Trident spends $10m on Utah lithium royalty
Diversified mining royalty company Trident Royalties has entered into a binding sale and purchase agreement to acquire an existing royalty from Atherton Resources over projects owned by Anson Resources in the Paradox basin, in Utah, US.
Trident will pay $10-million for the royalty, which is a 2.5% net smelter return linked to Anson’s ownership of the projects. These include the Paradox advanced-stage lithium brine project, targeting the use of direct lithium extraction.
Phase 1 of Paradox will produce an initial 13 074 t/y of lithium carbonate for the first 10 years of a 23-year operation. Anson is currently targeting a final investment decision at the end of 2023.
At spot prices of $35 000/t of lithium carbonate equivalent, the royalty will pay about $11-million a year for the first 10 years.
“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,” said Trident CEO Adam Davidson.
The royalty is a perpetual royalty tied to Anson's ownership of the underlying projects, such that if Anson were to sell a project, the royalty would no longer apply to the asset. In this event, Trident would be entitled to receive 2.00% of the net sales proceeds upon the sale of a project within the Paradox basin by Anson. The royalty does not include any buyback provisions for the operator.
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