MIDAS SHARE TIPS UPDATE: Lithium powers Trident Royalties

Nevada’s Thacker Pass is home to the largest lithium deposit in America and one of the largest in the world. After several years of receiving regulatory approval, construction of a mine has begun, with first sales expected by 2026.

Once operational, the mine should supply approximately 80,000 tons of lithium per year, which at current prices would generate almost $2.5 billion in annual revenue.

Thacker is a source of great excitement in certain American circles. Lithium is a crucial component of electric car batteries, China dominates the market and President Biden is keen to bring production closer to home.

Thacker plays a central role and auto giant General Motors showed its support earlier this year with a $650 million investment.

Two years ago, Trident Royalty signed a royalty agreement with the owners of Thacker Pass, entitling the AIM-listed company to 1.05 percent of annual sales, which equates to $25 million at current prices.

Trident has come a long way since its launch in May 2020. At the time, CEO Adam Davidson had one royalty deal to his name: an iron ore project in Australia.

There are currently 20 royalty agreements in place, covering a range of base and precious metals including gold, silver and copper, as well as lithium. The projects span the mining world, from the US and Canada to Mexico and Brazil to parts of Africa.

More than half of the locations are already in production. The remainder are under construction or in relatively early stages, but the combination is intended to generate a steady stream of revenue for many years.

Last week, Davidson showed that the strategy was delivering results. Royalty revenue rose 45 percent in the first half of 2023, with further growth expected this year and beyond. Davidson also sold a group of gold rights for $15.5 million after paying $6.25 million for them two years ago.

And in recent weeks, two new royalty deals have been struck: a lithium deal in Utah and one for gold in Mali, which may sound risky but is reassuringly close to a large, established US mine.

Midas judgment: Midas recommended Trident Royalties in 2021 at 34p. Shares have since risen 29 percent to 43.5 cents, but should continue to gain ground. Davidson and chief financial officer Richard Hughes have spent more than £200,000 of their own money acquiring shares in recent months. Investors should take this into account.

Traded on: GOAL ticker: TRR Contact: tridentroyalties.com or 001 757 208 5171