A GROWTH-FOCUSED
DIVERSIFIED MINING
ROYALTY AND STREAMING
COMPANY
Trident Royalties plc
Annual Report & Accounts 2022
Page Title
TRIDENT IS FAST
BECOMING A LEADING
MINING ROYALTY COMPANY
WITH A PORTFOLIO OF HIGH
QUALITY INVESTMENTS
ACROSS THE GLOBAL
MINING SECTOR
Financial Statements
56 Independent Auditor’s report
62 Consolidated statement of
comprehensive income
63 Consolidated statement of
financial position
64 Consolidated statement of
changes in equity
65 Consolidated statement of cash flows
66 Company statement of financial position
67 Company statement of changes in equity
68 Company statement of cash flows
69 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
33 Environmental, social and
governance report
37 Section 172 statement
38 Risk management
40 Financial review
Corporate Governance
44 Board of Directors
46 Directors’ report
48 Corporate governance statement
52 Remuneration report
53 Directors’ responsibility statement
For more information please visit
https://www.tridentroyalties.com
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Trident Royalties plc Annual Report & Financial Statements 2022
Our Performance
VALUE ACCRETIVE ACQUISITIONS AND
TRANSACTIONS UNDERTAKEN TO BUILD A
DIVERSIFIED AND HIGHLY CASH GENERATIVE
PORTFOLIO OF ROYALTIES AND OFFTAKES
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Total value of transactions since June 2020
Monetised several pre-production assets
for return on invested capital
+140%
US$148m
Current cash position to pursue new opportunities1 159%
US$29m
+37%
Shareholder returns of since the inception
of strategy2
Sector leading share price
performance during 2022
25%
7%
3%
Trident portfolio by commodity
by acquisition price
(At 19 May 2023)
7%
59%
Battery Metals - Lithium
Base Metals - Copper
Precious Metals - Gold
Precious Metals - Silver
Bulks and Industrial - Iron Ore
TARGETING A MID-TEENS POST-TAX RETURN
ON THE PORTFOLIO, WHILE REDUCING
TRIDENT’S COST OF CAPITAL.
1 Pro forma cash balance including the upfront transaction proceeds from the Australian gold
royalties sale and the net gold trading receivable, less the La Preciosa initial acquisition cost.
2 Share price performance since listing at 20p in June 2020 to 1 June 2023.
Trident Royalties plc Annual Report & Financial Statements 2022
01
Our Portfolio
A DIVERSIFIED PORTFOLIO
OF COMMODITIES, GEOGRAPHICAL
LOCATIONS
Production
Current assets Operator Location Stage Commodity Terms2
Los Filos Equinox Gold Mexico Production Gold Offtake
Eagle Victoria Gold Canada Production Gold Offtake
Blyvoor Blyvoor Gold South Africa Production Gold Offtake
Bonikro Allied Gold Cote d’Ivoire Production Gold Offtake
Fazenda Equinox Gold Brazil Production Gold Offtake
RDM Equinox Gold Brazil Production Gold Offtake
Santa Luz Equinox Gold Brazil Production Gold Offtake
Sugar Zone Silverlake Resources Canada Production Gold Offtake
i-80 Gold i-80 Gold USA Production Gold Offtake
Koolyanobbing Mineral Resources Australia Production Iron Ore 1.5% FOB
Mimbula Moxico Resources Zambia Production Copper 1.25% GRR
Kwale Base Resources Kenya Production Mineral Sands 0.25% FOB
Development
Current assets Operator Location Stage Commodity Terms2
Sonora1 Ganfeng Lithium Mexico Construction Lithium 1.5% GRR
Greenstone Equinox Gold Canada Construction Gold Offtake
La Preciosa Avino Silver & Gold Mexico Construction Silver 1.25% NSR
Lincoln Seduli Holdings USA Advanced Gold 1.5% NSR
Thacker Pass Lithium Americas USA Advanced Lithium 1.05% GRR
Exploration
Current assets Operator Location Stage Commodity Terms2
Pukaqaqa Nexa Resources Peru Exploration Copper 1% sliding scale NSR
Additional Assets
Held During Period Operator Location Stage Commodity Status
Spring Hill Novo Resources Australia Advanced Gold Sold to Franco-Nevada
Lake Rebecca Ramelius Resources Australia Advanced Gold Sold to Franco-Nevada
Warrawoona Calidus Resources Australia Advanced Gold Sold to Franco-Nevada
Talga Talga Novo Resources Australia Exploration Gold Sold to Franco-Nevada
Bullfinch Torque Metals Australia Exploration Gold Sold to Franco-Nevada
1 Effective 1.5% GRR attributable to Trident, pending completion.
2 GRR = Gross Revenue Royalty, FOB = Free on Board, NSR = Net Smelter Return.
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Our Portfolio continued
18 diversified royalties, geographical
locations and stages of development
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Canada
USA
Mexico
Peru
Brazil
Côte d’Ivoire
Kenya
Zambia
South Africa
Australia
13 Cash flowing assets1
67%
Production
Trident portfolio by stage
Countries
6 Commodoties 10
28%
5%
Development
Exploration
1 Includes Lincoln, which is currently making minimum payments whist development is ongoing
Trident Royalties plc Annual Report & Financial Statements 2022
03
Our Strategy
DELIVERING VALUE FOR
OUR SHAREHOLDERS
Trident has built a diversified portfolio of highly cash generative and/or high-quality royalties and offtakes. Royalty receipts
for 2022 totalled US$13.6 million (including revenue from Mimbula and the Mercedes gold offtake amendment), a nearly
ninefold increase over 2021. This is a trend that we believe will continue and strengthen over the coming years as
additional assets move into production, and as we deploy further capital into value accretive opportunities.
The Company’s current portfolio provides investors with exposure to base, precious, and battery metals, as well as bulk
materials and includes lithium, gold, copper, molybdenum, mineral sands and iron ore assets.
Trident has adopted a strategy to provide investors with a broad asset base, reducing geographic and individual asset
risk whilst providing shareholders with positive exposure to the energy transition and the strong macro environment for
commodities. Its investment mandate explicitly excludes fossil fuels and focuses on mine operators which demonstrate
industry-leading Environmental, Social and Governance stewardship.
Constructing a royalty portfolio to
broadly mirror the commodity
exposure of the global mining
sector with a bias toward
producing assets.
Maintaining a low-overhead
model which can support the
increasing scale of the business
without a commensurate
increase in operating costs.
Acquiring royalties
in resource-friendly
jurisdictions worldwide.
Active deal-sourcing that
focuses on royalties held
by natural sellers such as:
closed-end funds, prospect
generators, junior and mid-tier
miners.
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.
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Our Business Model
WHAT WE DO
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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 has built, and is now expanding, a royalty and offtake portfolio with a bias towards production or near-production
assets. This differentiates Trident from the majority of peers which are exclusively, or heavily weighted, to precious metals.
Trident also has a global mandate, targeting attractive assets in resource-friendly jurisdictions worldwide, while most
competitors have portfolios focused on North and South America. A further competitive difference between the Company
and its peers is that Trident targets attractive small-to-mid size transactions, which are often ignored in a sector dominated
by large players.
Trident has adopted a strategy of active deal-sourcing which, in addition to writing new royalties and streams, will focus on
the acquisition of assets held by natural sellers such as: closed-end funds, prospect generators, junior and mid-tier miners
holding royalties as non-core assets, and counterparties seeking to monetise packages of royalties and streams which are
otherwise undervalued by the market.
The Board of 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.
As Trident continues to build scale within its portfolio the company expects strong cash generation to support a 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.
Trident Royalties plc Annual Report & Financial Statements 2022
05
Page Title
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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Page Title
STRATEGIC REPORT
08 Chairman’s statement
10 Chief Executive Officer’s statement
12 Operational review
33 Environmental, social and governance report
37 Section 172 statement
38 Risk Management
40 Financial review
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Chairman’s statement
2022
has seen Trident’s business
grow significantly in terms of revenue, as well as portfolio
scale and diversification
Trident seeks to invest in royalties or streams where the asset owner
runs safe, efficient, cost-effective mines and projects and demonstrates
a commitment to the responsible management of their ESG impacts.
Looking forward, our priorities for 2023 are to further reduce our cost
of capital (as this directly improves our competitiveness) and deploy
capital for value. We are well resourced based on our existing cash on
hand and debt facility. We continue to see base and battery metals as
most prospective in terms of demand for royalty finance.
2023 is looking more prospective in terms of potential new
transactions. The widespread postponement of capital raising by
mining companies during 2022 has created a backlog of project
funding. The combination of higher interest rates and continued
depressed equity prices for mining companies are making royalties
an increasingly attractive funding alternative.
With our strong management team and balance sheet, we are well
positioned to deploy capital and continue to create shareholder value.
Paul Smith
Non-Executive Chairman
2 June 2023
Trident shares saw an increase of 37% during 2022. This increase
compared to declines of 32% and 44% for the AIM and the All-Share
Mining Index respectively. The outperformance reflected 3 factors;
the inherent resilience of the royalty model, the evolution of Trident’s
portfolio; and further improvements in analyst coverage and our
shareholder register.
2022 was light in terms of transactions, which partly reflected
the economic backdrop and pressure on commodity prices.
Many operators chose to postpone capital raising, in anticipation of
improved conditions. We commenced the year with the completion
of the gold offtake portfolio acquisition. This transaction materially
increased the cash generation from within our portfolio, which in turn
enables us to internally fund a larger proportion of future growth.
The sale of our Lake Rebecca royalty to Franco Nevada highlighted
several key themes which underpin the reasons for owning Trident
Royalties’ shares. Firstly, Trident‘s ability to access world class assets.
Secondly, our willingness to lock-in value and recycle capital when
we feel this to be in shareholders’ best interests. The transaction
was at a value which was not reflected in our share price prior to sale.
Thirdly, the cash proceeds from the disposal allowed us to
renegotiate our debt facility and deliver a significant reduction
in our cost of debt.
2022, also saw major improvements in the quality of our register and
trading liquidity, which was principally due to management’s active
engagement with investors.
The Board recognises the importance of cash returns to shareholders.
We ourselves are significant shareholders. Many of our major assets
are not yet in production and our priority remains to invest in new
royalties whilst further reducing our cost of capital. As we add more
cash generating assets and our existing portfolio matures, we expect
to pay a dividend based on a sustainable percentage of free cash flow.
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Trident Royalties plc Annual Report & Financial Statements 2022
Chairman’s statement continued
TRIDENT SHARES
SAW AN INDUSTRY
LEADING INCREASE OF
DURING 2022
37%
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Chief Executive Officer’s statement
THE BUSINESS HAS
ACHIEVED A NUMBER OF
IMPORTANT MILESTONES
DURING THE LAST YEAR
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Chief Executive Officer’s statement
2022
has shown the resilience
of the royalty model as a compelling investment approach
and delivered results for Trident
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The investment strategy that we implemented at the inception
of Trident is yielding results and providing a solid foundation
for considerable growth over the medium and long term.
Importantly, the royalty model has proven to be a resilient investment
approach, as highlighted in performance through 2022, a year in
which a confluence of inflationary pressures had a significant impact
on mine operators’ capital and operating costs. As shareholders will
be aware, as royalty holders, Trident is largely insulated from these
capex overruns and operating margin squeezes, with our portfolio
benefitting from exposure to top line revenue.
This strategy delivered for us in 2022 and is expected to continue
as we expand and diversify our portfolio, offering shareholders
superior returns through commodity cycles. Royalty receipts and
offtake revenue for the year increased nearly ninefold to US$13.6
million, reflecting the significant asset-level progress of several of
our royalties, in addition to the expansion of our portfolio with new,
cash generative and value accretive transactions.
The completion of the acquisition of a portfolio of gold offtakes
presented a strong start to 2022. It was our largest transaction to
date and increased the number of producing assets in our portfolio
significantly. This was a defining moment for Trident, which resulted
in an immediate and significant boost to our revenue for the year.
This transactional momentum continued in late-January, as Trident
entered into an agreement to acquire, subject to certain conditions
and at its election, an indirect 1.5% gross revenue royalty over the
Sonora Lithium Project in Mexico. Like the Thacker Pass Lithium
Project, over which Trident acquired a gross revenue royalty in 2021,
Sonora is a globally significant lithium asset. In the year, Ganfeng
announced an expanded planned production profile, with Stage 2
production increasing by 43% to 50,000 tonnes per annum of lithium
hydroxide, while noting that early construction works are underway.
Trident’s transactional creativity was further evidenced in December
with the agreement to sell its pre-production, exploration stage gold
royalties over Rebecca, Spring Hill and three other projects to Franco-
Nevada in exchange for cash proceeds of up to US$15.55 million.
This portfolio of royalties was acquired by Trident for approximately
US$6.5 million, representing a return on invested capital of over
140% in approximately two years. Not only was this transaction a clear
demonstration of the potential returns from acquiring royalties over
quality assets, but it also provided Trident with a significant increase
in available capital for future acquisitions at a time of current weakness
in traditional debt and equity markets. This disciplined investment
approach will continue to define Trident’s strategy as it targets
accretive opportunities.
The sale of the pre-production gold royalties also precipitated the
restructuring of the Group’s existing debt facility with Macquarie Bank
Limited on more favourable terms, reducing the coupon by up to 2%,
deferring principal repayments, and extending the term by one year.
This restructuring illustrates the longer-term downward direction of
the Group’s cost of capital, with the cost of debt nearly halving from
the previous year.
Since the period end, Lithium Americas, the operator of the Thacker
Pass Lithium Project, announced its intention to jointly develop the
project alongside General Motors, as part of a landmark investment
and offtake partnership valued at US$650 million. This is the largest-
ever investment by an automaker to produce battery raw materials
and is clear evidence of the automotive industry’s desire to mitigate
concerns relating to critical minerals supply chains over the long-term.
Lithium Americas subsequently announced the positive confirmation of
the Record of Decision appeals process which, with all final key Nevada
state-level environmental permits received, has allowed the project to
move forward in earnest; reporting in early March that construction has
commenced ahead of targeted first production in H2 2026.
The recent acquisition of the La Preciosa royalty, provides exposure
to an exciting asset, with expected near term cash flows, along with
diversifying the portfolio further with the addition of silver.
The numerous asset-level and transactional developments that we
have reported during the year have had a marked impact on our
value proposition and revenue generation potential. In addition,
the board has also assessed additional corporate activities through
which to grow the Group. One such undertaking was the decision
to cross-trade Trident’s shares on the OTCQX post period end. We
believe this listing will provide enhanced investor benefits, including
easier trading access for investors located in the US, and greater
liquidity due to a broader geographic pool of potential investors.
In 2022, we have also been working to evaluate and develop our
approach to ESG in order to lay strong foundations for future
reporting, increase transparency and performance.
I would like to take this opportunity to thank our shareholders and
reiterate my genuine enthusiasm and confidence in both our
portfolio and wider investment strategy. 2022 proved to be highly
significant for Trident, and I believe this will continue to build
throughout 2023 and over the coming years.
Adam Davidson
Chief Executive Officer
2 June 2023
Trident Royalties plc Annual Report & Financial Statements 2022
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Operational Review
ELECTRIFICATION &
BATTERY METALS
BATTERIES ARE A
FOUNDATIONAL TECHNOLOGY
IN THE TRANSITION AWAY
FROM FOSSIL FUELS
PERCENTAGE OF LITHIUM IN
TRIDENT PORTFOLIO
25%
In order for car manufacturers to electrify their fleets, renewable energy developers to meet their
aggressive goals, and governments worldwide to achieve net zero targets, demand for batteries
is expected to grow significantly. Lithium is predominantly used in the manufacture of lithium-ion
batteries and batteries for electric vehicles (EVs), mobile phones, laptops and other electronic devices.
Lithium is used in almost every EV battery design currently, and EV sales are increasing rapidly,
driving the demand for lithium-ion batteries. Commentators have suggested that 2022 marked
a potential inflection point for the industry with EVs surpassing 5% of all auto sales in the US,
and global EV sales on target to more than triple by 20251.
By 2030, spurred by the Inflation Reduction Act and 2035 bans on sales of petroleum powered
cars in California, New York, and the EU, EVs could make up more than 40% of all passenger-vehicle
sales globally with more than half of those sales in the US, according to BNEF.
Trident is exposed to lithium though its acquisition of 60% of a royalty over the Thacker Pass Lithium
Project in Nevada, which is the largest known lithium resource in the United States.
Trident has also secured the right to acquire an indirect 1.5% Gross Revenue Royalty over the Sonora
Lithium Project, operated by Ganfeng Lithium. Construction has commenced at Sonora with planned
production targeting 50,000 tonnes per annum of lithium hydroxide.
1 Source: BloombergNEF: https://about.bnef.com/blog/the-road-to-electric-car-supremacy-in-five-charts/
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Operational Review continued
COPPER
COPPER IS A KEY
COMPONENT
FOR GLOBAL
ELECTRIFICATION
PERCENTAGE OF COPPER IN
TRIDENT PORTFOLIO
7%
Copper is a key component for global electrification which is expected to increase annual
copper demand to 36.6 million metric tonnes by 2031.
Copper’s excellent electrical and thermal conductivity make it a critical constituent to batteries
and all the wiring required for the charging infrastructure for electric vehicles. EVs require up to
four times more copper than traditional petrol or diesel vehicles, and renewable energy systems
use up to six times more copper than fossil fuel systems.
Trident is exposed to copper through its royalty over the Pukaqaqa pre-development asset
in Peru and the producing Mimbula Mine in Zambia.
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MINERAL SANDS
MINERAL SANDS CAN
BE USED FOR A VARIETY
OF INDUSTRIAL
PURPOSES
PERCENTAGE OF MINERAL SANDS
IN TRIDENT PORTFOLIO
<1%
Mineral sands, also called “heavy mineral sands”, contain concentrations of titanium minerals
(including rutile and ilmenite) and zircon.
Mineral sands can be used for a variety of industrial purposes and are found in a range of everyday
consumer goods such as pigment for paint, paper and plastics as well as toothpaste, sun cream and
homewares such as ceramics.
Because of their widespread use in industrial and consumer goods, demand for mineral sands
is strongly linked to global GDP growth. New housing construction, health of emerging economies
and the seasonal northern hemisphere painting season (dry and warm months) are all key drivers
of demand for mineral sands.
Trident has exposure to minerals sands through its acquisition of a 0.25% Free on Board royalty
over the Kwale mineral sands project in Kenya.
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IRON ORE
IRON ORE IS AN
ESSENTIAL COMPONENT
OF THE GLOBAL IRON AND
STEEL INDUSTRIES
PERCENTAGE OF IRON ORE IN
TRIDENT PORTFOLIO
3%
Iron ore is an essential component of the global iron and steel industries. Almost 98% of mined
iron ore is used in steel making.
Whilst approximately 50 countries mine iron ore, Australia and Brazil dominate the export market.
Trident is exposed to iron ore through its 1.5% Free on Board royalty over certain tenements
at the Koolyanobbing Iron Ore mine in Australia.
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GOLD OFFTAKES,
WORLDWIDE
THE PORTFOLIO COMPRISES
OFFTAKES OVER EIGHT
PRODUCING MINES IN SIX
COUNTRIES
PERCENTAGE OF GOLD IN
TRIDENT PORTFOLIO
59%
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
seven producing mines in six countries. On 23 March 2022, Trident acquired a further gold offtake
contract over the Sugar Zone mine operated by Silver Lake Resources Limited.
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.
Gold offtakes provide “royalty-like” exposure, where returns are driven by the volatility, production
profile, gold price and exploration success but is insulated from capex or operating costs.
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.
The offtake portfolio generated US$6.1m of revenue for Trident during the year and is expected
to grow significantly over the coming years.
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Asset Operator Location Status Quotation period Contract key terms
Los Filos Equinox Gold Mexico Production 6 Days Offtake on 50% of all refined gold
production, up to cap of 1,100,000
ounces of refined gold.
Eagle Victoria Gold Canada Production 7 Days Offtake on 25% of all refined gold
production, up to cap of 1,111,500
ounces of refined gold.
Blyvoor Blyvoor Gold South Africa Production 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.
RDM, Fazenda Equinox Gold Brazil Production 6 Days Offtake on 35% of all refined gold
& Santa Luz production, up to a cap of 658,333
ounces of refined gold.
Bonikro Allied Gold Cote d’Ivoire Production 6 Days Offtake on 50% of all refined gold
production (after deduction of streamed
ounces), no cap.
Greenstone Equinox Gold Canada Construction 6 Days Offtake on 100% of refined gold
production, up to cap of 58,500 ounces per
year through March 2027. If annual
production cap not achieved in 2024-25,
then Trident paid $23.50/oz on any shortfall.
Ruby Hill, i-80 Gold USA Production 7 Days Offtake on 100% of refined gold
Granite Creek production subject to an annual ounce cap.
& Cove
Sugar Zone Silver Lake Canada Production 7 Days Offtake on 50% of all refined gold
Resources production, up to a cap of 375,000
ounces of refined gold.
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SILVER
SILVER IS AN IMPORTANT
INDUSTRIAL METAL DUE TO
ITS CONDUCTIVITY AND
CORROSION RESISTANCE
PERCENTAGE OF SILVER IN
TRIDENT PORTFOLIO
7%
Silver is a tangible store of value for investment purposes and as a hedge against inflation,
along with being an increasing important industrial metal due to its conductivity and corrosion
resistance, making it a critical component of both solar panels and electric vehicles.
Trident is exposed to silver through its 1.25% NSR Royalty over the area covering the Gloria
and Abundancia veins and a 2.00% GVR Royalty over the surrounding area and US$8.75m
milestone payment at the La Preciosa project in Mexico.
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PRODUCING ROYALTIES
KOOLYANOBBING
AUSTRALIA // IRON ORE
KEY FACTS
Location: Western Australia
Operator: Mineral Resources Ltd. (ASX: MIN)
Commodity: Iron ore
Mine Type: Open pit, Direct Ship Ore
Stage: Production
Royalty: 1.5% Free on Board
Reserves & Resources: 9.3Mt @ 59.9% Fe Reserves
(Deception Pit)
19.5Mt @59.9% Fe Resources
(Deception Pit)
40.8Mt @ 58.2% Fe Reserves
(Yilgarn)
108.6Mt @ 56.8% Fe Resources
(Yilgarn)
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.
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 worldclass 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$1.55m (2021: US$0.08m)
in royalty income. The significant increase was due to the operator,
Mineral Resources, recommencing activity at the Deception Pit
and beginning mining operations at the Claw deposit.
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PRODUCING ROYALTIES
MIMBULA
ZAMBIA // COPPER
KEY FACTS
Location: Zambia
Operator: Moxico Resources Plc (private)
Commodity: Copper
Mine Type: Open Pit
Stage: Production
Royalty: Gross Revenue Royalty 1.25%
Reserves & Resources: 93.7Mt @ 0.97% Total Copper
(“TCu”) Resources
67.5Mt @ 0.92% TCu Reserves
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, which is expected to occur in Q3 2023, 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$2.0m (2021: US$1.5m) of
payments from Mimbula in line with the minimum payment schedule.
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Operational Review continued
PRODUCING ROYALTIES
KWALE
KENYA // MINERAL SANDS
KEY FACTS
Location: Kenya
Operator: Base Resources
Commodity: Mineral Sands
Mine Type: Open Pit
Stage: Production
Reserves & Resources: 40Mt @ 2.7% Heavy Mineral
(“HM”) Reserves
205Mt @ 1.7% HM Resources
Trident acquired a 0.25% Free On Board royalty over the
Kwale mineral sands project with an effective acquisition date
of 1 October 2022. Kwale commenced production in 2013,
with operator Base Resources extending the scheduled mine life
to the end of 2024. Though a non-material purchase consideration
and limited remaining mine life on the current schedule, Trident
considers there to be potential for further mine life extensions.
During the year Trident received US$0.06m of payments from
Kwale, relating to the Q4 period post-acquisition of the royalty.
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PRODUCING ROYALTIES
LINCOLN
USA // GOLD
KEY FACTS
Location: California, USA
Operator: Seduli Holdings Pty (private)
Commodity: Gold
Mine Type: Underground
Stage: Production
Royalty: 1.5% net smelter return royalty
(over down dip extension zone)
Total Resource: 958Kt @ 9.29g/t Au for 286koz gold
In 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 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.
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.
The operator, Seduli Holdings Pty, completed its first gold pour
in March 2022, however the ramp up did not occur as planned and
the operator suspended operations to focus on resource expansion.
Trident agreed to revise to provide various waivers in relation to its
security position in exchange for the implementation of a minimum
payment schedule, which will replace the revenue expected from
deferred Stage 1 production.
During the year Trident received US$0.35m of payments from
Lincoln under the minimum payment schedule, relating to the
Q3 and Q4 periods.
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Operational Review continued
ROYALTIES ADVANCING
TOWARDS PRODUCTION
THACKER PASS
USA // LITHIUM
KEY FACTS
Location: USA
Operator: Lithium Americas Corp.
Commodity: Lithium
Mine Type: Open pit
Stage: Advanced
Royalty: 60% interest in a 1.75% gross
revenue royalty (1.05% net to
Trident), assuming the buyback is
completed, as detailed below
Total Reserves: 3.1 million tonnes of Lithium
Carbonate Equivalent (“LCE”)
at 3,283ppm Li
In 2021 Trident acquired a 60% interest in a GRR over the Thacker
Pass Lithium Project for US$28.0 million, with the remaining 40%
retained by Orion Resource Partners.
The project is the largest known lithium reserve and resource in North
America and currently contains CIM compliant Mineral Reserves of
3.7Mt LCE, the largest lithium reserve in the United States, with a mine
life of 40 years based on Reserves. There is significant additional
resource upside to potentially provide further reserve conversion to
increase the mine life or support a production expansion leading to
increased royalty revenues.
Post year-end, in February 2023, General Motors Co. (NYSE: GM)
and Lithium Americas announced their intention to jointly invest to
develop Thacker Pass. Under this agreement, General Motors will
make a US$650 million equity investment in Lithium Americas.
General Motors has also entered into a 10-year offtake agreement,
to purchase the Phase 1 production from Thacker Pass. The price
within the offtake agreement will be based on an agreed upon
price formula linked to prevailing market prices.
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.
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ROYALTIES ADVANCING
TOWARDS PRODUCTION
SONORA
MEXICO // LITHIUM
KEY FACTS
Location: Mexico
Operator: Ganfeng Lithium
Commodity: Lithium
Mine Type: Open pit
Stage Advanced
Royalty: 50% interest in a 3.0% indirect gross
revenue royalty (1.5% net to Trident)
Total Reserves: 244Mt @ 3,480ppm – 4,515kt LCE
A deposit of US$2.5 million has been paid by Sonoroy Holdings Ltd
(“Sonoroy”), a joint venture company in which Trident holds a 50%
interest, with the balance to be paid upon completion of the royalty
acquisition transaction, pending several issues including a favourable
resolution of a dispute between the seller of the royalty and Bacanora.
If the dispute is found against the vendor of the royalty, Trident’s
funding is fully repayable by Sonoroy.
The project currently has Measured & Indicated Resources exceeding
5Mt LCE, and an additional 3.8Mt LCE Inferred Resource. Per the
Feasibility Study published by Bacanora Lithium in 2018, the mine
is expected to produce 17,500 tpa LCE in Stage 1 and 35,000 tpa at
Stage 2. Subsequently, the project was acquired by Ganfeng Lithium
which, in its 2022 Interim Report, noted a larger planned production
profile relative to the Feasibility Study, increasing Stage 1 to 20,000 tpa
of lithium hydroxide, with Stage 2 production increasing by 43% to
50,000 tpa of lithium hydroxide. Construction is underway. The project
is also expected to generate potassium sulphate (potash), a high value
fertiliser, as a by-product which would be covered by the royalty.
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Operational Review continued
ROYALTIES ADVANCING
TOWARDS PRODUCTION
PUKAQAQA
PERU // IRON ORE
KEY FACTS
Location: Peru
Operator: Nexa Resources SA (TSX:NEXA)
Commodity: Copper, Molybdenum
Mine Type: Open pit
Stage: Advanced
Royalty (sliding scale NSR): Three royalties
Total Resources: 349.1Mt @ 0.40% Cu
Trident holds a portfolio of three royalties over the Pukaqaqa Copper
Project, an advanced 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 six
operating base metals mines 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.
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ROYALTIES ADVANCING
TOWARDS PRODUCTION
LA PRECIOSA
MEXICO // SILVER
KEY FACTS
Location: Mexico
Operator: Avino Silver & Gold mines Ltd
(TSX:ASM)
Commodity: Silver
Mine Type: Underground
Stage: Advanced
Royalty: 1.25% NSR and 2.00% gross value
return royalty
Total Resources: 137Moz Ag Equivalent - Indicated
17.4Mt @ 202 g/t AgEq &
Inferred 4.4Mt @ 170 g/t AgEq
Trident holds a 1.25% NSR Royalty over the area covering the
Gloria and Abundancia veins and a 2.00% GVR Royalty over the
surrounding area. Additionally, Trident is entitled to a milestone
payment of US$8.75 million from Avino within 12 months of first
production. The milestone payment may be paid up to 50% in
shares of Avino.
The project is held by TSX-listed Avino Silver & Gold Mines Ltd, an
established silver producer with other assets in Peru. Avino intends to
begin processing stockpiled material from La Preciosa in late H2 2023
at its mill, before commencing production from fresh ore in 2024.
Avino intends to ramp up annual silver production from La Preciosa
to circa 3 million ounces by 2027, increasing to 3.5 million ounces
in 2028. With a current total Mineral Resource estimate of 120Moz
of silver and 224,000 ounces of gold, La Preciosa is expected
to be a long-life asset with further expansion potential.
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Operational Review continued
ROYALTIES SOLD DURING
THE YEAR
In December 2022, Trident announced the sale of a portfolio of
pre-production, exploration stage gold royalties to Franco-Nevada
Corporation for cash proceeds of up to US$15.8 million1.
The transaction crystallised a return on invested capital of 143%,
providing additional capital for redeployment into new transactions.
One early-stage royalty was removed from the portfolio prior
to closing and the transactions proceeds were adjusted to be
up to US$15.6 million. The sale of this gold portfolio was
completed in February 2023.
The royalties sold to Franco-Nevada Corporation were as follows:
LAKE REBECCA GOLD ROYALTY
Location: Western Australia
Operator: Ramelius Resources Ltd (ASX: RMS)
Commodity: Gold
Mine Type: Open pit
Stage: Pre-development
Royalty: 1.5% net smelter return royalty
Total Resource: 29.1Mt @ 1.2g/t Au for 1.1Moz
SPRING HILL GOLD ROYALTY
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 gold price is > A$1,500/oz)
Total Resource: 8.8Mt @ 1.26g/t Au for 355koz.
WARRAWOONA GOLD ROYALTY
Location: Western Australia
Operator: Calidus Resources Ltd (ASX: CAI)
Commodity: Gold
Mine Type: Open pit
Stage: Pre-development
Royalty: 1.5% net smelter return royalty
(over down dip extension zone)
Total Resource: 13.6Mt @ 1.2g/t Au for 519koz
WESTERN AUSTRALIAN GOLD ROYALTIES
Project: Talga Talga and Bullfinch
Location: Western Australia
Stage: Pre-development
Operator: Various
Royalty (NSR): Various
1 Source: Trident Royalties announcement dated 9 December 2022
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Environment, Social and Governance (“ESG”) Report
TRIDENT IS COMMITTED
TO RESPONSIBLE AND
SUSTAINABLE PRACTICES.
AS A ROYALTY AND
STREAMING BUSINESS,
WE MAKE THE DISTINCTION
BETWEEN TRIDENT’S OWN
INTERNAL PRACTICES AND
THE PERFORMANCE OF
OUR PORTFOLIO WHEN
CONSIDERING OUR ESG
APPROACH.
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ESG Report continued
As a royalty and streaming business, we make the distinction between Trident’s own internal practices and the performance
of our portfolio when considering ESG approach.
As a company, Trident is committed to responsible and sustainable practices, but as an office-based business with a small team, we are aware
that the most material environmental and social impacts occur within our portfolio and therefore are not within Trident’s direct control.
Trident seeks to invest in royalties or streams where the asset owner runs safe, efficient, cost-effective mines and projects and demonstrates
a commitment to the responsible management of their ESG impacts.
Our approach to ESG
We have been working to evaluate and develop our approach to ESG in 2022 in order to lay strong foundations for future reporting, increase
transparency and performance. This involved conducting a materiality assessment to understand and assess our most relevant impacts, which
was undertaken with the assistance of external consultants in 2022 and involved stakeholder engagement.
Commitment to the UN Sustainable Development Goals
We have also analysed the 17 United Nations Sustainable Development Goals (“SDGs”) to identify two initial priority goals to which we believe
Trident can meaningfully contribute. As our ESG practices continue to develop, we will endeavour to include additional goals to demonstrate
our commitment to sustainable development.
Promote sustained, inclusive and
sustainable economic growth, full and
productive employment and decent
work for all.
Build resilient infrastructure, promote
inclusive and sustainable
industrialisation and foster innovation.
Trident’s contribution
By investing in mining and development assets, we are able
to contribute to the positive impacts of these operations in our
portfolio, which have the capacity to drive industry and socio-
economic development, cultivate innovation and provide
employment opportunities.
Trident’s contribution
We invest in the production of base, battery and industrial
commodities which are essential components of global
infrastructure expansion, driving economic development
and sustainable industrialisation.
Our ESG roadmap
Recognising that there is more the Company can do to advance its ESG commitments and practices, we have set out a clear roadmap
to drive improvement and development. We aim to provide transparent communications with stakeholders on our approach to ESG.
Complete
Current
Next Steps
• Comprehensive ESG approach and
benchmarking exercise undertaken
• Strengthening and development
• Identify applicable global ESG
of policies
reporting frameworks for adoption
• Undertook first materiality assement
• Further explore appropriate
• Conducted analysis of UN SDGs and
identified initial commitment goals
approach to ESG due diligence
and evaluation of assets
• Contiue to embed policies and
strengthen ESG practices
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ESG Report continued
Our approach to responsible investment
Trident’s team of mining investment professionals has extensive experience and expertise in all aspects of mine development and operation.
This is fundamental in the Company’s ability to evaluate and structure potential investments. Our team applies this experience to assess ESG
risks and opportunities (alongside financial, technical and political), supplemented by external expertise as required.
Trident’s royalty and offtake portfolio has been carefully constructed with a focus on high-quality assets in favourable jurisdictions, which are
operated by well-established and reputable mining companies. We believe that this approach provides a diversified portfolio that is expected
to generate the best returns for stakeholders in a sustainable manner.
Due diligence and ongoing monitoring
Although Trident is not involved in, nor has any direct control over, the operational decisions of mining partners, the Company is aware of its
indirect exposure to ESG risks arising from their business practices and actions. Trident therefore reviews ESG risks and issues as part of its due
diligence process prior to entering into a royalty or streaming agreement and aims to monitor ESG issues on an ongoing basis once the
agreement is in place.
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Whilst all mining and development operations have potential ESG impacts, the nature of risks and issues can vary significantly depending
on the project, jurisdiction and local context. Trident’s due diligence process, whether for primary or secondary acquisitions, is based upon
an understanding of the material ESG risks and issues of each operation as well as an assessment of how ESG is being managed and
monitored by the operator.
Given that secondary royalties have been created by another party prior to Trident’s investment, the due diligence process usually involves
publicly available ESG information.
When evaluating new primary investment opportunities, Trident’s internal team employs extensive and diverse methods to identify
and assess ESG and other risks prior to entering into agreements. The Company seeks to apply best practices across the risk spectrum,
including consideration of safety records, community engagement, water management, energy consumption, closure planning, and
employment practices.
Trident can build specific requirements from the operator into its royalty agreements ranging from specific ESG related targets,
to reporting, to compliance with specific requirements.
Our typical due diligence and evaluation process
Initial “red flag” review
Detailed due diligence
• Trident assesses ESG
information as part
of its in-house review
of private and public
asset details .
• Focusing on any
areas identified
during prior stage.
• Third party experts
can be engaged
to facilitate process.
Commercial negotiations,
documentation and Board
approval
Ongoing investment
management
• Continued formal
and informal
engagement
with counterparty,
including site visits
and management
meetings.
• Engagement with
counterparty on
commercial aspects,
including
documentation
of any ESG
requirements.
• Investment approval
document provided
to the Board detailing
all elements of the
transaction.
Governance
Robust corporate governance and business ethics are fundamental to the successful operation of Trident Royalties. This has been underscored
by the materiality assessment which highlighted related topics as key priorities.
Trident is committed to maintaining the highest standards in corporate governance throughout its business activities. We aim to conduct
our business activities transparently, ethically and efficiently– see further detail on pages 48 to 51.
In terms of our investments, Trident will only provide primary finance to businesses which comply with anti-bribery and corruption
and anti-slavery legislation.
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Case Study
Environmental considerations at Thacker Pass
Thacker Pass has been engineered to minimise its
environmental footprint, by avoiding sensitive environmental
habitats and employing the best available environmental control
technologies. As a responsible steward of the environment,
Lithium Americas is focused on reducing energy consumption
and aims to sustainably manage water resources.
Having collected baseline environmental data at the project
over a seven-year period, Lithium Americas has put in place
comprehensive plans to mitigate impacts to wildlife, water and air,
with a commitment to extensive monitoring on an ongoing basis.
ESG Report continued
Social
Communities
Mining projects tend to have an important role in their local
communities. Maintaining strong community stakeholder
relationships is essential to achieving social licence to operate,
allowing for profitable, sustainable and successful mining activities.
Trident endeavours to ensure that the companies it works with have
appropriate procedures in place to facilitate effective engagement.
Aspects of projects relating to local communities are considered
as part of Trident’s investment due diligence process.
Whilst we have little direct contact with communities owing to our
business model, Trident assesses community engagement practices
as part of its investment due diligence, and we believe that mining
project have both the opportunity and a duty to positively contribute
to local communities.
Employees
Health and safety have been identified by our stakeholders as one
of Trident’s most important issues. As an office-based business, it is
the health and safety risks for our asset operators which are most
material. Trident carefully considers the health and safety procedures
in operation and performance track record prior to any potential
asset purchase.
With regards to Trident’s own social considerations, Trident has
assembled a strong team with the requisite diverse experience,
as well as the technical and financial acumen to successfully execute
the company’s strategy. Trident’s Board demonstrates strong
geographical diversity, which we believe is relevant in the context
of the global reach of our portfolio. 20% of Trident’s Non-Executive
Directors are female (being 14% of the full Board of Directors).
Environmental
Mining and development activities have the potential to create
negative environmental impacts which must be responsibly
managed to achieve long-term success and value generation.
Given the differing operating contexts of our asset operators as well
as the variety of projects, there are different environmental risks and
opportunities to consider across our portfolio.
Careful consideration is given within Trident’s investment decision
process to the environmental aspects of any potential asset purchase
during the due diligence phase. As part of this, we assess many areas,
including the environmental impacts of mining operations, emissions,
tailings storage and rehabilitation plans. As a minimum, Trident
requires compliance with environmental laws and regulations
in the locations in which our investee businesses operate.
As a result of the climate-related risks inherent in its business model,
Trident’s Board has taken the decision to avoid any investment in
thermal coal operations.
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Section 172
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This section serves as our section 172(1) statement and should be read in conjunction with the Operational Review on pages 12 to 32 of this
report and the Company’s Corporate Governance Statement on pages 48 to 51 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 an essential undertaking. 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
Four 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
held in the royalty portfolio, the Board 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.
On behalf of the Board
Paul Smith
Non-Executive Chairman
2 June 2023
Trident Royalties plc Annual Report & Financial Statements 2022
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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.
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
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.
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 undertake transactions that wouldn’t be
commercial for Trident.
Portfolio diversification
The Group paid a deposit on a royalty during the year.
The Group also acquired a portfolio of gold offtakes in
January 2022, along with an additional gold offtake in
March 2022. The Group currently has
13 cash flowing assets – however should
there be a failure of an operator, or any dispute
relating to any given royalty or offtake this may have a
disproportionate and material adverse effect on
the financial position and prospects of the Group
at this stage of development.
Medium
The Board and executive team closely monitor the
market and pays attention to general macro trends.
The Group targets the entire resources universe
(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.
Medium
The Group considers that its target investments are
Medium / High
often overlooked by other royalty companies 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 the operators
of 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.
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Risk Management continued
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Risk and description
Business impact
Mitigation
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 impact 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.
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.
Medium
The 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 assets which do not meet the
Group’s stringent investment criteria, the Group
engages equally professional third-party consultants
when appropriate.
Medium
The Board will continually review its incentive schemes
to ensure that its key personnel are rewarded and
engaged appropriately, along with considering long
term succession plans.
The Group includes subject to a number of financial risks, including capital risk, commodity price risk, credit risk, liquidity risk and foreign
exchange risk. Full details are provided in note 23.
Trident Royalties plc Annual Report & Financial Statements 2022
39
Financial Review
2022
has been a transformational
year, with a material uplift in revenue and a restructuring
of the balance sheet to fund further growth
During 2022, Trident made significant progress in a number of areas.
The newly acquired gold offtake portfolio was integrated effectively
and provided a solid cash flow base for the business. The innovative
transaction to acquire an option over a royalty on the Sonora lithium
project provides exposure to a second high quality lithium asset,
complimenting the existing portfolio. The sale of the Australian gold
royalty portfolio delivered an over 140% return in approximately
2 years, allowing capital to be recycled into new opportunities.
From a capital structuring perspective, 2022 has been a
transformational year, with the new US$40.0m debt facility with
Macquarie Bank drawn down in January to facilitate the gold offtake
portfolio acquisition. In conjunction with the Australian gold royalty
sale announced in December, the facility was subsequently extended
by a year to December 2025 and the interest coupon was reduced
by 2%. Trident ended the year with a diverse portfolio of royalty
assets, combined with a strong cash position to pursue future
growth opportunities.
Royalty and Offtake Transactions
The Group acquired the following royalties and offtake contracts
during the year:
• A portfolio of 7 producing gold offtake contracts from
Orion Resource Partners for US$69.75m;
• Gold offtake contract over 50% of the production from
the Sugar Zone mine in Canada for US$3.75m;
• The payment of a US$2.5m cash deposit (treated as an interest free
loan – in trade and other receivables) to secure the right to acquire
an indirect 1.5% Gross Revenue Royalty over the Sonora Lithium
Project in Mexico, through a joint venture company Sonoroy
Holdings Limited in which Trident has a 50% shareholding; and
• Following the acquisition of the gold offtake portfolio, the
Mercedes mine (which was included in one of the offtake contracts)
was disposed of by the operator. This triggered a fee payable
to Trident of US$3.7m and the Mercedes mine was removed
from its obligations under the contract.
In addition, on 9 December 2022 the Group entered into
a conditional agreement to sell several pre-production exploration
stage gold royalties over assets in Australia for cash proceeds of up
to US$15.8 million. A non-material royalty was removed from the
transaction consideration reducing the previously announced total
consideration from US$15.8 million to US$15.6 million and the
transaction completed on 23 February 2023.
Statement of Financial Position
Royalty intangible assets consist of US$116.58m cost, less US$4.86m
amortisation and US$6.75m relating to the Australian gold royalties
which were reclassified as assets held for sale, resulting in a total net
book value of US$104.98m representing the Thacker Pass, Pukaqaqa,
Koolyanobbing and Lincoln projects together with the acquisitions
described.
Royalty financial instruments were valued at US$7.65m 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$7.46m, US$2.00m
royalty income was received in the year and a fair value increase
of US$2.19m was recognised in the income statement.
Trade and other receivables totalling US$12.05m (2021: US$1.21m)
includes US$6.41m receivable from Macquarie bank relating to gold
offtake trades which settled after the year end, US$0.99m in respect
of 4th quarter 2022 royalty income due from Koolyanobbing and
Mimbula receivable after the year-end. Other receivables also include
US$2.50m in respect of the Sonora lithium project described above.
Trade and other payables totalling US$2.28m (2021: US$1.04m)
consisted predominantly of US$1.29m payables relating to the gold
received under the offtake contracts, which had been sold but not yet
settled with the operators, trade payables, social security and taxation
and accruals with all amounts within agreed payment terms.
At the year-end the net gold receivable amount was US$5.12m.
Deferred contingent consideration of US$0.41m 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.
The Spring Hill royalty, along with the contingent consideration
obligation was sold to Franco Nevada in February 2023.
Total cash at the end of the year was US$16.58m (US$21.70m
including the net gold trading receivables) and total debt was
US$40.00m.
Total net assets increased to US$104.87m during the year from
US$88.07m at 31 December 2021 largely due to the gold offtake
portfolio acquisition.
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Financial Review continued
Statement of Comprehensive Income and EBITDA
The Group reported a gross profit of US$2.99m (2021: US$0.06m)
from reported net revenues of US$7.85m (2021: US$0.08m).
The increase in net revenue was from the new gold offtake contracts
acquired in January 2022 and the return of production at the
Koolyanobbing royalty tenement. The fair value gain on the Mimbula
copper project was US$2.19m (2021: US$1.51m) predominantly due
to the payment of the minimum payment schedule in lieu of the mine
currently in ramp up and therefore not materially depreciating in value.
A profit on disposal of US$1.86m was made on amendment to one
of the gold offtake contracts – with gross proceeds of US$3.70m.
The Group made a foreign exchange loss totalling US$1.01m (2021:
US$0.52m loss) mainly as a result of the strengthening of the
US dollar against the Australian dollar. Finance charges totalled
US$6.24m including US$3.77m in interest payments and US$2.47m
of amortised finance arrangement fees and other finance charges.
Loss after taxation was US$3.68m (2021: US$3.54m loss) and basic
loss per share of 1.28c (2021: 2.15c).
The Group generated net revenue from its gold offtake contracts of
US$6.07m and its Koolyanobbing iron ore asset of US$1.43m (2021:
US$0.08m). The amortisation charge was US$4.86m (2021:
US$0.02m) and total Group overheads of US$4.67m (2021:
US$3.74m) including US$0.47m (2021: $0.34m) non-cash share-
based payments and other charges; resulting in an operating loss of
US$1.67m (2021: US$3.68m). The gold offtakes and Koolyanobbing
asset are amortised on a units of production basis over the life of the
assets depleted.
EBITDA and Adjusted EBITDA
The below table summarises EBITDA and adjusted EBITDA:
Year ended Year ended
31 December 31 December
2022 2021
US$’000 US$’000
Loss after tax (3,684) (3,538)
Income tax (945) (863)
Amortisation 4,857 21
Finance costs net of finance income 6,002 1,707
EBITDA 6,230 (2,673)
Net foreign exchange losses 1,007 523
Income from financial instrument through
profit and loss 2,000 1,500
Revaluation of royalty financial assets (2,193) (1,511)
Share-based payments charge and other
non-cash items 474 396
Profit on disposal of intangible asset (1,862) -
Adjusted EBITDA 5,656 (1,765)
The following table shows total royalty receipts for the period for royalty
intangible assets, net offtake interests, disposals and financial assets:
Year ended Year ended
31 December 31 December
2022 2021
US$’000 US$’000
Royalty interests 1,780 83
Offtake interests (net proceeds)* 6,070 -
Proceeds from Mercedes gold offtake
amendment – (gross) 3,706 -
Royalties due or received from royalty
financial assets 2,000 1,500
Total 13,556 1,583
* Offtake interests
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An offtake contract is a contract pursuant to which the operator
agrees to sell, and the purchaser (Trident) agrees to buy, refined gold
produced from the mine or mines over which the offtake is granted.
The key commercial terms include those relating to the amount of
gold to be purchased, the duration of the contract, and the payment
terms. Trident has the right to purchase gold at the lowest reference
price in a defined quotation period, which is typically 6-8 days.
The revenue from these contracts is disclosed net of the purchase
costs in the income statement. Net proceeds comprises gross
offtake revenue of US$446.1m less purchase costs of US$440.0m.
Cashflow and Borrowings
Net cash decreased in the period by US$29.06m (2021: US$38.46m
increase). Financing inflows were US$36.17m (2021: US$70.25m)
from an equity fund raise in January and the new loan facility with
Macquarie Bank along with the repayment of the Tribeca facility; of
which US$60.52m (2021: US$29.07m) was invested into acquiring
those assets noted above, and US$3.53m (2021: US$2.93m) was
used in operating activities. Note that the reduction in cash and use in
operating activities includes a US$5.12m increase in net gold trading
receivables, which is a function of the gold offtake trades settling
open over the year end with Macquarie Bank. Depending on the
timing and settlement of gold trades and the payments to operators
this figure fluctuates and can be a receivable or payable item. The
Group has a separate US$5.00m short term overdraft facility with
Macquarie Bank entered into on 21 March 2022, to provide funding
for the gold trading receivable over the 2-day settlement period if
required. Given the cash balance on hand throughout 2022 the
overdraft facility was not used.
The cash figure (excluding the net gold trading receivable)
at 31 December 2022 was US$16.58m (31 December 2021:
US$45.64m) with the majority held in US dollars with HSBC Bank plc
and Macquarie Bank Limited. On 10 January 2022, Trident entered
into a US$40.00m secured loan facility agreement with Macquarie
Bank, US$10m of which was used to retire the debt held with
a syndicate managed by Tribeca Investment Partners.
Taxation
During the period the Group paid nil (2021: US$0.03m) in respect
of tax due. A deferred tax asset was recognised totalling US$2.01m
(2021: US$1.04m) primarily in relation to taxable losses incurred
in the Australian subsidiary. Given the increase in activity on the
Australian royalty tenements these losses are expected to be fully
utilised and accordingly have been recognised in full; resulting
in a deferred tax credit to the income statement of US$0.68m
(2021: US$0.71m).
Trident Royalties plc Annual Report & Financial Statements 2022
41
Page Title
COPPER WILL PLAY
A MAJOR ROLE IN
THE ONGOING
ELECTRIFICATION
OF THE WORLD WITH
ITS PRINCIPAL
APPLICATION FOR
COPPER WIRING
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Page Title
CORPORATE
GOVERNANCE
44 Board of Directors
46 Directors’ report
48 Corporate governance statement
52 Remuneration report
53 Directors’ responsibility statement
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Board of Directors
Executive Directors
Non-Executive Directors
Adam Davidson
Executive Director and
Chief Executive Officer
Richard Hughes
Executive Director and
Chief Financial Officer
Paul Smith
Non-Executive Chairman
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.
Richard Hughes has over 15 years of
experience in the natural resources sector.
In 2019, he founded an independent
consultancy providing corporate finance
advisory services to both mining and royalty
finance companies. Prior to this he was a
senior member of the Metals and Mining
Investment Banking team at RBC Capital
Markets based in London from 2010 to
2018. Richard began his career at CIBC,
where he was a member of the Global
Mining Group. He has extensive mining
capital markets and advisory experience
across a breadth of jurisdictions and
commodities. Richard holds an MA (Oxon)
in Economics and Management from the
University of Oxford.
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.
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Board of Directors continued
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Peter Bacchus
Non-Executive Director
Al Gourley
Non-Executive Director
Helen Pein
Non-Executive Director
David Reading
Non-Executive Director
David previously held Chief
Executive Officer positions at
Aureus Mining (TSX & AIM:
AUE) and European Goldfields
and was formerly Chief
Geologist and SVP Exploration
& New Business for Randgold
Resources. From 2018 to 2020
David served as Special Advisor
to the board of directors and
CEO of Continental Goldfields
Inc (TSX: CNL), undertaking a full
review of all geology and
exploration data and previous
work providing strategic advice
and being extensively involved
in its sale to Zijin. Mr. Reading
has over 40 years’ experience
in the mining industry covering
all stages of mine development,
including exploration, feasibility,
financing, construction and
operations. He has an MSc
in Economic Geology and
is a Fellow of the Institute of
Materials, Minerals and Mining
and is a Fellow of the Society
of Economic Geologists.
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.
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.
Trident Royalties plc Annual Report & Financial Statements 2022
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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 2022.
Directors and Directors’ Interests
The Directors who served during the year to date are as follows:
Principal Activities
The Group’s principal activity is to invest in mining royalties and
offtakes across the natural resources sector. Its current activities are
located in the United Kingdom, Australia, US, Zambia, Peru, Canada,
South Africa, Mexico, Brazil and Kenya. 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 8 to 43 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 23. The principal risks and uncertainties faced by
the Group are set out on pages 38 and 39.
Results and Dividends
The results of the Group for the year ended 31 December 2022
are set out in the Consolidated Statement of Comprehensive Income.
The Directors do not recommend the payment of a dividend
for the year.
Adam Davidson
Paul Smith
Richard Hughes (appointed 20 September 2022)
Peter Bacchus
Al Gourley
Helen Pein
David Reading (appointed 26 June 2022)
The direct and beneficial shareholdings of the Board in the Company
as at 31 December 2022 were as follows:
Shares held at Shares held at
31 December 31 December
2022 2021
Adam Davidson 300,000 130,000
Paul Smith 4,201,867 3,317,000
Richard Hughes 475,000 -
Peter Bacchus 202,015 175,000
Al Gourley* 7,500,000 6,327,027
Helen Pein 105,468 9,009
David Reading 175,000 -
* 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 Directors during
the year are provided in the Renumeration Report and note 22.
Substantial Shareholders
As at 31 December 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% 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
Orion Resource Partners 25,742,752 8.84
LIM Asia Special Situations
Master Fund Limited 25,428,837 8.73
Ponderosa Investments
(WA) Pty Limited 16,124,196 5.54
Amati UK Smaller Companies Fund 14,663,060 5.03
Tribeca Investment Partners
Pty Limited 12,322,285 4.23
BlackRock World Mining Trust Plc 11,586,558 3.97
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Directors’ Report continued
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 21. As at 31 December 2022, 291,130,600 ordinary shares
of 1p were in issue.
Corporate Governance
The Group has set out its full Corporate Governance Statement
on pages 48 to 51. 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 pages 33 to 36.
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.
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.
Going Concern
The financial position of the Group and cash flows as at 31 December
2022 are set out on pages 63 and 65. 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 23 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.
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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 37 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
2 June 2023
Trident Royalties plc Annual Report & Financial Statements 2022
47
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
Principle
Establish a strategy and business model which promote long-term value for shareholders
Trident Response
Establish a strategy and business model which promote
long-term value for shareholders
The strategic vision of the Company is explained in the Strategic
Report on pages 8 to 43. 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.
Seek to understand and meet shareholder needs and expectations
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 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 44 and 45.
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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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 2022, the Board of the Company consisted of the Non-Executive Chairman, the
Chief Executive Officer, the Chief Financial Officer and four Non-Executive Directors. Four 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.
Trident Royalties plc Annual Report & Financial Statements 2022
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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, 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 David Reading, as Chairman, Al Gourley 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 Statement continued
Board Committees continued
Nominations Committee
The Nominations Committee comprises David Reading as Chairman, Paul Smith and Helen Pein.
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 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 2022 and each Director’s
attendance at those meetings.
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Director
Paul Smith
Adam Davidson
Peter Bacchus
Al Gourley
Helen Pein
David Reading1
Richard Hughes2
Total Meetings
1 David Reading appointed 27 June 2022
2 Richard Hughes appointed 20 September 2022
Board Nominations
Committee
1
-
-
-
1
1
-
1
Meetings
5
6
5
6
6
3
2
6
Audit Remuneration
Committee
2
-
-
2
2
2
-
2
Committee
2
-
2
2
-
-
-
2
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 2 June 2023.
Adam Davidson
Chief Executive Officer
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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 2022.
Salary/fees
US$’000
Bonus
US$’000
Other1
US$’000
Total
US$’000
Executive Directors:
Adam Davidson
Richard Hughes2
Non-Executive Directors7:
Peter Bacchus3
Al Gourley
Helen Pein
Paul Smith4
David Reading5
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
385
250
63
-
93
21
91
69
87
49
155
44
37
-
231
188
44
-
-
-
-
-
-
-
-
-
-
-
-
29
0.16
-
16
-
-
-
-
-
-
-
-
-
616
467
107
-
94
21
91
69
87
49
155
44
37
-
1 Other remuneration consists of a one-off US$29k payment to Adam Davidson for untaken annual leave.
2 Richard Hughes was appointed to the Board on 20 September 2022.
3 Peter Bacchus was appointed to the Board on 23 July 2021.
4 Paul Smith was appointed non-executive Chairman on 21 June 2021.
5 David Reading was appointed to the Board on 27 June 2022.
6 The Company made pension contributions of US$0.1k and US$0.9k on behalf of Richard Hughes and Peter Bacchus respectively.
7 Given the payment timings, the amounts paid to Non-Executive Directors in 2022 includes cash conservation payments relating to the 2021 and 2022 financial years.
The aggregate emoluments of the highest paid Director totalled US$616k (2021: US$467k). 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 Directors
The discretionary bonuses of the Executive Directors were assessed
against a number of objectives and criteria by the Remuneration
Committee, resulting in an award to Adam Davidson of US$231k (2021:
US$188k) and an award to Richard Hughes of US$44k (2021: N/A).
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.
Adam Davidson has a rolling service contract that is subject to twelve
months’ notice. Richard Hughes has a rolling service contract that is
subject to six months’ notice. On 1 January 2023, Adam Davidson’s base
salary was increased from US$385k to US$412k per annum and Richard
Hughes’ base salary increased from £180k to £200k per annum.
On 1 January 2023, 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£32.1k, plus a cash conservation sum of GBP£26.8k 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£64.2k plus a cash conservation
sum of GBP£42.8k 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 conservation fee of the
Non-Executive Chairman to GBP£40k and the Non-Executive
Directors to GBP£25k.
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Remuneration Report continued
Directors’ Responsibility Statement
On 1 January 2023, 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£32.1k, plus a cash conservation sum of GBP£26.8k 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£64.2k
plus a cash conservation sum of GBP£42.8k 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 15 February 2023, it agreed that going forward the share-based
portion of the cash conservation sum would now be paid in cash
rather than through the issuance of new shares. It was also agreed
that David Reading and Helen Pein will each receive an additional
GBP£20k annual payment in respect of the additional technical
advice and support provided to the Company for the review and
analysis of new royalty opportunities and portfolio assets.
Directors Option Awards
During the year Adam Davidson was awarded 3,150,000 options
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.
In addition Richard Hughes was awarded 1,600,000 options which
vest and become exercisable in 5 tranches from the date of grant
(20 September 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.
Approved on behalf of the Board on 2 June 2023.
Adam Davidson
Chief Executive Officer
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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 UK-adopted
international accounting standards and 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, UK-adopted
international accounting standards 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 2 June 2023.
Adam Davidson
Chief Executive Officer
Trident Royalties plc Annual Report & Financial Statements 2022
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Page Title
GOLD HAS HISTORICALLY
BEEN HELD AS A STORE
OF WEALTH AND HEDGE
AGAINST INFLATION
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FINANCIAL
STATEMENTS
56 Independent Auditor’s report
62 Consolidated statement of comprehensive income
63 Consolidated statement of financial position
64 Consolidated statement of changes in equity
65 Consolidated statement of cash flows
66 Company statement of financial position
67 Company statement of changes in equity
68 Company statement of cash flows
69 Notes to the financial statements
IBC Company information
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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 2022 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company
Statements 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 2022
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.
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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$1,400,000, (2021: US$950,000), with performance materiality set at US$980,000, (2021: US$665,000) and triviality
threshold set at $70,000 (2021: US$47,500). 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 previously and this represents the most significant balance in the group financial statements, therefore
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 increase 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$210,000 (2021: US$40,000), based on 1% of gross assets, as the
Company continues to hold royalty assets acquired in the prior year, and this represents the most significant balance. The performance
materiality was US$147,000, (2021: US$28,000).
Trident Services Australia Pty Limited was audited using a materiality of US$110,000 (2021: US$220,000), based on 1% of gross assets, with
performance materiality being $77,000 (2021: US$154,000), which was considered appropriate given the importance of the assets on the
current and future group operations.
Trident Services LLC was audited using a materiality of US$310,000 (2021: nil), based on 1% of gross assets, with performance materiality being
$217,000 (2021: nil), which was considered appropriate given the importance of the assets on the current and future group operations.
Trident Offtakes LLC was audited using a materiality of US$820,000 (2021: nil), based on 1% of gross assets, with performance materiality being
$574,000 (2021: nil), which was 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 six trading companies within the consolidated financial statements, two based in the UK, one based in Europe, one based in
Australia and two in the US. We identified four significant components, the parent company, Trident Royalties Plc, TRR Services Australia Pty Ltd,
Trident Services LLC and Trident Offtakes which were subject to a full scope audit by a team with relevant sector experience. Component offices
were not visited 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 2022
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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.
Accounting treatment and recoverability of royalty interest assets
The group has continued to increase its holdings in royalty interests
significantly in the year, completing four new acquisitions worth a
combined $34.8m as at 31 December 2022. Investments in royalty
interest assets represented US$119m (80%) of the group’s total
assets. Further details can be found at note 2, 12 & 13 of the
Financial Statements. 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 company’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$90.4m at year end, as shown in
note 15 of the financial statements. Management considers 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 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.
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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 2022
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Independent Auditor’s Report continued
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.
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
2 June 2023 London E14 4HD
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Page Title
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2022
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Notes
3
12
4
13
12
7
8
9
9
Year ended
Year ended
31 December 31 December
2021
US$’000
83
(21)
62
(3,744)
(3,682)
2022
US$’000
7,850
(4,857)
2,993
(4,667)
(1,674)
2,193
1,862
241
(6,244)
(1,007)
(4,629)
945
(3,684)
-
141
141
(3,543)
1,511
-
-
(1,707)
(523)
(4,401)
863
(3,538)
-
29
29
(3,509)
10
(1.28)
(2.15)
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
Continuing operations
Royalty and offtake related revenue
Amortisation of royalty intangible assets
Gross profit
Administrative expenses
Operating loss
Revaluation of royalty financial assets
Profit on disposal of intangible asset
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 69 to 88 are an integral part of these financial statements.
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Consolidated Statement of Financial Position
As at 31 December 2022
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
Assets classified as held for sale
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
Borrowings
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
17
14
18
19
9
20
19
20
20
21
21
22
Year ended
Year ended
31 December 31 December
2021
US$’000
2022
US$’000
104,975
7,653
2,005
114,633
12,047
6,750
16,577
35,374
150,007
2,277
-
7,500
9,777
408
32,500
2,452
35,360
45,137
44,900
7,461
1,043
53,404
1,212
-
45,637
46,849
100,253
1,039
-
10,536
11,575
436
172
608
12,183
104,870
88,070
3,835
106,387
511
259
(6,122)
104,870
3,307
87,046
403
118
(2,804)
88,070
The notes on pages 69 to 88 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board on 2 June 2023 and are signed on its behalf by:
Adam Davidson
Director
Trident Royalties plc Annual Report & Financial Statements 2022
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Share
capital
US$’000
1,335
Share
premium
US$’000
23,288
Share
based
payments
reserve
US$’000
63
Foreign
exchange
reserve
US$’000
89
Retained
earnings
US$’000
734
Total
US$’000
25,509
(3,538)
(3,538)
-
(3,538)
29
(3,509)
-
-
-
-
68,965
(3,235)
340
66,070
(2,804)
88,070
(3,684)
(3,684)
-
(3,684)
141
(3,543)
-
-
366
-
366
20,141
(272)
-
474
20,343
-
29
29
-
-
-
-
118
-
141
141
-
-
-
-
-
259
(6,122)
104,870
-
-
-
-
-
340
340
403
-
-
-
-
-
(366)
474
108
511
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Balance at 1 January 2021
Loss for the year
Other comprehensive income:
Exchange gains on translation of foreign operations
Total comprehensive income
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
Balance at 31 December 2021
Loss for the year
Other comprehensive income:
Exchange gains on translation of foreign operations
Total comprehensive income
Transaction with owners in their capacity as owners:
Issue of share capital
Share issue costs
Share options lapsed
Share-based payment charge
Total transactions with owners,
recognised directly in equity
-
-
-
1,972
-
-
1,972
3,307
-
-
-
528
-
-
-
528
-
-
-
66,993
(3,235)
-
63,758
87,046
-
-
-
19,613
(272)
-
-
19,341
Balance at 31 December 2022
3,835
106,387
The notes on pages 69 to 88 are an integral part of these financial statements.
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Consolidated Statement of Cash Flows
for the year ended 31 December 2022
Cash flow from Operating Activities
(Loss)/profit before taxation
Revaluation of royalty financial assets
Profit on sale of intangible asset
Finance income
Other finance costs
Net foreign exchange losses
Amortisation of royalty intangible asset
Other non-cash items
Share-based payments charge
Net cash generated/(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
Cash received from sale of intangible asset
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
Repayment of borrowings
Issue costs of credit facility
Finance costs
Net cash generated from financing activities
Net (decrease)/increase in cash and cash equivalents during the year
Cash at the beginning of year
Effect of foreign exchange rate on cash and cash equivalents
Cash and cash equivalents at the end of the year
The notes on pages 69 to 88 are an integral part of these financial statements.
Notes
13
12
20
20
Year ended
Year ended
31 December 31 December
2021
US$’000
2022
US$’000
(4,629)
(2,193)
(1,862)
(241)
6,244
1,442
4,857
-
474
4,092
1,424
(9,048)
(3,532)
-
(3,532)
(60,518)
3,528
1,875
215
(54,900)
6,438
(272)
40,000
(10,000)
(1,576)
(4,529)
30,061
(28,371)
45,637
(689)
16,577
(4,401)
(1,511)
-
-
1,707
523
21
56
340
(3,265)
684
(195)
(2,776)
(153)
(2,929)
(29,072)
-
1,182
-
(27,890)
63,489
(3,235)
10,000
-
-
(979)
69,275
38,456
6,971
210
45,637
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Company Statement of Financial Position
As at 31 December 2022
Non-current assets
Investment in subsidiaries
Royalty financial assets at fair value through profit and loss
Amount due from subsidiary undertakings
Deferred tax asset
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Current liabilities
Non-current liabilities
Derivative financial liability
Total liabilities
Net assets
Equity
Share Capital
Share Premium
Share-based payments reserve
Foreign exchange reserve
Retained Earnings
Total equity
Notes
15
13
16
9
17
18
19
9
20
21
21
22
Year ended
Year ended
31 December 31 December
2021
US$’000
2022
US$’000
113
7,653
90,553
221
98,540
4,041
9,537
13,578
112,118
322
-
322
2,452
2,774
109,344
3,835
106,387
511
(23)
(1,366)
109,344
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
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$1.32m (2021: US$0.20m).
The notes on pages 69 to 88 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board on 2 June 2023 and are signed on its behalf by.
Adam Davidson
Director
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Company Statement of Changes in Equity
For the year ended 31 December 2022
Balance at 1 January 2021
Loss for the year
Total comprehensive income for the year
Issue of share capital
Share issue costs
Share-based payment charge
Total transactions with owners,
recognised directly in equity
Balance at 31 December 2021
Loss for the year
Total comprehensive income for the year
Issue of share capital
Share issue costs
Share options lapsed
Share-based payment charge
Total transactions with owners,
recognised directly in equity
Share
capital
US$’000
1,335
Share
premium
US$’000
23,288
Share
based
payments
reserve
US$’000
63
Foreign
exchange
reserve
US$’000
(23)
-
-
1,972
-
-
1,972
3,307
-
-
528
-
-
-
528
-
-
66,993
(3,235)
-
63,758
87,046
-
-
19,613
(272)
-
-
19,341
-
-
-
-
340
340
403
-
-
-
-
(366)
474
108
511
I
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A
N
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A
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S
T
A
T
E
M
E
N
T
S
Retained
earnings
US$’000
(216)
(196)
(196)
-
-
-
-
Total
US$’000
24,447
(196)
(196)
68,965
(3,235)
340
66,070
-
-
-
-
-
-
(23)
(412)
90,321
-
-
-
-
-
-
-
(1,320)
(1,320)
-
-
366
-
366
(1,320)
(1,320)
20,141
(272)
-
474
20,343
(23)
(1,366)
109,344
Balance at 31 December 2022
3,835
106,387
The notes on pages 69 to 88 are an integral part of these financial statements.
Trident Royalties plc Annual Report & Financial Statements 2022
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Year ended
Year ended
31 December 31 December
2021
US$’000
2022
US$’000
(1,364)
(2,193)
(113)
(831)
1,694
127
-
474
(2,206)
86
(2,154)
(4,274)
-
(4,274)
1,875
113
7
-
(28,696)
-
(26,701)
6,438
(272)
6,166
(24,809)
34,480
(134)
9,537
(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
Notes
13
Company Statement of Cash Flows
for the year ended 31 December 2022
Cash flows from Operating Activities
(Loss)/profit before taxation
Revaluation of royalty financial asset
Finance income
Intercompany interest received
Other finance costs
Net foreign exchange losses/(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
Cash received from royalty financial asset
Finance income
Net foreign exchange gains
Finance costs
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 (decrease)/increase in cash and cash equivalents during the year
Cash at the beginning of year
Effect of foreign exchange rate on cash and cash equivalents
Cash and cash equivalents at the end of the year
The notes on pages 69 to 88 are an integral part of these financial statements.
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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 with UK-
adopted international accounting standards and the requirements of 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 2022 are set out on pages 63 and 65. The Group meets its day-to-day
working capital and other funding requirements with its current cash, raised through equity placings, proceeds from the disposal of assets and
revenue from its cash generating royalties. The Group actively manages its financial risks as set out in note 23 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.
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.
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 2022, 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.
Trident Royalties plc Annual Report & Financial Statements 2022
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Notes to the financial statements continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
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 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 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 an 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
At
At
31 December 31 December
2021
0.7263
0.7483
2022
0.6806
0.6926
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.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Assets held for sale
Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met only when the sale is highly probable, and the asset is available for immediate sale in its present
condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year
from the date of classification.
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 or loss 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 or loss 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.
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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 22.
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.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
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.
Trident adopts IFRS 15 revenue from contracts with customers (“IFRS 15”) except in the case of the offtake contract revenue. The strict legal
interpretation of IFRS 15 deems Trident to be principal in the transaction (and not agent) and accordingly should disclose revenue and costs
gross. However, management considers that the substance of these instruments (and revenue and cost) is such that Trident will always sell the
gold within the quotation period, does not intend to hold gold for long term trading and will not make a gross loss. As a result of the above
judgement, revenue in the income statement is stated net. The gross revenue, and related costs, are disclosed in note 3 – Business and
Geographical Reporting.
Interest income is accrued on a time basis, by reference to the carrying value and at the effective interest rate applicable.
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.
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Notes to the financial statements continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Critical accounting judgements continued
Accounting classification
Substance of contractual terms
Accounting treatment
Examples
Royalty intangible assets and
offtake interests
• Investment is presented
as an intangible asset and
carried at cost less
accumulated amortisation
and any impairment
provision
• Royalty or offtake income
is recognised as revenue
in the income statement
• Intangible asset is assessed
for indicators of impairment
at each period end
• Koolyanobbing
• Spring Hill
• Lake Rebecca
• Thacker Pass
• Lincoln gold
• WA Gold
• Sugar Zone offtake
• Equinox Gold offtake
• Allied Gold offtake
Simple royalty with no right to
receive cash other than
through a royalty related to
production
An offtake contract is a contract
where an operator agrees to
sell, and the purchaser agrees
to buy, refined metal produced
from the mine or mines over
which the offtake is granted. The
key commercial terms include
those relating to the amount of
metal to be purchased, the
delivery mechanics, and the
payment terms.
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
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 69 for more details.
Loans to subsidiaries
Loans to subsidiaries have a carrying value at 31 December 2022 of US$90.6m (2021: US$47.6m). The Directors have assessed the carrying
value to be equal to fair value on the basis that the loans will be recovered from 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 Statement of Comprehensive Income.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
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
The Group’s amortisation policy is based on a depletion method using units of production. Management regularly review the life of its assets,
the amortisation rates and methodology, and amortisation rates may be adjusted for changes to the estimates.
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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: Lake Rebecca, Spring Hill, Lincoln Gold Mine, Western Australia gold, Gold Offtake Contracts
Bulk: Koolyanobbing,
Battery Metals: Thacker Pass
Base: 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 2022:
Royalty related revenue
Amortisation of royalty intangible assets
Gross profit
Operating expenses
Total segment operating profit/(loss)
Precious
US$’000
6,418
(3,796)
2,622
-
2,622
Bulk
US$’000
1,432
(1,061)
371
-
371
Battery
metals
US$’000
-
-
-
-
-
Base
US$’000
-
-
-
-
-
Other Total
US$’000 US$’000
- 7,850
- (4,857)
- 2,993
(4,667) (4,667)
(4,667) (1,674)
Total segment assets
84,381
2,445
28,234
11,714
23,233 150,007
Total segment liabilities
(41,730)
-
-
-
(3,956) (45,686)
As at 31 December 2022 the Group was receiving royalty income from the Gold Offtake portfolio and Lincoln gold (precious segment),
Koolyanobbing (bulk segment) and Mimbula (base segment) which is accounted for as a financial asset (see note 13). A fair value gain of
US$2.2m (2021: US$1.5m) was recognised in the base segment. US$6.1m of the Precious revenue relates to net proceeds from gold offtake
contracts – gross revenue was US$446.1m with US$440.0m costs.
Segmental information as at 31 December 2021:
Royalty related revenue
Amortisation of royalty intangible assets
Gross profit
Operating expenses
Total segment operating result
Total segment assets
Total segment liabilities
4. EXPENSES BY NATURE
Employee benefit expense (note 6)
Share based payments
Legal and professional
Other operating expenses
Total operating expenses
Precious
US$’000
-
-
-
-
-
9,869
436
Bulk
US$’000
83
(21)
62
-
62
Battery
metals
US$’000
-
-
-
-
-
Base
US$’000
-
-
-
-
-
Other
US$’000
-
-
-
(3,744)
(3,744)
Total
US$’000
83
(21)
62
(3,744)
(3,682)
3,722
28,234
10,535
47,893
100,253
-
-
-
11,747
12,183
Year ended
Year ended
31 December 31 December
2021
US$’000
2,093
340
788
523
3,744
2022
US$’000
2,472
474
1068
653
4,667
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5. AUDITOR REMUNERATION
During the year the Company obtained the following services from the auditor:
Fees payable to the auditor for the audit of the Company
Total auditor’s remuneration
Year ended
Year ended
31 December 31 December
2021
US$’000
62
62
2022
US$’000
69
69
Other assurance services pursuant to legislation
-
6
Details of the Company’s policy on the use of auditors for non-audit services, the reasons why the auditor was used rather than another supplier
and how the auditor’s independence and objectivity are safeguarded are set out in the Audit Committee Report.
6. EMPLOYEE BENEFIT EXPENSE
Directors’ salary and fees
Employee costs
Social security costs
Total employee benefit expense
Group
Year ended
Company
Year ended
Group
Year ended
Company
Year ended
31 December 31 December 31 December 31 December
2021
US$’000
447
358
85
890
2022
US$’000
1,185
1,103
184
2,472
2022
US$’000
585
455
90
1,130
2021
US$’000
899
1,011
183
2,903
All the wages and salaries were paid to the Directors and senior management. There were no employees in the year other than the Directors
and senior management. Further disclosures in respect of Directors’ remuneration are included within the Directors’ Remuneration Report.
The average number of employees (including Directors) during the year was 9 (2021: 8).
7. FINANCE INCOME
Interest from bank deposits
Total
8. FINANCE EXPENSE
Interest paid
Amortisation of financing costs (including warrant charge)
Other finance charges
Total
Year ended
Year ended
31 December 31 December
2021
US$’000
-
-
2022
US$’000
241
241
Year ended
Year ended
31 December 31 December
2021
US$’000
801
906
-
1,707
2022
US$’000
3,774
2,220
250
6,244
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Notes to the financial statements continued
9. INCOME TAX
Analysis of charge for year:
United Kingdom corporation tax
Overseas taxation
Adjustments in respect of prior years
Current tax expense
Deferred tax credit in current year
Adjustments in respect of prior years
Effect of changes in tax rates
Deferred tax
Income tax credit
Factors affecting the tax charge for the year:
Profit/(loss) before taxation
Tax on result calculated at UK Corporation tax of 19% (2019: 19%)
Tax effects of:
Items non-taxable/deductible for tax purposes:
Non-deductible expenses
Non-taxable income
Temporary and other differences:
Foreign tax credits
Effect of differences between local and UK tax rates
Prior year adjustment to current and deferred tax
Deferred tax not recognised
Remeasurement of deferred tax for changes in tax rates
Other adjustments
Income tax
Year ended
Year ended
31 December 31 December
2021
US$’000
2022
US$’000
-
84
-
84
(1,317)
318
(30)
(1,028)
(945)
-
-
2
2
(914)
49
-
(865)
(863)
Year ended
Year ended
31 December 31 December
2021
US$’000
2022
US$’000
(4,629)
(4,401)
(880)
(836)
107
-
83
(420)
319
(27)
(127)
-
(945)
87
157
-
(257)
51
37
-
(102)
(863)
The Group is subject to taxation in United Kingdom, USA and Australia with applicable tax rates of 25.00%, 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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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 2021
Credit/(charge) to income statement
Exchange differences
31 December 2021
Credit/(charge) to income statement
Exchange differences
At 31 December 2022
Tax losses
US$000
220
Other
US$000
(10)
Total
US$000
210
1,262
-
1,482
1,317
-
1,317
(397)
(32)
(439)
(289)
(66)
(355)
865
(32)
1,043
1,028
(66)
2,005
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 2021
Credit to income statement
At 31 December 2021
Credit to income statement
At 31 December 2022
10. EARNINGS PER SHARE
Tax losses
US$000
-
Other
US$000
29
Total
US$000
29
-
-
98
98
64
93
30
123
64
93
128
221
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period.
Net (loss)/profit attributable to shareholders
Loss
Year ended
Year ended
31 December 31 December
2021
US$’000
(3,538)
2022
US$’000
(3,684)
The weighted average number of shares in issue for the purpose of calculating basic and diluted earnings per share and basic and diluted
adjusted earnings per share are as follows:
Weighted average number of shares in issue
Basic number of shares outstanding
Dilutive effect of Employee Share Option Scheme
Diluted number of shares outstanding
Earnings per share – basic
Earnings per share – diluted
2022
288,853,068
-
288,853,068
2021
164,638,648
-
164,638,648
(1.28) c
(1.28) c
(2.15) c
(2.15) c
The Company has outstanding warrants and options as disclosed under Note 22 which may be dilutive in future periods. The effect in respect of
the current year would have been anti-dilutive (reducing the loss per share) and accordingly is not presented.
In addition, the effect of the issue of ordinary shares shortly after year end, would also have been anti-dilutive, and accordingly is not considered.
The issue, however, may be dilutive in future periods.
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Notes to the financial statements continued
11. DIVIDENDS
There were no dividends paid or proposed by the Company in either period.
12. ROYALTY INTANGIBLE ASSETS
Group
Cost
At 1 January 2021
Acquisitions
Exchange differences
At 31 December 2021
Acquisitions
Disposals
Reclassified as assets held for sale
Exchange differences
At 31 December 2022
Accumulated Amortisation
At 1 January 2021
Amortisation
Exchange differences
At 31 December 2021
Amortisation
Disposal
Exchange differences
At 31 December 2022
Net book value at 31 December 2021
Net book value at 31 December 2022
Royalty
interests
US$’000
Offtake
interests
US$’000
12,346
34,606
(785)
46,167
-
-
(6,750)
(768)
38,649
(1,328)
(21)
82
(1,267)
(1,061)
-
98
(2,230)
44,900
36,419
-
-
-
-
74,018
(1,833)
-
-
72,185
-
-
-
-
(3,795)
166
-
(3,629)
-
68,556
Total
US$’000
12,346
34,606
(785)
46,167
74,018
(1,833)
(6,750)
(768)
110,834
(1,328)
(21)
82
(1,267)
(4,611)
166
98
(5,614)
44,900
104,975
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 52% (2021:70%) of the original acquired reserve remains.
Acquisitions
Gold Offtake Portfolio
On 11 January 2022 the Group completed the acquisition of a portfolio of 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.
On 23 March 2022 the Group completed the acquisition of a gold offtake contract over the Sugar Zone Mine in Canada from funds managed
by Orion Resource Partners for total consideration of US$3.75m payable in new ordinary shares.
Sonora Lithium Project
On 27 January 2022, the Group entered into an agreement to acquire, subject to certain conditions, an indirect 1.5% Gross Royalty over the
Sonora Lithium Project in Mexico, through a joint venture company called Sonoroy Holdings Limited (“Sonoroy”). Sonoroy holds a 3.0% Gross
Royalty over the project. The transaction was structured so as to result in Trident holding a 50% shareholding in Sonoroy in consideration of an
initial deposit of US$2.5m and a further payment, at Trident’s sole election, of US$23.5m. The second payment is due on or before 31 January
2025. If Trident elects to withdraw from the joint venture, its initial deposit is to be returned. As such, the initial deposit is treated as an interest free
loan and included in trade and other receivables.
Disposals
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 above) the sale of the mine triggered a payment from Equinox to Trident of US$3.75m and the mine was removed
from the offtake contract. The payment was received on 22 April 2022. The agreement resulted in a profit on disposal of US$1.86m.
Reclassified as assets held for sale
In December 2022 the Group agreed to sell certain pre-production gold royalties. As the sale had not been completed at 31 December 2022
these royalties were re-classified to assets held for sale. See note 14 for further information.
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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$5.00m. Trident is entitled to royalty payments on production which commenced on 1 July 2020 and extend in perpetuity. This royalty asset
is classified as FVTPL.
Trident will receive either a Minimum Payment (“MP”) or royalty payment, whichever is higher until June 2023. Thereafter, Trident will only receive
royalty payments. The royalty payments are calculated as a percentage of the gross revenue derived from sale of finished copper and copper
concentrate. Per the terms of the agreement, the royalty percentage is calculated as follows:
a. During the MP period, 1.25% of gross revenue;
b. During the period commencing on the day after the expiry of MP period and ending on the date on which royalty payments have been
made to Trident in respect of a total aggregate quantity of no less than 575,000 tonnes of copper cathode or other finished copper
product, 0.3% of gross revenue; and
c. During the period commencing on the day after the expiry of the MP period and continuing for the duration of the agreement,
0.2% of gross revenue.
Group and Company
Fair Value
At 1 January
Royalties due or received
Revaluation of royalty financial asset recognised in profit or loss
At 31 December
2022
US$’000
7,461
(2,000)
2,192
7,653
2021
US$’000
7,453
(1,503)
1,511
7,461
As at 31 December 2022 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$7.65m (2021: US$7.46m). This results in a fair value gain in the income
statement of US$2.19m (2021: US$1.51m). 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$0.59m (2021: US$0.39m) reduction
and a US$0.68m (2021: US$0.43m) increase, respectively.
If the commodity price used was to increase or decrease by 10% the valuation effect would be a US$0.62m (2021: US$0.5m) increase
and a US$0.62m (2021: US$0.1m) reduction, respectively.
14. ASSETS HELD FOR SALE
Group
At 1 January
Royalty intangible assets reclassified as held for sale
At 31 December
2022
US$’000
-
6,750
6,750
2021
US$’000
-
-
-
In December 2022 the Group agreed to sell its pre-production gold royalties over Lake Rebecca, Spring Hill and four other projects acquired
as a portfolio from Talga Resources to Franco-Nevada in exchange for cash proceeds of up to US$15.8 million. One early-stage royalty was
removed from the portfolio prior to closing and the transactions proceeds were adjusted to be up to US$15.6 million. The sale of these
investments was completed in February 2023. See note 26 for further information.
There were no assets held for sale in the Company (FY2021: nil)
Trident Royalties plc Annual Report & Financial Statements 2022
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Notes to the financial statements continued
15. INVESTMENTS IN SUBSIDIARIES
Company
Cost
At 31 December 2021 and 1 January 2022
Investment in subsidiary
At 31 December 2022
US$’000
113
-
113
As at 31 December 2022 the Company held interests in the following subsidiary and joint venture companies:
Country Proportion
Company registration held Registered 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
TRR Holdings LLC USA 100% 251 Little Falls Drive, Wilmington,
DE 19808
TRR Offtakes LLC USA 100% 251 Little Falls Drive, Wilmington,
DE 19808
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 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
Nature
of business
Service company
Service company
Service company
Service company
Service company
Service company
Dormant
Dormant
Dormant
16. AMOUNT DUE FROM SUBSIDIARY UNDERTAKINGS
Company
Loans and contributions to subsidiaries
Total
2022
US$’000
90,553
90,553
2021
US$’000
47,609
47,609
During the year ended 31 December 2022 the maximum amount owed by the subsidiaries to the Parent Company was US$90.6m (2021:
US$47.6). The related party loans are unsecured, repayable upon demand and have a 6% interest rate where applicable. The fair value of loans
to subsidiaries is the same as their carrying values stated above.
17. TRADE AND OTHER RECEIVABLES
Trade receivables
Prepayments and accrued income
Current tax asset
Indirect taxes recoverable
Total
Group
2022
US$’000
9,938
2,043
29
37
12,047
Company
2022
US$’000
3,015
989
-
37
4,041
Group
2021
US$’000
-
1,040
29
143
1,212
Company
2021
US$’000
-
1,033
-
143
1,176
Due to the short-term nature of the current receivables, their carrying amount is considered to be approximate to their fair value.
18. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Group
2022
US$’000
16,577
Company
2022
US$’000
9,537
Group
2021
US$’000
45,637
Company
2021
US$’000
34,480
All of the Company’s cash and cash equivalents are held in accounts which bear interest at floating rates and the Directors consider their
carrying amount approximates to their fair value. Details of the credit risk associated with cash and cash equivalents is set out in note 23.
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19. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security
Accrued expenses
Total
Group
2022
US$’000
1,556
113
608
2,277
Company
2022
US$’000
85
-
237
322
Group
2021
US$’000
203
49
787
1,039
Company
2021
US$’000
199
-
240
439
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The Company has financial risk
management policies in place to ensure that all payables are paid within the pre-agreed credit terms. The Directors consider that the carrying
amount of trade payables approximates to their fair value.
Contingent consideration
Group
At 31 December 2021
Exchange differences
At 31 December 2022
US$’000
436
(28)
408
Contingent consideration relates to the acquisition of the Spring Hill royalty. A total of A$600k remains payable to the vendor on the operator
meeting certain production milestones. The above amount is managements estimate of the amounts due assuming the operation meets those
production limits that trigger payment of the additional consideration. The amount is discounted and expected to fall due after more than one year.
On 23 February 2023 the Spring Hill royalty was sold see note 26 for more details.
20. BORROWINGS
Group
At 1 January
Secured loan facility at amortised cost
Repayment of debt facility
Accrued finance charges
At 31 December
2022
US$’000
10,536
40,000
(10,536)
-
40,000
2021
US$’000
-
10,000
-
536
10,536
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.
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$40m loan facility was entered into with Macquarie Bank Limited. The facility has a 3-year term and
interest is charged at 7.75% plus SOFR. On 23 February 2023, the facility was restructured, with a one-year extension to December 2025 and a
reduction in the coupon to 5.75% plus SOFR (subject to maintaining certain leverage ratios).
Maturity analysis
Group
Amounts due within one year
Amounts due after more than one year
Total
2022
US$’000
7,500
32,500
40,000
2021
US$’000
10,536
-
10,536
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Notes to the financial statements continued
20. BORROWINGS CONTINUED
Reconciliation of net cash flow to movement in debt
Group
Cash and cash equivalents
Borrowings
Net debt
Net (decrease)/increase in cash and cash equivalents in the year
Cash inflow from increase in borrowings
Other non-cash changes
Exchange differences
Change in net debt resulting from cash flows
Net debt at the start of the year
Net debt at the end of the year
2022
US$’000
16,577
(40,000)
(23,423)
(28,371)
(29,464)
-
(689)
(58,524)
35,101
(23,423)
2021
US$’000
45,637
(10,536)
35,101
38,456
(10,000)
(536)
210
28,130
6,971
35,101
The net gold receivable amount of US$5.12m is not included in the net debt reconciliation shown above.
Warrant liability
As part of the Tribeca facility, 3,500,000 share warrants to subscribe for shares in the Company were issued exercisable at £0.5166 per share
(“Tribeca Warrants”). The Tribeca Warrants were exercisable immediately on issue and will expire 24-months from drawdown. As the US$ value
of the Tribeca 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 22.
As part of the Macquarie facility, 14,840,517 share warrants to subscribe for shares in the Company were issued exercisable at £0.51 per share
(“Macquarie Warrants”). The Macquarie Warrants were exercisable immediately on issue and will expire 36-months from drawdown. As the US$
value of the Macquarie 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 22.
Group and Company
Fair Value
At 1 January 2022
Fair value of Macquarie Warrants on initial recognition
Revaluation of derivative financial asset recognised in profit or loss
At 31 December 2022
21. SHARE CAPITAL AND SHARE PREMIUM
Group and Company
At 1 January 2021
Share issue – placing
Share issue – royalty acquisitions
Share issue – non-executive directors’ fees
Share issue expenses
At 31 December 2021
Share issue – placing
Share issue – royalty acquisitions
Share issue – to employees and directors
Share issue expenses
At 31 December 2022
US$’000
172
879
1,401
2,452
Share
premium
US$’000
23,288
61,683
5,256
54
(3,235)
87,046
6,259
13,156
198
(272)
106,387
Number
of ordinary
shares of 1p
105,362,556
134,181,943
11,939,806
108,108
-
251,592,413
13,118,057
26,013,903
406,227
-
291,130,600
Number
of deferred
shares of 1p
-
-
-
-
-
-
-
-
-
-
-
Share
capital
US$’000
1,335
1,806
164
2
-
3,307
179
344
5
-
3,835
Share issues during the year:
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 stream portfolio.
On 17 January 2022, of the 406,227 shares issued, including 126,070 ordinary shares issued at 37.02p per shares to the non-executive directors
of the Company in lieu of directors fees.
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.
Shares issued subsequent to the year-end
On 17 January 2023, 174,366 ordinary shares were issued at 48.84p per shares to the non-executive directors of the Company
in lieu of directors fees.
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22. SHARE BASED PAYMENTS
Share options
During 2022 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 2022, 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
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
Total
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
01/02/2029
01/02/2029
01/02/2029
01/02/2029
01/02/2029
20/09/2029
20/09/2029
20/09/2029
20/09/2029
20/09/2029
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
01/02/2023
31/12/2023
31/12/2024
31/12/2025
31/12/2026
20/09/2023
31/12/2023
31/12/2024
31/12/2025
31/12/2026
Fair
value of
individual
option
£0.0630
£0.0608
£0.0605
£0.1260
£0.1180
£0.1060
£0.1068
£0.0720
£0.1010
£0.0910
£0.0830
£0.0740
£0.0650
£0.1690
£0.1610
£0.1510
£0.1440
£0.1310
At
1 January
2022
1,041,666
1,041,667
1,041,667
533,334
533,333
533,333
610,000
2,500,000
-
-
-
-
-
-
-
-
-
-
7,835,000
At
Expired or 31 December
2022
1,041,666
1,041,667
1,041,667
200,001
200,000
199,999
510,000
-
1,280,000
1,280,000
1,280,000
1,280,000
1,280,000
320,000
320,000
320,000
320,000
320,000
12,235,000
lapsed
-
-
-
(333,333)
(333,333)
(333,334)
(100,000)
(2,500,000)
(320,000)
(320,000)
(320,000)
(320,000)
(320,000)
-
-
-
-
-
(5,200,000)
Issued
1,600,000
1,600,000
1,600,000
1,600,000
1,600,000
320,000
320,000
320,000
320,000
320,000
9,600,000
For the year ended 31 December 2022 the share options granted are subject to two vesting conditions. The options vest upon the occurrence
of both the earliest vesting date and upon the remuneration committee determining the Hurdle volume-weighted average price less the total
dividend per share (excluding any tax credit) (“VWAP”) has been achieved for at least a period of 365 days consecutively at any time between
the grant date to the seventh anniversary of the grant date (“Performance Period”). There are five hurdles and subsequent vesting dates, with
20% of the total options granted vesting once these are achieved.
The fair value of the share options was determined using a Monte Carlo model that can simulate a range of possible outcomes. The Monte
Carlo model uses a normal distribution of outcomes and is capable of capturing the market-based performance conditions which should
be included in the option fair value, by allowing the simulation of daily VWAP share price. The Monte Carlo model used the following inputs:
Grant date
Weighted average share price on date of grant
Exercise price
Expected volatility,%
Expected dividend growth rate,%
Risk-free interest rate (5-year bond),%
1 February 20 September
2022
£0.497
£0.50
36%
0%
3.24%
2022
£0.409
£0.50
36%
0%
1.29%
For the year ended 31 December 2021 the following information is relevant in the determination of the fair value of options granted using
the Black Scholes model:
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),%
20 April
2021
£0.37
0.1068
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%
Share-based remuneration expense related to the share options granted is included in the administration expenses line in the consolidated
income statement in the amount of US$0.47m (31/12/2021: US$0.34m). 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.
Trident Royalties plc Annual Report & Financial Statements 2022
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Notes to the financial statements continued
22. SHARE BASED PAYMENTS CONTINUED
Share warrants
On 11 January 2022, 14,840,517 share warrants to subscribe for shares in the Company were issued to Macquarie Bank Limited.
See note 20 for further information.
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$879,000.
On 3 August 2021, 3,500,000 share warrants to subscribe for shares in the Company were issued to Tribeca.
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.
23. FINANCIAL RISK MANAGEMENT
£0.51
0.044
Black Scholes
0.352
3
35%
0%
0.73%
£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
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23. FINANCIAL RISK MANAGEMENT CONTINUED
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 18 and on its trade and other
receivable balances as set out in note 17. 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.
Future expected payments
Group
Trade and other payables within one year
Current tax liabilities within one year
Contingent consideration due > one year
Borrowings due within one year
Borrowings due > one year
2022
US$’000
2,277
-
408
7,500
32,500
2021
US$’000
1,039
-
436
10,536
-
The $40m of borrowings, as at 31 December 2022 was restructured in February 2023, with the first repayment not due until mid-2024. The
Group has sufficient resources to service the borrowings and meet related financial covenants.
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the United States Dollar, British Pound
(GBP) and the Australian Dollar.
The following table highlights the major currencies the Group operates in and the movements against the US Dollar during the course of the year:
British Pound
Australian Dollar
Average rate
2021
1.37
0.75
2022
1.23
0.69
Reporting spot rate
Movement
(0.14)
(0.06)
2022
1.21
0.68
2021
1.35
0.73
Movement
(0.14)
(0.05)
The Group’s exposure to foreign currency risk based on US Dollar equivalent carrying amounts of monetary items at the reported date:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Contingent consideration
Net exposure
2022
US$’000
2021
US$’000
US$
15,383
9,436
(1,585)
-
23,234
GBP
280
-
(321)
-
(41)
Other
914
486
(259)
(408)
733
US$
44,496
375
(238)
-
44,633
GBP
852
-
(438)
-
414
Other
289
7
(314)
(436)
(454)
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:
2022
US$’000
2021
US$’000
British Pound
Australian Dollar
Profit/(loss)
(32)
145
Equity
-
314
Profit/(loss)
(99)
265
Equity
-
183
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Notes to the financial statements continued
24. FINANCIAL INSTRUMENTS
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
Borrowings
Financial liabilities at fair value through profit and loss
Warrant liability
Group
2022
US$’000
7,653
16,577
Company
2022
US$’000
7,653
9,537
Group
2021
US$’000
7,461
45,637
Company
2021
US$’000
7,461
34,480
9,922
93,553
381
47,984
2,165
408
40,000
321
-
-
990
436
10,536
2,452
2,452
172
439
-
-
172
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$7.65m (2021: US$7.46m). 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).
25. 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 which was
repaid in January 2022. Paul Smith also received 175,000 warrants, which were issued in connection with the US$10.0m loan facility, as disclosed
in note 22.
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 legal fees totalling US$0.33m (2021: US$0.18m) to Fasken Martineau DuMoulin LLP (“Fasken”) and its worldwide affiliates.
Fasken is a legal firm in which Al Gourley is a senior partner.
During the year the Group paid US$0.01m to Bacchus Capital Advisers Limited, for the provision of office space and meeting facilities.
Bacchus Capital Advisers Limited is a company controlled by Peter Bacchus.
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 15.
26. EVENTS OCCURRING AFTER THE REPORTING DATE
On 17 January 2023, 174,366 ordinary shares were issued at 48.84p per shares to the non-executive directors of the Company
in lieu of directors fees.
On 23 February 2023 the Company completed the sale of several pre-production gold royalties for gross proceeds of up to US$15.55m.
Following completion, the Company has restructured its US$40m debt facility with Macquarie Bank Limited including:
• 2% reduction in coupon (dependant on maintaining leverage ratio), reducing debt service costs by up to US$800,000 per year.
- Extension of the loan term by one year, to December 2025
- Deferral of scheduled quarterly payments until June 2024
• In lieu of a cash restructuring fee, the Company has agreed to an extension of the term of the warrants held by Macquarie
by 12 months.
27. ULTIMATE CONTROLLING PARTY
The company does not have a single controlling party.
88
Trident Royalties plc Annual Report & Financial Statements 2022
Company Information
Directors
Paul Smith Non-Executive Chairman
Adam Davidson Chief Executive Officer and
Executive Director
Richard Hughes Chief Financial Officer and
Executive Director
Peter Bacchus Non-Executive Director
Al Gourley Non-Executive Director
Helen Pein Non-Executive Director
David Reading 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
Liberum Capital Limited
25 Ropemaker Street, London EC2Y 9LY
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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