("Trident" or the "Company")
Acquisition of Near-Production
The Royalty Assets comprise:
· 1.25% net smelter return royalty (the "NSR Royalty") covering the Gloria and Abundancia veins;
· 2.00% gross value return royalty (the "GVR Royalty") covering all other areas of La Preciosa; and
·
In consideration, Trident shall pay
HIGHLIGHTS
Near term cash flow over an attractive asset & new commodity exposure
· La Preciosa is one of the largest undeveloped primary silver resources in
· Avino operates the Avino silver mine and mill 19km from La Preciosa, producing concentrates which are sold to
· Avino intends to ramp annual silver production from La Preciosa to circa 3 million ounces ("Moz") by 2027, increasing to 3.5Moz in 2028.2 With a current total Mineral Resource estimate of 120Moz of silver and 224,000 ounces of gold3, La Preciosa is expected to be a long-life asset with further expansion potential.
· The Transaction introduces a new commodity to Trident's portfolio, which currently contains exposure to gold, lithium, copper, iron ore, and mineral sands. In addition to being a tangible store of value and an inflation hedge, with over 50% of silver use for industrial purposes, it is increasingly important due to its conductivity and corrosion resistance, making it a critical component of both solar panels and electric vehicles.
"This transaction with Coeur again demonstrates our ability to add value for shareholders. The generation of cash earlier this year from the highly profitable disposal of several exploration stage gold royalties has enabled us to complete a speedy and efficient transaction that provides Coeur with a meaningful cash consideration while delivering an attractive return for our investors.
"The Trident portfolio is developing and maturing. La Preciosa is expected to start generating cash for Trident in the near-term, further adding to the rising cash profile that we see over the coming years. La Preciosa is a highly attractive, long-life asset. We are delighted to add silver to our portfolio, combining aspects of precious metals along with significant potential within electrification and transition materials."
The Project, an advanced stage development project located in the
Figure 1. Map Highlighting the Distance from the
Avino notes that La Preciosa is one of
Avino is currently developing underground mining plans to initially mine the Gloria and Abundancia veins at La Preciosa. Additionally, Avino is engaging with local communities and advancing permitting to allow it to open a portal for the underground mine, which is expected to be completed in early 2024. Avino notes that it expects little economic impact in the short term from the recent changes to Mexican mining laws, with its concessions in good standing for the long term.4 In parallel to developing the underground mine, Avino has indicated it expects to begin processing existing surface stockpiles from La Preciosa in H2 2023.
Royalty Assets
Pursuant to the Transaction, Trident is acquiring two royalties and the associated Milestone Payment.
The NSR Royalty is a 1.25% net smelter returns royalty and covers the Gloria and Abundancia veins at La Preciosa as outlined in Figure 2 below.
Figure 2. Map of La Preciosa Project Showing Named Veins and Licence Areas Subject to the NSR Royalty, GVR Royalty and the Contingent New Reserve Discovery Payment
The NSR royalty is a perpetual royalty and does not include any buyback provisions for the operator. Additionally, the royalty entitles Trident a right of first refusal on any future additional royalties over the NSR Royalty coverage area.
The GVR Royalty is a 2.00% gross value returns royalty and covers the entirety of the
The GVR Royalty also provides for a New Reserve Discovery Payment over certain areas of La Preciosa, entitling the royalty holder to receive
The Milestone Payment comprises a
The Transaction
Pursuant to a legally binding sale and purchase agreement (the "Sale and Purchase Agreement"), Trident has paid
Upon receipt of the Milestone Payment or other circumstances as set out in the SPA, Trident must pay a further
References
1: Source: Webcast - Fourth Quarter and Year End 2022 Financial Results Webcast and Call,
(https://avino.com/site/assets/files/5422/avino20230329_archive.mp4)
2: Source: Avino Silver & Gold Mines Corporate Presentation,
( https://avino.com/investors/presentations/ )
3: Source: Resource Estimate Update for the Proposed Acquisition of the La Preciosa Property,
( https://avino.com/site/assets/files/5327/la_preciosa_technical_report.pdf )
La Preciosa Property Mineral Resource Summary (Total, All Veins), Effective Date
Resource Classification |
Tonnage (kt) |
Grade |
Metal Contents |
||||
Ag (g/t) |
Au (g/t) |
AgEq (g/t) |
Ag (Moz) |
Au (koz) |
AgEq (Moz) |
||
Indicated |
17,441 |
176 |
0.34 |
202 |
99 |
189 |
113 |
Inferred |
4,397 |
151 |
0.25 |
170 |
21 |
35 |
24 |
Notes: kt=thousands of tonnes, Cu=Silver, Au=gold, koz.= thousands of troy ounces, Moz millions of troy ounces
Mineral Resources are reported using CIM Definition Standards for Mineral Resources and Mineral Reserves (
of Mineral Resources and Mineral Reserves Best Practice Guidelines (November 2019).
The QP for the estimate is Mr. Michael F O'Brien,
Mineral Resources are reported using a silver equivalent (AgEq) cut-off of 120 g//t, using metal prices of Ag
Totals may not sum due to rounding.
Areas of uncertainty that may materially impact the MREs include:
• Changes to long-term metal price assumptions;
• Changes in local interpretations of mineralization geometry, fault geometry and continuity of mineralized zones;
• Changes to metallurgical recovery assumptions;
• Changes to resource classification approach
• Variations in geotechnical, hydrogeological, and mining assumptions;
• Changes to environmental, permitting, and social license assumptions.
The Mineral Resource was estimated in
4: Source: Webcast - First Quarter 2023 Results Webcast and Call,
( https://avino.com/investors/quarterly-results-calls/ )
Competent Person's Statement
The technical information contained in this disclosure has been read and approved by Mr
** Ends **
Contact details:
|
+1 (757) 208-5171 / +44 7967 589997 |
|
+44 020 7383 5100 |
|
+44 20 7710 7600 |
|
+44 20 3100 2184 |
|
+44 20 3882 2868 |
Susie Geliher / |
+44 20 7236 1177 |
About Trident
Trident is a growth-focused diversified mining royalty and streaming company, providing investors with exposure to a mix of base battery, precious, and bulk metals.
Key highlights of Trident's strategy include:
· |
Building upon a royalty and streaming portfolio which broadly mirrors the commodity exposure of the global mining sector (excluding fossil fuels) with a bias towards production or near-production assets, differentiating Trident from the majority of peers which are exclusively, or heavily weighted, to precious metals;
|
· |
Acquiring royalties and streams in resource-friendly jurisdictions worldwide, while most competitors have portfolios focused on
|
· |
Targeting attractive small-to-mid size transactions which are often ignored in a sector dominated by large players;
|
· |
Active deal-sourcing which, in addition to writing new royalties and streams, will focus on the acquisition of assets held by natural sellers such as: closed-end funds, prospect generators, junior and mid-tier miners holding royalties as non-core assets, and counterparties seeking to monetise packages of royalties and streams which are otherwise undervalued by the market;
|
· |
Maintaining a low-overhead model which is capable of supporting a larger scale business without a commensurate increase in operating costs; and
|
· |
Leveraging the experience of management, the board of directors, and Trident's adviser team, all of whom have deep industry connections and strong transactional experience across multiple commodities and jurisdictions. |
The acquisition and aggregation of individual royalties and streams is expected to deliver strong returns for shareholders as assets are acquired on terms reflective of single asset risk compared with the lower risk profile of a diversified, larger scale portfolio. Further value is expected to be delivered by the introduction of conservative levels of leverage through debt. Once scale has been achieved, strong cash generation is expected to support an attractive dividend policy, providing investors with a desirable mix of inflation protection, growth and income.
Forward-looking Statements
This news release contains forward‐looking information. The statements are based on reasonable assumptions and expectations of management and Trident provides no assurance that actual events will meet management's expectations. In certain cases, forward‐looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Although Trident believes the expectations expressed in such forward‐looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those projected. Mining exploration and development is an inherently risky business. In addition, factors that could cause actual events to differ materially from the forward-looking information stated herein include any factors which affect decisions to pursue mineral exploration on the relevant property and the ultimate exercise of option rights, which may include changes in market conditions, changes in metal prices, general economic and political conditions, environmental risks, and community and non-governmental actions. Such factors will also affect whether Trident will ultimately receive the benefits anticipated pursuant to relevant agreements. This list is not exhaustive of the factors that may affect any of the forward‐looking statements. These and other factors should be considered carefully and readers should not place undue reliance on forward-looking information.
Third Party Information
As a royalty and streaming company, Trident often has limited, if any, access to non-public scientific and technical information in respect of the properties underlying its portfolio of royalties and investments, or such information is subject to confidentiality provisions. As such, in preparing this announcement, the Company often largely relies upon information provided by or the public disclosures of the owners and operators of the properties underlying its portfolio of royalties, as available at the date of this announcement.