UK-based mining royalty company Trident Royalties has signed a binding deal to acquire an existing lithium royalty from Atherton Resources for the projects owned by Anson Resources.
The lithium projects are located in the Paradox Basin in Utah, US, with a market capitalisation of around $113m (A$175m) and are Anson’s flagship project. The royalty covers all the projects owned by Anson within the Paradox Basin.
Trident agreed to pay $10m (£7.96m) in three tranches for the acquisition, including $1.5m in cash on closing.
Once Anson begins commercial product at the projects, Trident will pay up to $3.5m as the first tranche payment. In addition, 50% of the payment can also be made via an issuance of its shares.
On the second anniversary of the first tranche payment, the company will have to pay up to $5m, with an option to pay up to 50% of the payment in shares.
According to the definitive feasibility study released by Anson last September, the project is expected to produce 13,074 tonnes per annum of lithium carbonate (Li₂CO₃) for the initial ten years of operation.
The company expects a final investment decision by the end of this year.
This project is expected to have a revenue of $11m per annum for the first ten years at a spot price of $35,000 per tonne of lithium carbonate.
The royalty for the projects is a 2.5% net smelter return royalty and is tied to Anson’s ownership of the projects. If the company sells a property within the Paradox Basin, Trident will receive 2% of the net sales proceeds and the royalty will no longer apply to the sold asset.
Trident CEO Adam Davidson said: “We are delighted to announce the acquisition of this royalty over the Paradox lithium project. For a modest initial cash outlay, we have secured exposure for shareholders to a well-funded, highly attractive project with a pathway to cash generation and significant growth potential.
“The Paradox project reinforces our strong position in battery materials and introduces exposure to direct lithium extraction, which could play a significant role in future lithium supply. The acquisition again demonstrates Trident's ability to source innovative transactions to create shareholder value.”
