A GROWTH-FOCUSED
DIVERSIFIED MINING
ROYALTY AND
STREAMING COMPANY
Trident Royalties plc
Annual Report & Accounts 2023
TRIDENT IS FAST
BECOMING A LEADING
MINING ROYALTY
COMPANY WITH A
PORTFOLIO OF HIGH
QUALITY INVESTMENTS
ACROSS THE GLOBAL
MINING SECTOR
Financial Statements
60 Independent Auditor’s report
66 Consolidated statement of
comprehensive income
67 Consolidated statement of
financial position
68 Consolidated statement of
changes in equity
69 Consolidated statement of cash flows
70 Company statement of financial position
71 Company statement of changes in equity
72 Company statement of cash flows
73 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 Our markets
24 Operational review
35 Environmental, social and
governance report
41 Section 172 statement
42 Risk management
44 Financial review
Corporate Governance
48 Board of Directors
50 Directors’ report
52 Corporate governance statement
56 Remuneration report
57 Directors’ responsibility statement
For more information please visit
https://www.tridentroyalties.com
OUR PERFORMANCE
WE HAVE A DIVERSIFIED AND
HIGHLY CASH GENERATIVE PORTFOLIO
OF ROYALTIES AND OFFTAKES
5
Acquisitions
during 2023
+140%
Monetised several
pre-production assets for
return on investment
US$40m
New revolving credit facility
(option to increase
to US$60m)
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74%
Shareholder returns
of since the inception
of strategy1
US$11m
Generated in royalty and
offtake revenue in 2023
1 Share price performance since listing at 20p in June
2020 to 30 April 2024.
Trident portfolio by commodity
by acquisition price
(At 30 April 2024)
Battery Metals - Lithium 27%
Base Metals - Copper 10%
Precious Metals - Gold 55%
Precious Metals - Silver 5%
Bulks and Industrial - Iron Ore 3%
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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OUR PORTFOLIO
BUILDING A DIVERSIFIED AND BALANCED PORTFOLIO
OF ROYALTIES AND OFFTAKES THAT OFFERS
SHAREHOLDERS EXPOSURE TO PRECIOUS, BASE,
BATTERY AND BULK METALS
PRODUCTION
Current assets Operator Location Stage Commodity Terms1
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
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 Terms1
Greenstone Equinox Gold Canada Construction Gold Offtake
La Preciosa Avino Silver & Gold Mexico Construction / Restart Silver 1.25% NSR
Thacker Pass Lithium Americas USA Construction Lithium 1.05% GRR
Sugar Zone Silverlake Resources Canada Construction Gold Offtake
Sonora2 Ganfeng Lithium Mexico Advanced Lithium 1.5% GRR
Lincoln Seduli Holdings USA Advanced (Paying MPS) Gold 1.5% NSR
Paradox Basin Anson Resources USA Advanced Lithium 2.5% NSR
Antler New World Resources USA Advanced Copper 0.90% NSR
Dandoko B2 Gold Mali Advanced Gold 1% NSR
EXPLORATION
Current assets Operator Location Stage Commodity Terms1
Pukaqaqa Nexa Resources Peru Exploration Copper 1% sliding scale NSR
1 Note: GRR = Gross Revenue Royalty, FOB = Free on Board, NSR = Net Smelter Return
2 Effective 1.5% GRR attributable to Trident, pending completion
02 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
OUR PORTFOLIO CONTINUED
21
Assets
12
Cash flowing
assets1
6
Commodoties
11
Countries
Canada
USA
Mexico
Peru
Brazil
Mali
Côte d’Ivoire
Kenya
Zambia
South Africa
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Australia
TRIDENT PORTFOLIO BY STAGE
52%
Production 43%
Development
5%
Exploration
1 Includes Lincoln which is currently making minimum payments whilst development is ongoing
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
03
OUR STRATEGY
DELIVERING VALUE FOR OUR
SHAREHOLDERS
Trident is building a diversified portfolio of cash-generative high-quality
royalties and offtakes that provide shareholders with exposure to a
breadth of commodities. As the portfolio continues to mature, royalty
and offtake revenues for 2023 totalled US$11.0m and are expected to
increase further during 2024 with several assets targeting first
production during the year. With key advancements expected across
our current portfolio alongside a robust balance sheet supporting
further capital deployment into a pipeline of opportunities, we believe
this revenue growth will continue over the mid- to long- term.
The Company’s current portfolio provides investors with exposure to
base, precious, bulk and battery metals, including lithium, gold, silver,
copper, zinc, mineral sands and iron ore. This diversified portfolio
provides shareholders with exposure to the energy transition and the
strong macro environment for a range of commodities whilst reducing
individual commodity risk. We believe there is an important role we
can play in funding the production of critical minerals required to
advance the global clean energy transition and consider
Trident to be well positioned to participate in such opportunities.
Trident is strategically focused on constructing a diverse portfolio
spanning various geographic regions. This approach aims to mitigate
political and geographical risks while prioritising resource-rich
jurisdictions. Currently, over 60% of the net asset value of Trident’s
portfolio is situated in the USA, Canada, and Australia, reflecting
a deliberate emphasis on favourable mining jurisdictions.
Trident’s investment mandate is underpinned by a robust internal
approach to environmental, social and governance (ESG) due
diligence. We seek to invest in royalties or streams where the asset
owner demonstrates a commitment to the responsible management
of ESG impacts and therefore excludes all fossil fuels.
Constructing a royalty
portfolio to mirror exposure
of the global mining sector
with a bias towards
production assets
Maintaining a
low-overhead model which
is capable of supporting a
larger scale business without
a commensurate increase
in operating cost
Active deal-sourcing
focusing 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
ignored in a royalty space
dominated by large
players
Leveraging the
experience of management,
Board and advisers, all of
whom have deep industry
connections and strong
transactional experience
Acquiring royalties in
resources-friendly
jurisdictions worldwide
04 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
OUR BUSINESS MODEL
WHAT WE DO
Since inception in 2020, Trident has built a portfolio of 21 royalty
and offtakes targeting a mid-teen post-tax blended return across
the portfolio. Trident seeks to exploit gaps in the royalty sector by
providing exposure to the full breadth of commodities, unlike most
peers who are typically focused on precious metals. Our strategy
reduces single asset and commodity risk as the broad, diversified
nature of Trident’s portfolio is less vulnerable to the cyclical nature
of individual commodities.
Trident has developed and is consistently expanding its portfolio,
benefitting from a diverse global asset base to mitigate geographical
risks. Unlike many participants in the royalties sector, which often focus
heavily on North and South America, Trident maintains a balanced
approach by targeting resource-friendly jurisdictions worldwide.
This multifaceted strategy involves the pursuit of a variety of
commodities across the globe, complemented by an investment
mandate tailored for small-to-mid size transactions. Consequently,
Trident is adept at acquiring high-value royalties that frequently
escape the attention of larger industry counterparts.
Trident pursues a dual deal-sourcing strategy.
In addition to writing new royalties as an increasingly
prevalent source of financing for mine operators, we
acquire preexisting royalties from natural sellers including
closed-end funds, junior and mid-tier miners holding royalties
as non-core assets, and counterparties seeking to monetise
packages of royalties and streams.
The Board of Trident believes that the acquisition and aggregation
of individual royalties and offtakes into Trident’s portfolio has the
potential to deliver strong returns for shareholders by providing
exposure to a larger, more diversified pool of cash flow which may
provide a hedge against inflationary pressures. As returns are
enhanced through the growth of the portfolio and the advancement
of many key assets, alongside the lowering cost of capital, Trident
intends to deliver a dividend policy to shareholders when
appropriate in the future.
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Create value through
the aggregation
of assets
Attractive dividend
policy once scale
achieved
Boost returns by
introducing conservative
leverage
Add scale through
accretive scrip
transactions
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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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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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
PAGE TITLE
STRATEGIC REPORT
08 Chairman’s statement
10 Chief Executive Officer’s statement
12 Our markets
24 Operational review
35 Environmental, social and governance report
41 Section 172 statement
42 Risk management
44 Financial review
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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CHAIRMAN’S STATEMENT
SINCE LISTING IN 2020
WITH A SINGLE ROYALTY,
WE HAVE MADE GOOD
PROGRESS ON THIS
JOURNEY...
08 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
CHAIRMAN’S STATEMENT CONTINUED
...WITH OUR PORTFOLIO NOW
CONSISTING OF 21 ASSETS, OF WHICH
12 ARE CASH FLOWING
The last year has been challenging for the global financial industry:
in 2022, geopolitical tensions rose with a war in Ukraine and then,
in 2023, war broke out in the Middle East. Both have potential for
escalation, as we have seen with the recent attacks on ships in the Red
Sea. Grant Shapps, the UK Defence Secretary, described the world as
moving from a post-war period to a pre-war period where “combined
threats risk tearing apart the rules-based international order.”
Within the mining industry, we experience these rising geopolitical
tensions through an ever- shrinking field on which it is prudent to invest.
Twenty years ago, China, India and Russia were open for foreign
resource investment, but this is no longer the case. In the last ten
years, large parts of Africa have been effectively closed to Western
investment with military coup d’etats in Sudan, Guinea, Burkina Faso,
Niger, Mali, Gabon and Chad. In more recent years, several Central
and South American governments have been elected by a populace
more sceptical of the mining industry with Panama, in 2023, choosing
to permanently close its world-class Cobre Panama Mine in the face
of political protests.
Taking these factors into account, the supply side of our industry
is going to face increasing challenges whether from regulatory delays,
community dissent or events of expropriation. The Mining Journal’s
World Risk Report amply demonstrates this where the number of
mining jurisdictions that are considered high risk has increased from
18 to 36 in the last five years. We can expect commodity prices to rise
over time due to these difficulties, as well as the entirely appropriate,
but ever-increasing, costs associated with developing mines in serenity
with modern community, environmental, safety and other standards.
For most investors in junior mining companies, the height of the rising
wall is believed too high to scale. Many junior mining companies have
seen their shares descend in value over time in the face of repeated
(and dilutive) capital raises, delays in permitting, changing commodity
prices, political interference, capricious litigation and project
expropriation. It is therefore unsurprising that, of the junior mining
companies listed on the TSX Venture Exchange and AIM markets,
approximately 60% and 35% of them, respectively, have a market
cap of less than US$10m.
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What does this mean for Trident Royalties?
First and foremost, it means that Trident is likely to have more and more
opportunities to help provide a capital solution to our counterparties in
the resource industry. Second, we must continue to be selective about
which projects to back. In 2023, we demonstrated our screening
process by filtering out all but four material projects that received
Board approval for investment; namely, two royalties in the USA
(copper and lithium), one in Mexico (silver), one in Mali (gold).
The decision to invest in our Mali asset was taken after extensive
deliberation. We considered a range of factors, but ultimately
concluded that the risk was justified on the basis of (i) the long term
presence of the operator (B2 Gold) in Mali, (ii) the size of the operator;
(iii) the importance of the Fekola mine to the operator’s business (circa
600k oz per annum), (iv) the potential for near-term cash flow;
(v) exploration upside, and (vi) the linkage of a substantial part
of the consideration to royalty receipts.
We can assure our shareholders that we will continue to exercise
prudence in our decision making. Trident has a strong and effective
board, as well as a highly competent management team. The Board
meets regularly, including the CEO and CFO, to consider and debate
investment opportunities and strategy. The Board has a broad
diversity of opinion, skills and experience, and is always conscious
of its responsibility, as a fiduciary, to our shareholders.
We continue to maintain our strategy of building a diversified
portfolio of royalties, which broadly mirrors the commodity exposure
of the global mining sector and where the asset owner demonstrates
a commitment to safe, efficient, cost-effective operations where ESG
impacts are managed in a responsible manner. Over time, our
business model will lead to our investors being exposed to a
diversified range of commodities and a balanced exposure to
geopolitical risks. Over time, our portfolio will also mature and
eventually underpin a dividend when we can reliably predict strong
cash flows from long-life assets. As previously stated, the Board
recognises the importance of returning cash to its shareholders.
Since listing in 2020 with a single royalty, we have made good
progress on this journey with our portfolio now consisting
of 21 assets, of which 12 are cash flowing. In tandem, we have
been able to progressively reduce our cost of capital, most recently
transitioning our debt funding to a revolving credit facility, significantly
lowering borrowing costs and increasing balance sheet flexibility.
This improves our competitive positioning for asset acquisitions
and will enhance returns to shareholders.
Finally, I would like to add my thanks to our shareholders
and long-term supporters throughout a difficult year.
We believe that the next few years will be very exciting
and I look forward to reporting on our progress.
Al Gourley
Non-Executive Chairman
2 May 2024
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
09
CEO’S STATEMENT
2023 SAW TRIDENT CAPITALISE
ON THE WIDER ECONOMIC LANDSCAPE
OF SOFTER EQUITY MARKETS...
2023 saw Trident capitalise on the wider economic landscape
of softer equity markets by pursuing an aggressive acquisition
strategy which added to the scale and diversification of the portfolio.
Our objective of acquiring and aggregating value accretive royalties
has been yielding results as evidenced in increasing revenue returns
totalling US$11.0m in 2023, and we are confident in future revenue
growth as portfolio assets either expand or advance into production.
Due to weak equity markets, 2023 saw mine operators increasingly
seek alternative sources of financing leading to a total of four material
acquisitions in the year. In the first half of 2023, we acquired royalties
over the La Preciosa Silver Project, while in the latter part of the year,
we announced transactions over the Paradox Lithium Project, the
Antler Copper Project and the Dandoko Gold Project, further
bolstering our exposure to lithium, copper and gold.
In addition to the growth of the portfolio through acquisitions,
we have seen material organic growth as several key assets progress
through project milestones. At the beginning of 2023, we confirmed
the completion of a sale of several pre-production gold royalties
acquired shortly after listing in 2020, in exchange for cash proceeds
of up to US$15.55m, crystalising a 140% ROI. This strengthened our
cash position and the value unlocked by this transaction supported
our objective to successfully reduce our cost of capital through
a restructuring of our existing debt facility. Other key acquisitions
made shortly after listing in 2020 have now had time to mature, with
the royalties over the Koolyanobbing Iron Ore Mine and the Mimbula
Copper Mine having fully recovered their initial acquisition costs
by mid-2023, with further mine life remaining at both projects.
One of Trident’s cornerstone assets, our portfolio of gold offtakes,
performed well across 2023, delivering increased year-on-year
revenues across all four quarters buoyed by strong gold prices and
volatility. With the Greenstone Gold Project targeting first production
in H1 2024, we expect the growth in ounces delivered to Trident
to continue into 2024. At Thacker Pass, we were delighted to note
favourable court rulings at the start of the year allowing the project,
the largest known lithium resource in North America, to commence
construction. The project reaffirmed its status as a Tier 1 asset, with
the operator Lithium Americas announcing it had secured US$650m
in funding from General Motors and recently announcing it has
received a conditional commitment from the U.S. Department of
Energy for a US$2.26 billion loan under the Advanced Technology
Vehicles Manufacturing Loan Program.
As Thacker Pass advances through the construction phase, we have
looked to increase our interaction with North American investors and
were pleased to be admitted to trading on the OTC market allowing
us to increase accessibility and strengthen our engagement with
US investors. This strategy was further strengthened with two further
acquisitions over royalties located in the US in 2023 and is a focus
for 2024.
Following the completion of several deals in the latter half of the year,
we were able to further reduce our cost of capital with a new debt
facility which also provides greater flexibility in managing our cash
and increases our potential borrowing capacity. By lowering our
cost of capital, we have directly increased our competitiveness with
regards to making new acquisitions.
I would like to thank our shareholders for their continued support
throughout a difficult year for equity markets across the sector. I stand
confident in our investment strategy and believe that the material
organic growth we are seeing across our portfolio, as well our active
acquisition of value-accretive royalties, will continue to drive long-
term revenue growth and deliver shareholder returns.
Adam Davidson
Chief Executive Officer
2 May 2024
10 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
CEO’S STATEMENT CONTINUED
...BY PURSUING AN
AGGRESSIVE ACQUISITION
STRATEGY WE ADDED
TO THE SCALE AND
DIVERSIFICATION OF THE
PORTFOLIO
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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OUR MARKETS
ELECTRIFICATION &
BATTERY METALS...
Trident is exposed to lithium through
its acquisition of 60% of a royalty over the Thacker
Pass Lithium Project in Nevada, which is the largest
known lithium resource in the USA. Trident has
also secured the right to acquire an indirect 1.5%
Gross Revenue Royalty over the Sonora Lithium
Project, Mexico and holds a 2.5% NSR over the
Paradox Basin Project in the USA.
PERCENTAGE OF LITHIUM
IN TRIDENT PORTFOLIO
27%
Lithium’s primary use is in the manufacture of
batteries, supporting the transition away from fossil
fuels and enabling vehicle manufacturers across all
industries to electrify their fleets in order to meet
stringent net zero carbon emission targets.
Governments globally have brought in legislation
to accelerate the transition to EVs, including
Europe and UK’s targets to ban the sale of
petroleum powered cars. This rapid transition
has resulted in an increase in demand for lithium
batteries. As well as uses in electric vehicles,
lithium is also used in mobile phones, laptops
and other electronic devices.
12 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
OUR MARKETS CONTINUED
...ARE THE FOUNDATION
FOR THE TRANSITION
AWAY FROM FOSSIL FUELS
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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OUR MARKETS CONTINUED
COPPER...
PERCENTAGE OF COPPER
IN TRIDENT PORTFOLIO
10%
Due to copper’s electrical and thermal
conductivity, it is used in most electrical systems
including the battery and wiring required for
the charging of 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 therefore global demand for
copper has significantly increased.
1 Wood Mackenzie, “Red metal, green demand Copper’s critical role
in achieving net zero”, October 2022
14 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
The development of electric transport,
electricity transmission grids and renewable
power generation is forecasted to have
pushed global demand for copper up to
55Mt/year by 20401.
Trident is exposed to copper through its
royalties over the advanced Pukaqaqa Asset
in Peru, the Antler Project in the USA, and the
producing Mimbula Mine in Zambia.
OUR MARKETS CONTINUED
...IS A KEY
COMPONENT FOR GLOBAL
ELECTRIFICATION
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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OUR MARKETS CONTINUED
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.
PERCENTAGE OF MINERAL SANDS
IN TRIDENT PORTFOLIO
<1%
Mineral sands, also commonly known
as “heavy mineral sands”, contain
concentrated amounts of economically
important minerals such as zircon and titanium
minerals, including rutile and ilmenite.
Mineral sands are used most frequently
in household products such as suncream,
inks, paints and tiles but are also used
in medical devices, welding materials,
purification systems as well as other
industrial uses.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
OUR MARKETS CONTINUED
...CAN BE USED FOR A
VARIETY OF INDUSTRIAL
PURPOSES
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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OUR MARKETS CONTINUED
IRON ORE...
PERCENTAGE OF IRON ORE
IN TRIDENT PORTFOLIO
3%
Iron ore is the essential component of the
global iron and steel industries with 98%
of mined iron ore being used in the
production of steel.
The construction and transport industries
are reliant on the iron ore and steel industry,
and it is critical to the development of energy
infrastructure such as the production of
wind turbines.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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.
OUR MARKETS CONTINUED
...IS AN ESSENTIAL
COMPONENT OF THE
GLOBAL IRON AND STEEL
INDUSTRIES
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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OUR MARKETS CONTINUED
SILVER...
PERCENTAGE OF SILVER
IN TRIDENT PORTFOLIO
5%
As well as the traditional investment into this
precious metal as a hedge against inflation,
silver due to its conductivity, is now a key
component in electrical systems including
solar panels and those used in electric vehicles
such as automatic braking, power steering
and navigation systems. The increase in
demand for electric vehicles and the move to
autonomous driving vehicles has significantly
increased the global demand for silver.
20 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
Trident is exposed to silver through its
1.25% NSR Royalty and 2.00% GVR Royalty
over certain tenements at the La Preciosa
Project in Mexico.
OUR MARKETS CONTINUED
...IS AN IMPORTANT
INDUSTRIAL METAL DUE TO
ITS CONDUCTIVITY AND
CORROSION RESISTANCE
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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OUR MARKETS CONTINUED
GOLD OFFTAKES &
ROYALTIES WORLDWIDE...
PERCENTAGE OF GOLD
IN TRIDENT PORTFOLIO
55%
Gold offers investors a hedge against inflation
and in 2023 the global gold price increased by
13%. Trident holds a portfolio of gold offtake
contracts over 10 mines. An offtake contract is
a contract in which the operator agrees to sell,
and the purchaser agrees to buy, refined gold
produced from the mine over which the
offtake is granted. Offtake returns are driven by
the direction and volatility of gold prices but
like royalties are not impacted by operator
capex or operating costs.
The key commercial terms of the contract are
stated on page 23. 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.
Trident also hold a 1% NSR royalty over the
Dandoko Gold Project, operated by B2 Gold
in Mali, and a 1.5% NSR royalty over the
Lincoln Gold Mine, USA.
22 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
The gold offtake portfolio continued to
develop as several projects continued to ramp
up, and exploration activities were completed
across various assets in the portfolio. Quarterly
revenue increased across all four quarters and
the gold offtakes portfolio generated
US$6.9m in revenue this year, an increase
of 12.8%, in comparison to 2022 in which
US$6.1m in revenue was received.
Post period end, Trident completed the
acquisition of a further incremental offtake at
the Sugar Zone Gold Mine resulting in Trident
holding three offtakes over the project for a
combined 80% of the gold doré produced up
to 961,250 delivered ounces.
The outlook for the offtake portfolio is strong
heading into 2024 with the commencement of
production at Greenstone expected in H1 2024
execpted to deliver increased ounces, alongside
the potential for increased production from
Blyvoor, i-80 Gold and Santa Luz.
Further details of the Group’s investments are provided on its website
at www.tridentroyalties.com.
OUR MARKETS CONTINUED
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...COMPRISING OF OFFTAKE
CONTRACTS OVER 10 MINES
ACROSS SIX COUNTRIES
Asset Operator Country 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
i-80 Gold i-80 Gold USA Production 7 Days Offtake on 100% of refined gold
production subject to an annual
ounce cap
Sugar Zone Silver Lake Canada Construction / 7 Days Offtake on 80% of the gold doré
Restart produced at Silver Lake Resources’
Sugar Zone Gold Mine up to 961,250
delivered ounces
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 is paid US$23.50/oz on any
shortfall
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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OPERATIONAL REVIEW
PRODUCING ROYALTIES
KOOLYANOBBING
AUSTRALIA // IRON ORE
KEY FACTS
Location: 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
Total 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 cover part of the
Deception Pit and all of the Claw Pit at Koolyanobbing.
The royalty provides Trident with cash flow from a producing iron ore
asset operated by an established mining company in a worldclass
jurisdiction. Following the Q2 2023 royalty payment Trident has now
fully recovered its investment into the asset.
During the year Trident received US$1.88m (2022: US$1.55m)
in royalty income.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
OPERATIONAL REVIEW CONTINUED
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 0.3%
Total Reserves and Resources: 93.7Mt @ 0.97% Total Copper
(“TCu”) Resources
67.5Mt @ 0.92% Tcu Reserves
Trident held a 1.25% GRR over all copper produced from the
Mimbula Mine in Zambia, operated by Moxico Resources PLC.
In Q2 2023 Trident recovered its investment in full and following the
end of the Minimum Payment Schedule the GRR decreased to 0.3%,
with a subsequent decrease to 0.2% once the royalty has been paid
on 575,000 tonnes of copper.
Moxico during the year has successfully ramped up production
and capacity is expected to double in 2024 with the full Phase 2
expansion to 56,000 tonnes expected to commence in mid-2025.
During the year Trident received US$1.6m (2022: US$2.0m)
of payments from Mimbula, the decrease in royalty payments
was expected due to the conclusion of the minimum
payment schedule.
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PRODUCING ROYALTIES
KWALE
KENYA // MINERAL SANDS
KEY FACTS
Location: Kenya
Operator: Base Resources (ASX: BSE)
Commodity: Mineral Sands
Mine Type: Open Pit
Stage: Production
Royalty: 0.25% Free on Board
Total Reserves and Resources: 21Mt @ 2.2% Heavy Mineral
(“HM”) Reserves
184Mt @ 1.5% 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.
26 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
OPERATIONAL REVIEW CONTINUED
ROYALTIES ADVANCING TOWARDS PRODUCTION
THACKER PASS
USA // LITHIUM
KEY FACTS
Location: USA
Operator: Lithium Americas Corp.
(NYSE/TSX: LAC)
Commodity: Lithium
Mine Type: Open pit
Stage: Construction
Royalty: 60% interest in a 1.75% gross
revenue royalty (1.05% net to
Trident), assuming the buyback is
completed with a US$13.2m
payment attributable to Trident,
as detailed below
Total Reserves: 3.7m tonnes of Lithium Carbonate
Equivalent (“LCE”) at 3,160ppm Li
In 2021 Trident acquired a 60% interest in a GRR over the Thacker
Pass Lithium Project for US$28.0m. This project is the largest known
lithium deposit in North America and the operator Lithium Americas
is targeting 80,000 tonnes per annum of battery-quality lithium
carbonate production capacity in two phases of 40,000 tonnes per
annum. Phase 1 production is expected to commence in 2027.
Thacker Pass is a critical asset in the USA’s development of its own
critical minerals supply chain. Thacker Pass entered the construction
phase this year after several key permitting decisions were reached.
An appeal relating to the issuance of the Record of Decision for
Thacker Pass was dismissed by the US District Court, District of
Nevada subject to minor additional work which was successfully
completed in May 2023. This decision was subsequently appealed to
the 9th U.S. Circuit Court of Appeals, which rejected the arguments
the opponents had put forth in their appeal and ruled that the U.S.
Bureau of Land Management, which approved Thacker Pass, had
acted “reasonably and in good faith”.
In February 2023, General Motors invested US$650m toward project
development and entered into a 10-year offtake agreement to
purchase Phase 1 production to support production of up to 1 million
electric vehicles per year.
In March 2024, Lithium Americas received a conditional commitment
from the U.S. Department of Energy for a US$2.26 billion loan under
the Advanced Technology Vehicles Manufacturing Loan Program for
financing the construction of the processing facilities at Thacker Pass.
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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: Construction
Royalty: 1.25% NSR and 2.00% gross value
return royalty
Total Resources: 137Moz Ag Equivalent -
Indicated 17.4Mt @ 202 g/t Ag Eq &
Inferred 4.4Mt @ 170 g/t Ag Eq
In May 2023 Trident acquired a 1.25% NSR Royalty over the area
covering the Gloria and Abundancia veins and a 2.00% GVR Royalty
over the surrounding area at the La Preciosa Silver Project in Mexico.
Additionally, Trident is entitled to a milestone payment of US$8.75m
from the operator Avino Silver and Gold Mines (“Avino”) within 12
months of first production. The milestone payment may be paid
up to 50% in shares of Avino. Avino intends to begin processing
stockpiled material from La Preciosa in H1 2024 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.
Gaining exposure to silver was a strategic decision for Trident, as silver
has the characteristics of a precious metal as well as an increasingly
significant industrial use due to its usage in electrical systems in EVs
and solar panels.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
OPERATIONAL REVIEW CONTINUED
ROYALTIES ADVANCING TOWARDS PRODUCTION
ANTLER
USA // COPPER
KEY FACTS
Location: USA
Operator: New World Resources Ltd
(ASX:NWC)
Commodity: Copper, Zinc
Mine Type: Underground
Stage: Advanced
Royalty: 0.90% NSR Royalty
Total Reserves: 11.4Mt @ 4.1% Cu-Equivalent
Trident acquired in Q4 2023 a 0.90% NSR royalty over the current
tenement package which covers the entire Antler Copper Project,
including the copper-zinc Antler deposit and five named exploration
targets. The Royalty also includes a 0.45% NSR royalty over any
ground subsequently acquired by New World within 5km of the
Project Area Royalty boundary.
The Antler Project has a JORC (2012) Compliant Mineral Resource
estimate of 11.4Mt @ 4.1% Cu-equivalent for approximately 467,000
tonnes of Cu-equivalent. An Enhanced Scoping Study published in
May 2023 outlined a 13-year mine life with average annual
production of 32,700 tonnes copper equivalent.
A Pre-Feasibility Study on the Project is expected in Q4 2024, with
commencement of pre-construction development works targeted for
Q1 2025. Together with Trident’s investment and a recent AUD$5m
investment from a leading mining private equity firm, New World is
well funded to advance through the remainder of its planned
feasibility studies. Trident considers there to be significant upside
potential, with New World concurrently targeting exploration
opportunities across its land holdings.
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ROYALTIES ADVANCING TOWARDS PRODUCTION
PARADOX BASIN
USA // LITHIUM
KEY FACTS
Location: USA
Operator: Anson Resources Ltd (ASX: ASN)
Commodity: Lithium, Bromine
Mine Type: Brine
Stage: Advanced
Royalty (sliding scale NSR): 2.50% NSR Royalty
Total Resources: Indicated Resource of 366,737t of
LCE and 1.91Mt of Bromine
Inferred Resource of 1.14Mt of LCE
and 5.70Mt of Bromine
In August 2023 Trident acquired a 2.50% NSR royalty over projects
owned by Anson Resources in the Paradox Basin in Utah, USA
including the Paradox Lithium Project and the Green Lithium River
Project. Trident will also be entitled to 2.00% of the net sales proceeds
of any projects at which point the royalty would no longer apply to the
sold asset. The Paradox Lithium Project is an advanced stage lithium
brine project, targeting use of direct lithium extraction.
In October 2023 the operator announced a 45% increase
in the JORC (2012) Compliant Mineral Resource to 1.504Mt
of Lithium Carbonate Equivalent (LCE) and 7.61Mt of Bromine
and the strategic acquisition of the Green Energy Lithium project
directly adjacent to Paradox.
30 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
OPERATIONAL REVIEW CONTINUED
ROYALTIES ADVANCING TOWARDS PRODUCTION
DANDOKO
MALI // GOLD
KEY FACTS
Location: Mali
Operator: B2Gold Corporation Limited
(TSX: BTO)
Commodity: Gold
Mine Type: Open pit
Stage: Advanced
Royalty: 1% NSR Royalty
Total Resources: Indicated 7.95Mt @ 1.33g/t Au,
for 400Koz Au
Inferred 1.55Mt @ 0.79g/t Au,
for 34Koz Au
In September 2023 Trident acquired a 50% interest in a 2% net
smelter return royalty over the Dandoko Gold Permit owned by
B2 Gold Corporation Limited.
Dandoko is located 25km from B2Gold’s largest operating asset,
the Fekola Mine. B2 Gold have stated they believe the metallurgical
characteristics of mineralisation at Dandoko are similar to Fekola and
will be amenable to processing at Fekola.
B2Gold has completed a study confirming the potential for near-term
production by trucking saprolite material to Fekola. The company
has budgeted US$79m to facilitate Phase 1 saprolite mining from the
Anaconda and Dandoko areas. Of the budgeted US$79m, US$16m
has been allocated for haul road construction to Fekola from the
Anaconda and Dandoko projects.
B2Gold is also currently advancing an engineering study of the
“Fekola Regional Development Plan” to assess the potential for a new,
standalone 4Mtpa processing facility located at Anaconda, with
Resources from Anaconda and Dandoko forming the basis for the
engineering study. Fulfilment of this plan will permit more substantial
production in the medium term.
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ROYALTIES ADVANCING TOWARDS PRODUCTION
PUKAQAQA
PERU // COPPER
KEY FACTS
Location: Peru
Operator: Nexa Resources SA (TSX:NEXA)
Commodity: Copper, Molybdenum
Mine Type: Open pit
Stage: Exploration
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 Peru and operated by South-American focused Nexa Resources.
The Pukaqaqa Project has NI 43-101 compliant Measured and
Indicated Resources of 309Mt at 0.41% Cu (approximately 1.26m
tonnes of contained copper), with an additional Inferred Resource
of 40.1Mt at 0.34% Cu (for 136,340 tonnes contained copper and
related molybdenum credits).
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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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
OPERATIONAL REVIEW CONTINUED
ROYALTIES ADVANCING TOWARDS PRODUCTION
LINCOLN
USA // GOLD
KEY FACTS
Location: California, USA
Operator: Seduli Holdings Pty (private)
Commodity: Gold
Mine Type: Underground
Stage: Advanced (Paying MPS)
Royalty: 1.5% net smelter return royalty
(over down dip extension zone)
Total Resource: 958Kt @ 9.29g/t Au for 286koz gold
Trident acquired a 1.5% NSR gold royalty covering the entire Lincoln
gold project in California. The royalty includes a 5-mile area of interest
which spans the majority of the exploration area. The royalty is fully
secured by the project assets and reduces to a 0.75% NSR in
perpetuity once the royalty has paid US$3m.
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.
Despite achieving first gold pour in H1 2022, the operator Seduli
Holdings Pty, suspended production operations to undertake
resource expansion activities. Trident agreed 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 Stage 1.
During the year Trident received US$0.60m of payments from
Lincoln under the minimum payment schedule.
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ROYALTIES ADVANCING TOWARDS PRODUCTION
SONORA
MEXICO // LITHIUM
KEY FACTS
Location: Mexico
Operator: Ganfeng Lithium (SEHK: 1772)
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
In 2022 Trident announced that Sonoroy, a 50%-held joint venture
between Trident and Marmottes Capital Limited, entered into an
agreement to acquire a 3.0% Gross Revenue Royalty (1.5%
attributable to Trident) over the Sonora Lithium Project. The terms of
the agreement were the long-stop date to complete the acquisition
of the royalty is the earlier of 31 January 2025, or the date which is six
months after the first royalty payment.
However, Bacanora Minerals Ltd. have pursued legal action against
the validity of the royalty. Subsequently, in September the General
Directorate of Mines in Mexico issued a formal decision that nine
lithium concessions, which comprise the Sonora Lithium Project, were
cancelled. Gangfeng have indicated that they believe that its Mexican
subsidiaries have complied with their obligations as required by
Mexican law, and therefore have filed administrative review recourses
before the Secretary of Economy.
The conditions requiring Trident to provide funding in respect of
Sonoroy to enable it to complete the acquisition remain at Trident’s
discretion and includes a provision that, at the time of funding, no
changes in Mexico’s regulatory regime materially affects the Sonora
project and that ongoing litigation regarding the royalty is favourably
resolved. If Trident elects to exit the joint venture, the repayment date
of an initial loan made by Trident to Sonoroy of US$2.5m is due six
months from notification of termination of the Sale and Purchase
Agreement or Joint Venture Agreement. Trident will continue to
monitor the situation carefully but currently intends to maintain its
rights in respect of the asset. The long stop date to complete the
transaction has been extended to 31 December 2026.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
ENVIRONMENT, SOCIAL AND GOVERNANCE
(“ESG”) REPORT
RESPONSIBLE AND
SUTAINABLE PRACTICES
We are committed to embedding responsible and sustainable practices within both
our own business, as well as participating in an environmentally and socially responsible,
ethical and sustainable value chain.
As a royalty and streaming business, we recognise the distinction between our internal
practices and those of the operators and assets within our portfolio. As a predominately
office-based business with a small team, our direct environmental and social impacts are
minor relative to those that occur within our portfolio, which are typically outside of Trident’s
direct control. Nonetheless, we seek to invest in royalties or streams where the asset owner
demonstrates a commitment to safe, efficient, cost-effective operations where ESG impacts
are managed in a responsible manner.
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ESG REPORT CONTINUED
PROGRESSING OUR ESG
APPROACH
Building on the foundations laid in 2022, we have carried this momentum forward in 2023. This has involved working to gain a better
understanding of our ESG landscape and refining the development of our ESG approach. To do this, we have analysed our business,
our sustainability context as well as the material ESG topics identified through an assessment conducted in 2022 involving a range
of external and intenal stakeholders.
Trident is committed to adopting responsible and sustainable practices within our own business in the following key areas:
Compliance
Corporate Governance
& Ethics
Stakeholder relationships
& partnerships
Promoting responsible
& sustainable practices
Responsible
employment practices
Our ESG roadmap
Trident considers the application and development of its ESG commitments and practices as an ongoing and continuous process,
and as such, 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
Future steps
• Development of formal ESG
• Approving updated and new
• Further enhance ESG reporting,
approach
• Policy review
• Implement ESG roadmap
policies at Board level
with data
• Enhancing and formalising ESG data
• Conduct updated materiality
collection practices
• Continued ESG due diligence and
monitoring in line with our policies
• Implementing ESG action plan
assessment
36 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
ESG REPORT CONTINUED
UN SUSTAINABLE
DEVELOPMENT GOALS
GOVERNANCE AND
ETHICS
Addressing global challenges, the United Nations Sustainable
Development Goals (“SDGs”) provide a blueprint to achieve a better
and more sustaianble future for all. Trident has committed to two
priority SDGs following an analysis process. We believe that Trident
can meaningfully contribute to SDG 8 and 9 and, as our ESG practices
continue to develop, we will look 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.
Trident’s contribution
By investing in and financing mining projects at various stages
of development, we are able to contribute to the positive impacts
of these operations in our portfolio, which have the capacity to
drive industry and socioeconomic development, cultivate
innovation and provide employment opportunities.
Example
Trident holds a number of offtakes for gold produced by Equinox
Gold, which has stated its commitment to being a leader for
responsible mining. In 2022, the Company employed 8,471
people and contractors, and invested US$8.9 milllion to support
community programmes.
Robust corporate governance and business ethics are fundamental
to Trident’s long-term success. We endeavour to uphold strong
practices throughout our activities, conducting business transparently,
ethically and efficiently – see further detail on pages 52 to 55.
We are committed to compliance with applicable legal and
regulatory, environmental, health and safety, and human rights
requirements of the jurisdictions in which we operate, and also
take international standards into account where appropriate.
We strive to uphold human rights, guided by the UN Guiding
Principles on Business and Human Rights and the UN Declaration
of Human Rights.
It is important to us that our employees feel able to raise concerns
and believe this is vital to creating the right culture and to Trident’s
long-term success. Therefore, we encourage a culture of speaking
up and helping us do the right thing. As part of this, we operate
a Whistleblowing Policy, which provides a channel for employees
and other stakeholders to report unethical conduct or concerns.
At Trident we are committed to acting professionally, fairly, honestly
and with integrity in all our business dealings and relationships
wherever we operate. We also look to implement and enforce
effective systems to counter bribery and corruption, including
our Anti-Bribery and Anti-Corruption Policy. Trident conducts due
diligence on anti-bribery and anti-slavery policies and practices
before providing primary finance to businesses and will expect
all partners to comply with anti-bribery and anti-slavery legislation.
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Build resilient infrastructure,
promote inclusive and sustainable
industrialisation and foster innovation.
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.
Example
Trident holds a 60% interest in a gross revenue royalty over
the Thacker Pass lithium project, which is an asset of national
significance to the USA as it seeks to secure and develop
its own critical minerals supply chain.
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37
ESG REPORT CONTINUED
PROMOTING RESPONSIBLE
AND SUSTAINABLE
PRACTICES
Our approach to responsible investment
Understanding how our approach differs
Trident strives to participate in an environmentally and socially
responsible, ethical and sustainable value chain. Although Trident
is not involved in, nor has any direct control over, the operational
decisions of our partners, we are conscious of our indirect exposure
to ESG risks arising from their business practices and actions and look
to mitigate or minimise these wherever possible.
Trident invests across a wide range of royalties, streams and
alternative investments which can broadly be catagorised into
“primary” or “secondary” investments. These require different
approaches to due diligence and have varying degrees of
monitoring and information rights.
As part of our capital allocation and investment management
process, we seek to apply robust due diligence, evaluation and
ongoing engagement with partners and local stakeholders, with
the ultimate aim of promoting responsible and sustainable mineral
exploration, development, extraction – as shown below.
Trident’s team of mining investment professionals has extensive
experience and expertise in all aspects of mine development and
operation. This is fundamental to our 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.
Responsible
capital allocation
and portfolio
construction
Effective stakeholder
engagement
3
Monitoring and
evaluation
4
2
Primary
Primary investment opportunities involve the creation of a new
royalty, stream or offtake in exchange for direct financing of the
project partner. Trident usually has access to a greater degree
of due diligence information in primary investments and can also
often document specific requirements into the royalty agreement –
ranging from specific ESG-related targets, to information reporting
and potential compliance with other ESG requirements.
When evaluating new primary investment opportunities,
Trident typically has direct access to the project partner and
associated detailed documentation on which to conduct diligence.
Consideration is also given to the application of internationally-
recognised ESG principles and frameworks by partners, as part
of Trident’s due diligence process.
Secondary
Secondary (or existing) investments are royalties, streams, or offtakes
that have been created by a third party and subsequently acquired
by Trident at a later date. In these transactions, Trident may be limited
to public information available on the asset, which varies significantly
across jurisdiction and operator status. There is rarely the ability for
Trident to alter the terms of the original agreement, with ESG-related
rights limited to those outlined in the original agreement.
1
Notwithstanding this, the Company performs due diligence
of all available materials in consideration of relevant ESG impacts
when evaluating an investment.
Due diligence
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ESG REPORT CONTINUED
Responsible capital allocation and
portfolio construction
In addition, Trident’s assessment considers ESG impacts which may
include, but are not limited to:
• health and safety management;
• responsible and ethical approach to business;
• environmental management, including:
- Energy use, carbon emissions and air quality;
- Water stewardship;
- Waste and tailings management;
- Biodiversity management;
- Closure planning and rehabilitation.
• responsible employment practices, human rights and approach
to labour relations;
• community and broader stakeholder engagement and
contribution; and
• responsible practices relating to project closure
Monitoring and evaluation
We monitor the performance of our investments with regards
to material ESG impacts through ongoing engagement with our
partners, reviewing public reporting, receiving regular reports
concerning ESG-related activities and conducting site visits,
which include engaging with local community groups.
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As part of our ambition to participate in a responsible and sustainable
value chain, Trident seeks to invest in royalties or streams where
the project operator runs safe, efficient, cost-effective mines,
and demonstrates a commitment to the responsible management
of their ESG impacts.
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.
Trident aims to build and maintain an attractive and balanced
exposure to a wide range of commodities, including those needed
for electrification and a more sustainable future. We believe there is
an important role we can play in funding the production of critical
minerals required to advance the global clean energy transition and
consider Trident to be well positioned positioned to participate in
such opportunities. Trident’s future growth is weighted towards
energy transition metals, including our 1.05% gross revenue royalty
in Thacker Pass – one of North America’s largest lithium resources
and currently under construction in Nevada.
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
fossil fuels operations.
Due diligence
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.
As part of our due diligence process undertaken prior to entering
into a royalty or streaming agreement, we review potential ESG-
related issues. This process, whether for primary or secondary
investment opportunities, is based upon an understanding of the
identified ESG risks of each operation, as well as an assessment
of how ESG is being managed and monitored by the operator.
As a minimum, Trident requires compliance with applicable laws
and regulations in the jurisdictions in which our partners operate.
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ESG REPORT CONTINUED
PROMOTING RESPONSIBLE
AND SUSTAINABLE
PRACTICES CONTINUED
RESPONSIBLE
EMPLOYEE PRACTICES
Effective stakeholder engagement
A crucial element of Trident’s investment management approach is
based upon sustained formal and informal engagement with our
partners. Engagement methods vary, but include site visits, management
meetings and formal reporting obligations where appropriate.
Health and safety is a crucial topic in our wider industry and one
of the most material ESG considerations for our asset operators.
Trident reviews and carefully considers the health and safety
performance and track record of potential partners as part of
due diligence activities when considering potential investments.
By focusing on effective and transparent engagement with our
partners, we aim to assess the success of their approach in the
management of material ESG topics, as well as to promote and
encourage continual improvement in practices and performance.
See our Section 172 Statement on page 41 for further information.
Within Trident’s own business, the Company upholds responsible
employment practices, with due consideration to key areas such as
skills development and succession planning. We have 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. 40% of Trident’s Non-Executive Directors are female
(being 29% of the total Board of Directors).
We are committed to maintaining a cordial, respectful and
positive working environment free from discrimination, harassment
or violence, as well as one which encourages and fosters diversity
and inclusion. It is only in this spirit that our diverse board is able
to provide and harness their unque expereinces and perspectives.
Communities
Mining projects often 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,
community engagement practices are assessed as part of our
investment due diligence, and we believe that mining projects have
both the opportunity and a duty to positively contribute to local
communities.
Environmental
As an office-based business with a small team, we are aware that
the most material environmental impacts occur within our portfolio
of investments and are therefore not within Trident’s direct control.
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
making process to the pertinent environmental and social aspects
of any potential investment. Due diligence is completed on materials
made available to Trident as part of primary investments, as well as
a review of public information and Trident’s own internal queries.
We utilise external consults where necessary to complement
Trident’s internal due diligence capabilities.
As a minimum, Trident requires compliance with environmental laws and
regulations in the locations in which our investee businesses operate.
40 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
SECTION 172 STATEMENT
This section serves as our section 172(1) statement and should be read in conjunction with the Operational Review on pages 24 to 34 of this
report and the Company’s Corporate Governance Statement on pages 52 to 55 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 have identified four
key stakeholder groups and are aware of the importance for Trident of engaging effectively with and listening to each of these with the aim
of understanding, their specific interests, and fostering longstanding and mutually beneficial relationships. By understanding the opinions
and views of our stakeholders, we aim to 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 a pivotal role in supporting
our Company. We regularly engage with investors
on our financial performance, strategy and business model
and recognise the value of their feedback in shaping our
decision making.
Employees
Six individuals are employed directly on a full-time basis
within the Company and are vital to the success of its
activities. By prioritising strong communication, we can
collaborate effectively to fulfil the Company’s strategy.
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.
On behalf of the Board
Al Gourley
2 May 2024
• Regular portfolio and trading updates
• RNS Announcements
• Investor relations section on website
• Webcasts
• AGM
• Social Media
• One-on-one meetings
• Investor conferences and events
• The team is small and highly integrated with daily dialogue
between the team and the Chief Executive Officer.
• Direct engagement with 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.
• Formal reporting obligations of operators
where appropriate.
• Ongoing monitoring of developments through
public announcements.
• Through dialogue with and reporting from the operator
to understand updates on key community and
environmental milestones and incidents.
• Conducting site visits, which include engaging
with local community groups.
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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, 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 acquired five new royalties in 2023,
materially increasing the diversity of the portfolio.
The Group currently has 12 cash flowing assets –
however shouldthere 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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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
RISK MANAGEMENT CONTINUED
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.
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.
The technical aspects of a royalty acquisition or
financing are now also reviewed in detail by a
Technical Committee which was established in
September 2023. 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.
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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 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 is 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 24.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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FINANCIAL REVIEW
THE EVOLUTION OF THE GROUP’S
CAPITAL STRUCTURE CONTINUED
DURING 2023
During 2023, Trident made significant progress across many areas
of the business. The gold offtake portfolio continued to mature, with
increasing production volumes and a 13% increase in cash flows.
Looking forward, the commissioning of the Greenstone mine in
Canada and developments at other assets should provide further
growth in offtake revenues in 2024. An important milestone was
achieved with the Koolyanobbing and Mimbula royalty investments,
as the initial capital outlay was recovered during 2023, approximately
three years after the initial investments.
The proceeds from the sale of the Australian gold royalty portfolio,
were successfully redeployed during 2023 into a number of new
assets, further enhancing the scale and diversity of the portfolio.
We look forward to near term cash flow from the La Preciosa silver
deposit in Mexico and positive project developments at the Antler,
Paradox Basin and Dandoko projects.
The evolution of the Group’s capital structure continued during 2023,
with the announcement of a new revolving credit facility with BMO
and CIBC, two leading financiers in the mining sector. The new facility
provides several benefits; materially lowering interest costs, providing
additional capacity with an accordion feature to increase the facility
to US$60m and reducing ongoing standby costs, as the facility is
revolving and can be drawn as required. Trident is well positioned
with a diverse portfolio of royalty assets, combined with a strong
balance sheet to pursue future growth opportunities.
Royalty and Offtake Transactions
The Group acquired the following royalties during the year:
• La Preciosa silver royalties in Mexico (1.25% NSR Royalty over the
Gloria and Abundancia veins and a 2.00% GVR Royalty over the
surrounding area) and a U$8.75m milestone payment, acquired for
US$8m (US$7m on completion and a further US$1m upon receipt
of the milestone payment);
• Dandoko gold project in Western Mali (1% NSR Royalty) acquired
for total consideration of US$6.25m (US$3.75m upfront and a
further US$2.5m as production linked milestone payments);
• Paradox Basin lithium project in the USA (2.5% NSR Royalty)
acquired for total consideration of US$10m (US$1.5m upfront and
a further US$8.5m as production linked milestone payments);
• Antler copper project in the USA (0.9% NSR Royalty covering the
Antler deposit and five named exploration areas and a 0.45% NSR
Royalty over a wider area) acquired for total consideration of
A$11m; and
• Kwale mineral sands project in Kenya (0.25% FOB Royalty).
In addition, on 22 February 2023 the Group completed the sale
of several pre-production exploration stage gold royalties over
assets in Australia for cash proceeds of up to US$15.55m.
44 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
Statement of Financial Position
Royalty intangible assets at 31 December 2023, consist of
US$104.98m cost, less US$5.36m amortisation and additions of
US$28.41m relating to new acquisitions and US$6.73m relating to the
reclassification of Mimbula as a royalty intangible asset, resulting in a
total net book value of US$134.76m representing the Thacker Pass,
Pukaqaqa, Koolyanobbing, Mimbula and Lincoln projects together
with the acquisitions outlined.
The royalty financial instrument representing the fair value of the
Mimbula royalty was reclassified as a royalty intangible asset in July
2023, following completion of the minimum payment schedule. The
royalty financial instrument had been classified 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$7.65m, US$1.50m royalty income was received in during H1
and a fair value increase of US$0.58m was recognised in the income
statement, resulting in a value of US$6.73m at reclassification.
Trade and other receivables totalling US$9.81m (2022: US$10.40m)
includes US$5.87m receivable from Macquarie bank relating to gold
offtake trades which settled after the year end, US$0.57m in respect of
Q4 2023 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 cash deposit,
treated as an interest free loan.
Trade and other payables totalling US$2.20m (2022: US$2.28m)
consisted predominantly of US$0.99m 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$4.88m.
Deferred contingent consideration of US$8.19m represents
contingent payments to the vendors of the La Preciosa, Paradox and
Dandoko assets based on the operators meeting certain production
targets. The amounts have been discounted and treated as non-
current liabilities, given managements’ assessment of when the
projects will become operational and the targets achieved.
Total cash at the end of the year was US$3.25m (US$8.13m including
the net gold trading receivables) and total debt was US$30.00m.
Total net assets increased to US$108.56m during the year from
US$104.87m at 31 December 2022 largely due to acquisitions outlined.
Statement of Comprehensive Income and EBITDA
The Group reported a gross profit of US$4.16m (2022: US$2.99m)
from reported net revenues of US$9.52m (2022: US$7.85m).
The increase in net revenue was from the gold offtake portfolio,
Koolyanobbing and Lincoln. The fair value gain on Mimbula was
US$0.58m (2021: US$2.19m) 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.
FINANCIAL REVIEW CONTINUED
Statement of Comprehensive Income and EBITDA continued
A profit on disposal of US$6.94m was made on sale of Australian
pre-production gold royalties – with gross proceeds of US$14.30m.
The Group made a foreign exchange gain totalling US$0.02m
(2022: US$1.01m loss). Finance charges totalled US$3.55m including
US$4.48m in interest payments to Macquarie Bank and US$1.28m
gain relating to amortised finance arrangement fees and warrant
charges and other finance charges. Profit after taxation was US$2.39m
(2022: US$3.68m loss) and basic earnings per share of 0.82c
(2022: 1.28c loss).
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$522.0m less purchase costs of US$515.1m.
The Group generated net revenue from its gold offtake portfolio
of US$6.88m (2022: US$6.07m), US$1.87m (2022: US$1.43m) at
Koolyanobbing, US$0.60m (2022: US$0.35m) from Lincoln and
$0.17m (2022: US$Nil) from other assets. The amortisation charge
was US$5.37m (2022: US$4.86m) and total Group overheads of
US$5.27m (2022: US$4.67m) including US$0.41m (2022: $0.47m)
non-cash share-based payments and other charges; resulting in an
operating loss of US$1.11m (2022: US$1.67m). The gold offtakes,
Koolyanobbing and Mimbula assets are amortised on a unit of
production basis over the life of the assets.
EBITDA and Adjusted EBITDA
The below table summarises EBITDA and adjusted EBITDA:
Year ended Year ended
31 December 31 December
2023 2022
US$’000 US$’000
Profit/(loss) after tax 2,392 (3,684)
Income tax 1,411 (945)
Amortisation 5,365 4,857
Finance costs net of finance income 2,631 6,002
EBITDA 11,799 6,230
Net foreign exchange losses (23) 1,007
Income from financial instrument through
profit and loss 1,500 2,000
Revaluation of royalty financial assets (578) (2,193)
Share-based payments charge and other
non-cash items 408 474
Profit on disposal of intangible asset (6,944) (1,862)
Adjusted EBITDA 6,162 5,656
The following table shows total royalty receipts for the period for royalty
intangible assets, net offtake interests, disposals and financial assets:
Year ended Year ended
31 December 31 December
2023 2022
US$’000 US$’000
Royalty interests 2,643 1,780
Offtake interests (net proceeds)* 6,878 6,070
Royalties due or received from royalty
financial assets 1,500 2,000
Proceeds from Mercedes gold offtake
amendment – (gross) - 3,706
Proceeds from the Australian gold
royalties sale – (gross) 14,300 -
Total 25,321 13,556
* Offtake interests
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Cashflow and Borrowings
Net cash decreased in the period by US$13.33m (2022: US$28.37m).
Financing outflows were US$14.74m (2022: US$30.06 inflow)
resulting from the repayment of US$10m of the Macquarie Bank
facility and financing costs; US$3.28m (2022: US$54.90m) was
invested into acquiring royalty assets, after allowing for proceeds
received from asset sales, cash from royalty financial assets and
finance income, as noted above, and US$4.69m generated (2022:
US$3.53m used) in operating activities.
During 2023 the net gold trading receivable decreased by US$0.24m
to US$4.88m. 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 had a separate
US$5.00m short term overdraft facility with Macquarie Bank to
provide funding for the gold trading receivable over the 2-day
settlement period if required. A similar US$2.00m overdraft facility has
been arranged with CIBC, alongside the new revolving credit facility
and the Macquarie overdraft was terminated upon the refinancing.
The cash figure (excluding the net gold trading receivable) at 31
December 2023 was US$3.25m (31 December 2022: US$16.58m)
with the majority held in US dollars with HSBC Bank plc and
Macquarie Bank Limited. On 19 February 2024, Trident entered into a
new fully secured US$40m revolving credit facility with an option to
increase the facility to US$60m via an accordion feature with BMO
Capital Markets and CIBC. The proceeds are to be applied to retire
the existing US$40m secured debt facility provided by Macquarie
Bank Limited.
Taxation
During the period the Group paid US$0.34m (2022: US$Nil) in
respect of tax due. A deferred tax asset was recognised totalling
US$1.49m (2022: US$2.01m) primarily in relation to taxable losses
incurred in the Company and US subsidiaries. Following the sale of
the Australian gold royalties outlined above, the deferred tax losses
held in the Australian subsidiary were used during the year; resulting
in a deferred tax debit to the income statement of US$1.97m
(2022: US$0.68m credit).
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
45
PAGE TITLE
COPPER WILL PLAY A
MAJOR ROLE IN THE
ONGOING
ELECTRIFICATION OF
THE WORLD WITH ITS
PRINCIPAL APPLICATION
FOR COPPER WIRING
46 TRIDENT ROYALTIES PLC
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PAGE TITLE
CORPORATE GOVERNANCE
48 Board of Directors
50 Directors’ report
52 Corporate governance statement
56 Remuneration report
57 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
Al Gourley
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.
Al Gourley is a senior 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.
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BOARD OF DIRECTORS CONTINUED
Peter Bacchus
Non-Executive Director
Helen Pein
Non-Executive Director
David Reading
Non-Executive Director
Leslie Stephenson
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.
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Leslie Stephenson has over 30
years’ experience in the financial
services industry. Leslie has
worked for two major insurance
companies in the US and has
worked in banking and held
senior roles at HSBC, specifically
around strategic planning and
risk management. Leslie left
HSBC in 2022.
Leslie was also previously the
Head of Governance & Control
for the UK Remediation
Management Office, which
carried out a regulatory review
of the UK bank. Leslie currently
sits on the board of the Canada-
UK Council and previously was
Vice President of the Canada-UK
Chamber of Commerce. Leslie
holds an MBA from Richard Ivey
School of Business and a BA
from Western University.
Peter Bacchus is currently
Chairman and Chief Executive
of Bacchus Capital, an
independent investment
banking boutique with particular
expertise in the natural
resources sector. Peter has over
25 years of experience as a
leading global M&A adviser,
with particularly deep
experience within natural
resources having advised some
of the largest companies in the
sector. Throughout Peter’s
career he has been at the
forefront of several large and
transformative M&A
transactions, financed
substantial deals, and advised
on development projects
worldwide. Peter previously
acted as the Global Head of
Mining and Metals at Morgan
Stanley and European Head of
Investment Banking at Jefferies.
Before relocating to London in
2006, he was based in Australia
and Indonesia, where he was
Asia-Pacific Head of Industrials
and Natural Resources
investment banking at Citigroup.
Peter currently sits on the board
of New York and Johannesburg
Stock Exchange listed Gold
Fields 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.
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.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
49
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 2023.
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, Mali and Kenya. Trident is domiciled and
incorporated in 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 47 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 24. The principal risks and uncertainties faced
by the Group are set out on pages 42 and 43.
Results and Dividends
The results of the Group for the year ended 31 December 2023
are set out in the Consolidated Statement of Comprehensive Income.
The Directors do not recommend the payment of a dividend
for the year.
Directors and Directors’ Interests
The Directors who served during the year to date are as follows:
Adam Davidson
Richard Hughes
Peter Bacchus
Al Gourley
Helen Pein
David Reading
Leslie Stephenson (appointed 14 August 2023)
Paul Smith (resigned 29 June 2023)
The direct and beneficial shareholdings of the Board in the Company
as at 31 December 2023 were as follows:
Shares held at Shares held at
31 December 31 December
2023 2022
Adam Davidson 330,000 300,000
Richard Hughes 800,000 475,000
Peter Bacchus 236,140 202,015
Al Gourley* 7,534,125 7,500,000
Helen Pein 139,593 105,468
David Reading 192,390 175,000
Leslie Stephenson - -
* 34,125 shares held directly, and 7,500,000 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 Remuneration Report and note 23.
50 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
DIRECTORS’ REPORT CONTINUED
Substantial Shareholders
As at 31 December 2023, the total number of issued Ordinary Shares
with voting rights in the Company was 292,730,176. 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 35,461,858 12.11
LIM Asia Special Situations
Master Fund Limited 25,428,837 8.69
Ponderosa Investments
(WA) Pty Limited 16,124,196 5.51
Ruffer LLP 15,582,647 5.32
Amati UK Smaller Companies Fund 14,232,467 4.86
BlackRock World Mining Trust Plc 11,568,558 3.96
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 22. As at 31 December 2023, 292,730,176
ordinary shares of 1p were in issue.
Corporate Governance
The Group has set out its full Corporate Governance Statement
on pages 52 to 55. 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 6 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 given in its Environmental and Social
Governance Statement on pages 35 to 40.
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 27.
Going Concern
The financial position of the Group and cash flows as at 31 December
2023 are set out on pages 67 and 69. 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 24 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.
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 41 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:
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Non-Executive Chairman
2 May 2024
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
51
CORPORATE GOVERNANCE STATEMENT
The Company is committed to maintaining the highest standards in corporate governance throughout its operations and to ensure all 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 adopting the UK’s
Quoted Companies Alliance Corporate Governance Code 2018 (“QCA Code”).
The 10 principles set out in the QCA Code are listed below, with an explanation of how the Company applies each of the principles
and the reason for any aspect of non-compliance.
Principle
Trident Response
Establish a strategy and business model which promote
long-term value for shareholders
Seek to understand and meet shareholder needs
and expectations
Take into account wider stakeholder and social
responsibilities and their implications for long
term success
Embed effective risk management, considering both
opportunities and threats, throughout the organisation
The strategic vision of the Company is explained in the Strategic
Report on pages 8 to 47. The Company’s strategy follows the well
understood royalty company model, however it seeks to create
value through the acquisition of attractive and robust royalties
in commodities and jurisdictions which are inherently less
competitive relative to those with a precious metal focus.
The Board is committed to maintaining good communications
and having constructive dialogue with its shareholders. Institutional
shareholders and analysts have the opportunity to discuss issues
and provide feedback at meetings with the Company. In addition,
all shareholders are encouraged to attend the Company’s Annual
General Meeting and any other General Meetings that are held
throughout the year.
The Board recognises that the long-term success of the Company
will be enhanced by good relations with different internal and
external groups and to understand their needs, interest and
expectations, the Board has established a range of processes and
systems to ensure that there is ongoing two-way communication,
control and feedback processes in place with which to enable
appropriate and timely response.
The Board maintains a risk register and regularly reviews the risks
to which the Company is exposed and ensures through its meetings
and regular reporting that these risks are minimised as far as
possible whilst recognising that its business opportunities carry
an inherently high level of risk.
Maintain the Board as a well-functioning, balanced team
led by the Non-Executive Chairman
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 48 and 49.
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 Remuneration and
Nominations Committee and measured against a definitive list of
short, medium and long-term strategic targets set by the Board.
52 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
CORPORATE GOVERNANCE STATEMENT
CONTINUED
Principle
Trident Response
Promote a corporate culture that is based on ethical
values and behaviours
The corporate culture of the Company is promoted through its
employees and contractors and is underpinned by compliance with
local regulations and the implementation and regular review and
enforcement of various policies including a Share Dealing Policy
and Code, Anti-Corruption and Anti-Bribery Policy, Matters Reserved
for the Board, Code of Business Ethics, Employee Leave Policy,
Expenses Policy, Whistle Blowing Policy, Grievance Redressal and
Disciplinary Policy, Social Media Policy and Media and
Communications Policy so that all aspects of the Company
are run in a robust and responsible way.
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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 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 2023, 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 2023
53
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 Committee, Remuneration and Nomination Committee and the Technical Committee.
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, Leslie Stephenson 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 and Nomination Committee
The Remuneration and Nomination Committee comprises Leslie Stephenson, as Chair, David Reading and Helen Pein.
The Committee has responsibility for considering all criteria for new Executive and Non-Executive Director appointments, 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 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 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 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 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 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.
54 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
CORPORATE GOVERNANCE STATEMENT
CONTINUED
The Remuneration and Nomination 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 assesses whether each Non-Executive Director is spending enough
time to fulfil their duties;
• 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;
• determines and agrees with the Board the framework or broad policy for the remuneration of the Chief Executive Officer;
• determines targets for any performance-related pay schemes operated by the Company;
• determines the total individual remuneration package of the Chief Executive Officer and Chief Financial Officer, including bonuses, incentive
payments and share options;
• ensures that contractual terms on termination and any payments made are fair to the individual, as well as the Company, and that failure
is not rewarded and that the duty to mitigate loss is fully recognised;
• 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;
• determines the remuneration of Non-Executive Directors; and
• is exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference
for any remuneration consultants who advise on Remuneration.
Technical Committee
The Technical Committee is comprised of David Reading, as chairman, and Helen Pein as alternate chairman.
The Technical Committee’s primary function is to assist the Board of Directors in discharging its oversight responsibilities
on technical risk relating to the acquisition of new assets, including royalties, offtakes and streams.
The Technical Committee’s focus is to understand and evaluate the Company’s approach to due diligence in respect of critical project or asset
risk areas, such as resource or reserve calculations, mine design, expectations as to production levels and metal recoveries, as well as operational
team competence, exploration upside and ESG matters.
Meetings of the Technical Committee are held at regular intervals depending on priority and activity levels. Members of the management team
attend meetings of the Technical Committee, as required, depending on their involvement with particular projects or assets being reviewed.
The Technical Committee reports to the Board in advance of any Board meeting to consider the merits of a particular project or asset.
Board and Committee Attendance
The table below sets out the number of Board Committee meetings held during the year ended 31 December 2023 and each Director’s
attendance at those meetings.
Remuneration
Board & Nomination Audit Technical
Director Meetings Committee Committee Committee3
Paul Smith1 2 - 1 -
Adam Davidson 7 - - -
Peter Bacchus 6 - 2 -
Al Gourley 6 - 2 -
Helen Pein 7 2 - 2
David Reading 7 2 - 2
Richard Hughes 7 - - -
Leslie Stephenson2 4 2 - -
Total Meetings 7 2 2 2
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2 Leslie Stephenson appointed 14 August 2023
3 Technical Committee established in September 2023
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 May 2024
Adam Davidson
Chief Executive Officer
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
55
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 2023.
Salary/fees Bonus - cash Bonus - shares Other Total
US$’000 US$’000 US$’000 US$’000 US$’000
Executive Directors:
Adam Davidson 2023 412 165 41 - 618
2022 385 231 - - 616
Richard Hughes1 2023 258 128 32 24 420
2022 63 44 - 0.1 107
Non-Executive Directors5:
Peter Bacchus 2023 80 - - 24 82
2022 93 - - 14 94
Al Gourley 2023 104 - - - 104
2022 91 - - - 91
Helen Pein 2023 99 - - - 99
2022 87 - - - 87
Paul Smith2 2023 164 - - - 164
2022 155 - - - 155
David Reading3 2023 107 - - - 107
2022 37 - - - 37
Leslie Stephenson6 2023 27 - - 0.64 28
2022 - - - - -
1 Richard Hughes was appointed to the Board on 20 September 2022
2 Paul Smith resigned 29 June 2023
3 David Reading was appointed to the Board on 27 June 2022
4 The Company made pension contributions of US$2k on behalf of Richard Hughes and Peter Bacchus and US$0.6k on behalf of Leslie Stephenson
5 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
6 Leslie Stephenson was appointed to the Board on 14 August 2023
Executive Directors
The discretionary bonuses of the Executive Directors were assessed
against a number of objectives and criteria by the Remuneration
Committee, resulting in a total award split between cash and shares to
Adam Davidson of US$206k (2022: US$231k) and to Richard Hughes
of US$160k (2022: $44k).
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 2024, Richard Hughes’ base
salary increased from £200k to £230k per annum Adam Davidson’s
base salary remained at US$412k per annum.
Non-Executive Directors
Each Non-Executive Director appointment is subject to periodic
renewal, in terms of the Company’s Articles of Association, at the
AGM. For Non-Executive Directors, these engagements can be
terminated by either party on six months’ notice.
On 1 January 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 £32.1k,
plus a cash conservation sum of £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 £5k for each Committee they
chair. The Non-Executive Chairman was entitled to an annual fee
totalling £64.2k plus a cash conservation sum of £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 15 February 2023, it was 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 £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.
56 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
REMUNERATION REPORT CONTINUED
DIRECTORS’ RESPONSIBILITY STATEMENT
In December 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 totaling £60k, plus
£15k for each Committee they chair and £5k for each Committee of
which they are a member. It was also agreed that Peter Bacchus
receive an additional £5k for additional guidance provided to the
Board and its committees.
Directors Option Awards
No option awards were granted to Directors in the year.
During the prior 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 May 2024
Adam Davidson
Chief Executive Officer
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 May 2024
Adam Davidson
Chief Executive Officer
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57
PAGE TITLE
ROYALTIES TYPICALLY
PROVIDE INVESTORS
WITH TOP LINE EXPOSURE
TO A VARIETY OF
COMMODITIES WITHOUT
DIRECT EXPOSURE TO
CAPITAL OR OPERATING
COST INFLATION
58 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
PAGE TITLE
FINANCIAL STATEMENTS
60 Independent Auditor’s report
66 Consolidated statement of comprehensive income
67 Consolidated statement of financial position
68 Consolidated statement of changes in equity
69 Consolidated statement of cash flows
70 Company statement of financial position
71 Company statement of changes in equity
72 Company statement of cash flows
73 Notes to the financial statements
IBC Company information
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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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 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statement
of Financial Position, the Consolidated and Company Statements of Changes in Equity, the Consolidated and 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 2023
and of the group’s Profit 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 the period to 31 May 2025, including checking the mathematical accuracy of the budgets and assessing
the reasonableness of significant assumptions used by management;
• Performing a comparison of budgets to current year results, and post-year end results to date, to assess completeness and accuracy
of forecast financial information;
• Discussing with management key plans and expectations over the period to 31 May 2025 in respect of business performance and
development of asset portfolio;
• Assessing the adequacy of financing facilities and working capital balances to allow the group and parent company to meet its liabilities
as they fall due over the going concern period; and
• Reviewing the latest available post-year end bank statements, regulatory announcements, and board minutes, and assessing 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.
60 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF TRIDENT ROYALTIES PLC
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine
the scope of our audit and the nature, timing and extent of our audit procedures. The materiality applied to the group financial statements
as a whole was set at US$1,531,000 (2022: US$1,400,000), with performance materiality set at US$1,071,000 (2022: US$980,000) and triviality
threshold set at US$76,000 (2022: US$70,000). 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. The group
continued its growth in the year through investment in new royalty assets, and these assets represent 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 materiality applied to the parent company financial statements was US$1,050,000 (2022: US$210,000), based on 1% of gross assets,
as the most significant balances in the Company’s statement of financial position are the royalty assets and intragroup receivables.
Performance materiality was set at US$735,000 (2022: US$147,000).
The remainder of the components were audited at overall component materiality levels ranging between US$104,000 to US$1,500,000, based
on their relative asset contribution to the group, with performance materiality levels of 70% of overall materiality levels, depending on the
scoping and risk assessment of the components.
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 intragroup receivable balances (at the parent company level). 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 significant components within the consolidated financial statements, two based in the United Kingdom (Trident Royalties Plc
and TRR UK Services Ltd), one based in Switzerland (TRR Services Schweiz), one based in Australia (TRR Services Australia Pty Ltd) and two in the
United States of America (Trident Offtakes LLC and Trident Services LLC). 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.
This approach gave the audit team sufficient coverage on group revenue, gross assets and result for the year.
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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
Accounting treatment and recoverability
of royalty interest assets
The group has continued to increase its holdings in royalty
interests significantly in the year. Investments in royalty interest
assets represented US$135m (90%) (2022: US$105m (92%)) of the
group’s total assets. Further details can be found in notes 2, 12 & 13
to the financial statements. The investments comprise upfront and
deferred 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 (note that no such assets are held at 31 December 2023); 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 is performed for each project based
on discounted future cash-flows and compared to carrying value,
where indicators of impairments are noted. 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,
and other relevant matters.
There is a risk that royalty interest assets have not been correctly
valued and classified in accordance with the requirements of IFRS.
We have determined this to be a key audit matter based on the
financial significance of these assets to the group combined with
the requirement for management to use their judgment in
assessing their recoverability.
Recoverability of related party balances (parent company)
There is a risk around the recoverability of investments and inter-
company balances on the parent’s balance sheet, which is directly
related to the recoverability of the underlying asset performance.
The parent company held balances receivable from subsidiaries
to the value of US$99.7m (2022:US$90.6m) at year end, as shown
in note 16 to 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.
As a result of the estimation and judgement management are
required to exercise in making their assessment, we have
determined this to be a key audit matter.
62 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
Our work in this area included;
• A review of the technical accounting memorandums prepared
by management along with the accounting policies adopted by
the Group for compliance with IFRS 9 (if deemed to be a financial
asset) or IAS 38 (if deemed to be an intangible asset);
• A review of the asset acquisition accounting treatment including
contingent consideration for compliance with IFRS, including
verification of key terms back to underlying acquisition
agreement;
• Re-performance of amortisation charges during the period
and review of the useful economic lives;
• Verification of ownership of the royalty interests and
corroboration to the relevant agreements;
• Review of management’s impairment assessment for each
project / interest, corroborating and providing challenge
to key inputs and assumptions;
• An assessment of each royalty interest for indicators of
impairment in accordance with IAS 36, including obtaining
an understanding of the status and timing of project activity,
actual versus budgeted production quantities, commodity
price changes and publicly available information in respect
of the project owners; and
• Reviewing the associated disclosures in the financial statements.
Our work in this area included:
• Considering whether indicators of impairment exist as at
31 December 2023 by reference to underlying asset values
in the respective entities, as well as the value in use models
supporting these assets;
• Considering the appropriateness of management’s assessment
of expected credit losses in relation to intercompany receivables
in accordance with IFRS 9; and
• Reviewing the associated disclosures in the financial statements.
INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF TRIDENT ROYALTIES PLC
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group and parent
company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the group and parent
company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic
alternative but to do so.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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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
detailed discussions with management about the potential instances of non-compliance with laws and regulations both in the UK and in
overseas subsidiaries. We also selected a specific audit team based on experience with auditing entities within this industry of a similar size.
• We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from:
- Companies Act 2006
- AIM Rules
- Local industry regulations in Australia, the United States of America, Switzerland and the United Kingdom
- Local tax and employment law
• We designed our audit procedures 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. These procedures included, but were not limited to:
- Making enquiries of management
- A review of Board Minutes
- A review of legal ledger accounts
- A review of RNS Announcements
• We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override of controls, that there were no other significant fraud risks.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures 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.
Imogen Massey (Statutory Auditor)
For and on behalf of PKF Littlejohn LLP 15 Westferry Circus
Statutory Auditor Canary Wharf
London E14 4HD
2 May 2024
64 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
65
Notes
3
12
4
13
14
7
8
9
Year ended
Year ended
31 December 31 December
2022
US$’000
7,850
(4,857)
2,993
(4,667)
(1,674)
2023
US$’000
9,521
(5,365)
4,156
(5,267)
(1,111)
578
6,944
915
(3,546)
23
3,803
(1,411)
2,392
36
36
2,428
2,193
1,862
241
(6,244)
(1,007)
(4,629)
945
(3,684)
141
141
(3,543)
10
0.82
(1.28)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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 assets
Finance income
Other finance costs
Net foreign exchange gains/(losses)
Profit/(loss) before taxation
Income tax
Profit/(loss) attributable to owners of the parent
Other comprehensive income
Items that may be subsequently reclassified to profit and loss:
Exchange gains on translation of foreign operations
Other comprehensive income for the period, net of tax
Total comprehensive income/(loss) attributable to owners of the parent
Earnings per share:
Basic and diluted earnings/(loss) per share (U.S. cents)
The notes on pages 73 to 94 are an integral part of these financial statements.
66 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
REGISTERED COMPANY NUMBER: 11328666
Non-current assets
Royalty intangible assets
Royalty financial assets at fair value through profit and loss
Deferred tax asset
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Assets classified as held for sale
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
Deferred tax 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
18
14
19
9
21
20
21
21
9
22
22
23
Year ended
Year ended
31 December 31 December
2022
US$’000
2023
US$’000
134,755
-
1,489
136,244
9,805
3,248
13,053
-
13,053
149,297
2,203
225
5,064
7,492
8,188
23,814
607
637
33,246
40,738
108,559
3,855
107,220
919
295
(3,730)
108,559
104,975
7,653
2,005
114,633
10,398
16,577
26,975
6,750
33,725
148,358
2,277
-
6,775
9,052
408
31,576
2,452
-
34,436
43,488
104,870
3,835
106,387
511
259
(6,122)
104,870
The notes on pages 73 to 94 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board on 2 May 2024 and are signed on its behalf by:
Adam Davidson
Director
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Balance at 1 January 2021
Loss for the year
Other comprehensive income:
Exchange gains on translation of foreign operations
Total comprehensive income
Transaction with owners in their capacity as owners:
Issue of share capital
Share issue costs
Share-based payment charge
Total transactions with owners recognised directly
in equity
Balance at 31 December 2022
Profit for the year
Other comprehensive income:
Exchange gains on translation of foreign operations
Total comprehensive income
Transaction with owners in their capacity as owners:
Issue of share capital
Share-based payment charge
Total transactions with owners recognised directly
in equity
Balance at 31 December 2023
Share
capital
US$’000
3,307
Share
premium
US$’000
87,046
Share based
payments
reserve
US$’000
403
Foreign
exchange
reserve
US$’000
118
-
-
-
528
-
-
528
3,835
-
-
-
20
-
-
-
-
19,613
(272)
-
19,341
106,387
-
-
-
833
-
20
3,855
833
107,220
-
-
-
-
-
108
108
511
-
-
-
-
408
408
919
-
141
141
-
-
-
-
259
-
36
36
-
-
-
295
The notes on pages 73 to 94 are an integral part of these financial statements.
Retained
earnings
US$’000
(2,804)
Total
US$’000
88,070
(3,684)
(3,684)
-
(3,684)
141
(3,543)
-
-
366
366
(6,122)
2,392
-
2,392
-
-
20,141
(272)
474
20,343
104,870
2,392
36
2,428
853
408
-
(3,730)
1,261
108,559
68 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flow from Operating Activities
Profit/(loss) 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
Share-based payments charge
Net cash generated before changes in working capital
Movement in payables
Movement in receivables
Net cash generated/(used) in operating activities before tax
Corporate income tax paid
Net cash generated/(used) in operating activities
Cash flows from investing activities
Payments for acquisition of royalty intangible assets1
Net cash received from sale of intangible assets
Cash received from royalty financial assets
Finance income
Net cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs
Proceeds from borrowings
Repayment of borrowings
Issue costs of credit facility
Finance costs
Net cash (used)/generated from financing activities
Net (decrease) 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
Notes
13
14
7
8
12
12
14
13
7
22
22
21
21
8
18
18
1 During 2023, non-cash consideration of US$0.75m in shares and US$8.19m of contingent consideration were recognised in relation
to the acquisition of royalty intangible assets. See note 12 for further details.
The notes on pages 73 to 94 are an integral part of these financial statements.
Year ended
Year ended
31 December 31 December
2022
US$’000
2023
US$’000
3,803
(578)
(6,944)
(915)
3,546
37
5,365
408
4,722
(60)
62
4,724
(34)
4,690
(19,485)
13,292
2,000
915
(3,278)
-
-
-
(10,000)
-
(4,742)
(14,742)
(13,330)
16,577
1
3,248
(4,629)
(2,193)
(1,862)
(241)
6,244
1,442
4,857
474
4,092
1,424
(9,048)
(3,532)
-
(3,532)
(60,518)
3,528
1,875
215
(54,900)
6,438
(272)
40,000
(10,000)
(1,576)
(4,529)
30,061
(28,371)
45,637
(689)
16,577
TRIDENT ROYALTIES PLC
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
REGISTERED COMPANY NUMBER: 11328666
Non-current assets
Investment in subsidiaries
Royalty intangible asset
Royalty financial assets at fair value through profit and loss
Amount due from subsidiary undertakings
Deferred tax asset
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Current Liabilities
Trade and other payables
Current liabilities
Non-current Liabilities
Derivative financial liability
Total liabilities
Net assets
Equity
Share Capital
Share Premium
Share-based payments reserve
Foreign exchange reserve
Retained Earnings
Total equity
Notes
15
12
13
16
9
17
18
19
21
22
22
23
Year ended
Year ended
31 December 31 December
2022
US$’000
2023
US$’000
113
6,685
-
99,704
323
106,825
3,615
1,667
5,282
112,107
113
-
7,653
90,553
221
98,540
4,041
9,537
13,578
112,118
486
486
322
322
607
1,093
111,014
2,452
2,774
109,344
3,855
107,220
919
(23)
(957)
111,014
3,835
106,387
511
(23)
(1,366)
109,344
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 profit for the Parent Company for the year was US$0.41m (2022: US$1.32m loss).
The notes on pages 56 to 84 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board on 2 May 2024 and are signed on its behalf by.
Adam Davidson
Director
70 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share
capital
US$’000
3,307
Share
premium
US$’000
87,046
Share based
payments
reserve
US$’000
403
Foreign
exchange
reserve
US$’000
(23)
Balance at 1 January 2022
Loss for the year
Total comprehensive income for the year
Issue of share capital
Share issue costs
Share options lapsed
Share-based payment charge
Total transactions with owners recognised directly
in equity
Balance at 31 December 2022
Profit for the year
Total comprehensive income for the year
Issue of share capital
Share-based payment charge
Total transactions with owners recognised directly
in equity
Balance at 31 December 2023
-
-
528
-
-
-
-
-
19,613
(272)
-
-
528
3,835
19,341
106,387
-
-
20
-
-
-
833
-
20
3,855
833
107,220
-
-
-
-
(366)
474
108
511
-
-
-
408
408
919
The notes on pages 73 to 94 are an integral part of these financial statements.
Retained
losses
US$’000
(412)
(1,320)
(1,320)
-
-
366
-
Total
US$’000
90,321
(1,320)
(1,320)
20,141
(272)
-
474
-
-
-
-
-
-
I
I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
-
(23)
366
(1,366)
20,343
109,344
-
-
-
-
409
409
-
-
409
409
853
408
-
(23)
-
(957)
1,261
111,014
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
71
Year ended
Year ended
31 December 31 December
2022
US$’000
2023
US$’000
332
(578)
(463)
(250)
(1,645)
(5)
64
408
(2,137)
249
(272)
(2,160)
-
(2,160)
2,000
463
-
(22,994)
14,817
(5,714)
-
-
-
(7,874)
9,537
4
1,667
(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
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
Profit/(loss) before taxation
Revaluation of royalty financial asset
Finance income
Intercompany interest received
Other finance (income)/costs
Net foreign exchange losses/(gains)
Amortisation of royalty intangible asset
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
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
Net cash generated from financing activities
Net decrease 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 73 to 94 are an integral part of these financial statements.
Notes
13
8
13
16
16
22
22
72 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Trident Royalties plc is a company incorporated and domiciled in the United Kingdom. The Company is a public limited company,
which is listed on AIM of the London Stock Exchange, incorporated and domiciled in England and Wales. The address of the registered
office is 6th Floor 60 Gracechurch Street, London, United Kingdom, EC3V 0HR.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial statements are set out below. The policies have been
consistently applied throughout the year presented, unless otherwise stated.
Basis of preparation
The Group’s consolidated financial statements and the Parent Company financial statements have been prepared in accordance
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, contingent consideration and financial derivative liabilities which are measured at fair value. The principal accounting policies adopted
are set out below. The Group financial statements are presented in US Dollars (US$) 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 2023 are set out on pages 67 and 69. 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 24 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 2023, 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 2023
73
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S
T
A
T
E
M
E
N
T
S
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$), which is the functional currency of the Group and Company.
The functional currency of all the Company’s subsidiaries is US$ 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
2022
0.6806
0.6926
2023
0.6812
0.6737
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.
74 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 and performance vesting conditions are included in assumptions about the number of options
that are expected to vest. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At each reporting date, the entity revises its estimates of the number of options that are expected to vest
based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit and loss,
with a corresponding adjustment to equity.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
75
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M
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N
T
S
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Financial Instruments
Financial instruments comprise cash and cash equivalents, borrowings, financial assets and liabilities, derivative financial 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.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected
credit loss model.
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 classified 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.
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.
Contingent consideration
Contingent consideration is initially recognised at its fair value based on the expected future cash flows. After initial recognition the contingent
consideration is remeasured at the end of each reporting period with any gains or losses recognised in the royalty intangible asset balance on
the balance sheet.
Warrant liability at fair value through profit and loss
The warrant liability is initially measured at fair value, including transaction costs. The liability is measured at fair value at the end of each reporting
period, with any gains or losses recognised as other finance costs in the income statement. Fair value is determined by the calculation described
in note 21.
Equity instruments and reserves description
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
Ordinary shares are classified as equity.
Deferred shares are classified as equity but have restricted rights such that they have no economic value.
Share capital account represents the nominal value of the ordinary and deferred shares issued.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated
with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Share based payment reserve represents equity-settled share-based employee remuneration until such share options are exercised.
Foreign exchange reserve represents
• differences arising on the opening net assets retranslation at a closing rate that differs from opening rate; and
• differences arising from retranslating the income statement at exchange rates at the dates of transactions at average rates and assets
and liabilities at the closing rate.
Retained earnings include all current and prior period results as disclosed in the Statement of Comprehensive Income.
76 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
77
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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
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.
• 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
• Thacker Pass
• Lincoln gold
• Sugar Zone offtake
• Equinox Gold offtake
• Allied Gold offtake
• Blyvoor Gold offtake
• i80 Gold offtake
• Victoria Gold offtake
• Mimbula
• Kwale
• La Preciosa
• Dandoko
• Paradox
• Antler
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 (till 1st July 2023)
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
The Directors are cognisant that the Lincoln gold royalty is subject to a minimum payment schedule and is classified as a Royalty intangible
asset. The classification decision was arrived at having considered that the minimum payment schedule was introduced as an amendment
to the original royalty agreement in order to assist the operator with the progression of the asset development and with the intention to revert
to a standard royalty arrangement upon commencement of production. The classification will be reviewed at each reporting date.
Gold offtake revenue recognition
The Directors have decided that Trident acts as an agent in the gold offtake transaction and accordingly should disclose revenue and costs
net. The strict legal interpretation of IFRS 15 deems Trident to be the principal. However, the Directors consider 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.
Further details are disclosed in note 3 – Business and Geographical Reporting.
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 73 for more details.
Loans to subsidiaries
Loans to subsidiaries have a carrying value at 31 December 2023 of US$99.7m (2021: US$90.6m). The Directors have assessed the carrying
value, in accordance with the IFRS 9 Expected Credit Loss model and consider it 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.
78 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 was held at fair value until its reclassification as a royalty intangible asset. Fair value was 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 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.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
79
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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: Lincoln Gold Mine, Gold Offtake Contracts, La Preciosa, Dandoko
Bulk: Koolyanobbing, Kwale
Battery Metals: Thacker Pass, Paradox
Base: Mimbula, Pukaqaqa, Antler
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 2023:
Royalty and offtake related revenue
Amortisation of royalty intangible assets
Gross profit
Administrative expenses
Total segment operating profit/(loss)
Precious
US$’000
7,478
(4,148)
3,330
-
3,330
Bulk Battery metals
US$’000
-
-
-
-
-
US$’000
1,930
(1,153)
777
-
777
Base
US$’000
113
(64)
49
-
49
Other
US$’000
-
-
-
(5,267)
(5,267)
Total
US$’000
9,521
(5,365)
4,156
(5,267)
(1,111)
Total segment assets
80,107
2,118
35,296
17,041
13,735
149,297
Total segment liabilities
(31,205)
-
-
-
(9,533)
(40,738)
Segmental information as at 31 December 2022:
Royalty and offtake related revenue
Amortisation of royalty intangible assets
Gross profit
Administrative expenses
Total segment operating result
Precious
US$’000
6,418
(3,796)
2,622
-
2,622
Bulk Battery metals
US$’000
-
-
-
-
-
US$’000
1,432
(1,061)
371
-
371
Base
US$’000
-
-
-
-
-
Other
US$’000
-
-
-
(4,667)
(4,667)
Total
US$’000
7,850
(4,857)
2,993
(4,667)
(1,674)
Total segment assets
82,732
2,445
28,234
11,714
23,233
148,358
Total segment liabilities
(40,081)
-
-
-
(3,407)
(43,488)
As at 31 December 2023, the Group had received royalty income from the Gold Offtake portfolio and Lincoln gold (precious segment),
Koolyanobbing and Kwale (bulk segment) and Mimbula (base segment). Additionally, a fair value gain of US$0.6m (2022: US$2.2m)
was recognised in the base segment relating to the Mimbula asset for the period prior to its reclassification as a Royalty intangible asset
(see note 13).
US$6.9m (2022: US$6.1m) of the precious revenue relates to net proceeds from gold offtake contracts – gross revenue was US$522.0m
(2022: US$446.1m) with US$515.1m (2022: US$440.0m) costs.
80 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
4. ADMINISTRATIVE EXPENSES
Employee benefit expense (note 6)
Legal and professional
Other operating expenses
Total operating expenses
5. AUDITOR REMUNERATION
During the year the Company obtained the following services from the auditor:
Fees payable to the auditor for the audit of the Group and Company
Total auditor’s remuneration
Year ended
Year ended
31 December 31 December
2022
US$’000
2,946
1,068
653
4,667
2023
US$’000
3,309
1,126
832
5,267
Year ended
Year ended
31 December 31 December
2022
US$’000
69
69
2023
US$’000
55
55
Other assurance services pursuant to legislation
-
-
Details of the Company’s policy on the use of auditors for non-audit services, the reasons why the auditor was used rather than another supplier
and how the auditor’s independence and objectivity are safeguarded are set out in the Audit Committee Report.
6. EMPLOYEE BENEFIT EXPENSE
Directors’ salary and fees
Employee costs
Social security costs
Share based payments
Total employee benefit expense
Group
Year ended
Company
Year ended
Group
Year ended
Company
Year ended
31 December 31 December 31 December 31 December
2022
US$’000
585
455
90
474
1,604
2023
US$’000
1,014
68
115
408
1,605
2023
US$’000
1,617
1,051
233
408
3,309
2022
US$’000
1,185
1,103
184
474
2,946
Further disclosures in respect of Directors’ remuneration are included within the Directors’ Remuneration Report. The average number
of employees (including Directors) during the year was 9 (2022: 9).
7. FINANCE INCOME
Interest from bank deposits
Total
Year ended
Year ended
31 December 31 December
2022
US$’000
241
241
2023
US$’000
915
915
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
81
I
I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
8. OTHER FINANCE COSTS
Interest paid
Amortisation of financing costs (including warrant (credit)/charge)
Other finance charges
Total
Year ended
Year ended
31 December 31 December
2022
US$’000
3,774
2,220
250
6,244
2023
US$’000
4,483
(1,284)
347
3,546
A fair value credit of US$1.6m (2022: US$1.7 charge) relating to the outstanding warrants held in the Company was recognised in the year.
9. INCOME TAX
Analysis of charge for year:
United Kingdom corporation tax
Overseas taxation
Adjustments in respect of prior years
Current tax expense
Deferred tax charge/(credit) in current year
Adjustments in respect of prior years
Effect of changes in tax rates
Deferred tax
Income tax charge/(credit)
Factors affecting the tax charge for the year:
Profit/(loss) before taxation
Tax on result calculated at UK Corporation tax of 23.5% (2022: 19%)
Tax effects of:
Items non-taxable/deductible for tax purposes:
Non-deductible expenses
Non-taxable income
Temporary and other differences:
Foreign tax credits
Effect of differences between local and UK tax rates
Prior year adjustment to current and deferred tax
Deferred tax not recognised
Remeasurement of deferred tax for changes in tax rates
Other adjustments
Income tax
Year ended
Year ended
31 December 31 December
2022
US$’000
2023
US$’000
-
258
-
258
1,476
(323)
-
1,153
1,411
-
84
-
84
(1,317)
318
(30)
(1,029)
(945)
Year ended
Year ended
31 December 31 December
2022
US$’000
2023
US$’000
3,803
(4,629)
894
(880)
47
-
34
502
(323)
(100)
365
(8)
1,411
107
-
83
(420)
319
(27)
(127)
-
(945)
The Group is subject to taxation in United Kingdom, USA and Australia with applicable tax rates of 25.00%, 21.00% and 30.00% respectively.
The Group does not have any unresolved tax matters or disputes with the tax authorities in the jurisdictions in which it operates.
82 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
9. INCOME TAX CONTINUED
Deferred taxation
The following are the deferred tax assets and liabilities recognised by the Group and the movements during the year:
Group
At 1 January 2022
Credit/(charge) to income statement
Exchange differences
31 December 2022
(Charge)/credit to income statement
Exchange differences
At 31 December 2023
Analysed as:
Deferred tax asset
Deferred tax liability
Tax losses
US$’000
1,482
Other
US$’000
(439)
Total
US$’000
1,043
1,317
-
2,799
(2,521)
-
278
278
-
(289)
(66)
(794)
1,382
(14)
574
1,211
(637)
1,028
(66)
2,005
(1,139)
(14)
852
1,489
(637)
The deferred tax asset predominantly relates to the US subsidiaries. Based on the forecast future cashflows for the royalty assets held by these
subsidiaries the losses are expected to be fully utilised, accordingly the deferred tax asset has been recognised in full. The deferred tax liability
principally relates to accelerated capital allowances in the Australian subsidiary.
Company
At 1 January 2022
Credit to income statement
At 31 December 2022
Credit to income statement
At 31 December 2023
10. EARNINGS PER SHARE
Tax losses
US$’000
-
Other
US$’000
93
Total
US$’000
93
-
-
-
-
128
221
102
323
128
221
102
323
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period.
Net (loss)/profit attributable to shareholders
Profit/(loss)
Year ended
Year ended
31 December 31 December
2022
US$’000
(3,684)
2023
US$’000
2,392
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/(loss) per share – basic
Earnings/(loss) per share - diluted
2023
291,749,788
40,859
291,790,647
2022
288,853,068
-
288,853,068
0.82 c
0.82 c
(1.28) c
(1.28) c
The effect of the outstanding warrants and options in respect of the prior year as disclosed under note 23 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.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
83
I
I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
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 2022
Acquisitions
Disposals
Reclassified as assets held for sale
Exchange differences
At 31 December 2022
Acquisitions
Additions
Disposals
Reclassified from royalty financial assets
Exchange differences
At 31 December 2023
Accumulated Amortisation
At 1 January 2022
Amortisation
Disposal
Exchange differences
At 31 December 2022
Amortisation
Disposal
Exchange differences
At 31 December 2023
Net book value at 31 December 2022
Net book value at 31 December 2023
Company
Cost
At 1 January 2022 and 31 December 2022
Acquisitions
Additions
Reclassified from royalty financial assets
At 31 December 2023
Accumulated Amortisation
At 1 January 2022 and 31 December 2022
Amortisation
At 31 December 2023
Net book value at 31 December 2022
Net book value at 31 December 2023
84 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
Royalty
interests
US$’000
Offtake
interests
US$’000
46,167
-
-
(6,750)
(768)
38,649
28,406
18
-
6,731
4
73,808
(1,267)
(1,062)
-
99
(2,230)
(1,217)
-
(14)
(3,461)
36,419
70,347
-
74,018
(1,833)
-
-
72,185
-
-
-
-
-
72,185
-
(3,795)
166
-
(3,629)
(4,148)
-
-
(7,777)
68,556
64,408
Total
US$’000
46,167
74,018
(1,833)
(6,750)
(768)
110,834
28,406
18
-
6,731
4
145,993
(1,267)
(4,857)
166
99
(5,859)
(5,365)
-
(14)
(11,238)
104,975
134,755
Royalty
interests
US$’000
Offtake
interests
US$’000
Total
US$’000
-
-
18
6,731
6,749
-
(64)
(64)
-
6,685
-
-
-
-
-
-
-
-
-
-
-
-
18
6,731
6,749
-
(64)
(64)
-
6,685
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
12. ROYALTY INTANGIBLE ASSETS CONTINUED
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 20% (2022:52%) of the original acquired reserve remains.
Impairment
The royalty intangible assets are reviewed for impairment indicators at each reporting date. In the event that impairment indicators exist
a full impairment review will take place to determine whether the discounted future cash flows exceed cost.
The sensitivity of the discounted future cash flows to changes in management’s key assumptions, such as commodity prices and production
rates, has been reviewed to assess for indicators of impairment. It has been concluded that any reasonable change in the key inputs would
not result in a material impairment.
Material acquisitions
La Preciosa
In May 2023 Trident acquired royalties and a milestone payment over the La Preciosa Silver Project in Mexico. The royalty assets comprise:
• 1.25% net smelter return royalty covering the Gloria and Abundancia veins;
• 2.00% gross value return royalty covering all other areas of La Preciosa; and
• US$8.75m milestone payment (the “Milestone Payment”), payable within 12 months of first silver production at La Preciosa.
In consideration, Trident paid US$7m in cash on completion and will pay a further US$1m, in cash or shares at Trident’s election,
upon receipt of the Milestone Payment or other circumstances as set out in the SPA.
Dandoko
In September 2023 Trident acquired a 50% interest in a 2% net smelter return royalty over the Dandoko Gold Project in Western Mali, Africa.
The total consideration was US$6.25m comprising US$3m in cash and US$0.75m in Trident shares paid on completion of the investment.
Further consideration will be paid on the following milestones:
• US$1.25m in cash on first royalty receipt from the royalty area, and
• US$1.25m in cash on receipt of payment on 500,000 ounces gold sold from the royalty area.
Antler
In November 2023 Trident acquired royalties which compromises of:
• 0.90% net smelter return royalty covering Antler deposit and five named exploration targets (“Project Area Royalty”);
• 0.45% net smelter return royalty covering royalty over any ground subsequently acquired by New World within 5km of the Project Area
Royalty boundary.
In consideration, Trident paid AUD 11m in cash.
Paradox
In September 2023 Trident acquired a 2.50% net smelter royalty in the Paradox Basin in Utah, USA. In consideration, Trident paid US$1.5m
on completion and will pay a further consideration on the achievement of the following milestones:
• US$3.5m upon commencement of commercial production by Anson at Paradox (“First Contingent Payment”);
• US$5.0m on the second anniversary of the First Contingent Payment
Reclassified from royalty financial asset
In July 2023 Trident’s entitlement to receive a minimum payment from the Mimbula Royalty ceased with royalty payments being received
thereafter. Consequently, the Mimbula Royalty no longer meets the conditions to be classified as royalty financial asset and has been
reclassified as a royalty intangible asset. See note 13 for further information regarding the terms of the royalty.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
85
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F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
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$5.00m. Trident is entitled to royalty payments on production which commenced on 1 July 2020 and extend in perpetuity.
Until June 2023 Trident was entitled to receive either a Minimum Payment (“MP”) or a royalty payment, whichever was higher. Thereafter, Trident
would only receive royalty payments. The royalty payments are calculated as a percentage of the gross revenue derived from sale of finished
copper and copper concentrate. Per the terms of the agreement, the royalty percentage is calculated as follows:
a. During the MP period, 1.25% of gross revenue;
b. During the period commencing on the day after the expiry of MP period and ending on the date on which royalty payments have
been made to Trident in respect of a total aggregate quantity of no less than 575,000 tonnes of copper cathode or other finished
copper product, 0.3% of gross revenue; and
c. during the period commencing on the day after the expiry of the MP period and continuing for the duration of the agreement,
0.2% of gross revenue.
Group and Company
Fair Value
At 1 January
Royalties due or received
Revaluation of royalty financial asset recognised in profit or loss
Reclassified to royalty financial assets
At 31 December
2023
US$’000
7,653
(1,500)
578
(6,731)
-
2022
US$’000
7,461
(2,000)
2,192
-
7,653
On the 1 July 2023, following the expiry of the minimum payment period the Mimbula royalty was reclassified as a royalty intangible asset
(see note 12).
14. ASSETS HELD FOR SALE
Group
At 1 January
Royalty intangible assets reclassified as held for sale
Disposal
At 31 December
2023
US$’000
6,750
-
(6,750)
-
2022
US$’000
-
6,750
-
6,750
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$15.8m. One early-stage royalty was removed
from the portfolio prior to closing and the transactions proceeds were adjusted to be up to US$15.6m. Cash consideration of US$14.3m
(US$13.3m net of transaction costs) was received in the year with a further US$1.3m to be paid upon first production from the Rebecca Gold
Project. A profit on disposal of US$6.9m was recognised in the year following the netting off of contingent consideration (US$0.4m) attached
to the Spring Hill royalty (see note 20). The sale of these investments was completed in February 2023.
There were no assets held for sale in the Company (2022: US$Nil).
15. INVESTMENTS IN SUBSIDIARIES
Company
Cost
At 1 January 2022 and 1 January 2023
Investment in subsidiary
At 31 December 2023
86 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
US$’000
113
-
113
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15. INVESTMENTS IN SUBSIDIARIES CONTINUED
As at 31 December 2023 the Company held interests in the following subsidiary and joint venture companies:
Country of Proportion Nature
Company registration held Registered Office of business
TRR Services, LLC USA 100% 7233 S.Kellerman Way,
Aurora, CO 80016 Service company
TRR ServicesAustralia Pty Limited Australia 100% Floor 2, 44A Kings Park Road,
West Perth, WA 6005 Service company
TRR Services Schweiz AG Switzerland 100% Grafenauweg 8, 6300 Zug Service company
TRR Services UK Ltd United Kingdom 100% 6th Floor 60 Gracechurch Street,
London, United Kingdom, EC3V 0HR Service company
TRR Holdings LLC USA 100% 251 Little Falls Drive, Wilmington,
DE 19808 Service company
TRR Offtakes LLC USA 100% 251 Little Falls Drive, Wilmington,
DE 19808 Service company
Tiomin Peru S.A.C Peru 100% Parque las Leyendas MZA, 13 Lote,
°902A Al Costado de Metro
De La Av La Marina, Lima, Peru Dormant
TRR Sonora Limited United Kingdom 100% 6th Floor 60 Gracechurch Street,
London, United Kingdom, EC3V 0HR Dormant
Sonoroy Holdings Limited United Kingdom 50% Lynton House 7-12 Tavistock Square,
London, England, WC1H 9BQ Dormant
16. AMOUNT DUE FROM SUBSIDIARY UNDERTAKINGS
Company
Loans and contributions to subsidiaries
Total
2023
US$’000
99,704
99,704
2022
US$’000
90,553
90,553
During the year ended 31 December 2023 the maximum amount owed by the subsidiaries to the Parent Company was US$99.7m (2022:
US$90.6m). The related party loans are unsecured, repayable upon demand and have a 6% interest rate where applicable. The fair value
of loans to subsidiaries is the same as their carrying values stated above.
17. TRADE AND OTHER RECEIVABLES
Trade receivables
Prepayments and accrued income
Current tax asset
Indirect taxes recoverable
Total
Group
2023
US$’000
9,270
511
-
24
9,805
Company
2023
US$’000
2,655
905
-
55
3,615
Group
2022
US$’000
9,938
394
29
37
10,398
Company
2022
US$’000
3,015
989
-
37
4,041
Due to the short-term nature of the current receivables, their carrying amount is considered to be approximate to their fair value.
18. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Group
2023
US$’000
3,248
Company
2023
US$’000
1,667
Group
2022
US$’000
16,577
Company
2022
US$’000
9,537
All of the Company’s cash and cash equivalents are held in accounts which bear interest at floating rates and the Directors consider their
carrying amount approximates to their fair value. Details of the credit risk associated with cash and cash equivalents is set out in note 24.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
87
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N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
19. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security
Accrued expenses
Total
Group
2023
US$’000
1,343
6
854
2,203
Company
2023
US$’000
231
-
255
486
Group
2022
US$’000
1,556
113
608
2,277
Company
2022
US$’000
85
-
237
322
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The Company has financial risk
management policies in place to ensure that all payables are paid within the pre-agreed credit terms. The Directors consider that the carrying
amount of trade payables approximates to their fair value.
20. CONTINGENT CONSIDERATION
Group
At 31 December 2022
Additions
Disposal
At 31 December 2023
US$’000
408
8,188
(408)
8,188
The brought forward Contingent consideration relates to the acquisition of the Spring Hill royalty which was sold on 23 February 2023. The 2023
additions relate to three royalties; Dandoko US$1.83m, Paradox US$5.43m, La Preciosa US$0.93m. The above amounts represent managements
estimate of the amounts due and their belief that the events that trigger payment of the additional consideration will be met. See note 12 for
further information regarding the conditions attached to the contingent payments. The amounts are discounted and expected to fall due after
more than one year.
21. BORROWINGS
Group
At 1 January
Repayment of debt facility
Secured loan facility at amortised cost
Prepayment of debt facility
Other movements
At 31 December
2023
US$’000
38,351
-
-
(10,000)
527
28,878
2022
US$’000
10,536
(10,536)
40,000
-
(1,649)
38,351
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 and repaid in full on 6 January 2022.
On 10 January 2022, a new fully secured US$40m loan facility was entered into with Macquarie Bank Limited. The facility had a 3-year term with
interest 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). On 29 November 2023, a US$10m prepayment
was made against the facility. Other movements includes non-cash amortisation of US$0.53m (2021: US$0.81m) on the arrangement fees of
US$2.46m incurred on the Macquarie Bank facility in the prior year which have been netted off against the borrowings in accordance with IFRS 9
“Financial Instruments”. In the prior year’s Annual Report and Accounts the amortised arrangement fees were not netted off against borrowings
and were disclosed within the trade and other receivables balance. This has resulted in a restatement of the disclosed borrowings balance of
US$40.0m to US$38.4m and a reduction in the trade and other receivables balance from US$12.0m to US$10.4m as at 31 December 2022.
Maturity analysis
Group
Amounts due within one year
Amounts due after more than one year
Total
88 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
2023
US$’000
5,064
23,814
28,878
2022
US$’000
6,775
31,576
38,351
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21. BORROWINGS CONTINUED
Reconciliation of net cash flow to movement in debt
Group
Cash and cash equivalents
Secured loan facility
Net debt
Net (decrease)/increase in cash and cash equivalents in the year
Cash outflow/(inflow) from change in secured loan facility
Exchange differences
Change in net debt resulting from cash flows
Net debt at the start of the year
Net debt at the end of the year
2023
US$’000
3,248
(30,000)
(26,752)
(13,330)
10,000
1
(3,329)
(23,423)
(26,752)
2022
US$’000
16,577
(40,000)
(23,423)
(28,371)
(29,464)
(689)
(58,524)
35,101
(23,423)
The net gold receivable amount of US$4.88m (2022: US$5.12m) is not included in the net debt reconciliation shown above.
Warrant liability
As part of the Tribeca facility, 3,500,000 share warrants to subscribe for shares in the Company were issued exercisable at £0.5166 per share
(“Tribeca Warrants”). The Tribeca Warrants expired on 2 August 2023.
As part of the Macquarie facility, 14,840,517 share warrants to subscribe for shares in the Company were issued exercisable at £0.51 per share
(“Macquarie Warrants”). The Macquarie Warrants were exercisable immediately on issue and expired 36 months from drawdown. Following the
restructuring of the facility on the 23 February 2023, the expiry date was extended for a further twelve months. As the US$ 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 23.
Group and Company
Fair Value
At 1 January 2023
Revaluation of derivative financial asset recognised in profit or loss
At 31 December 2023
22. SHARE CAPITAL AND SHARE PREMIUM
Group and Company
At 1 January 2022
Share issue – placing
Share issue – royalty acquisitions
Share issue – non-executive directors’ fees
Share issue expenses
At 31 December 2022
Share issue – non-executive directors’ fees
Share issue – royalty acquisitions
At 31 December 2023
US$’000
2,452
(1,845)
607
Share
premium
US$’000
87,046
6,259
13,156
198
(272)
106,387
101
732
107,220
Number
of ordinary
shares of 1p
251,592,413
13,118,057
26,013,903
406,227
-
291,130,600
174,366
1,425,210
292,730,176
Number
0f deferred
shares of 1p
-
-
-
-
-
-
-
-
-
Share
capital
US$’000
3,307
179
344
5
-
3,835
2
18
3,855
Share issues during the year:
On 17 January 2023, 174,366 ordinary shares were issued at 49p per share in lieu of non-executive directors’ fees.
On 6 September 2023, 1,425,210 ordinary shares were issued at 42p as consideration for the acquisition of the Dandoko royalty.
Shares issued subsequent to the year-end
On 2 January 2024, 349,206 ordinary shares were issued at 33p per shares to directors and management of the Company.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23. SHARE BASED PAYMENTS
Share options
During 2023 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.
Option exercise price
£0.2000
£0.2400
£0.2800
£0.2965
£0.3558
£0.4551
£0.3700
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5000
£0.5550
£0.6600
£0.7700
Total
Expiry date
02/06/2030
02/06/2030
02/06/2030
20/12/2030
20/12/2030
20/12/2030
20/04/2028
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
13/03/2030
13/03/2030
13/03/2030
Vesting date
02/06/2021
02/06/2022
02/06/2023
20/12/2022
20/12/2023
20/12/2024
20/12/2024
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
13/03/2025
13/03/2026
13/03/2029
Fair value
of individual
option
£0.0630
£0.0608
£0.0605
£0.1260
£0.1180
£0.1060
£0.1068
£0.1010
£0.0910
£0.0830
£0.0740
£0.0650
£0.1690
£0.1610
£0.1510
£0.1440
£0.1310
£0.2620
£0.2311
£0.2502
At
1 January
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
Issued
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
333,333
333,333
333,334
1,000,000
At
Expired 31 December
2023
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
333,333
333,333
333,334
13,235,000
or lapsed
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
On 13 March 2023, 1,000,000 share options were granted to a senior manager, with time-based vesting conditions. One third of the options will
vest on 12 March 2025 and then one-third at the end of each subsequent year thereafter until all options have vested. The fair value of the share
options was determined using a Black Scholes model using the following inputs:
Weighted average share price on date of grant (£)
Exercise price (£)
Length (years)
Expected volatility,%
Expected dividend growth rate,%
Risk-free interest rate (5-year bond),%
£0.555
£0.555
7
36%
0%
3.65%
£0.555
£0.666
7
36%
0%
3.65%
£0.555
£0.777
7
36%
0%
3.65%
The share options granted in 2022 with a £0.50 exercise price 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.
90 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23. SHARE BASED PAYMENTS CONTINUED
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%
Share-based remuneration expense related to the share options in issue and those granted during the year is included
in the administration expenses line in the consolidated income statement in the amount of US$0.41m (2022: US$0.47m).
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.
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),%
£0.51
0.044
Black Scholes
0.352
3
35%
0%
0.73%
The fair value on initial recognition of the warrants was US$879,000. Subsequent remeasurement of the warrants was determined using the
Black Scholes pricing model with reference to updated key inputs being the share price of one ordinary share at 31 December and share price
volatility (calculated as the volatility of one ordinary share over a period equivalent to the remaining expected term to redemption). Following
the restructuring of the facility on 23 February 2023, the expiry date of the warrants was extended for a further 12 months to 31 December 2025.
24. FINANCIAL RISK MANAGEMENT
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.
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
91
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
24. 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 Macquarie Bank Limited in 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. The table below analyses the
Group’s financial liabilities, which will be settled on a gross basis. The amounts shown are the contractual undiscounted cash flows.
Future expected payments
Group
Trade and other payables within one year
Contingent consideration due > one year
Borrowings due within one year
Borrowings due > one year
2023
US$’000
2,203
12,000
5,625
24,375
2022
US$’000
2,277
408
7,500
32,500
The US$40m of borrowings, as at 31 December 2022 was restructured in February 2023, with the first repayment not due until mid-2024.
A prepayment of US$10m was made in the year on the Macquarie Bank loan facility resulting in undiscounted borrowings of US$30m
as at 31 December 2023. The Group has sufficient resources to service the borrowings and meet related financial covenants.
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the United States Dollar,
British Pound (GBP) and the Australian Dollar.
The following table highlights the major currencies the Group operates in and the movements against the US Dollar during the course of the year:
Average rate Reporting spot rate
British Pound
Australian Dollar
2023
1.25
0.69
2022
1.23
0.69
Movement
(0.14)
(0.06)
2023
1.27
0.68
2022
1.21
0.68
Movement
(0.14)
(0.05)
The Group’s exposure to foreign currency risk based on US Dollar equivalent carrying amounts of monetary items at the reported date:
2023 2022
US$’000 US$’000
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Contingent consideration
Net exposure
US$
2,863
8,730
(1,415)
(8,188)
1,990
GBP
20
-
(485)
-
(465)
Other
365
517
(293)
-
589
US$
15,383
9,436
(1,585)
-
23,234
GBP
280
-
(321)
-
(41)
Other
914
486
(259)
(408)
733
The royalty financial asset held in 2022 was denominated in US dollars.
The Group does not hedge against foreign exchange movements.
92 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
24. FINANCIAL RISK MANAGEMENT CONTINUED
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:
2023 2022
US$’000 US$’000
British Pound
Australian Dollar
Profit/(loss)
(7)
497
Equity
-
137
Profit/(loss)
(32)
145
Equity
-
314
The sensitivity of the profit/(loss) to movements in the Australian Dollar was impacted in the year by the one-off profit on disposal of intangible
assets in the Australian subsidiary.
25. 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
2023
US$’000
-
3,248
Company
2023
US$’000
-
1,667
Group
2022
US$’000
7,653
16,577
Company
2022
US$’000
7,653
9,537
9,247
102,359
9,922
93,553
2,193
8,188
28,878
607
485
-
-
607
2,165
408
38,351
321
-
-
2,452
2,452
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
Prior to its reclassification on 1 July 2023, the Group and Company had one asset, the Mimbula investment that was measured at fair value.
Mimbula was recognised as a royalty financial asset at fair value through profit and loss totalling 2023: US$Nil (2022: US$7.65m). The asset
was deemed to be a level 3 asset under the fair value hierarchy criteria – some of the inputs for the fair value determination were not based
on observable market data (mainly private resource data).
TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
26. RELATED PARTY TRANSACTIONS
During the year legal fees totalling US$0.30m (2022: US$0.33m) were paid 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$0.05m (2022: 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.
27. EVENTS OCCURRING AFTER THE REPORTING DATE
On 2 January 2024, 349,206 shares were issued at a price of 33 per Ordinary Share to certain directors and members of the management team
as part of the 2023 bonus awards.
In January 2024, the Company completed the acquisition of an additional gold offtake contract over the Sugar Zone mine in Canada,
owned and operated by Silver Lake Resources. The offtake contract covers 30% of gold dore production from the mine.
On 19 February 2024, the Company announced that, following the announcement on 29 November 2023, it had signed the facility agreement
with BMO Capital Markets and CIBC for a new fully secured US$40m revolving credit facility with an option to increase the facility to US$60m via
an accordion feature. The proceeds are be to applied to retire the existing US$40m secured debt facility provided by Macquarie Bank Limited.
28. ULTIMATE CONTROLLING PARTY
The company does not have a single controlling party.
94 TRIDENT ROYALTIES PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2023
COMPANY INFORMATION
Directors
Al Gourley Non-Executive Chairman
Adam Davidson Chief Executive Officer and
Executive Director
Richard Hughes Chief Financial Officer and
Executive Director
Peter Bacchus Non-Executive Director
Helen Pein Non-Executive Director
David Reading Non-Executive Director
Leslie Stephenson 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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