
mine operators with a strong
focus on Environmental, Social
and Governance (“ESG”)
stewardship.
Royalties typically provide
investors with top line
(revenue) exposure to a
variety of commodities
without direct exposure
to capital or operating cost
inflation. In particular, the
acquisition of the gold offtakes
in January 2022 will provide
the Group with cash flow that
will enable it to continue to
grow the portfolio either
through the further acquisition
of existing royalties or by
writing new ones.
Constructing a royalty
portfolio to broadly mirror
the commodity exposure
of the global mining sector
with a bias toward
producing assets.
Acquiring royalties
in resource-friendly
jurisdictions worldwide.
Targeting attractive small-
to-mid size transactions
which are often overlooked
in a royalty space that is
typically dominated by
large players.
Leveraging the
experience and networks
of management, Board
members and advisers,
all of whom have deep
industry connections and
strong transactional
experience.
Active deal-sourcing that
focuses on royalties held
by natural sellers such as:
closed-end funds, prospect
generators, junior and
mid-tier miners.
Maintaining a low-
overhead model which
can support the increasing
scale of the business
without a commensurate
increase in operating costs.
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OVERVIEW
Our Business Model
WHAT WE DO
Trident believes that the acquisition and aggregation of individual royalties, offtakes and streams
has the potential to deliver strong returns for shareholders as assets are acquired on terms
reflective of single asset risk as compared with the lower risk profile of a diversified, larger-scale
portfolio, and potentially during periods of idiosyncratic price lows in a commodity-agnostic
acquisition strategy.
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As Trident continues to build scale within its portfolio the company expects strong cash
generation to support an attractive dividend policy, providing investors with a desirable mix of
inflation protection (through exposure to commodities), capital growth and income, with returns
enhanced through a lowering of cost of capital.
Create value
through the
aggregation of
assets
Boost returns by
introducing
conservative
leverage
Add scale through
accretive scrip
transactions
Attractive
dividend policy
once scale
achieved
Trident Royalties plc Annual Report & Financial Statements 2021
05
STRATEGIC REPORT
ROYALTIES
TYPICALLY
PROVIDE
INVESTORS
WITH TOP LINE
EXPOSURE TO
A VARIETY OF
COMMODITIES
WITHOUT DIRECT
EXPOSURE TO
CAPITAL OR
OPERATING
COST INFLATION
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STRATEGIC REPORT
STRATEGIC
REPORT
08 Chairman’s statement
10 Chief Executive Officer’s statement
12 Operational review
28 Environmental, social and governance report
29 Section 172 statement
30 Risk Management
32 Financial review
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STRATEGIC REPORT
Chairman’s Statement
2021 WAS ANOTHER
TRANSFORMATIVE
YEAR FOR TRIDENT
ROYALTIES. WE ADDED
A FURTHER 4
INVESTMENTS DURING
THE YEAR FOLLOWED
BY THE SUBSTANTIAL
ACQUISITION OF THE
GOLD OFFTAKE
CONTRACTS IN
JANUARY 2022,
BRINGING THE TOTAL
TO 22 OF WHICH 12
ARE NOW PRODUCING.
2021 was another transformative year for Trident Royalties.
We added a further 4 investments during the year followed by the
substantial acquisition of the gold offtake contracts in January 2022,
bringing the total to 22 of which 12 are now producing. The
acquisition of the Thacker Pass lithium royalty together with the
gold offtake contracts, both from funds managed by Orion
Resource Partners, were particularly notable. We entered 2022 with
a portfolio capable of immediate and meaningful cash generation
as well as substantial future optionality.
2021 was very strong year for financial markets as easing monetary
conditions combined with fiscal stimuli designed to ensure a rapid
recovery from the economic effects of Covid. Commodity markets
were particularly strong in most areas, notably base and battery
metals. Momentum around decarbonisation has continued to
build globally.
2022 has so far seen far weaker financial markets. Covid in China
and the Ukrainian war have had a demonstrably negative impact
on real demand globally. Rising interest rates designed to curb
evident inflation have further eroded sentiment in financial markets
and the real world. None of these factors seems likely to recede
particularly quickly so we can expect continued volatility and
pressure on the underlying economy over the course of the year.
Notwithstanding the more challenging short term economic
conditions, Trident will continue to look to deploy capital, consistent
with our investment criteria of materially exceeding our cost of
capital. We will also target ways to improve our rating and reduce
our cost of capital. This should occur naturally as we add more
assets and the level of diversification, optionality and cash flow
continues to build. This s-curve can be seen in the evolution of our
more mature and larger gold royalty peers.
We believe that we can add most value to shareholders through
growth and we continue to see a lot of opportunity. The priority
remains to invest in value accretive deals, particularly at this stage
in our development. However, we intend to write a dividend policy
during 2022, so that shareholders get greater transparency over
our planned allocation of capital.
Potential deal flow currently continues to be both numerous and
attractive. Our priority will remain royalties in established mining
jurisdictions which are immediately or very near-term cash
generative.
The underlying drivers of decarbonisation mean that an
unprecedented level of investment into base and battery metals
will be required over the next decade. Base and battery metals are
therefore likely to continue to offer some of the most attractive
returns for royalty providers such as Trident.
In terms of the Board, I was delighted to join as Chairman in June.
We also welcomed the experienced deal-maker Peter Bacchus
in July complementing a very capable and experienced Board.
Alongside Adam Davidson as Chief Executive Officer the small
management team (and a small team of advisers) continue to be
relentless in driving the business forward, intent on implementing
the Board strategy and adding value for shareholders. Finally, I
would like to thank long-term and new shareholders who continue
to support the business recognising the huge opportunity that
Trident offers.
Paul Smith
Non-Executive Chairman
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6 May 2022
STRATEGIC REPORT
Chairman’s Statement
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STRATEGIC REPORT
Chief Executive Officer’s
Statement
THE BUSINESS HAS
ACHIEVED A NUMBER
OF IMPORTANT
MILESTONES DURING
THE LAST YEAR
2021 has been a pivotal year for Trident in which we continued
to build upon the momentum generated following our first full year
as a listed royalty company. We’ve not only continued to grow our
portfolio in an accretive manner, but have also witnessed significant
asset-level progress across a number of Trident’s key assets. In last
year’s annual report, I noted three key differentiating factors which
guide Trident’s strategic approach, specifically:
1. Building a diversified and balanced portfolio of royalties with
the ultimate objective of broadly reflecting the commodity
exposure of the global mining sector (excluding fossil fuels).
2. Targeting attractive assets in resource friendly jurisdictions
worldwide.
3. Taking a flexible and innovative approach to transaction sizing
and structuring, prioritising small-to-mid sized transactions which
tend to be overlooked by larger peers.
We have adhered to these principles across 2021, resulting in the
generation of a significant opportunity set across the royalty space,
which has underpinned the acceleration of growth and
diversification of our portfolio.
Our first major transaction for the year occurred in March 2021,
with the acquisition of a 60% stake in a gross revenue royalty over
the globally significant Thacker Pass lithium project located in the
United States. Thacker Pass provides Trident shareholders with tier-1
lithium exposure – a critical battery metal – in a developed mining
jurisdiction, acquired at a compelling return profile. Since the
acquisition of the royalty, lithium spot prices have increased 6-fold
as demand for the critical metal outstrips supply, highlighting the
value inherent in a tier-1 asset such as Thacker Pass. Outside of
lithium, we further strengthened our presence in “electrification”
minerals with the completion of the acquisition of the Pukaqaqa
copper and molybdenum royalties package.
We have also increased our exposure to precious metals in 2021,
with the completion of the acquisition of the Talga gold royalty
portfolio, which covers four assets located in Western Australia –
including a portion of the Warrawoona gold project which
commences production in 2022. Further, in August we acquired
a fully-secure Net Smelter Return royalty over the Lincoln Gold
Mine, located in California, which the operator is seeking to
commission on a small scale in 2022.
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STRATEGIC REPORT
Chief Executive Officer’s
Statement continued
Most significantly, shortly after the year-end we completed the
acquisition of a portfolio of gold offtake contracts, providing
immediate and future cashflow to our business. This acquisition
represents our largest to date, and was funded in December 2021
by an equity placing which raised approximately $40 million, as well
as the arrangement of a $40 million debt facility with Macquarie
Bank Limited.
As the scale of the company increases, our access to capital and
corresponding cost of capital will continue to improve. In addition,
as the portfolio grows to include more cash generative assets, we
see internally generated cash providing greater flexibility for
funding future acquisitions and growth.
Whilst growing quickly, Trident adheres to investment principles
which are based upon compliance with the highest levels of ESG
standards. We are committed to developing our sustainability
reporting and practices at a corporate level, and to this end are
currently undertaking a materiality assessment and audit process
that will identify the key focus areas for our own ESG policies and
disclosure.
From a macro perspective, we have seen the return of inflation
which is broadly anticipated to become more significant in the
short-to-medium term. Royalty instruments and companies are
particularly attractive during inflationary markets as they retain
exposure to inflationary driven upward commodity price
movements, but remain insulated from associated inflationary
pressure on operating and capital costs. As such, it is an ideal time
to further grow and diversify our portfolio, specifically with
additional base and battery metal exposure which will play a key
role in decarbonisation.
As a small team we have an ability to build scale without any
meaningful increase in central costs. I would like to thank my
colleagues for their dedication over the past year. I should also
like to thank the Board for their input and guidance, and to our
other stakeholders, including our operating partners, advisors
and financiers who are a key component of Trident’s business.
Our key focus remains unchanged – to drive shareholder returns
and investor value. We are very pleased with the progress within
our existing portfolio and, with an attractive pipeline of potential
opportunities, I remain confident in the team’s ability to continue
sourcing and delivering high-quality, value accretive transactions
into the future.
We approach 2022 with optimism, and I look forward to updating
the market on our progress.
Adam Davidson
Chief Executive Officer
6 May 2022
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STRATEGIC REPORT
Operational Review
ELECTRIFICATION & BATTERY METALS
LITHIUM IS USED IN
RECHARGEABLE BATTERIES,
WHICH CONSUMES MORE
THAN THREE-QUARTERS OF
LITHIUM PRODUCTION
Lithium is a predominantly used in the manufacture
of lithium ion batteries and batteries for electric vehicles,
mobile phones, laptops and other electronic devices.
Current mainstream battery chemistries all include lithium
as a consistent and key component.
Trident is exposed to lithium though its acquisition of 60%
of a royalty over the Thacker Pass operation in Nevada, which
is the largest known lithium resource in the United States.
25%
PERCENTAGE OF LITHIUM IN
TRIDENT PORTFOLIO
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STRATEGIC REPORT
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ELECTRIFICATION & BATTERY METALS
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STRATEGIC REPORT
Operational Review continued
GOLD OFFTAKES
OUR GOLD OFFTAKE
CONTRACTS CAPITALISE
ON INCREASED MARGINS
IN VOLATILE AND RISING
MARKETS
The gold offtake portfolio acquisition completed after the
year end is generating significantly increased cash flow
for the Group.
Gold can act as a hedge against inflation and deflation
alike, and is vital in any diversified portfolio.
Trident is also exposed to gold through its royalty over
the +1Moz Lake Rebecca asset and a collection of smaller
assets in Australia and North America.
66%
PERCENTAGE OF GOLD IN
TRIDENT PORTFOLIO
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GOLD OFFTAKES
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STRATEGIC REPORT
Operational Review continued
COPPER
THE MAJOR APPLICATION
OF COPPER IS FOR
ELECTRICAL WIRING
Copper is an essential commodity for the global transition
to a low-carbon future as it plays a key role in electrification
and power generation - including renewable energy and
electric vehicles.
Trident is exposed to copper through its royalty over
the Pukaqaqa pre-development asset in Peru and the
Mimbula Mine in Zambia.
6%
PERCENTAGE OF COPPER IN
TRIDENT PORTFOLIO
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COPPER
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STRATEGIC REPORT
Operational Review continued
PRODUCING ROYALTIES
IRON ORE
KOOLYANOBBING
AUSTRALIA
KEY FACTS
Location: Western Australia
Operator: Mineral Resources Ltd. (ASX: MIN)
Commodity: Iron ore
Mine Type: Open pit
Stage: Production
Royalty: 1.5% free on board
Total Resource: 9.3Mt @ 59.9% Fe reserve and
19.5Mt @59.9% Fe (excluding Claw)
9.3Mt @ 59.9% Fe
RESERVE
Trident owns a 1.5% free on board revenue royalty covering
part of the producing Koolyanobbing Iron Ore Operation in
Western Australia. The royalty is over tenements which covers
part of the Deception Pit and all of the Claw Pit at
Koolyanobbing.
1.5%
ROYALTY (FREE ON BOARD)
The royalty provides Trident with attractive exposure to a
significant and growing iron ore asset, operated by an innovative
and renowned operator with a strong balance sheet in a world-
class jurisdiction. As a royalty over an operating asset, the royalty
provides access to cashflow which will assist in bringing scale
and diversification to Trident’s growing royalty portfolio.
During the year Trident received US$0.08m (2020: US$1.67m)
in royalty income – the reduction was due to the mine operator
not being active on the Trident tenement. Since September
2021, Mineral Resources has recommenced activity in the
Deception pit and commenced mining at the Claw deposit.
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STRATEGIC REPORT
Operational Review continued
PRODUCING ROYALTIES
COPPER
MIMBULA
ZAMBIA
KEY FACTS
Location: Zambia
Operator: Moxico Resources Plc (private)
Commodity: Copper
Mine Type: Open Pit
Stage: Production
Royalty: Gross Revenue Royalty 1.25%
Total Resources: 93.7Mt @ 0.97% TCu
Trident owns a 1.25% GRR over all copper produced from
the Mimbula Mine in Zambia, which is operated by Moxico
Resources Plc. The GRR will decrease to 0.3% upon US$5.0m
being paid on the royalty, with a subsequent decrease to 0.2%
once the royalty has been paid on 575,000 tonnes of copper.
In addition, the GRR is subject to a Minimum Payment Schedule
in which the higher of the minimum amount, or the GRR
amount, are due; specifically:
Minimum payments of US$375,000 per quarter in 2021;
Minimum payments of US$500,000 per quarter in 2022; and
Minimum payments of US$750,000 in each of the first two
quarters of 2023.
During the year Trident received US$1.5m (2020: US$0.8m)
of payments from Mimbula in line with the minimum
payment schedule.
Moxico Resources (owner of Mimbula) successfully raised
US$73M in equity in June 2021 in order to fast-track the
construction of a standalone processing centre at Mimbula
capable of producing 30,000kta of copper.
9.37Mt @0.97% TCu
RESOURCE
Favourable
terms
MINIMUM PAYMENT SCHEDULE TO 2023
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46 year
INITIAL MINE LIFE
STRATEGIC REPORT
Operational Review continued
PRE-DEVELOPMENT ROYALTIES
LITHIUM
THACKER PASS
USA
KEY FACTS
Location: Nevada USA
Operator: Lithium Americas Corp (TSX:LAC)
Commodity: Lithium
Mine Type: Open pit
Stage: Pre-development
(initial construction funding secured,
finalisation of permits expected in 2022)
Royalty: Gross Revenue Royalty (1.75% following
buy-back – 60% attributable to Trident)
Total Reserve: 3.1Mt @ 3,283 ppm of lithium carbonate
On 19 March 2021, Trident acquired a 60% interest in a GRR
over the Thacker Pass Lithium Project from Alnitak Holdings LLC
a special purpose vehicle indirectly owned by Orion Resource
Partners (which retains ownership of the remaining 40%) for
US$28.0m. The project is the largest known lithium reserve and
resource in North America and is 100% owned and operated
by Lithium Americas Corp.
Thacker Pass currently contains CIM compliant Mineral
Reserves of 3.1Mt Lithium Carbonate Equivalent (“LCE”),
the largest lithium reserve in the United States, with a mine
life of 46 years based on Reserves. With the Total Resources
amounting to circa 8.3Mt LCE plus further as yet undrilled
exploration targets, there is significant additional resource
upside to potentially provide further reserve conversion to
increase the mine life or support a production expansion.
The key terms of the royalty are as follows:
• A gross revenue royalty on all mineral products generated at
the mine of 8% (4.8% attributable to Trident) until US$22.0m
is paid, after which the GRR drops to 4%.
• The GRR may be reduced to 1.75% (1.05% attributable
to Trident) at any time by the operator making a one-time
payment of US$22.0m (US$13.2m attributable to Trident).
• Trident notes that the PFS assumes the US$22.0m buyback
is completed within the first year of operation.
The royalty provides Trident with attractive exposure to the
growing lithium market, the demand for which is growing
as a result of increasing demand for rechargeable batteries
driven by the uptake in electric vehicles.
Lithium Americas received its final state permits in Q1 2022 and
is expected to receive all final permits necessary to commence
construction during H2 2022.
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STRATEGIC REPORT
Operational Review continued
PRE-DEVELOPMENT ROYALTIES
GOLD
LAKE REBECCA
AUSTRALIA
KEY FACTS
Location: Western Australia
Operator: Ramelius Resources Ltd. (ASX: RMS)
Commodity: Gold
Mine Type: Open pit
Stage: Pre-development
Royalty: 1.5% net smelter royalty
Total Resource: 29.1Mt @ 1.2g/t Au for 1.1Moz
Trident owns a 1.5% NSR gold royalty over the production
of the Lake Rebecca Gold Project located in Western Australia.
Lake Rebecca has a JORC (2012) compliant published
Resource of over 1Moz at a cut-off grade of 0.5g/t across
3 deposits within wholly contained pit shells, and is being
actively progressed towards development by Ramelius
Resources (“Ramelius”) – a well-funded, ASX listed mining
company. Lake Rebecca provides Trident with an uncapped
precious metal royalty, in an attractive jurisdiction with material
upside beyond the maiden resource announced in 2020.
Ramelius acquired the project from Apollo Consolidated
the previous owner in January 2022 for circa US$130m.
With a market capitalisation in excess of US$1bn Ramelius
recently announced an extensive drilling programme
targeting an expanded resource for the project during 2022.
1.1Moz
AU RESOURCE
1.5%
NET SMELTER ROYALTY
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STRATEGIC REPORT
Operational Review continued
PRE-DEVELOPMENT ROYALTIES
COPPER
PUKAQAQA
PERU
KEY FACTS
Location: Peru
Operator: Nexa Resources SA (TSX:NEXA)
Commodity: Copper, Molybdenum
Mine Type: Open pit
Stage: Pre-development
Royalty
(sliding scale NSR): 3 Royalties
Total Resources: 349.1Mt @ 0.40% Cu
Trident acquired a portfolio of three existing royalties over
the Pukaqaqa Copper Project, a pre-development stage
copper/molybdenum asset located in the Huancavelica
region in Peru. The Pukaqaqa Project has NI 43-101 compliant
Measured and Indicated Resources of 309m tonnes at 0.41%
Cu (approximately 1.26m tonnes of contained copper), with
an additional Inferred Resource of 40.1m tonnes at 0.34% Cu
(for 136,340 tonnes contained copper and related
molybdenum credits).
The project is held by NYSE- and TSX-listed Nexa Resources,
an established South America-focused mid-tier producer with
five operating base metals mines (plus an additional mine
under construction) and three operating smelters in Peru
and Brazil. The most recent technical report contemplates
an open-pit mining operation to feed a 30,000 tonne-per-day
processing plant to produce copper and molybdenum
concentrates over an initial 19-year mine life. Nexa has
allocated a total of US$16m towards advancing the project
over the last three years.
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349.1Mt @0.40% Cu
RESOURCE
3
ROYALTIES
STRATEGIC REPORT
Operational Review continued
PRE-DEVELOPMENT ROYALTIES
GOLD
SPRING HILL
AUSTRALIA
KEY FACTS
Location: Australian Northern Territory
Operator: PC Gold Pty (private)
Commodity: Gold
Mine Type: Open pit
Stage: Pre-development
Royalty: fixed rate A$13.30 per oz
(where the goldprice is > A$1,500/oz)
Total Resource: 8.8Mt @ 1.26g/t Au for 355koz
Spring Hill is located within the highly prospective Pine Creek
region in Australia’s Northern Territory, which has historically
produced over 3Moz of gold across multiple deposits and
contains more than 10Moz of undeveloped Resources. Spring
Hill has a JORC (2012) compliant open pit Inferred Mineral
Resource Estimate of 8.79Mt grading 1.26g/t Au for 355,000
ounces of contained gold at 0.5g/t Au cut-off, as at January
2017. In Q1 2021, the operator of Spring Hill received the final
substantive environmental permit required to proceed with
development of the Spring Hill project.
355koz
RESOURCE
Moving towards
production
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STRATEGIC REPORT
Operational Review continued
PRE-DEVELOPMENT ROYALTIES
GOLD
WARRAWOONA
AUSTRALIA
KEY FACTS
Location: Western Australia
Operator: Calidus Resources Ltd. (ASX: CAI)
Commodity: Gold
Mine Type: Open pit
Stage: Pre-development
Royalty: 1.5% net smelter royalty
(over down dip extension zone)
Total Resource: 13.6Mt @ 1.2g/t Au for 519koz
The royalty applies over an area totalling 153.52km2, providing
coverage for at least 16 high priority exploration targets, as well
as mining licence M45/1290 which holds the eastern extension
of the planned Klondyke open pit gold mine. This extension,
known as Klondyke East, has been scheduled for exploitation
in Year 3 of the Warrawoona mining schedule. The mine is
currently fully financed and under construction. It is estimated
that approximately 150koz of gold, subject to the royalty,
fall within the current mine plan.
1.5%
ROYALTY (NSR)
Mine in
construction
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STRATEGIC REPORT
Operational Review continued
PRE-DEVELOPMENT ROYALTIES
GOLD
LINCOLN
USA
KEY FACTS
Location: California, USA
Operator: Seduli Holdings Pty (private)
Commodity: Gold
Mine Type: Underground
Stage: Restart/commissioning
Royalty: 1.5% net smelter royalty
(over down dip extension zone)
Total Resource: 958Kt @ 9.29g/t Au for 286koz
During 2021, Trident acquired a 1.5% NSR gold royalty
covering the entire Lincoln gold project in California.
During 2021, Trident acquired a 1.5% NSR gold royalty
covering the entire Lincoln gold project in California. The royalty
includes a 5-mile area of interest which spans the majority of
the exploration area. The royalty is fully secured by the project
assets and reduces to a 0.75% NSR in perpetuity once the
royalty has paid US$3M. Existing infrastructure, including a fully
functional processing plant, has been installed onsite and
supports an initial 220tpd operation. The project is permitted
to a maximum of 1,000tpd, leaving it well placed to exploit the
significant exploration potential of the region. The Lincoln Gold
Mine is the only permitted project and processing plant on the
Californian Mother Lode, providing it with significant leverage
to aggressively explore and acquire additional tenure for
further upside to Trident’s royalty.
1.5%
ROYALTY FULLY SECURED
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Portfolio over
3 highly
prospective
gold tenements
STRATEGIC REPORT
Operational Review continued
EXPLORATION ROYALTIES
GOLD
VARIOUS
AUSTRALIA
KEY FACTS
Project: Various
Location: Western Australia
Stage: Pre-development
Operator: Various
Royalty (NSR): Various
Talga Talga
The royalty covers granted Mining Lease M45/618 which
is owned and operated by TSX listed Novo Resources
Corporation. Located in the Pilbara region of Western Australia,
historical drilling has identified shallow dipping, near-surface
gold zones including 7m @ 14.4g/t Au and 3m @ 24.8g/t Au.
Mosquito Creek
The royalty covers exploration licence E46/1035 which was
acquired by Nimble Resources in November 2017 from Novo
Resources Inc (“Novo”). The royalty zone sits to the north east of
Novo’s Millennium Mill and, is considered prospective for gold
as evidenced by historical workings, soil and rock geochemistry
and previous drilling. In February of 2021, Nimble entered into
a farm in agreement with Calidus on the royalty tenement.
Calidus is constructing the nearby Warrawoona mine and the
royalty lies within trucking distance of the mine and along strike
from mineralised trends identified on adjacent tenements.
Bullfinch
The royalty covers Mining Leases owned by Torque Metals.
Torque is listed on the Australian Stock Exchange (ASX) and,
and in 2021 completed a A$5.0m fundraise. The royalty
tenements are located in the prospective Yilgarn goldfields,
located within 70km of two existing processing plants.
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STRATEGIC REPORT
Operational Review continued
ROYALTIES ACQUIRED AFTER THE REPORTING DATE
GOLD
GOLD OFFTAKES
WORLDWIDE
On 11 January 2022, Trident completed the acquisition of
a portfolio of gold offtake contracts from funds managed by Orion
Resource Partners for US$69.75m. The portfolio comprises offtakes
over 7 producing mines in 6 countries. On 23 March, Trident
acquired a further gold offtake contract over the Sugar Zone
mine operated by Silver Lake Resources Limited.
The key commercial terms include those relating to the amount
of gold to be purchased, the duration of the contract, and the
payment terms. The purchaser has the right to purchase gold at
the lowest reference price in a defined quotation period, which is
typically 6-8 days. A positive margin can normally be made on the
resale of the gold. The average margin is typically larger during
periods of increased volatility and higher/rising gold prices.
An offtake contract is a contract pursuant to which the operator
agrees to sell, and the purchaser agrees to buy, refined gold
produced from the mine or mines over which the offtake is granted.
The offtake portfolio is expected to generate significant cash
flow for the Group over the coming years.
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Contract Asset(s) Operator Country Quotation period Contract Key Terms
1 Los Filos Equinox Gold Mexico 6 Days • Offtake on 50% of all refined gold production,
up to cap of 1,100,000 ounces of refined gold
• 828,471 ounces remained under the contract at 1/12/21
2 Eagle Victoria Gold Canada 7 Days • Offtake on 25% of all refined gold production,
up to cap of 1,111,500 ounces of refined gold
• 1,044,188 ounces remained under contract at 1/12/21
3 Blyvoor Blyvoor Gold South Africa 8 Days • Offtake on 100% of all refined gold production (after
deduction of streamed ounces), up to cap of 2,700,000
ounces of refined gold
• 2,697,900 ounces remained under contract at 1/12/21
4 RDM Equinox Gold Brazil 6 Days • Offtake on 35% of all refined gold production,
Fazenda up to a cap of 658,333 ounces of refined gold
Santa Luz • 469,806 ounces remained under the contract at 1/12/21
5 Bonikro Allied Gold Cote d’Ivoire 6 Days • Offtake on 50% of all refined gold production
(after deduction of streamed ounces), no cap
6 Greenstone Equinox Gold Mexico 6 Days • Offtake on 100% of refined gold production,
Canada up to cap of 58,500 ounces per year through 2027
7 Various i-80 Gold USA 7 Days • Offtake on 100% of refined gold production subject
8 Sugar Zone Silver Lake Canada 7 Days • Offtake on 50% of all refined gold production,
Resources up to a cap of 375,000 ounces of refined gold
• 325,000 ounces remained under the contract at 23/3/22
to an annual ounce cap
Further details of the Group’s investments are provided on its website at www.tridentroyalties.com.
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STRATEGIC REPORT
Environmental, Social and Governance Report (“ESG”)
We strive to comply with the highest levels of ESG and use it as
a foundation for our investments. We seek to only invest in royalties
or streams where the asset owner runs safe, efficient, cost-effective
mines and projects; as well as compliance with environmental
protection policies, community development, transparency and
governance while minimising the potential for harmful impacts
from its operations to the lowest levels reasonably expected.
Also, as a minimum, we will insist on full compliance by investee
businesses with anti-bribery and corruption, and anti-slavery
legislation and regulation. We believe that our commitment to
these principles will make us an investment partner of choice.
Considering our approach to ESG and, in particular, our dedication
towards environmental standards, the directors within the firm have
decided not to seek any royalty or stream investments in thermal
(or energy) coal assets.
Environmental
The nature of our investments is such that we do not directly
operate any of our properties underlying its royalty portfolio and,
consequently, we cannot always influence how the projects are
operated. Nevertheless, a responsible approach to a project’s
environmental impact and its sustainability management is essential
to the success of the project over its life. Therefore, as part of our
investment decision process, we carefully consider the environmental
aspects of any potential asset purchase during the due diligence
phase. We typically engage with consultants who have the requisite
expertise to ensure that it can consider any risks in this regard.
When conducting the due diligence of a potential investment’s
environmental impact we typically analyse the following:
• Whether the operator is committed to the principles
of the International Council on Mining and Metals
or other relevant standards
• Water management and reduction plans within the firm
• Other environmental programmes and initiatives put in
place by the operator, including carbon reduction and
biodiversity protection
Environmental highlights across our investments
Thacker Pass royalty highlights our continued commitment towards
investing in royalties and streams within companies that consider
their environmental impact. The Thacker Pass lithium project which
is 100% owned by Lithium Americas Inc, recently announced it
received final state permits in Nevada including its Water Pollution
Control and Air Quality Control permits. Thacker Pass also received
its Record of Decision from the Bureau of Land Management in
January 2021, this decision may be confirmed following an appeal
claim in Q3 2022.
Social Initiatives
Across 2021, we continually monitored the social governance
within the companies we invested in. Positive social and community
relationships are essential to profitable, sustainable and successful
mining activities.
We acknowledge that, whilst our activities have little direct contact
with communities, we can still positively influence the social
practices and policies of companies in which we conduct business
with. We therefore endeavour to ensure that the companies we
work with have appropriate procedures in place to facilitate this
engagement. More specifically, our investment decision process
for potential asset purchases involves due diligence relating to the
full range of issues, including the social and community aspects of
the project. When conducting due diligence into potential
investments, we typically assess the community initiatives put in
place by the company and the engagement that they have with
indigenous peoples.
Governance Initiatives
We endeavour to only finance businesses that are respectful
of their staff, support gender equality, and build safe and inclusive
environments for them to work within. Therefore, when conducting
the due diligence into potential investments we typically assess the
following aspects as part of our governance:
• Safety records
• Workplace standards, protections and policies
Internal Governance
We strive to create a safe and healthy working environment
for the wellbeing of our staff, and to create a trusting and respectful
environment, where all members of staff are encouraged to feel
responsible for the reputation and performance of the Group.
Our Board contains personnel with a good history of running
businesses that have been compliant with all relevant laws and
regulations and there have been no instances of non-compliance
in respect of environment matters.
QCA Corporate Governance Code
We adhere to the QCA Corporate Governance code and its ten
key principles as detailed in our Corporate Governance Report.
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STRATEGIC REPORT
Section 172 Statement
This section serves as our section 172(1) statement and should be read in conjunction with the Operational Review on pages 12-27
of this report and the Company’s Corporate Governance Statement on pages 36-45 of this report. Section 172 of the Companies Act 2006
requires Directors to act in a way that they consider, in good faith, would most likely promote the success of the Company for the benefit of
its members as a whole, taking into account the factors listed in section 172 in regard to:
(a) the likely consequences of any decision in the long term;
(b) the interests of the Company’s employees;
(c) the need to foster the Company’s business relationships with suppliers, customers and others;
(d) the impact of the Company’s operations on the community and the environment;
(e) the desirability of the Company maintaining a reputation for high standards of business conduct; and
(f) the need to act fairly between members of the Company.
The Board views engagement with our shareholders and wider stakeholder groups as essential work. We are aware that we need
to listen to each stakeholder group, so that we can understand specific interests, and foster effective and mutually beneficial relationships.
By understanding our stakeholders, we can build their needs into the decisions we take.
The Board considers and discusses information from across the organisation to help it understand the impact of the Company’s operations,
and the interests and views of our key stakeholders. It also reviews strategy, financial and operational performance, as well as information
covering areas such as key risks, and legal and regulatory compliance. This information is provided to the Board through reports sent in
advance of each Board meeting, and through in-person presentations.
As a result of these activities, the Board has an overview of engagement with stakeholders, and other relevant factors, which enables
the Directors to comply with their legal duty under section 172 of the Companies Act 2006.
The following table acts as our section 172(1) statement by setting out the key stakeholder groups, their interests and how
Trident Royalties Plc has engaged with them over the reporting period.
Stakeholders
Aims and objectives
How Trident engages
Investors
Our shareholders play an important role in supporting
our Company. We recognise the importance of the
activities and outcomes of stewardship and regularly
engage with investors on our financial performance,
strategy and business model
Employees
4 individuals are employed directly on a full time
basis within the Company and are vital to the
success of its activities.
Counterparties and
Operators
Trident aims to have direct communication with
the operators of the underlying assets in which it
invests either through a direct contractual
arrangement – or more ad-hoc methods.
Community
As a royalty and streaming company, Trident does not
operate any of the underlying assets within its portfolio.
While this limits the direct involvement the Company
has with the communities impacted by the operations
underlying the portfolio, the Board, led by the Chief
Executive Officer, engages with the mine operators
seeking to influence and encourage compliance with
relevant environmental, social and governance
standards.
• Annual and Interim reports
• Regular portfolio and trading updates
• RNS Announcements
• Investor relations section on website
• Webcasts
• AGM
• Social Media
• The team is small and highly integrated
with daily dialogue between the team and
the Chief Executive Officer.
• Direct engagement to the Board to ensure the
Company’s values and purpose are upheld
• Workforce remuneration policies focused
on long term engagement and retention.
• The team will conduct site visits where possible
• Direct communication with senior personnel from
the operator
• Ongoing monitoring of developments through
public announcements
• Through dialogue with the operator to understand
updates on key community and environmental
milestones and incidents.
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On behalf of the Board
Paul Smith
Non-Executive Chairman
6 May 2022
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STRATEGIC REPORT
Risk Management
The Board has overall responsibility for the management and maintenance of systems and processes to manage and mitigate risk and
ensure delivery of the Group’s strategic priorities. The Board does not consider that given the current size of the Group, that a separate
Risk Committee is required and that risk management is sufficiently governed by the Board, its sub-committees and the senior
management team. The management of risk is subject to regular review by the Board and changes will be implemented as necessary
and as the Group continues to grow.
The Chief Executive Officer and senior management are responsible for the day-to-day implementation of the risk management
process and provide regular feedback to the Board for consideration. The Group assesses each risk and the requirement for mitigation,
taking into account the appetite for the impact of the risks on the strategic objectives of the business.
A short statement on the impact of Covid-19 is given in the Directors Report.
Risks and uncertainties
The following section provides an overview of the principal risks and uncertainties that have the potential to impact the implementation
of the Group’s strategy and business model.
Risk and description
Business impact
Mitigation
Medium
The Board and executive team closely monitor the
market and pays attention to general macro trends.
Royalty Acquisitions
The growth and viability of the Group is
dependent on its ability to successfully identify
and acquire royalties. The availability of potential
royalties which meet the Group’s investing policy
will depend, inter alia, on the state of the world
economy, general business conditions,
commodity prices, mining sector appetite,
alternative sources of finance and financial
markets generally.
The Group targets all of the natural resources
sector (except for thermal coal), accordingly it
considers that it has a wide number of options
available for investment compared to a number
of its precious metal peers.
In addition, the Group has an extremely active
network of Directors, employees and consultants
that ensures that it generates numerous pipeline
opportunities which may lead to investments by
the Group.
The Group considers that its target investments are
often overlooked by other royalty company’s that
are either solely focused on precious metals or are
looking for larger investments.
Management considers that it is well placed to
attract small/medium-sized operators that are
looking for funding or early exits in the case of
secondary royalties.
Management is in regular contact with both the
producing assets and those in development.
The current operations are all on sound financial
footing with either consistent production or paths
to production.
The best way the Group can mitigate dependence
upon any one operator is to expand and diversify
its royalty portfolio to ensure a well-balanced
source of income by location and commodity.
The Group’s overheads remain low and ensures
a cash buffer of at least 12 months costs in the event
of operator default. Subsequent to the year end the
Group acquired a portfolio of paying gold offtake
contracts that will generate significant cash flow.
Medium
Medium / High
Competition
The Group will compete with a large number
of funds and other royalty or stream companies
for investments. Some of its competitors are
substantially larger and have considerably greater
financial resources than the Group. Competitors
may have a lower cost of capital and many have
access to funding sources that allows them to
make offers in excess of that Trident is willing
to pay.
Portfolio diversification
The Group has completed 4 royalties investments
during the year – with a further acquisition
committed at the reporting date. 2 of the royalties
are in production and paying – however should
there be a failure of an operator, or any dispute
relating to any given royalty this may have a
disproportionate and material adverse effect on
the financial position and prospects of the Group
at this stage of development.
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STRATEGIC REPORT
Risk Management continued
Risk and description
Business impact
Mitigation
Medium
Investment decisions
Prior to making or proposing any royalty
acquisition or financing, the Group will undertake
legal, financial and commercial due diligence on
potential transactions to a level considered
reasonable and appropriate by the Group.
However, these efforts may not reveal all material
facts or circumstances which could have a material
adverse effect upon the value of the royalty. Any
due diligence process involves subjective analysis
and there can be no assurance that due diligence
will reveal all material issues related to a potential
royalty transaction or asset owner.
Medium
Key personnel
The Group is dependent upon the services of a
small number of key management personnel who
are highly skilled and experienced. The Group’s
ability to manage its activities will depend in part
on the efforts of these individuals. The Group faces
competition for qualified personnel, and there can
be no assurance that the Group will be able to
retain such personnel.
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The Trident Board has enacted strict investment
criteria that avoids overly competitive bidding,
or a transaction for transactions sake approach.
The Board constructively challenges the executive
team on the due diligence process.
In addition, the executive team consists of a highly
experienced and professional team that has
demonstrated a track record of successful
investments. The team has considerable technical,
financial and tax expertise to identify fatal flaws and
uses equally professional third party consultants
when appropriate.
The Board will continually review its incentive
schemes to ensure that its key personnel are
rewarded appropriately.
The Group is subject to number of financial
risk including capital risk, commodity price risk,
credit risk, liquidity risk and foreign exchange risk.
Full details are provided in note 22.
The Group is subject to number of financial risk including capital risk, commodity price risk, credit risk, liquidity risk and foreign exchange
risk. Full details are provided in note 22.
Trident Royalties plc Annual Report & Financial Statements 2021
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STRATEGIC REPORT
Financial Review
DURING 2021, TRIDENT
CONTINUED TO GROW
RAPIDLY PURSUING
THE STRATEGY OF
BUILDING A
DIVERSIFIED MINING
ROYALTY COMPANY
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During 2021, Trident continued to grow rapidly pursuing the
strategy of building a diversified mining royalty company. The year
was bookended by 2 transformational acquisitions that have
positioned Trident with significant long-term project value together
with current and near term cash generation. The acquisitions of the
Thacker Pass lithium royalty and the gold offtake contracts in Q1
and Q4, respectively, were expedited by Trident’s capital raising
ability with over US$62.0m of cash raised from the equity market
and US$40m from a new loan facility negotiated with Macquarie
Bank. Trident ended the year with a clear line of sight to profitability
and cash generation, combined with a strong a cash position and
growing portfolio on the balance sheet.
Royalty acquisitions
The Group acquired the following royalties during the year:
• 60% interest in the Thacker Pass lithium 1.75% gross revenue
royalty over the Thacker Pass Lithium project in Nevada, USA for
US$28.0m plus costs;
• Pukaqaqa copper sliding scale royalty (1-2% net smelter – 1.05%
net) over production from the Pukaqaqa copper/molybdenum
development operation in Peru for US$3.0m payable in equity,
plus costs;
• West Australian gold royalties over a variety of tenements and
projects for A$0.8m, paid in cash and equity; and
• Lincoln gold 1.5% net smelter royalty over production from
the Lincoln Gold Mine located in California, USA for US$2.5m,
plus costs.
In addition, on 13 December 2021 the Group entered
into a binding, conditional agreement to acquire:
• 7 producing gold offtake contracts from Orion Resource Partners
for US$69.75m
This acquisition completed on 11 January 2022 and has been
disclosed as a capital commitment.
Statement of Financial Position
Royalty intangible assets consist of US$46.17m cost, less US$1.27m
amortisation for total net book value of US$44.90m representing
the acquisitions in the year detailed above and the existing royalty
assets of Koolyanobbing, Spring Hill and Lake Rebecca.
Royalty financial instruments were valued at US$7.46m
representing the fair value of the Mimbula copper project
in Zambia. The royalty financial instrument has been designated
as fair value through profit and loss with the fair value gains and
losses recognised in “revaluation of royalty financial assets” line item
in the income statement. The value at the beginning of the financial
year was US$7.45m and US$1.50m royalty income was received in
the year and a fair value increase of US$1.51m was recognised in
the income statement.
Trade and other receivables totalling US$1.21m (2020: US$0.78m)
includes US$0.38m in respect of 4th quarter 2021 royalty income
due from Koolyanobbing and Mimbula receivable after the year-
end. Other receivables also includes US$0.61m in respect of
prepaid legal and other fees for the Gold offtakes and Sonora
transactions completed after the year end and US$0.14m in respect
of VAT repayable in the UK following registration with HMRC.
Trade and other payables totalling US$1.04m (2020: US$0.34m)
consisted predominantly of trade payables, social security and
taxation and accruals with all amounts within agreed payment terms.
STRATEGIC REPORT
Financial Review continued
Deferred contingent consideration of US$0.43m represents
A$0.60m contingent payment due on the Spring Hill project based
on the operator meeting certain production targets. The amount
has been treated as due > 1 year representing managements’
assessment of when the project will become operational and the
targets achieved.
Total cash at the end of the year was US$45.64m and total debt and
accrued interest was US$10.54m. Subsequent to the year end the
existing debt facility was refinanced for a US$40m facility with
Macquarie bank and cash totalling US$60m was deployed
acquiring the gold offtake contracts.
Total net assets increased to US$88.07m during the year from
US$25.51m at 31 December 2020 largely due to the Thacker Pass
acquisition and the fund-raise in December 2021.
Income Statement
The 2021 results show the need for the Group to continue to grow
and diversify and particularly highlights the importance of Trident’s
acquisition of the gold offtake contracts in January 2022 which will
provide significant cashflow.
The primary impacts on the 2021 income statement and resultant
loss were the limited royalty revenue from the Koolyanobbing iron
ore asset in Australia, together with the cost of refinancing the
Tribeca debt facility within 6 months of drawdown and foreign
exchange losses totalling US$0.52m. Loss after taxation was
US$3.54m (2020: US$1.71m profit) and basic earnings per share
of 2.15 loss (2020: 2.45c).
Updates to the market during the year by Mineral Resources Ltd,
the mine operator at Koolyanobbing, informed the Company that
mining had been focused on areas that did not fall within the
Trident royalty tenement. Towards the end of 2021 and subsequent
to the year end, the operator recommenced mining on areas that
will result in revenue for the Group – highlighted by the Q1 2022
payment of AUS$0.2m. The Group generated royalty income from
its Koolyanobbing asset of US$0.08m (2020: US$1,67m) in the year.
The amortisation charge was US$0.02m (2020: US$1.19m) and
total Group overheads of US$3.74m (2020: US$2.53m); resulted
in an operating loss of US$3.68m (2020: US$2.06m).
The fair value gain on the Mimbula copper project was US$1.51m
(2020: US$2.53m) and US$1.50m of royalty income was received
under the minimum payment terms. In addition, the Group made
a foreign exchange loss totalling US$0.52m (2020: US$1.38m gain)
mainly as a result of the retranslation of an intercompany loan
balance between the parent company and an Australian subsidiary;
and the conversion of cash balances denominated in non-US dollar
currencies.
As the debt facility was fully refinanced after the year end all
arrangement fees and costs were expensed in the year totalling
US$0.90m, rather than being spread over the expected 2 year facility
life. This amount included arrangement and broker fees and the fair
value charge of the warrants issued to the lender. Redemption
interest was also accrued for a total interest charge on the facility
of US$0.7m, plus withholding taxes suffered on both the facility
and the intercompany loan.
Cashflow and liquidity
Net cash increased in the year by US$38.46m (2020: US$2.32m)
although this increase was predominantly due to the fund-raise
in December for the gold offtake stream acquisition completed
in January 2022. Financing inflows were US$60.25m (2020:
US$18.60m) from 2 equity fund raises; which were invested
US$29.07m (2020: US$) into Thacker Pass and Lincoln Gold,
and US$2.93m (2020: US$1.26m) in operating activities. A further
US$10m inflow came from the Trident’s first debt facility with a
syndicate managed by Tribeca Investment Partners to strengthen
the balance sheet and facilitate further acquisitions. This facility was
redeemed in January 2022. In addition, the Group made foreign
exchange gains on the cash totalling US$0.21m (2020: US$0.52)
for a final cash figure as at 31 December 2021 of US$45.64m
(2019: US$6.97m).
Taxation
Trident recognised a deferred tax credit of US$0.86m (2020:
US$0.05m) mainly due to losses incurred in Australia as a result
of debt finance charges and accelerated allowances on the
Koolyanobbing asset. With the Group expected to return to profit
during 2022 (and the losses utilised) the deferred tax asset of
US$1.04m was recognised in full. The Group paid US$0.15m
in tax on the 2020 results.
Reporting currency
The Group has a presentational reporting currency of the US dollar.
The Australian subsidiary TRR Services Australia, which directly owns
some of the Group’s royalty assets, has a functional currency of
Australian dollars. Accordingly, the Group is subject to foreign
exchange gains and losses when reporting consolidated balances
and results. In addition, the Australian subsidiary has an intercompany
loan balance with the parent company denominated in US dollars
which results in gains and losses in the income statement.
During the year, the Australian dollar strengthened against the
US dollar by approximately 6% decreasing the value of those
assets and liabilities denominated in Australian dollars and subject
to conversion. All other subsidiaries of the Group have US dollar
functional currencies.
Events occurring after the reporting period
Subsequent to the year-end the Group announced the completion
of the gold offtake portfolio acquisition for a total of US$69.75m
funded by a new US$40m debt facility with Macquarie and the
existing cash balance. At the same time the existing debt facility
was fully redeemed and the conditional element of the placement
announced in December 2021 was closed raising a further
US$6.10m. In addition, on 27 January 2022 Trident paid a
US$2.50m deposit for the right to acquire 50% of the 3% gross
royalty over the Sonora lithium project, subject to certain conditions,
for total consideration of US$26.0m.
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CORPORATE GOVERNANCE
COPPER WILL
PLAY A MAJOR
ROLE IN THE
ONGOING
ELECTRIFICATION
OF THE WORLD
WITH ITS
PRINCIPAL
APPLICATION
FOR COPPER
WIRING
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Trident Royalties plc Annual Report & Financial Statements 2021
CORPORATE GOVERNANCE
Page Title
CORPORATE
GOVERNANCE
36 Board of Directors
37 Senior management
38 Directors’ report
40 Corporate governance statement
44 Remuneration report
45 Directors’ responsibility statement
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CORPORATE GOVERNANCE
Board of Directors
Executive Director
Non-Executive Directors
Adam Davidson
Executive Director &
Chief Executive Officer
Adam Davidson has over 10 years’
experience in the natural
resources sector. Prior to joining
Trident, Adam was a member of
the investment team at Resource
Capital Funds ("RCF"), a leading
mining focused private equity firm.
Prior to RCF, he held positions with
BMO Capital Markets in Metals &
Mining Equity Research and with
Orica Mining Services in Strategic
Planning. He has extensive mining
capital markets experience across
a breadth of jurisdictions and
commodities. Adam began his
career with T. Rowe Price and also
served in the U.S. Marine Corps.
Adam is a graduate of the
Australian Institute of Company
Directors and previously served as
a Non-Executive Director of
private gold producer RG Gold
and currently serves on the Board
of South Atlantic Gold Inc. He
earned his MBA from the College
of William & Mary and completed
a post-graduate in Mining Studies
from the University of Arizona.
Paul Smith
Non-Executive Chairman
Peter Bacchus
Non-Executive Director
Al Gourley
Non-Executive Director
Helen Pein
Non-Executive Director
Paul Smith has built a prominent
career in the mining industry and
has held various senior level
positions at Glencore Plc including
the group’s Head of Strategy.
During his time in this role, he
successfully completed a number
of large scale corporate and capital
markets transactions, including the
merger with Xstrata plc. Whilst
working at Glencore, Paul also
served as CFO of Katanga Mining
Limited, Glencore’s subsidiary,
from 2019 until its de-listing in
2020. Additionally, Paul
represented Glencore as a non-
executive director of Lonmin Plc
and Glencore Agriculture Limited.
Prior to joining Glencore, Paul was
an analyst and fund manager at
Marshall Wace Asset Management
before working in investment
banking at Close Brothers and
Credit Suisse. Paul is a qualified
Chartered Accountant and holds
an MA in Modern History from
Oxford University.
Peter Bacchus is currently Chairman
and Chief Executive of Bacchus
Capital, an independent
investment banking boutique with
particular expertise in the natural
resources sector. Peter has over 25
years of experience as a leading
global M&A adviser, with
particularly deep experience within
natural resources having advised
some of the largest companies in
the sector. Throughout Peter’s
career he has been at the forefront
of several large and transformative
M&A transactions, financed
substantial deals, and advised on
development projects worldwide.
Peter previously acted as the Global
Head of Mining and Metals at
Morgan Stanley and European
Head of Investment Banking at
Jefferies. Before relocating to
London in 2006, he was based in
Australia and Indonesia, where he
was Asia-Pacific Head of Industrials
and Natural Resources investment
banking at Citigroup. Peter
currently sits on the boards of New
York and Johannesburg Stock
Exchange listed Gold Fields
Limited, London Stock Exchange
listed Kenmare Resources Plc and
Australian Stock Exchange listed
Galaxy Resources Limited. He is
also Chairman of Africa-focused
conservation charity, Space for
Giants. Peter holds an MA from St
John’s College, Cambridge and is a
Member of the Institute of
Chartered Accountants in England
and Wales.
Al Gourley is the London
Managing Partner of Fasken
Martineau, an international law
firm, where his practise focuses on
finance and asset transactions in
the natural resource industry.
Mr. Gourley has served as a
director of several TSX, TSX-V
and AIM mining and mineral
exploration companies, including
a company that was acquired by
Franco-Nevada for its gold royalty
on the Newmont Ahafo Mine in
Ghana. Mr. Gourley has direct
mining industry experience having
worked for the Noranda Group
(1992 to 1995) and having served
as CEO of an AIM-listed industrial
mineral producer (2011 to 2012).
Mr. Gourley is a member of the
Solicitors Regulatory Authority
(England and Wales), a member
of the Ontario Law Society and
Chairman of the Board of the
World Association of Mining
Lawyers (WAOML), whose
Advisory Council he led from the
date of its formation in 2014 until
2018. Mr. Gourley holds a BBA
from Schulich School of Business
and an LLB from the University
of Ottawa.
Helen Pein has had a successful
career spanning more than 30
years as an economic geologist
in the natural resource sector.
Helen is currently a director of
Pan Iberia Ltd. (UK) and founder
member of Panex Resources Pty.
Ltd. (Mauritius and SA) a private
company focusing on finding
and developing global mining
projects. Helen was formerly
a director and shareholder of
Pangea Exploration (Pty) Ltd for
20 years. She was part of the
executive team which was directly
responsible for the discovery and
evaluation of a number of world
class gold and mineral sands
deposits throughout Africa
(Burnstone, Tuluwaka, Buzwagi,
Corridor Sands and Kwale). From
2012, Pangea was affiliated to
Private Equity Company, Denham
Capital International, providing
asset analysis and technical
evaluation of mining investments
in Africa. Helen is a recipient of the
Gencor Geology Award and
Fellow of the Geological Society
of South Africa and member of the
International Society for Economic
Geologists. She holds a B.Sc.
Geoscience and a B.Sc. Geology
(Hons) (Cum Laude), from the
University of Stellenbosch SA.
Helen sits on both the Nomination
and Remuneration Committees.
Committee membership
Paul serves as Chairman of the
Nominations Committee and sits
on the Audit and Remuneration
Committees.
Peter serves as Chairman of the
Audit Committee
Al serves as Chairman of the
Remuneration Committee and sits
on the Audit and Nominations
Committees.
Helen sits on both the Nomination
and Remuneration Committees.
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Trident Royalties plc Annual Report & Financial Statements 2021
CORPORATE GOVERNANCE
Senior Management
Tyron Rees
Vice-President
Corporate Development
Julien Bosché
Vice-President
Investments
Mr Rees has over 10 years’
experience in the natural
resources sector, most recently
with Resource Capital Funds (RCF),
a mining focused private equity
firm. Prior to RCF, Tyron held
various roles with Sandfire
Resources and Newmont
Goldcorp in a technical capacity
as a Metallurgical Engineer.
Tyron is a graduate of the
Australian Institute of Company
Directors, is a CFA Charterholder,
holds a Master of Finance from
Charles Sturt University and
graduated with a Bachelor of
Engineering in Minerals
Engineering.
Julien Bosché has over a decade
of experience in the natural
resources sector across
commodities, jurisdictions, project
stage, and investment types. Prior
to his most recent work as an
independent advisor, he was with
Pala Investments (“Pala”), a leading
metals and mining focused
investment firm. Prior to Pala,
Julien held roles in the
International Finance
Corporation´s mining division in
Washington, D.C. and the M&A
group in Citigroup´s investment
banking division in New York.
Senior Management
Martin Page
Chief Financial Officer
Martin Page has over 10 years’
experience in the natural
resources sector, most recently
as CFO of Toro Gold Limited,
a West African gold producer,
that was sold to Resolute Mining
in July 2019 for US$300m.
Martin was a member of Toro’s
senior executive team that guided
the Group through the latter
stages of its development and
subsequent divestment to
Resolute. Prior to Toro, he was
CFO at Curzon Resources, a
privately backed natural resources
investment firm and before that as
Head of Finance at Amara Mining
plc; a West African gold operator.
Martin has extensive experience
developing and leading finance
functions in both the capital and
private markets.
Martin began his career in practice
and is a qualified Chartered
Accountant with over 15 years
post qualification experience.
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CORPORATE GOVERNANCE
Directors’ Report
The Directors of the Company present their report, together with
the audited Group financial statements of Trident Royalties plc
for the year ended 31 December 2021.
Principal Activities
The Group’s principal activity is to invest in mining royalties across
the natural resources sector. Its current activities are located in the
United Kingdom, Australia, US, Zambia and Peru. Trident is
domiciled and incorporated in the England and Wales with
registration number 11328666.
Review of Business
A review of the current and future development of the Group’s
business is given in the Strategic Report on pages 6-33 which forms
part of, and by reference is incorporated in, this Directors’ Report.
The Group’s Financial Risk Management objectives and policies
are discussed in note 22. The principal risks and uncertainties faced
by the Group are set out on pages 30 and 31.
Substantial Shareholders
As at 30 April 2022, the total number of issued Ordinary Shares with
voting rights in the Company was 291,130,600. The Company has
been notified of the following interests of 3 per cent or more in its
issued share capital.
Number of % of issued
Shareholder ordinary shares share capital
Regal Funds
Management Pty Limited 31,329,800 10.76
LIM Asia Special Situations
Master Fund Limited 26,003,837 8.93
Orion Resource Partners 25,742,752 8.84
Ponderosa Investments
(WA) Pty Limited 16,124,196 5.54
Amati UK Smaller Companies Fund 14,019,892 4.82
Tribeca Investment
Partners Pty Limited 12,322,285 4.23
Results and Dividends
The results of the Group for the year ended 31 December 2021 are
set out in the Consolidated Statement of Comprehensive Income.
The Directors do not recommend the payment of a dividend for
the year.
Changes in Share Capital
Details of transactions during the year, and subsequent to the year-
end, that increased the share capital of the Company are detailed
in note 20. As at 31 December 2021, 251,592,413 ordinary shares
of 1p were in issue.
Directors and Directors’ Interests
The Directors who served during the year to date are as follows:
AGM Notice
A separate communication will be sent to shareholders and
published on the Group’s website regarding the 2022 AGM.
Adam Davidson
Paul Smith (appointed 21 June 2021)
Peter Bacchus (appointed 23 July 2021)
Al Gourley
Helen Pein
James Kelly (resigned 23 July 2021)
Mark Potter (resigned 18 June 2021)
The direct and beneficial shareholdings of the Board
in the Company as at 30 April 2022 were as follows:
Share held at Share held at
30 April 31 December
2021 2020
Adam Davidson 222,490 95,000
Paul Smith 4,201,867 -
Peter Bacchus 202,015 -
Al Gourley* 7,500,000 5,000,000
Helen Pein 105,468 -
Corporate Governance
The Group has set out its full Corporate Governance Statement on
pages 40-43. The Corporate Governance Statement forms part of
this Directors’ report and is incorporated into it by cross reference.
Greenhouse Gas Disclosures
The Group is an investment company, with 4 full time employees
and the Board of Directors and no head office, and therefore has
minimal carbon emissions. It is not practical to obtain emissions
data and as such none is disclosed. Further information of the
Group’s environmental impact is give in its Environmental and
Social Governance Statement on page 28.
Supplier payment policy
It is the policy and normal practice of the Group to make payments
due to suppliers in accordance with agreed terms and conditions,
generally 30 days. Where suppliers offer early settlement discounts,
these may be taken advantage of.
* 2,754,042 shares held directly and 4,745,958 shares held through Albert C Gourley
Professional Corporation, a corporation controlled by Mr. Gourley
Details of share options issued to the Executive Director during
the year and the Non-Executive Chairman (on appointment)
are provided in the Renumeration Report and note 21.
Directors’ Insurance
During the year, Directors and Officers Liability Insurance was
maintained for Directors and other Officers of the Group.
Events after the Reporting Period
Events since the balance sheet date are included in note 26.
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Trident Royalties plc Annual Report & Financial Statements 2021
CORPORATE GOVERNANCE
Directors’ Report continued
Going Concern
The financial position of the Group and cash flows as at
31 December 2021 are set out on pages 55 and 57. The Group
meets its day-to-day working capital and other funding
requirements with its current cash, raised through equity placings
and revenue from its cash generating royalties. The Group actively
manages its financial risks as set out in note 22 and operates Board-
approved financial policies, that are designed to ensure that the
Group maintains an adequate level of headroom and effectively
mitigates financial risks.
On the basis of current financial projections (at least 12 months
from the date of the approval of the financial statements), the
Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence, and meet
its liabilities as they fall due, for the foreseeable future. Accordingly,
the Directors consider it appropriate to adopt the going concern
basis in preparing these financial statements.
COVID-19
The Group has not been made aware of any significant issues at the
operations in which it has made investments. Whilst the mining
sector as a whole has been affected by Covid – mainly in respect to
their supply chains – their very nature (usually self-contained mine
sites) has been such that mitigation of Covid is easier than in other
industries. The Board continues to monitor the impact of COVID-19
on the ability of the Group to continue to pursue its strategy and will
make appropriate changes should they be required. There is not
considered to be any material impacts on the reporting financial
position and results of the Group as a result of COVID-19 as at the
reporting date.
Section 172 Statement
A statement of how the Board has performed its duties under
section 172 of the Companies Act 2006 can be found on page 29
of the Strategic Report.
Political Donations
During the year, the Group did not make any political donations.
Disclosure of information to Auditors
The Directors confirm that:
• So far as each Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
• The Directors have taken all steps that they ought to have taken
as Directors in order to make themselves aware of any relevant
audit information and to establish that the auditors are aware
of that information.
Auditor
A resolution proposing the re-appointment of PKF Littlejohn LLP
as auditor is contained in the Notice of Annual General Meeting
and will be put to shareholders at the Annual General Meeting.
This Directors’ Report has been approved by the Board and signed
on its behalf by:
Paul Smith
Non-Executive Chairman
6 May 2022
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CORPORATE GOVERNANCE
Corporate Governance Statement
The Company is committed to maintaining the highest standards in corporate governance throughout its operations and to ensure all of its
practices are conducted transparently, ethically and efficiently. The Company believes scrutinising all aspects of its business and reflecting,
analysing and improving its procedures will result in the continued success of the Company and deliver value to shareholders. Therefore,
and in accordance with the AIM Rules for Companies, the Company has chosen to formalise its governance policies by complying with the
UK’s Quoted Companies Alliance Corporate Governance Code 2018 (“QCA Code”).
The 10 principles set out in the QCA Code are listed below, with an explanation of how the Company applies each of the principles and the
reason for any aspect of non-compliance.
Principle
Trident Response
Establish a strategy and business model which promote
long-term value for shareholders
Seek to understand and meet shareholder needs
and expectations
Take into account wider stakeholder and social responsibilities
and their implications for long term success
Embed effective risk management, considering both
opportunities and threats, throughout the organisation
Maintain the Board as a well-functioning, balanced team
led by the Non-Executive Chairman
The strategic vision of the Company is explained in the Strategic
Report on pages 6-33. The Company’s strategy follows the well
understood royalty company model, however it seeks to create
value through the acquisition of attractive and robust royalties
in commodities and jurisdictions which are inherently less
competitive relative to those with a precious metal focus.
The Board is committed to maintaining good communications
and having constructive dialogue with its shareholders.
Institutional shareholders and analysts have the opportunity
to discuss issues and provide feedback at meetings with the
Company. In addition, all shareholders are encouraged to attend
the Company’s Annual General Meeting and any other General
Meetings that are held throughout the year.
The Board recognises that the long-term success of the
Company will be enhanced by good relations with different
internal and external groups and to understand their needs,
interest and expectations, the Board has established a range of
processes and systems to ensure that there is ongoing two-way
communication, control and feedback processes in place with
which to enable appropriate and timely response.
The Board maintains a risk register and regularly reviews the
risks to which the Company is exposed and ensures through its
meetings and regular reporting that these risks are minimised as
far as possible whilst recognising that its business opportunities
carry an inherently high level of risk.
The Board’s composition and structure is discussed elsewhere in
this corporate governance section together with a table of Board
committee attendance.
Ensure that between them the Directors have the
necessary up-to-date experience, skills and capabilities
The complementary skills and experience of the Board and
Executive Management team are included on pages 36 and 37.
Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement
Review of the Company’s progress against the long-term strategy
and aims of the business provides a means to measure the
effectiveness of the Board. This progress is reviewed in Board
meetings held at least four times a year. The Chief Executive
Officer’s performance is reviewed once a year by the rest of the
Board and measured against a definitive list of short, medium
and long-term strategic targets set by the Board.
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Trident Royalties plc Annual Report & Financial Statements 2021
CORPORATE GOVERNANCE
Corporate Governance Statement continued
Principle
Trident Response
Promote a corporate culture that is based on ethical
values and behaviours
The corporate culture of the Company is promoted through its
employees and contractors and is underpinned by compliance
with local regulations and the implementation and regular review
and enforcement of various policies including a Share Dealing
Policy and Code, Anti-Corruption and Anti-Bribery Policy, Matters
Reserved for the Board, Code of Business Ethics, Employee
Leave Policy, Expenses Policy, Whistle Blowing Policy, Grievance
Redressal and Disciplinary Policy, Social Media Policy and Media
and Communications Policy so that all aspects of the Company
are run in a robust and responsible way.
Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board
The Company’s governance structures are predominantly
its Committees as noted below.
Communicate how the Company is governed and is performing
by maintaining a dialogue with shareholders and other relevant
stakeholders
The Company’s financial and operational performance is
summarised in the Annual Report and the Interim Report,
with regular updates provided to stakeholders in other forums
through the year, including press releases and regular updates
to the Company’s website.
Board role and objectives
In leading the Company, the Board defines the purpose of the Company and makes key decisions in relation to strategic matters to deliver
this. The Board is also responsible for making key decisions about financial planning, review of financial performance, setting the cultural
tone for the Group, review of operational matters, the governance framework, investments and Director appointments. In doing so, the
Board draws on each Director’s unique skillset and wide range of experience in the natural resources sector, financial and operational
aspects of businesses, public markets and of different geographies around the world.
The Board retains ultimate accountability for good governance and maintains full and effective control over the Company. The Company
holds regular Board meetings (approximately once a month) at which financial, operational and other reports are considered and, where
appropriate voted on. The Board is responsible for the Group’s strategy, performance, key financial and compliance issues approval of any
major capital expenditure and the framework of internal controls.
The Board is meeting by video-conference and doing so for regular updates to be able to closely monitor and consider developments
in the Group and more widely during this period. As well as the Executive Directors, senior management are invited to attend and present
at meetings of the Board and its Committees where appropriate.
All Directors devote ample time in order to discharge their duties both at and outside of Board meetings. The Board is well briefed
in advance of meetings and receives high-quality, comprehensive reports to ensure matters can be given thorough consideration.
All Directors on the Board have access to, and the support of, the Company Secretary who acts as secretary to the Board and
its Committees, reporting directly to their Chairs, advising on, and assisting on compliance with, relevant governance regulations
and procedures. In addition, all Directors have unrestricted access to the Company’s external advisers.
Board Composition
The Board is comprised of a diverse group of experienced Directors, both from the UK and abroad, each with a wealth of expertise and
a depth of knowledge appropriate to their role. Many have worked across a variety of jurisdictions and have extensive business and financial
experience in the sector in which the Group operates. As at 31 December 2021, the Board of the Company consisted of the Non-Executive
Chairman, the Chief Executive Officer and three Non-Executive Directors. Three of the Non-Executive directors are considered to be
independent and ensure the Board independence requirement. All the Non-Executive Directors are independent in character and
judgement and have the range of experience and calibre to bring independent judgement on issues of strategy, performance, resources
and standards of conduct which is vital to the success of the Group. The Board believes that there is an adequate balance between the Non-
Executive and Executive Director, both in number and in experience and expertise, to ensure that the Board operates independently of
executive management.
The Company constantly keeps under review the constitution of the Board and may seek to add more members as required
as the Company grows and develops.
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CORPORATE GOVERNANCE
Corporate Governance Statement continued
Board Committees
As described above Trident draws from the principles of the QCA Code for guidance in structuring its governance framework. The Board
is supported by three Committees, specifically the Audit, Remuneration and Nomination Committees. These standing Committees focus
on the areas of the Group’s operation which the Board views as having key importance to the Group’s shareholders and other stakeholders.
Audit Committee
The Audit Committee comprises Peter Bacchus as Chairman and Paul Smith and Al Gourley.
The Audit Committee reviews reports from management and from PKF Littlejohn LLP (“PKF”), the Company’s statutory auditor,
relating to the interim and annual accounts and to the system of internal financial control.
The Audit Committee is responsible for assisting the Board’s oversight of the integrity of the financial statements and other financial
reporting, the independence and performance of PKF, the regulation and risk profile of the Company and the review and approval
of any related party transactions. The Audit Committee may hold private sessions with management and PKF without management present.
Further, the Audit Committee is responsible for making recommendations to the Board on the appointment of PKF and the audit fee and
reviews reports from management and PKF on the financial accounts and internal control systems used throughout the Company.
The Committee makes recommendations to the Board on the appointment, retention and removal of the external auditor and the
tendering of external audit services and will ensure that consideration of audit rotation takes place every 3 years.
The Audit Committee meets at least two times a year and is responsible for ensuring that the Company’s financial performance is properly
monitored, controlled and reported. The Audit Committee is responsible for the scope and effectiveness of the external audit and
compliance by the Company with statutory and other regulatory requirements.
The Audit Committee also reviews arrangements by which the staff of the Company and the Company may, in confidence, raise concerns
about possible improprieties in matters of financial reporting or other matters and ensure that arrangements are in place for the
proportionate and independent investigation of such matters with appropriate follow-up action.
Where necessary, the Audit Committee obtains specialist external advice from appropriate advisers.
Remuneration Committee
The Remuneration Committee comprises Al Gourley, as Chairman, and Paul Smith and Helen Pein.
The Remuneration Committee is responsible for considering all material elements of remuneration policy, the remuneration and
incentivisation of Executive Directors and senior management (as appropriate) and to make recommendations to the Board on the
framework for executive remuneration and its cost. The role of the Remuneration Committee is to keep under review the Company’s
remuneration policies to ensure that the Company attracts, retains and motivates the most qualified talent who will contribute to the long-
term success of the Company. The Remuneration Committee also reviews the performance of the Chief Executive Officer and sets the scale
and structure of his remuneration, including the implementation of any bonus arrangements, with due regard to the interests of shareholders.
The Remuneration Committee is also responsible for granting options under the Company’s share option plan and, in particular, the price
per share and the application of the performance standards which may apply to any grant, ensuring in determining such remuneration
packages and arrangements, due regard is given to any relevant legal requirements, the provisions and recommendations in the AIM Rules
and The QCA Code.
The Remuneration Committee:
• determines and agrees with the Board the framework or broad policy for the remuneration of the Chief Executive Officer;
• determines the remuneration of Non-Executive Directors;
• determines targets for any performance-related pay schemes operated by the Company;
• ensures that contractual terms on termination and any payments made are fair to the individual, the Company, that failure is not rewarded
and that the duty to mitigate loss is fully recognised;
• determines the total individual remuneration package of the Chief Executive Officer, including bonuses, incentive payments and share
options;
• is aware of and advises on any major changes in employees’ benefit structures throughout the Company;
• ensures that provisions regarding disclosure, including pensions, as set out in the (Directors’ Remuneration Policy and Directors’
Remuneration Report) Regulations 2019, are fulfilled; and
• is exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference
for any remuneration consultants who advise the Remuneration Committee.
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CORPORATE GOVERNANCE
Corporate Governance Statement continued
Nominations Committee
The Nominations Committee comprises Paul Smith as Chairman, Helen Pein and Al Gourley.
The Nominations Committee shall be responsible for considering all criteria for new Executive and Non-Executive Director appointments,
including experience of the industry in which the Company operates and professional background. Specifically, the Nominations
Committee:
• is responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise;
• evaluates the balance of skills, knowledge, experience and diversity of the Board and, in the light of this evaluation, prepares a description
of the role and capabilities required for a particular appointment;
• reviews annually the time required from the Non-Executive Directors and assess whether each Non-Executive Director is spending
enough time to fulfil their duties;
• considers candidates from a wide range of backgrounds;
• gives full consideration to succession planning in the course of its work, taking into account the challenges and opportunities facing
the Company, and the skills and expertise therefore needed on the Board, reporting to the Board regularly;
• regularly reviews the structure, size and composition (including the skills, knowledge and experience) of the Board and make
recommendations to the Board with regard to changes;
• keeps under review the leadership needs of the Company, both executive and non-executive, with a view to ensuring the continued
ability of the Company to compete effectively in the marketplace;
• makes a statement in the annual report about its activities, the process used for appointments and explains if external advice or open
advertising has not been used, the membership of the Nominations Committee, number of Nominations Committee meetings and
attendance over the course of the year;
• ensures that on appointment to the Executive and Non-Executive Directors receive formal letters of appointment setting out clearly
what is expected of them in terms of time commitment, committee service and involvement outside Board meetings;
• considers and makes recommendations to the Board about the re-appointment of any Non-Executive Director at the conclusion
of their specified term of office or retiring in accordance with the Company’s Articles of Association; and
• considers and make recommendations to the Board on any matter relating to the continuation in office of any Director at any time.
Board and Committee attendance
The table below sets out the number of Board Committee meetings held during the year ended 31 December 2021 and each Director’s
attendance at those meetings.
Board Nominations Audit Remuneration
Director Meetings Committee Committee Committee
Paul Smith1 4 - 1 1
Adam Davidson 7 - - -
Peter Bacchus1 4 - 1 -
Al Gourley 7 - 2 2
Helen Pein 7 - - 2
James Kelly2 3 - 1 1
Mark Potter3 3 - 1 -
Total Meetings 7 - 2 2
1 All meetings attended since appointment.
2 James Kelly retired from the Board on 23 July 2021
3 Mark Potter retired from the Board on 18 June 2021
Further information about the Group’s approach to Corporate Governance is provided on the Company’s website
at www.tridentroyalties.com.
Approved on behalf of the Board on 6 May 2022
Adam Davidson
Chief Executive Officer
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CORPORATE GOVERNANCE
Remuneration Report
The table below sets out the total remuneration in respect of qualifying services for both Executive and Non-Executive Directors
for the year ended 31 December 2021.
Salary/fees Bonus Other1 Total
US$’000 US$’000 US$’000 US$’000
Executive Director:
Adam Davidson 2021 250 188 29 467
2020 230 144 - 374
Non-Executive Directors:
Peter Bacchus2 2021 21 - - 21
2020 - - - -
Al Gourley3 2021 69 - - 69
2020 30 - - 30
James Kelly4 2021 160 - - 160
2020 63 67 - 130
Helen Pein5 2021 49 - - 49
2020 11 - - 11
Mark Potter6 2021 89 - - 89
2020 33 24 - 57
Paul Smith7 2021 44 - - 44
2020 - - - -
1 Other remuneration consists of a one off US$29k payment for untaken annual leave
2 Peter Bacchus was appointed to the Board on 23 July 2021
3 Al Gourley was appointed to the Board on 4 May 2020
4 James Kelly retired from the Board on 23 July 2021
5 Helen Pein was appointed to the Board on 18 September 2020
6 Mark Potter retired from the Board on 18 June 2021
7 Paul Smith was appointed non-executive Chairman on 21 June 2021
The aggregate emoluments of the highest paid Director totalled US$467k (2020: US$374k). No Director has a service agreement with the
Company that is terminable on more than twelve months’ notice. Details of shares owned by the Directors is provided in the Directors’ Report.
Executive Director
The discretionary bonus of the Executive Director was assessed against a number of objectives and criteria by the Remuneration
Committee, resulting in an award of US$188k (2020: US$144k). The Executive Director has a rolling service contract that is subject to twelve
months’ notice. On 1 January 2022, the Executive Directors base salary was increased from US$250k to US$385k per annum. No Director
accrued benefits under a pension scheme during the year – and no additional benefits in kind were received.
Non-Executive Directors
Each Non-Executive Director appointment is subject to periodic renewal, in terms of the Company’s Articles of Association, at the AGM.
For Non-Executive Directors, these engagements can be terminated by either party on six months’ notice.
On 1 January 2021, the Non-Executive Directors signed updated letters of appointment. Under the terms of these letters, the Non-
Executive Directors were entitled to an annual fee totalling GBP£30k, plus a cash conservation sum of GBP£15k paid in January each year
payable 2/3 in shares and 1/3 in cash (the share total calculated by reference to the 5 day VWAP prior to admission of the shares),
plus GBP£5k for each Committee they chair. The Non-Executive Chairman was entitled to an annual fee totalling GBP£60k plus a cash
conservation sum of GBP£25k paid in January each year payable 2/3 in shares and 1/3 in cash (the share total calculated by reference
to the 5 day VWAP prior to admission of the shares).
On 26 April 2022, the Non-Executive Directors received updated letters of appointment increasing the cash preservation fee of the
Non-Executive Chairman to GBP£40k and the Non-Executive Directors to GBP£25k. On their retirements from the Board James Kelly and
Mark Potter received GBP£57k and GBP£33k respectively as payments in lieu of notice, in line with the terms of their appointment letters.
Directors Option Awards
During the year 225,000 Options were granted to Adam Davidson, which vest and become exercisable on the fourth anniversary of the
date of grant (20 April 2021) and are exercisable at 37 pence. Subsequent to the year end Adam Davidson was awarded 3,150,000 which
vest and become exercisable in 5 tranches from the date of grant (1 February 2022) with an exercise price of 50 pence and vesting target
share prices of 80, 90, 100, 110 and 120 pence respectively. The options lapse after the 7th anniversary from the date of grant.
On appointment, Paul Smith was granted 2,500,000 options exercisable at 40 pence, the options lapse on 17 June 2022 and are held
in the name of Collingwood Capital Partners AG (“Collingwood”) (a company wholly owned and controlled by Mr Smith). In addition,
as part of the debt facility financing (syndicated by Tribeca Investment Partners), Collingwood was granted 175,000 warrants exercisable
at 51.66 pence, the warrants lapse on 3 August 2023.
Approved on behalf of the Board on 6 May 2022
Adam Davidson
Chief Executive Officer
44
Trident Royalties plc Annual Report & Financial Statements 2021
CORPORATE GOVERNANCE
Directors’ Responsibility Statement
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulations.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have elected to
prepare the financial statements in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006. Under company law the directors must not
approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the group and
company and of the profit or loss of the group and company
for that year.
In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether, for the group and company, international
accounting standards in conformity with the requirements
of the Companies Act 2006 have been followed, subject to
any material departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and
company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the group and
company’s transactions and disclose with reasonable accuracy
at any time the financial position of the group and company,
and enable them to ensure that the financial statements comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the group and company, and hence
for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company’s website. Legislation in the United Kingdom governing
the preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.
The company is compliant with AIM Rule 26 regarding
the company’s website.
The directors confirm that they have complied with the above
requirements in preparing the financial statements.
Approved on behalf of the Board on 6 May 2022.
Adam Davidson
Chief Executive Officer
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Trident Royalties plc Annual Report & Financial Statements 2021
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FINANCIAL STATEMENTS
GOLD HAS
HISTORICALLY
BEEN HELD AS
A STORE OF
WEALTH AND
HEDGE AGAINST
INFLATION
46
Trident Royalties plc Annual Report & Financial Statements 2021
FINANCIAL STATEMENTS
FINANCIAL
STATEMENTS
48 Independent Auditor’s report
54 Consolidated statement of comprehensive income
55 Consolidated statement of financial position
56 Consolidated statement of changes in equity
57 Consolidated statement of cash flows
58 Company statement of financial position
59 Company statement of changes in equity
60 Company statement of cash flows
61 Notes to the financial statements
IBC Company information
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Trident Royalties plc Annual Report & Financial Statements 2021
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FINANCIAL STATEMENTS
Independent Auditor’s Report
to the members of Trident Royalties plc
Opinion
We have audited the financial statements of Trident Royalties plc (the “parent company”) and its subsidiaries (the “group”) for the year
ended 31 December 2021 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent
Company Statement of Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated
and Parent Company Statements of Cash Flows and notes to the financial statements, including significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and
as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2021
and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the preparation
of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s and parent company’s ability to
continue to adopt the going concern basis of accounting included a review of budgets for twelve months from the sign off date including
checking the mathematical accuracy of the budgets and discussion of significant assumptions used by the management and comparing
these with current year and post year end performance. We have also reviewed the latest available post year end management accounts,
bank statements, regulatory announcements, board minutes and assessed any external industry wide factors which might affect the group
and the parent company.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group’s or parent company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
48
Trident Royalties plc Annual Report & Financial Statements 2021
FINANCIAL STATEMENTS
Independent Auditor’s Report continued
to the members of Trident Royalties plc
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine
the scope of our audit and the nature, timing and extent of our audit procedures. The materiality applied to the group financial statements
as a whole was set at US$950,000, (2020: US$250,000), with performance materiality set at US$665,000, (2020: US$175,000) and triviality
threshold set at $47,500 (2020: US$12,500). Considering group operations and controls are centrally managed, and the low level of
historically identified misstatements, a performance materiality threshold of 70% was considered appropriate. We agreed that we would
report to Those Charged with Governance all misstatements below that threshold that we believe warrant reporting on qualitative grounds.
Materiality has been calculated as 1% of the benchmark of gross assets, which we have determined, in our professional judgement,
to be one of the principal benchmarks within the financial statements relevant to members of the group in assessing financial performance.
As the group has acquired royalty investments in the year and this represents the most significant balance in the group financial statements,
we consider gross assets to be the best indicator of the group performance as a whole and most relevant to the users of the financial
statements. The change in the underlying business activities, means that materiality has changed significantly from the prior year.
The materiality applied to the parent company financial statements was US$40,000, (2020: US$48,000), based on 2% of expenses,
as the Company is loss-making and does not generate sufficient revenue or hold significant assets to warrant these as more appropriate
measures. The performance materiality was US$28,000, (2020: US$33,600). Trident Services Australia Pty Limited was audited using
a materiality of US$220,000 (2020: US$50,000), based on 1% of gross assets, with performance materiality being $154,000 (2020:
US$35,000), considered appropriate given the importance of the assets on the current and future group operations.
All other components are considered as insignificant for audit purposes and have been audited at a level below group materiality.
There were no misstatements identified during the course of our audit that were individually, or in aggregate, considered to be material.
Our approach to the audit
As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements.
In particular, we looked at areas involving significant accounting estimates and judgement by the directors and considered future events
that are inherently uncertain such as the impairment of intangible assets and assumptions used in calculating the fair value of financial assets.
We also addressed the risk of management override of internal controls, including among other matters consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
The group has five trading companies within the consolidated financial statements, two based in the UK, one based in Europe, one
based in Australia and one in the US. We identified two significant components, the parent company, Trident Royalties Plc and TRR Services
Australia Pty Ltd, which were subject to a full scope audit by a team with relevant sector experience. Component offices were not visited
due to ongoing Covid-19 restrictions and due to the fact that the finance function is centrally managed, and all data was provided to the
audit team remotely.
In addition, we identified components which were not significant to the group and performed an audit of specific account balances and
classes of transactions to ensure that balances which were material to the group were subject to audit procedures.
The approach gave the audit team the sufficient coverage on revenue, gross assets and loss for the year.
Trident Royalties plc Annual Report & Financial Statements 2021
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Independent Auditor’s Report continued
to the members of Trident Royalties plc
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our scope addressed this matter
Our work in this area included;
• A review of the technical accounting memorandums prepared
by management and the accounting policies adopted by the
group for compliance with IFRS;
• A review of the asset acquisition accounting treatment
including contingent consideration for compliance with IFRS,
including verification of the key terms back to the underlying
acquisition agreement;
• Re-performance of amortisation charges during the year
and review of the useful economic lives;
• Verification of ownership of the royalty interests and
corroboration to the agreements;
• An assessment of each royalty interest for indicators
of impairment;
• Reviewing the valuation methodology for each type of
investment held and ensuring that the carrying values are
supported by sufficient and appropriate audit evidence; and
• Reviewing the associated disclosures in the financial statements.
Our work did not identify any material errors regarding the
accounting treatment and valuation of royalty interest assets.
Accounting treatment and recoverability of royalty interest assets
The group has increased its holdings in royalty interests
significantly in the year, completing four new acquisitions worth
a combined $34.8m as at 31 December 2021. Investments in
royalty interest assets represented US$52.4m (52.2%) of the
group’s total assets. Further details can be found at note 2, 12 and
13 of the accounts. The investments comprise upfront payments
for royalty entitlements, including associated direct acquisition
costs. The group accounts for investments in royalty interests
in one of two ways, as detailed below:
• Financial assets at fair value through Profit or Loss – if there
is a contractual right to receive cash (i.e. minimum payments).
Royalties are not recognised in revenue and reduce the
financial asset; or
• Intangible assets – if no contractual right to receive cash.
Such assets are amortised over the life of the mine and
royalties recognised as revenue.
Value in use calculations are performed for each project based
on discounted future cash-flows and compared to carrying value.
The estimated recoverable amount is subjective due to the
inherent uncertainty involved in forecasting and discounting
cash flows. Where royalty interest assets are not yet revenue
generating, management assess whether there are any indicators
of impairment, having regard to progress of the underlying
exploration project towards commercial mining activity and other
publicly available information regarding successful progression
of the project, securing funding, permitting, etc.
There is the risk that royalty interest assets have not been correctly
valued and classified in accordance with the requirements of IFRS.
We have determined this to be a key audit matter based on the
financial significance of these assets to the group combined with
the requirement for management to use their judgment in
assessing their recoverability.
Recoverability of related party balances (parent company)
There is a risk around the recoverability of investments and inter-
company balances on the parent’s balance sheet, which is directly
related to the recoverability of the underlying asset performance.
The parent had loans and contributions receivable from
subsidiaries to the value of US$47.6m at year end, as shown in
note 15 of the accounts. Management consider the requirements
of IFRS 9 and IAS 36 when assessing recoverability and the
recognition of expected credit losses and impairments, which
requires estimation and judgement.
Our work in this area included:
• Corroborating any significant changes in the business
environment that would have an adverse effect on the
underlying projects within each geographical area.
• Obtaining audit evidence of the entity’s assessment
of indicators of impairment as per IFRS 9 and IAS 36.
Where indicators of impairment existed, , we have obtained
supporting explanations from management to confirm the
future prospects of recovering the related balances.
We have drawn conclusions on the related party balances
through aligning to findings in respect of the group’s underlying
project interests.
50
Trident Royalties plc Annual Report & Financial Statements 2021
FINANCIAL STATEMENTS
Independent Auditor’s Report continued
to the members of Trident Royalties plc
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group and parent
company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the group and parent
company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Trident Royalties plc Annual Report & Financial Statements 2021
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FINANCIAL STATEMENTS
Independent Auditor’s Report
to the members of Trident Royalties plc
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations
that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through
discussions with management, application of audit knowledge and experience of the sector.
Our audit procedures were designed to ensure the audit team considered whether there were any indications of non-compliance by the
group and parent company with those laws and regulations. The group and parent company is subject to laws and regulations that directly
affect the financial statements including financial reporting legislation, distributable profits legislation, and taxation legislation and we
assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
We addressed the risk of fraud arising from management override of controls by performing audit procedures over all significant
components which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias;
and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-
rebuttable presumption of a risk of fraud arising from management override of controls, that the recognition of revenue, posting of unusual
journals and manipulating the group’s alternative performance profit measures and other key performance indicators to meet remuneration
targets and externally communicated targets.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or
regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of
instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone,
other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Zahir Khaki (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP 15 Westferry Circus
Statutory Auditor Canary Wharf
6 May 2022 London E14 4HD
52
Trident Royalties plc Annual Report & Financial Statements 2021
FINANCIAL STATEMENTS
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2021
Trident Royalties plc Annual Report & Financial Statements 2021
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FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Notes
3
12
4
13
7
8
9
9
Year ended
Year ended
31 December 31 December
2020
US$’000
1,668
(1,193)
475
(2,529)
(2,054)
2021
US$’000
83
(21)
62
(3,744)
(3,682)
1,511
-
-
(1,707)
(523)
(4,401)
863
(3,538)
-
29
29
(3,509)
2,528
(204)
21
(20)
1,383
1,654
53
1,707
17
112
129
1,836
10
(2.15)
2.45
Continuing operations
Royalty related revenue
Amortisation of royalty intangible assets
Gross profit
Administrative expenses
Operating loss
Revaluation of royalty financial assets
AIM listing fees
Finance income
Other finance costs
Net foreign exchange (losses)/gains
(Loss)/profit before taxation
Income tax
(Loss)/profit attributable to owners of the parent
Other comprehensive income
Items that may be subsequently reclassified to profit and loss:
Deferred tax
Exchange gains on translation of foreign operations
Other comprehensive income for the period, net of tax
Total Comprehensive income attributable to owners of the parent
Earnings per share:
Basic and diluted earnings per share (U.S. cents)
The notes on pages 61 to 79 are an integral part of these financial statements.
54
Trident Royalties plc Annual Report & Financial Statements 2021
FINANCIAL STATEMENTS
Consolidated Statement of Financial Position
As at 31 December 2021
Non-current assets
Royalty intangible assets
Royalty financial assets at fair value through profit and loss
Deferred tax asset
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Borrowings
Total current liabilities
Non-current liabilities
Contingent consideration
Derivative financial liability
Total non-current liabilities
Total liabilities
Net Assets
Equity attributable to owners of the parent
Share Capital
Share Premium
Share-based payments reserve
Foreign exchange reserve
Retained Earnings
Total Equity
Notes
12
13
9
16
17
18
9
19
18
19
20
20
21
Year ended
Year ended
31 December 31 December
2020
US$’000
2021
US$’000
44,900
7,461
1,043
53,404
1,212
45,637
46,849
100,253
1,039
-
10,536
11,575
436
172
608
12,183
11,018
7,453
210
18,681
778
6,971
7,749
26,430
335
122
-
457
464
-
464
921
88,070
25,509
3,307
87,046
403
118
(2,804)
88,070
1,335
23,288
63
89
734
25,509
The notes on pages 61 to 79 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board on 6 May 2022 and are signed on its behalf by:
Adam Davidson
Director
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earnings
US$’000
(990)
1,707
17
-
1,724
-
-
-
-
-
Total
US$’000
4,102
1,707
17
112
1,836
21,165
-
(1,657)
63
19,571
734
25,509
(3,538)
(3,538)
-
(3,538)
29
(3,509)
-
-
-
-
68,965
(3,235)
340
66,070
-
-
112
112
-
-
-
-
-
89
-
29
29
-
-
-
-
118
(2,804)
88,070
FINANCIAL STATEMENTS
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Balance at 1 January 2020
Share
capital
US$’000
328
Share
premium
US$’000
4,787
Share
based
payments
reserve
US$’000
-
Foreign
exchange
reserve
US$’000
(23)
Profit for the year
Other comprehensive income:
Deferred tax
Exchange gains on translation of foreign operations
Total comprehensive income for the year
-
-
-
-
Transaction with owners in their
capacity as owners:
Issue of share capital
Cancellation of deferred shares
Share issue costs
Share-based payment charge
Total transactions with owners,
recognised directly in equity
Balance at 31 December 2020
1,046
(39)
-
-
1,007
1,335
Loss for the year
Other comprehensive income:
Exchange gains on translation of foreign operations
Total comprehensive income for the year
-
-
-
Transaction with owners in their
capacity as owners:
Issue of share capital
Share issue costs
Share-based payment charge
Total transactions with owners,
recognised directly in equity
1,972
-
-
1,972
-
-
-
-
20,119
39
(1,657)
-
18,501
23,288
-
-
-
66,993
(3,235)
-
63,758
Balance at 31 December 2021
3,307
87,046
The notes on pages 61 to 79 are an integral part of these financial statements.
-
-
-
-
-
-
-
63
63
63
-
-
-
-
-
340
340
403
56
Trident Royalties plc Annual Report & Financial Statements 2021
Notes
13
12
FINANCIAL STATEMENTS
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Cash flow from Operating Activities
(Loss)/profit before taxation
Revaluation of royalty financial assets
AIM listing fees
Finance income
Other finance costs
Net foreign exchange losses/(gains)
Amortisation of royalty intangible asset
Other non-cash items
Share-based payments charge
Net cash used before changes in working capital
Increase in payables
Increase in receivables
Net cash used in operating activities before tax
Corporate income tax paid
Net cash used in operating activities
Cash flows from investing activities
Payments for acquisition of royalty intangible assets
Payments for acquisition of royalty financial assets at fair value through profit and loss
Cash received from royalty financial asset
Finance income
Net cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs and AIM listing fees
Proceeds from borrowings
Finance costs
Net cash generated from financing activities
Net increase in cash and cash equivalents during the year
Cash at the beginning of year
Effect of foreign exchange rate
Cash and cash equivalents at the end of the year
The notes on pages 61 to 79 are an integral part of these financial statements.
Year ended
Year ended
31 December 31 December
2020
US$’000
2021
US$’000
(4,401)
(1,511)
-
-
1,707
523
21
56
340
(3,265)
684
(195)
(2,776)
(153)
(2,929)
(29,072)
-
1,182
-
(27,890)
63,489
(3,235)
10,000
(979)
69,275
38,456
6,971
210
45,637
1,654
(2,528)
204
(21)
20
(1,383)
1,193
-
63
(798)
257
(714)
(1,255)
-
(1,255)
(10,063)
(5,000)
22
21
(15,020)
20,080
(1,484)
-
-
18,596
2,321
4,135
515
6,971
Trident Royalties plc Annual Report & Financial Statements 2021
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FINANCIAL STATEMENTS
Company Statement of Financial Position
As at 31 December 2021
Non-current assets
Investment in subsidiaries
Royalty financial assets at fair value through profit and loss
Amount due from subsidiary undertakings
Deferred tax asset
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Current liabilities
Non-current Liabilities
Derivative financial liability
Total liabilities
Net Assets
Equity
Share Capital
Share Premium
Share-based payments reserve
Foreign exchange reserve
Retained Earnings
Total Equity
Notes
14
13
15
9
16
17
18
9
19
20
20
21
Year ended
Year ended
31 December 31 December
2020
US$’000
2021
US$’000
113
7,461
47,609
93
55,276
1,176
34,480
35,656
90,932
439
-
439
172
611
90,321
3,307
87,046
403
(23)
(412)
90,321
113
7,453
10,089
29
17,684
405
6,547
6,952
24,636
162
27
189
-
189
24,447
1,335
23,288
63
(23)
(216)
24,447
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the Parent Company
Statement of Comprehensive Income. The loss for the Parent Company for the year was US$0.20m (2020: US$0.67m profit).
The notes on pages 61 to 79 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board on 6 May 2022.
Adam Davidson
Director
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FINANCIAL STATEMENTS
Company Statement of Changes in Equity
For the year ended 31 December 2021
Share
capital
US$’000
328
Share
premium
US$’000
4,787
Share
based
payments
reserve
US$’000
-
Foreign
exchange
reserve
US$’000
(23)
Retained
earnings
US$’000
(910)
Total
US$’000
4,182
Balance at 1 January 2020
Profit for the year
Other comprehensive income:
Deferred tax
Total comprehensive income for the year
Issue of share capital
Cancellation of deferred shares
Share issue costs
Share-based payment charge
Total transactions with owners,
recognised directly in equity
Balance at 31 December 2020
Loss for the year
Total comprehensive income for the year
Issue of share capital
Share issue costs
Share-based payment charge
Total transactions with owners,
recognised directly in equity
-
-
-
1,046
(39)
-
-
1,007
1,335
-
-
1,972
-
-
1,972
-
-
-
20,119
39
(1,657)
-
18,501
23,288
-
-
66,993
(3,235)
-
63,758
Balance at 31 December 2021
3,307
87,046
The notes on pages 61 to 79 are an integral part of these financial statements.
-
-
-
-
-
-
63
63
63
-
-
-
-
340
340
403
-
-
-
-
-
-
-
-
(23)
-
-
-
-
-
-
677
17
694
-
-
-
-
-
(216)
(196)
(196)
-
-
-
-
677
17
694
21,165
-
(1,657)
63
19,571
24,447
(196)
(196)
68,965
(3,235)
340
66,070
(23)
(412)
90,321
Trident Royalties plc Annual Report & Financial Statements 2021
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T
A
T
E
M
E
N
T
S
Year ended
Year ended
31 December 31 December
2020
US$’000
2021
US$’000
(255)
(1,511)
-
-
(510)
51
(239)
56
340
(2,068)
462
(277)
(1,883)
(33)
(1,916)
-
1,182
-
(51)
-
(38,589)
7,000
(30,458)
63,489
(3,235)
60,254
27,880
6,547
53
34,480
692
(2,528)
204
(21)
(201)
20
(321)
-
63
(2,092)
110
(342)
(2,324)
-
(2,324)
(5,000)
22
21
-
(113)
(9,641)
529
(14,182)
20,080
(1,484)
18,596
2,090
4,120
337
6,547
Notes
13
FINANCIAL STATEMENTS
Company Statement of Cash Flows
for the year ended 31 December 2021
Cash flows from Operating Activities
(Loss)/profit before taxation
Revaluation of royalty financial asset
AIM listing fees
Finance income
Intercompany interest received
Other finance costs
Net foreign exchange gains
Other non-cash items
Share-based payments charge
Net cash used before changes in working capital
Increase in payables
Increase in receivables
Net cash used in operating activities before tax
Corporate income tax paid
Net cash used in operating activities
Cash flows from investing activities
Payments for acquisition of royalty financial assets at fair value through profit and loss
Cash received from royalty financial asset
Finance income
Finance costs
Investment in subsidiary
Loans granted to subsidiary undertakings
Loan repayments from subsidiary undertakings
Net cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs and AIM listing fees
Net cash generated from financing activities
Net increase in cash and cash equivalents during the year
Cash at the beginning of year
Effect of foreign exchange rate
Cash and cash equivalents at the end of the year
The notes on pages 61 to 79 are an integral part of these financial statements.
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FINANCIAL STATEMENTS
Notes to the financial statements
1. GENERAL INFORMATION
Trident Royalties plc is a company incorporated and domiciled in the United Kingdom. The Company is a public limited company,
which is listed on AIM of the London Stock Exchange, incorporated and domiciled in England and Wales. The address of the registered
office is 6th Floor 60 Gracechurch Street, London, United Kingdom, EC3V 0HR.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial statements are set out below. The policies have been
consistently applied throughout the year presented, unless otherwise stated.
Basis of preparation
The Group’s consolidated financial statements and the Parent Company financial statements have been prepared in accordance
international accounting standards in conformity with the Companies Act 2006.
The financial statements have been prepared under the historical cost convention except for financial assets at fair value through profit and
loss account and contingent consideration which are measured at fair value. The principal accounting policies adopted are set out below.
The Group financial statements are presented in US Dollars ($) and rounded to the nearest thousand.
The preparation of the Group financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are
explained below.
Going Concern
The financial position of the Group and cash flows as at 31 December 2021 are set out on pages 55 and 57. The Group meets its day-to-day
working capital and other funding requirements with its current cash, raised through equity placings and revenue from its cash generating
royalties. The Group actively manages its financial risks as set out in note 22 and operates Board-approved financial policies, that are
designed to ensure that the Group maintains an adequate level of headroom and effectively mitigates financial risks.
On the basis of current financial projections (at least 12 months from the date of approval of the financial statements), the Directors have a
reasonable expectation that the Group has adequate resources to continue in operational existence, and meet its liabilities as they fall due,
for the foreseeable future. Accordingly, the Directors consider it appropriate to adopt the going concern basis in preparing these financial
statements.
COVID-19
The Group has not been made aware of any significant issues at the operations in which it has made investments. Whilst the mining sector
as a whole has been affected by COVID-19 – mainly in respect to their supply chains – their very nature (usually self-contained mine sites) has
been such that mitigation of COVID-19 is easier than in other industries. The Board continues to monitor the impact of COVID-19 on the
ability of the Group to continue to pursue its strategy and will make appropriate changes should they be required. There is not considered
to be any material impacts on the reporting financial position and results of the Group as a result of COVID-19 as at the reporting date.
Standards, interpretations and amendments to published standards effective from 1 January 2021
The accounting policies applied are consistent with those adopted and disclosed in the Group financial statements for the year ended
31 December 2020. The Group adopted Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16) at 1 January 2021, with no significant impact.
Standards, interpretations and amendments to published standards not yet effective
The Directors have considered those standards and interpretations, which have not been applied in the financial statements, that are
in issue but not yet effective and do not consider that they will have a material impact on the future results of the Group or Company.
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FINANCIAL STATEMENTS
Notes to the financial statements continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Basis of consolidation
The consolidated financial statements present the results of the Company and its subsidiaries as if they formed a single entity. Intercompany
transactions and balances between group companies are therefore eliminated in full.
At 31 December 2021, the consolidated financial statements combine those of the Company with those of its subsidiaries. Subsidiaries are
entities over which the Group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less
than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it
has power over an investee, including:
• The contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
• The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more
of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during
the year are included in the Group financial statements from the date the Group gains control until the date the Group ceases to control
the subsidiary.
Investments in subsidiaries are accounted for at cost less impairment within the Company financial statements. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by
other members of the Group
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker
which is considered to be the Board.
Foreign currency
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they
operate (their "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and
liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary
assets and liabilities are recognised immediately in profit or loss.
Exchange gains and losses arising on the retranslation of monetary financial assets are treated as a separate component of the change
in fair value and recognised in profit or loss. Exchange gains and losses on non-monetary other comprehensive income (“OCI”) financial
assets form part of the overall gain or loss in OCI recognised in respect of that financial instrument.
Translation into presentation currency
The Company’s functional currency changed from British pound (£) to US Dollars (US$) on 1 January 2020. The Group presents its financial
information in US Dollars (US$). The functional currency of all the Company’s subsidiaries is US$ except for TRR Services Australia Pty Ltd
which has a AUD functional currency.
• Assets and liabilities for each financial reporting date presented (including comparatives) are translated at the closing rate of that financial
reporting period.
• Income and expenses for each income statement (including comparatives) is translated at exchange rates at the dates of transactions.
For practical reasons, the Company applies average exchange rates for the period.
• All resulting changes are recognised as a separate component of equity.
• Equity items are translated at exchange rates at the dates of transactions.
The following exchange rates were used in the retranslation of these financial statements.
US$/AUD closing rate at financial reporting date
US$/AUD average exchange rate during the reporting period
62
Trident Royalties plc Annual Report & Financial Statements 2021
At
At
31 December 31 December
2020
0.7736
0.6948
2021
0.7263
0.7483
FINANCIAL STATEMENTS
Notes to the financial statements continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Intangible assets
Royalty arrangements
Royalty arrangements which are identified and classified as intangible assets are initially measured at cost, including any transaction costs,
less provision for impairment where required.
Upon commencement of production at the underlying mining operation intangible assets are amortised on a units of production basis
matching the depletion of the ore body over the life of the mine. Amortisation rates are adjusted on a prospective basis for all changes
to estimates of the life of mine reserves.
Impairment
At each reporting date, the Group reviews the carrying amounts of its intangible assets to determine whether there is any indication that
those assets are impaired. If such an indication is identified, the recoverable amount of the asset is estimated in order to determine the
extent of any impairment. The recoverable amount is the higher of fair value (less costs of disposal) and value in use. In assessing value in
use, the estimated cash flows are discounted to their present value using a pre-tax discount rate. If the recoverable amount of the asset is
estimated to be less than its carrying value, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is also
recognised in the income statement. Should an impairment loss subsequently reverse, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would
have been determined had no impairment been recognised. A reversal of an impairment loss is also recognised in the income statement.
Investments
Investment in subsidiaries are recorded at cost less provision for impairment.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
Current tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted in the countries in which the Group
operates by the Statement of Financial Position date and is based on taxable profit for the year.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance
sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be
utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the
initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor
the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the year when the liability is settled or the asset is realised. Deferred
tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive
income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly
in equity respectively.
Share-based payments
The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount
to be expensed is determined by reference to the fair value of the options granted, excluding the impact of any non-market service and
performance vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are
expected to vest. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At each reporting date, the entity revises its estimates of the number of options that are expected
to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit and loss,
with a corresponding adjustment to equity.
Trident Royalties plc Annual Report & Financial Statements 2021
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Notes to the financial statements continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Financial Instruments
Financial instruments comprise royalty financial assets, cash and cash equivalents, borrowings, financial assets and liabilities and equity
instruments. Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument and comprise trade and other receivables and trade and other payables respectively.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and deposit balances at banks.
Borrowings
Interest bearing debt facilities are initially recognised at fair value, net of directly attributable transaction costs. Transaction costs
are recognised in the income statement on a straight-line basis over the term of the facility.
Trade and other receivables
Trade and other receivables are accounted for under IFRS 9 using the expected credit loss model and are initially recognised at fair value
and subsequently measured at amortised cost less any allowance for expected credit losses.
Royalty financial assets at fair value through profit and loss
Royalty financial assets are recognised or derecognised on completion date where a purchase or sale of the royalty is under a contract,
and are initially measured at fair value, including transaction costs.
All of the Group’s royalty financial assets have been designated as at fair value through profit and loss (“FVTPL”).
The royalty financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses
recognised in the “revaluation of royalty financial assets” line item of the income statement. Fair value is determined in the manner
described in note 13.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected
credit loss model.
Trade and other payables
Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective
interest method.
Warrant liability at fair value through profit and loss
The warrant liability is initially measured at fair value, including transaction costs. The liability is measured at fair value at the end of each
reporting period, with any gains or losses recognised as other finance costs in the income statement. Fair value is determined by the
calculation described in note 21.
Equity instruments and reserves description
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
Ordinary shares are classified as equity.
Deferred shares are classified as equity but have restricted rights such that they have no economic value.
Share capital account represents the nominal value of the ordinary and deferred shares issued.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated
with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Share based payment reserve represents equity-settled share-based employee remuneration until such share options are exercised.
Foreign exchange reserve represents
• differences arising on the opening net assets retranslation at a closing rate that differs from opening rate; and
• differences arising from retranslating the income statement at exchange rates at the dates of transactions at average rates and assets
and liabilities at the closing rate.
Retained earnings include all current and prior period results as disclosed in the Statement of Comprehensive Income.
Revenue recognition
The revenue of the Group comprises mainly royalty income. It is measured at the fair value of the consideration received or receivable
after deducting discounts, value added tax and other withholding tax. The royalty income becomes receivable on extraction and sale
of the relevant underlying commodity, and by determination of the relevant royalty agreement. Interest income is accrued on a time basis,
by reference to the carrying value and at the effective interest rate applicable.
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FINANCIAL STATEMENTS
Notes to the financial statements continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The Group’s
estimate in respect of contingent consideration that may be payable following the acquisition of Royalty Intangible Assets, is capitalised as an
asset acquisition cost. The value of the provision is determined by the amounts deemed payable by management at the balance sheet date.
Critical accounting estimates and judgements
The preparation of the financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Although these estimates are based on management’s best knowledge of the amounts, events or actions, actual results ultimately may
differ from these estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
Critical accounting judgements
Classification of royalty arrangements: initial recognition and subsequent measurement
The Directors must decide whether the Group’s royalty arrangements should be classified as:
• Intangible assets in accordance with IAS 38 Intangible Assets; or
• Financial assets in accordance with IFRS 9 Financial Instruments
The Directors use the following selection criteria to identify the characteristics which determine which accounting standard to apply to each
royalty arrangement:
Type 1 – Intangible assets: Royalties, are mainly classified as intangible assets by the Group. The Group considers the substance of a simple
royalty to be economically similar to holding a direct interest in the underlying mineral asset. Existence risk (the commodity physically
existing in the quantity demonstrated), production risk (that the operator can achieve production and operate a commercially viable
project), timing risk (commencement and quantity produced, determined by the operator) and price risk (returns vary depending on the
future commodity price, driven by future supply and demand) are all risks which the Group participates in on a similar basis to an owner of
the underlying mineral licence. Furthermore, in a royalty intangible, there is only a right to receive cash to the extent there is production and
there are no interest payments, minimum payment obligations or means to enforce production or guarantee repayment. These are
accounted for as intangible assets under IAS 38.
Type 2 – Financial royalty assets (royalties with additional financial protection): In certain circumstances where the risk is considered too high,
the Group will look to introduce additional protective measures. This has taken the form of minimum payment terms. Once an operation is
in production, these mechanisms generally fall away such that the royalty will display identical characteristics and risk profile to the intangible
royalties; however, it is the contractual right to enforce the receipt of cash which results in these royalties being accounted for as financial
assets under IFRS 9.
Accounting classification
Substance of contractual terms
Accounting treatment
Examples
Royalty intangible assets
Simple royalty with
no right to receive cash other
than through a royalty related to
production
• Koolyanobbing
• Spring Hill
• Lake Rebecca
• Thacker Pass
• Lincoln gold
• WA Gold
• Investment is presented as an
intangible asset and carried at
cost less accumulated
amortisation and any
impairment provision
• Royalty income is recognised
as revenue in the income
statement
• Intangible asset is assessed
for indicators of impairment
at each period end
Royalty financial instruments
Royalty arrangement with a
contractual right to receive cash
(e.g. through a minimum
payment profile)
• Financial asset is recognised
at fair value on the balance
sheet
• Fair value movements taken
• Mimbula
through the income
statement (FVTPL)
• Royalty income is not
recognised as revenue in the
income statement and
instead reduces the fair value
of the asset
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FINANCIAL STATEMENTS
Notes to the financial statements continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Going concern
The Group and Company financial statements have been prepared on a going concern basis as the Directors have assessed the Group’s
and Company’s ability to continue in operational existence for the foreseeable future. The operations are currently being funded through
existing cash reserves and royalty income.
The financial statements do not include the adjustments that would result if the Group or Company were not to continue as a going
concern. See Going Concern section on page 61 for more details.
Loans to subsidiaries
Loans to subsidiaries have a carrying value at 31 December 2021 of US$47.6m (2019: US$10.1m). The Directors have assessed the carrying
value to be equal to fair value on the basis that the loans will be recovered once the subsidiaries as they generate cash flow from their
underlying investments in royalty assets. In the event that the underlying value of the royalty asset becomes impaired, and the loans are not
considered to be recoverable, an impairment charge will then be recognised in the Company Statement of Comprehensive Income.
Key sources of estimation uncertainty
Assessment of fair value of royalty arrangements held at fair value
The Mimbula royalty is held at fair value. Fair value is determined based on discounted cash flow models (and other valuation
techniques) using assumptions considered to be reasonable and consistent with those that would be applied by a market participant.
The determination of assumptions used in assessing fair values is subjective and the use of different valuation assumptions could have
a significant impact on financial results.
In particular, expected future cash flows, which are used in discounted cash flows models, are inherently uncertain and could materially
change over time. They are significantly affected by a number of factors including commodity prices, exchange rate changes and reserves
and resources and timing/likelihood of mines entering production if not already generating income.
The key assumptions relating to the Group’s royalty financial asset classified as fair value through profit or loss is set out in note 13.
Impairment review of intangible assets
Intangible assets are assessed for indicators of impairment at each reporting date with the assessment considering variables such as the
production profiles, production commissioning dates where applicable, forecast commodity prices and guidance from the mine operators.
Where indicators are identified, the starting point for the impairment review will be to measure the expected future cash flows expected from
the royalty arrangement should the project continue/come into production. A pre-tax nominal discount rate is applied to the future cash flows.
The discount rate of each royalty arrangement is specific to the underlying project, making reference to the risk-free rate of return expected on
an investment with the same time horizon as the expected mine life, together with the country risk associated with the location of the
operation. Changes in discount rate are most sensitive to changes in the risk-free rate, country risk premiums and the expected mine life.
The outcome of this net present value calculation is then risk weighted to reflect management’s current assessment of the overall likelihood
and timing of each project coming into production and royalty income arising. This assessment is impacted by news flow relating to the
underlying operation in the year, in conjunction with management’s assessment of the economic viability of the project based on
commodity price projections.
Amortisation
During the year the Group amended its amortisation policy from a straight line basis to depletion using units of production. Management
now has sufficient information to reliably estimate the depletion of the ore body over which Trident holds the royalty and accordingly
applied a more appropriate amortisation policy. Management regularly review the life of its assets and amortisation rates and methodology,
and may be adjusted for changes to the estimates.
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FINANCIAL STATEMENTS
Notes to the financial statements continued
3. BUSINESS AND GEOGRAPHICAL REPORTING
The Group’s chief operating decision maker is considered to be the Executive Board. The Executive Board evaluates the financial
performance of the Group by reference to its diversified portfolio - split between precious, bulk/battery and base metal assets - its
reportable segments.
The following individual royalty arrangements are aggregated into the reportable segments:
Precious:
Bulk/Battery Metals:
Base:
Lake Rebecca, Spring Hill, Lincoln Gold Mine, Western Australia gold
Koolyanobbing, Thacker Pass
Mimbula, Pukaqaqa
Below is a summary of the Group’s results, assets and liabilities by reportable segment as presented to the Executive Board. Operating
profit/(loss) is stated before revaluation of royalty financial instruments, one off costs, finance income and expense foreign exchange gains
and taxation.
Segmental information as at 31 December 2021:
Royalty related revenue
Amortisation of royalty intangible assets
Gross profit
Operating expenses
Total segment operating profit/(loss)
Total segment assets
Total segment liabilities
Bulk/
Battery
metals
US$’000
83
(21)
62
-
62
Precious
US$’000
-
-
-
-
-
Base
US$’000
-
-
-
-
-
Other
US$’000
-
-
-
(3,744)
(3,744)
Total
US$’000
83
(21)
62
(3,744)
(3,682)
9,869
31,956
10,535
47,893
100,253
436
-
-
11,747
12,183
As at 31 December 2021 the Group was receiving royalty income from Koolyanobbing (bulk segment) and Mimbula (base segment) which
is accounted for as a financial asset (see note 13). A fair value gain of US$1.51m (2020: US$2.53m) was recognised in the base segment.
Segmental information as at 31 December 2020:
Royalty related revenue
Amortisation of royalty intangible assets
Gross profit
Operating expenses
Total segment operating result
Total segment assets
Total segment liabilities
4. EXPENSES BY NATURE
Employee benefit expense (note 6)
Share based payments
Legal and professional
Other operating expenses
Total operating expenses
Bulk/
Battery
metals
US$’000
1,668
(1,193)
475
-
475
Base
US$’000
-
-
-
-
-
Other
US$’000
-
-
-
(2,529)
(2,529)
Total
US$’000
1,668
(1,193)
475
(2,529)
(2,054)
4,246
7,454
7,698
26,430
-
-
457
921
Precious
US$’000
-
-
-
-
-
7,032
464
Year ended
Year ended
31 December 31 December
2020
US$’000
980
63
1,109
377
2,529
2021
US$’000
2,093
340
788
523
3,744
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FINANCIAL STATEMENTS
Notes to the financial statements continued
5. AUDITOR REMUNERATION
During the year the Company obtained the following services from the auditor:
Fees payable to the auditor for the audit of the Company
Total auditor’s remuneration
Year ended
Year ended
31 December 31 December
2020
US$’000
48
48
2021
US$’000
62
62
Other assurance services pursuant to legislation
6
48
Details of the Company’s policy on the use of auditors for non-audit services, the reasons why the auditor was used rather than another
supplier and how the auditor’s independence and objectivity are safeguarded are set out in the Audit Committee Report.
6. EMPLOYEE BENEFIT EXPENSE
Directors’ salary and fees
Employee costs
Social security costs
Share-based payments charge
Total employee benefit expense
Group
Year ended
Company
Year ended
Group
Year ended
Company
Year ended
31 December 31 December 31 December 31 December
2020
US$’000
243
33
24
5
300
2021
US$’000
447
358
85
340
890
2021
US$’000
899
1,011
183
340
2,093
2020
US$’000
602
314
64
63
980
All the wages and salaries were paid to the Directors and senior management. There were no employees in the year other than the
Directors and senior management. Further disclosures in respect of Directors’ remuneration are included within the Directors’ Remuneration
Report. The average number of employees (including Directors) during the year was 8 (2020: 5).
Year ended
Year ended
31 December 31 December
2020
US$’000
21
21
2021
US$’000
-
-
Year ended
Year ended
31 December 31 December
2020
US$’000
20
-
20
2021
US$’000
801
906
1,707
7. FINANCE INCOME
Interest from bank deposits
Total
8. FINANCE EXPENSE
Interest paid or payable
Amortisation of financing costs (including warrant charge)
Total
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FINANCIAL STATEMENTS
Notes to the financial statements continued
9. INCOME TAX
Analysis of charge for year:
United Kingdom corporation tax
Overseas taxation
Adjustments in respect of prior years
Current tax expense
Deferred tax credit in current year
Adjustments in respect of prior years
Deferred tax
Income tax credit
Factors affecting the tax charge for the year/period:
(Loss)/profit before taxation
Tax on result calculated at UK Corporation tax of 19% (2019: 19%)
Tax effects of:
Items non-taxable/deductible for tax purposes:
Non-deductible expenses
Non-taxable income
Temporary and other differences:
Utilisation of losses not previously recognised
Current year losses not recognised
Effect of differences between local and UK tax rates
Prior year adjustment to current and deferred tax
Other adjustments
Income tax
Year ended
Year ended
31 December 31 December
2020
US$’000
2021
US$’000
-
-
2
2
(914)
49
(865)
(863)
27
95
-
122
(175)
-
(175)
(53)
Year ended
Year ended
31 December 31 December
2020
US$’000
2021
US$’000
(4,401)
1,654
(836)
314
87
157
-
37
(257)
51
(102)
(863)
62
(202)
(160)
-
(35)
-
(32)
(53)
The Group is subject to taxation in United Kingdom, USA and Australia with applicable tax rates of 19.00%, 21.00% and 30.00% respectively.
The Group does not have any unresolved tax matters or disputes with the tax authorities in the jurisdictions in which it operates.
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FINANCIAL STATEMENTS
Notes to the financial statements continued
9. INCOME TAX CONTINUED
Deferred taxation
The following are the deferred tax assets and liabilities recognised by the Group and the movements during the year:
Group
At 1 January 2020
Credit/(charge) to income statement
Credit to other comprehensive income
Exchange differences
31 December 2020
Credit/(charge) to income statement
Exchange differences
At 31 December 2021
Tax losses
US$000
-
Other
US$000
-
Total
US$000
-
220
-
-
220
1,262
-
1,482
(45)
17
18
(10)
(397)
(32)
(439)
175
17
18
210
865
(32)
1,043
The deferred tax asset predominantly relates to losses incurred in the Australian subsidiary (as partially offset by accelerated capital
allowances). Based on forecast future cashflows on those royalty assets held by the Australian subsidiary these losses are expected
to be fully utilised, accordingly the deferred tax asset has been recognised in full.
Company
At 1 January 2020
Credit to income statement
Credit to other comprehensive income
At 31 December 2020
Credit to income statement
At 31 December 2021
10. EARNINGS PER SHARE
Tax losses
US$000
-
Other
US$000
-
Total
US$000
-
-
-
-
-
-
12
17
29
64
93
12
17
29
64
93
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period.
Net (loss)/profit attributable to shareholders
Earnings
Year ended
Year ended
31 December 31 December
2020
US$’000
1,707
2021
US$’000
(3,538)
The weighted average number of shares in issue for the purpose of calculating basic and diluted earnings per share and basic and diluted
adjusted earnings per share are as follows:
Weighted average number of shares in issue
Basic number of shares outstanding
Dilutive effect of Employee Share Option Scheme
Diluted number of shares outstanding
Earnings per share – basic
Earnings per share - diluted
2021
164,638,648
-
164,638,648
2020
69,528,254
61,169
69,589,423
(2.15) c
(2.15) c
2.45 c
2.45 c
Subsequent to the year end a further 39,258,030 ordinary shares were issued – full details of share capital is provided in note 20.
70
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FINANCIAL STATEMENTS
Notes to the financial statements continued
11. DIVIDENDS
There were no dividends paid or proposed by the Company in either period.
12. ROYALTY INTANGIBLE ASSETS
Group
Cost
At 1 January 2020
Additions
Exchange differences
At 31 December 2020
Acquisition of Western Australia Gold Royalty
Acquisition of Pukaqaqa Royalty
Acquisition of Thacker Pass Royalty
Acquisition of Lincoln Gold Royalty
Exchange differences
At 31 December 2021
Accumulated Amortisation
At 1 January 2020
Amortisation
Exchange differences
At 31 December 2020
Amortisation
Exchange differences
At 31 December 2021
Net book value at 31 December 2020
Net book value at 31 December 2021
US$’000
-
11,201
1,145
12,346
631
3,075
28,234
2,666
(785)
46,167
-
(1,193)
(135)
(1,328)
(21)
82
(1,267)
11,018
44,900
Amortisation
Amortisation is charged on a units of production basis (over initial estimated reserves) on those assets in production.
In the case of Koolyanobbing it is estimated that circa 70% of the original acquired reserve remains.
Acquisitions
Thacker Pass Royalty
On 19 March 2021 the Group acquired a 60% interest in an existing gross revenue royalty over the Thacker Pass Lithium Project from Orion
Resource Partners for US$28.00m, consideration payable by US$26.00m in cash and US$2.00m in new Trident shares issued at 34.00p on
24 March 2021.
Western Australia Gold Royalty
On 30 March 2021 the Group completed the acquisition of a package of gold royalties located in Western Australia from Talga Resources
Limited for A$0.80m (US$0.63m), consideration payable by A$0.25m in cash and A$0.55m in new Trident shares issued at 35.98p on
31 March 2021.
Pukaqaqa Royalty
On 8 April 2021 the Group acquired the Pukaqaqa copper royalty package from Orion Resource Partners for US$3.00m, consideration
fully payable in new Trident shares issued at 32.03p on 9 April 2021. A royalty within the package was held by Tiomin Peru S.A.C (“Tiomin”)
a Peruvian company, which was acquired as part of the transaction. Tiomin does not meet the definition of a business as defined by
IFRS 3 – business combinations and accordingly has been treated as a purchase of an asset.
Lincoln Gold Royalty
On 31 August 2021, the Group acquire a royalty over the Lincoln Gold Mine from Seduli Sutter Operations Corporation for a cash
consideration of US$2.5m.
The Parent Company does not hold any royalty intangible assets.
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Notes to the financial statements continued
13. ROYALTY FINANCIAL ASSETS
In July 2020 the Group acquired the Mimbula Royalty from Moxico Resources plc a staged GRR over production from the operating
Mimbula copper mine and associated stockpiles located in Zambia’s prolific Copperbelt Province. The GRR was acquired for cash
consideration of US$5m. Trident is entitled to royalty payments on production commencing from 1 July 2020 and extending in perpetuity.
This royalty asset is classified as FVTPL.
Trident will receive either a Minimum Payment (“MP”) or royalty payment, whichever is higher until June 2023. Thereafter, Trident will only
receive royalty payments. The royalty payments are calculated as a percentage of the gross revenue derived from sale of finished copper
and copper concentrate. Per the terms of the agreement, the royalty percentage is calculated as follows:
a. During the MP period, 1.25% of gross revenue;
b. During the period commencing on the day after the expiry of MP period and ending on the date on which royalty payments have
been made to Trident in respect of a total aggregate quantity of no less than 575,000 tonnes of copper cathode or other finished
copper product, 0.3% of gross revenue; and
c. During the period commencing on the day after the expiry of the MP period and continuing for the duration of the agreement,
0.2% of gross revenue.
Group and Company
Fair Value
At 1 January
Acquisition of Mimbula
Royalties due or received
Revaluation of royalty financial asset recognised in profit or loss
At 31 December2021
2021
US$’000
7,453
-
(1,503)
1,511
7,461
2020
US$’000
-
5,000
(75)
2,528
7,453
As at 31 December 2021 the Group determined the fair value of Mimbula by calculating the discounted future cash flows of the royalty
with a 12% pre-tax nominal discount rate, resulting in a valuation of US$7.46m (2020: US$7.45m). This results in a fair value gain in the
income statement of US$1.51m (2020: US$2.53m). The key input assumptions are discount rate and commodity price.
If the discount rate used were to increase or decrease by 2% the valuation effect would be a US$0.39m (2020: US$0.43m) reduction
and a US$0.43m (2020: US$0.49m) increase, respectively.
If the commodity price used was to increase or decrease by 10% the valuation effect would be a US$0.5m (2020: US$0.44m) increase
and a US$0.1m (2020: US$0.59m) reduction, respectively.
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FINANCIAL STATEMENTS
Notes to the financial statements continued
14. INVESTMENTS IN SUBSIDIARIES
Company
Cost
At 31 December 2020 and 1 January 2021
Investment in subsidiary
At 31 December 2021
As at 31 December 2021 the Company held interests in the following subsidiary and joint venture companies:
US$’000
113
-
113
Nature
of business
Country Proportion Registered
registration held office
TRR Services LLC USA 100% 7233 S.Kellerman Way,
Aurora, CO 80016
TRR Services Australia Pty Limited Australia 100% Floor 2, 44A Kings Park Road,
West Perth, WA 6005
TRR Services Schweiz AG Switzerland 100% Grafenauweg 8, 6300 Zug
TRR Services UK Ltd United Kingdom 100% 6th Floor 60 Gracechurch Street,
London, United Kingdom, EC3V 0HR Service company
Tiomin Peru S.A.C Peru 100% Parque las Leyendas MZA, 13 Lote,
902A Al Costado de Metro De La Av
La Marina, Lima, Peru
TRR Holdings LLC USA 100% 251 Little Falls Drive, Wilmington,
DE 19808
TRR Offtakes LLC USA 100% 251 Little Falls Drive, Wilmington,
DE 19808
TRR Sonora Limited United Kingdom 100% 6th Floor 60 Gracechurch Street,
London, United Kingdom, EC3V 0HR
Sonoroy Holdings Limited United Kingdom 50% Lynton House 7-12 Tavistock Square,
London, England, WC1H 9BQ
Service company
Service company
Service company
Dormant
Dormant
Dormant
Dormant
Dormant
15. AMOUNT DUE FROM SUBSIDIARY UNDERTAKINGS
Company
Loans and contributions to subsidiaries
Total
2021
US$’000
47,609
47,609
2020
US$’000
10,089
10,089
During the year ended 31 December 2021 the maximum amount owed by the subsidiaries to the Parent Company was US$47.6m (2020:
US$10.1m). The related party loans are unsecured, repayable upon demand and have a 6% interest rate where applicable. The fair value
of loans to subsidiaries is the same as their carrying values stated above.
16. TRADE AND OTHER RECEIVABLES
Prepayments and accrued income
Current tax asset
Indirect taxes recoverable
Total
Group
2021
US$’000
1,040
29
143
1,212
Company
2021
US$’000
1,033
-
143
1,176
Group
2020
US$’000
517
-
261
778
Company
2020
US$’000
144
-
261
405
Due to the short-term nature of the current receivables, their carrying amount is considered to be approximate to their fair value.
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Notes to the financial statements continued
17. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Group
2021
US$’000
45,637
Company
2021
US$’000
34,480
Group
2020
US$’000
6,971
Company
2020
US$’000
6,547
All of the Company’s cash and cash equivalents are held in accounts which bear interest at floating rates and the Directors consider their
carrying amount approximates to their fair value. Details of the credit risk associated with cash and cash equivalents is set out in note 22.
18. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security
Accrued expenses
Total
Group
2021
US$’000
203
49
787
1,039
Company
2021
US$’000
199
-
240
439
Group
2020
US$’000
109
164
62
335
Company
2020
US$’000
107
-
55
162
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The Company has financial
risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms. The Directors consider that the
carrying amount of trade payables approximates to their fair value.
Contingent consideration
Group
At 31 December 2020
Exchange differences
At 31 December 2021
US$’000
464
(28)
436
Contingent consideration relates to the acquisition of the Spring Hill royalty. A total of A$600k remains payable to the vendor on the
operator meeting certain production milestones. The above amount is managements estimate of the amounts due assuming the operation
meets those production limits that trigger payment of the additional consideration. The amount is discounted and expected due after more
than one year.
19. BORROWINGS
On 1 July 2021 the Group entered into a US$10m secured loan facility agreement with a syndicate managed by Tribeca Investment
Partners. The Facility was drawdown on 3 August 2021.
Group
At 31 December 2020
Secured loan facility at amortised cost
Accrued finance charges
At 31 December 2021
US$’000
-
10,000
536
10,536
The facility had an initial term of 1 year from drawdown, with an option to extend for a further year subject to certain conditions. The facility
had a coupon of 10% plus Libor per annum. On 6 January 2022 the Tribeca loan facility was repaid in full including redemption interest to
ensure a minimum cash return of 7%, which was accrued in full. All associated finance and arrangement costs were expensed in the year.
On 10 January 2022, a new fully secured US$40m loan facility was entered into with Macquarie Bank Limited. The facility has a 3 year term
and interest is charged at 7.75% plus SOFR.
Warrant liability
As part of the Tribeca facility, 3,500,000 share warrants to subscribe for shares in the Company were issued exercisable at £0.5166 per share.
The Warrants were exercisable immediately on issue and will expire 24-months from drawdown. As the US$ value of the Warrant exercise
price is a variable amount they have been treated as a derivative financial liability and are classified as fair value through profit and loss.
The inputs used to calculate the fair value of the Warrants on initial recognition is shown in note 21.
Group and Company
Fair Value
At 1 January 2021
Fair value of Warrants on initial recognition
Revaluation of derivate financial asset recognised in profit or loss
At 31 December 2021
74
Trident Royalties plc Annual Report & Financial Statements 2021
US$’000
-
181
(9)
172
FINANCIAL STATEMENTS
Notes to the financial statements continued
20. SHARE CAPITAL AND SHARE PREMIUM
Group and Company
At 1 January 2020
Share issue – placing
Share issue – advisor shares
Share issue – Lake Rebecca
Share issue expenses
Cancellation of deferred shares
At 31 December 2020
Share issue – placing
Share issue – royalty acquisitions
Share issue – non-executive directors’ fees
Share issue expenses
At 31 December 2021
Number
of ordinary
shares of 1p
22,000,000
80,000,000
1,500,000
1,862,556
Number
of deferred
shares of 1p
3,000,000
-
-
-
105,362,556
134,181,943
11,939,806
108,108
-
251,592,413
(3,000,000)
-
-
-
-
-
-
Share
capital
US$’000
328
1,004
19
23
(39)
1,335
1,806
164
2
-
3,307
Share
premium
US$’000
4,787
19,077
358
684
(1,657)
39
23,288
61,683
5,256
54
(3,235)
87,046
Share issues during the year:
Share placings
On 25 March 2021, 60,800,000 ordinary shares were issued for cash at 34p per share.
On 18 June 2021, 2,500,000 ordinary shares were issued for cash at 40p per share to Collingwood Capital of which Paul Smith
a director of the Company is the beneficial owner.
On 20 December 2021, 70,881,943 ordinary shares were issued for cash at 36p per share.
Royalty acquisitions
On 24 March 2021, 4,213,720 ordinary shares were issued at 34p per share as part of the consideration for the acquisition
of the Thacker Pass royalty (see note 12).
On 31 March 2021, 848,059 ordinary shares were issued at 35.98p in order to complete the acquisition of the Western Australian gold
royalties from Talga Resources Limited.
On 8 April 2021, 6,878,027 ordinary shares were issued at 32.03p in order to complete the acquisition of the Pukaqaqa copper royalty
from Bellatrix Limited, a wholly owned subsidiary of Orion Resource Partners.
Directors’ shares
On 20 April 2021, 108,108 ordinary shares were issued at 37p per share to the non-executive directors of the Company in lieu of directors fees.
Shares issued subsequent to the year-end
On 11 January 2022, 13,118,057 ordinary shares were issued for cash at 36p per share.
On 11 January 2022, 20,471,151 ordinary shares were issued at 36p as part of the part of the consideration for the gold offtake portfolio
as detailed in note 25.
On 17 January 2022, 126,070 ordinary shares were issued at 37.02p per share to the non-executive directors of the Company in lieu of
directors fees. In addition, 280,157 ordinary shares were issued at 37.02p per share to the management team in lieu of annual bonuses
On 23 March 2022, 5,542,752 ordinary shares were issued at 51.43p as consideration for the acquisition of the Sugar Zone gold offtake
stream as detailed in note 26
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Notes to the financial statements continued
21. SHARE BASED PAYMENTS
Share options
During 2021 and the previous year share options were granted to Directors and Senior Management of the Company. Under IFRS 2
“Share-based Payments”, the Company considers these to be equity settled share-based payments and determines the fair value of the
options issued to Directors and employees as remuneration and recognises the amount as an expense in the statement of income with
a corresponding increase in equity.
At 31 December 2021, the Company had outstanding options to subscribe for Ordinary shares as follows:
Option exercise price
£0.2000
£0.2400
£0.2800
£0.2965
£0.3558
£0.4551
£0.3700
£0.4000
Expiry date
02/06/2030
02/06/2030
02/06/2030
20/12/2030
20/12/2030
20/12/2030
20/04/2028
17/06/2022
Vesting date
02/06/2021
02/06/2022
02/06/2023
20/12/2022
20/12/2023
20/12/2024
20/12/2024
18/06/2021
Fair value
of individual
option
£0.0630
£0.0608
£0.0605
£0.1260
£0.1180
£0.1060
£0.1068
£0.0720
At
1 January
2021
1,041,666
1,041,667
1,041,667
533,334
533,333
533,333
-
-
4,725,000
At
31 December
2021
1,041,666
1,041,667
1,041,667
533,334
533,333
533,333
610,000
2,500,000
7,835,000
Issued
-
-
-
-
-
-
610,000
2,500,000
3,110,000
The following information is relevant in the determination of the fair value of options granted during 2021:
Grant date
Option exercise price
Fair value of one option, £
Option pricing model used
Weighted average share price at grant date, £
Weighted average contractual life, years
Expected volatility,%
Expected dividend growth rate,%
Risk-free interest rate (5 year bond),%
The following information is relevant in the determination of the fair value of options granted 2 June 2020:
£0.37
0.1068
20 April 2021 18 June 2021
£0.40
0.072
Black Scholes Black Scholes
0.40
1
45%
0%
0.29%
0.36
8
45%
0%
0.29%
Option exercise price
Fair value of one option, £
Option pricing model used
Weighted average share price at grant date, £
Weighted average contractual life, years
Expected volatility,%
Expected dividend growth rate,%
Risk-free interest rate (5 year bond),%
£0.24
0.0608
£0.20
0.0630
£0.28
0.0605
Black-Scholes Black-Scholes Black Scholes
0.22
10
45%
0%
0.29%
0.22
10
45%
0%
0.29%
0.22
10
45%
0%
0.29%
The following information is relevant in the determination of the fair value of options granted 18 December 2020:
Option exercise price
Fair value of one option, £
Option pricing model used
Weighted average share price at grant date, £
Weighted average contractual life, years
Expected volatility,%
Expected dividend growth rate,%
Risk-free interest rate (5 year bond),%
£0.2965
0.126
£0.3558
0.118
£0.4551
0.106
Black-Scholes Black-Scholes Black Scholes
0.37
10
45%
0%
0.29%
0.37
10
45%
0%
0.29%
0.37
10
45%
0%
0.29%
Share-based remuneration expense related to the share options granted during the reporting period is included in the administration
expenses line in the consolidated income statement in the amount of US$0.34m (31/12/2020: US$0.06m). Volatility was determined
by reference to historic share price data and comparison to peer groups where historic data is limited to a short time period.
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FINANCIAL STATEMENTS
Notes to the financial statements continued
21. SHARE BASED PAYMENTS CONTINUED
Share warrants
On 3 August 2021, 3,500,000 share warrants to subscribe for shares in the Company were issued to Tribeca. See note 19 for further
information.
The following information is relevant in the determination of the fair value of the Warrants on initial recognition:
Warrant exercise price
Fair value of one option, £
Option pricing model used
Weighted average share price at grant date, £
Weighted average contractual life, years
Expected volatility,%
Expected dividend growth rate,%
Risk-free interest rate (5 year bond),%
The fair value on initial recognition of the Warrants was US$181,000.
22. FINANCIAL RISK MANAGEMENT
£0.5166
0.052
Black Scholes
0.3974
2
35%
0%
0.29%
The Group’s activities expose it to a variety of financial risks which result from its operating and investing activities; market risk (foreign
currency exchange risk and commodity price risk), liquidity risk, capital risk and credit risk. These risks are mitigated wherever possible by the
Group’s financial management policies and practices described below. The Group’s financial risk management is carried out by the finance
team led by the Chief Financial Officer and under policies approved by the Board. Group finance identifies, evaluates and mitigates financial
risks in close co-operation with the Group’s senior management team.
Capital risk
The Group’s objectives when managing capital are:
• to safeguard the Group’s ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;
• to support the Group’s growth; and
• to provide capital for the purpose of strengthening the Group’s risk management capability
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns,
taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected
operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity
as capital and reserves, for capital management purposes. The Group is not subject to externally imposed capital requirements.
Commodity price risk
The royalty portfolio exposes the Group to commodity price risk through fluctuations in commodity prices of its royalty investments
particularly the prices of iron ore, gold and copper. The Board consider that the strategy of the Group to build a diversified portfolio of
royalty assets that mirrors the global natural resources sector is sufficient mitigation with regard to the exposure to commodity price risk.
Prior to committing to royalty acquisitions the Board obtain independent price forecasts to ensure that such investments are priced in
accordance with consensus pricing. The Group does not hedge against commodity price movements
Credit risk
Credit risk refers to the risk that the Group’s financial assets will be impaired by the default of a third party (being non-payment within
the agreed credit terms). The Group is exposed to credit risk primarily on its cash and cash equivalent balances as set out in note 17 and
on its trade and other receivable balances as set out in note 16. The Group’s credit risk is primarily attributable to its other receivables,
being royalty receivables. It is the policy of the Group to present the amounts in the balance sheet net of allowances for doubtful
receivables, estimated by the Group’s management based on prior experience and the current economic environment. In certain cases,
the Group has the right to audit the reported royalty income.
For banks and financial institutions, only parties with a minimum credit rating of BBB are accepted. The majority of cash is held with HSBC
Bank plc in the UK and household names in the US and Australia.
The Directors have considered the credit exposures and do not consider that they pose a material risk at the present time. The credit risk for
cash and cash equivalents is managed by ensuring that all surplus funds are deposited only with financial institutions with high quality credit
ratings. There are currently no expected credit losses.
Liquidity risk
Liquidity risk relates to the ability of the Group to meet future obligations and financial liabilities as and when they fall due. The Group
currently has sufficient cash resources to pay the trade and other payables and contingent consideration when they fall due.
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Notes to the financial statements continued
22. FINANCIAL RISK MANAGEMENT CONTINUED
Future expected payments
Group
Trade and other payables within one year
Current tax liabilities within one year
Contingent consideration due > one year
2021
US$’000
1,039
-
436
2020
US$’000
335
121
464
As at 31 December 2021 the Group had borrowings of US$10.0m plus accrued interest. Subsequent to the year end, the Group refinanced
the facility for a 3 year US$40m term facility with Macquarie Bank. The Group has sufficient resources to service the borrowings and meet
related financial covenants.
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the United States Dollar,
British Pound (GBP) and the Australian Dollar.
The following table highlights the major currencies the Group operates in and the movements against the US Dollar during the course
of the year:
British Pound
Australian Dollar
Average rate
2020
1.28
0.69
2021
1.37
0.75
Reporting spot rate
Movement
0.09
0.06
2021
1.35
0.73
2020
1.37
0.77
Movement
(0.02)
(0.04)
The Group’s exposure to foreign currency risk based on US Dollar equivalent carrying amounts of monetary items at the reported date:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Contingent consideration
Net exposure
2021
US$’000
US$
44,496
375
(238)
-
44,633
GBP
852
-
(438)
-
414
Other
289
7
(314)
(436)
(454)
2020
US$’000
GBP
581
-
(142)
-
439
US$
6,167
53
(21)
-
6,199
Other
223
260
(8)
(464)
11
The royalty financial asset is denominated in US dollar. The Group does not hedge against foreign exchange movements.
Exchange rate sensitivity
The Group is mainly exposed to foreign exchange risk on the cash balances and trade and other payables denominated in currencies other
than US$ as detailed above. A +/- 10% change in the USD:GBP and USD:AUD rate and the impact of a +/- 10% change on the exchange
rates on the translation of foreign subsidiaries into the Group’s presentation currency would result in the following changes:
British Pound
Australian Dollar
23. FINANCIAL INSTRUMENTS
2021
US$’000
2020
US$’000
Profit/(loss)
(99)
265
Equity
-
183
Profit/(loss)
(84)
105
Equity
-
79
The Group and Company held the following investments in financial instruments:
Fair value through profit and loss
Royalty financial assets
Cash and cash equivalents
Financial assets at amortised cost
Trade and other receivables
Financial liabilities at amortised cost
Trade and other payables
Contingent consideration
Financial liabilities at fair value through profit and loss
Warrant liability
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Trident Royalties plc Annual Report & Financial Statements 2021
Group
2021
US$’000
7,461
45,637
381
990
436
172
Company
2021
US$’000
7,461
34,480
47,984
439
-
172
Group
2020
US$’000
7,453
6,971
313
171
464
-
Company
2020
US$’000
7,453
6,547
10,042
162
-
-
FINANCIAL STATEMENTS
Notes to the financial statements continued
23. FINANCIAL INSTRUMENTS CONTINUED
Trade and other receivables and trade and other payables excludes all amounts considered to be statutory arrangements (such as VAT
recoverable and corporation tax) and prepayments.
Fair value hierarchy
The Group and Company only has one asset that is measured at fair value - the Mimbula investment that is recognised as a royalty financial asset
at fair value through profit and loss totalling US$7.46m (2020: US$7.45m). The asset is deemed to be a level 3 asset under the fair value hierarchy
criteria – some of the inputs for the fair value determination are not based on observable market data (mainly private resource data).
24. RELATED PARTY TRANSACTIONS
Paul Smith the non-executive Chairman provided US$0.5m of the US$10.0m loan facility syndicated by Tribeca Investment Partners,
at the year-end US$35k of interest was paid and payable to Mr Smith.
Al Gourley, non-executive director, and Adam Davidson, CEO, together with LIM Asia Special Situations Master Fund Limited (who was
at the time a substantial shareholder), participated in a placing on 25 March 2021 subscribing for 800,000 ordinary shares, 14,706 ordinary
shares and 10,112,928 ordinary shares respectively at a price of 34 pence per ordinary share.
Paul Smith, Al Gourley, Adam Davidson and Helen Pein, agreed to subscribe for new ordinary shares in December 2021 in the conditional
placing on 20 December 2021, which was completed on 11 January 2022, for 839,842 ordinary shares,1,035,000 ordinary shares, 52,490
ordinary shares and 69,444 ordinary shares respectively at a price of 36 pence per ordinary share.
During the year the Group paid legal fees totalling US$0.18m (2020: nil) to Fasken Martineau DuMoulin LLP (“Fasken”) and its worldwide
affiliates. Fasken is a legal firm in which Al Gourley is a senior partner.
There are no other related party transactions, or transactions with Directors that require disclosure except for the remuneration items
disclosed in note 6. The disclosures in note 6 include the compensation of key management personnel as all employees are considered to
be key. The Company’s related parties consist of its subsidiaries and the transactions and amounts due from them are disclosed in note 14.
25. CAPITAL COMMITMENTS
On 13 December 2021, the Group announced the proposed acquisition of a portfolio of producing gold offtake contracts from funds
managed by Orion Resource Partners for total consideration of US$69.75m of which US$60.00m was payable in cash and US$9.75m
in new ordinary shares. Completion of the transaction was conditional, amongst other things, upon drawdown of a new debt facility with
Macquarie Bank for US$40m and issuance of 20,471,151 new consideration shares following a General Meeting on 10 January 2022.
The debt facility was signed on 17 December 2021, but conditions precedent to drawdown were not completed until 10 January 2022
when the funds were drawn and the existing Tribeca debt facility was repaid in full. The acquisition completed on 11 January 2022 when
the cash consideration was paid and the consideration shares issued. This has been treated as a non-adjusting event for reporting purposes.
26. EVENTS OCCURING AFTER THE REPORTING DATE
On 27 January 2022, the Group announced it had entered into an agreement to acquire, subject to certain conditions, an indirect 1.5%
Gross Royalty over the Sonora Lithium Project in Mexico. Sonoroy Holdings Limited, a joint venture company in which Trident holds a 50%
interest, has the right to acquire the royalty for total consideration of US$52m in cash (US$26m attributable to Trident). A deposit of US$2.5m
was paid by Trident, with the balance to be paid upon completion of the transaction, expected to occur in early-2023 following a favourable
resolution of a dispute between the seller and the mine operator. If the dispute is found against the seller, Trident’s deposit is fully repayable.
On 23 March 2022, the Group completed the acquisition of a gold offtake contract over the Sugar Zone mine operated by Silver Lake Resources
Limited from a fund managed by Orion Resource Partners. Total consideration paid was US$3.75m, payable in 5,542,752 new ordinary shares.
On 14 April 2022, the Group reached an agreement with Equinox Gold Corp (“Equinox”) following the sale of the Mercedes gold mine
in Mexico by Equinox to Bear Creek Mining Corporation. Under the terms of the gold offtake contract (which was part of the portfolio
acquisition described in note 25) the sale of the mine triggered a payment from Equinox to Trident of US$3.7m and the mine was
removed from the offtake contract. The payment was received on 22 April 2022.
Details of shares issued subsequent to the year-end are provided in note 20. Additional information is included in note 25 regarding
the gold offtake acquisition. All of the above events have been treated as non-adjusting for reporting purposes.
27. ULTIMATE CONTROLLING PARTY
The company does not have a single controlling party.
Trident Royalties plc Annual Report & Financial Statements 2021
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Notes
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Trident Royalties plc Annual Report & Financial Statements 2021
Company Information
Directors
Paul Smith Non-Executive Chairman
Adam Davidson Chief Executive Officer
and Executive Director
Peter Bacchus Non-Executive Director
Al Gourley Non-Executive Director
Helen Pein Non-Executive Director
Company Secretary
Ben Harber, Shakespeare Martineau
Registered address
60 Gracechurch Street
London, EC3V 0HR
Independent auditors
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London, E14 4HD
Appointed brokers
Stifel Nicolaus Europe Limited
150 Cheapside
London, EC2V 6ET
Tamesis Partners LLP
125 Old Broad Street
London, EC2N 1AR
Registrars
Neville Registrars
Neville House
Steelpark Road
Halesowen, B62 8HD
Nominated Adviser
Grant Thornton UK LLP
30 Finsbury Square
London, EC2A 1AG
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Trident Royalties plc
Annual Report & Accounts 2021