Trident Royalties Plc Portfolio Announces Update: Sonora Lithium Royalty

LONDON, UK / ACCESSWIRE / September 1, 2023 / Trident Royalties Plc (AIM:TRR)(OTCQX:TDTRF), the diversified mining royalty company, notes the recent announcement by Ganfeng Lithium Co, Ltd ("Ganfeng") regarding the Sonora Lithium Project, in Mexico.

Ganfeng stated that the General Directorate of Mines ("DGM") in Mexico issued a formal decision notice to Ganfeng's Mexican subsidiaries in August 2023 indicating that nine lithium concessions, which comprise the Sonora Lithium Project, were cancelled.¹ Ganfeng indicated that it believes that its Mexican subsidiaries have complied with their obligations as required by Mexican law, and further notes that the cancellations issued by the DGM are not final, but that the cancellation may result in an asset impairment loss.

Ganfeng's position is that the DGM resolutions cancelling the concessions violate both Mexican law and international law as they are arbitrary, unsubstantiated in both fact and law, and infringe upon Ganfeng's and its subsidiaries' fundamental due process rights. Therefore, Ganfeng and its Mexican subsidiaries have filed administrative review recourses before the Secretary of Economy against the aforementioned resolutions.

Transaction Background

On 27 January 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. In accordance with the terms of the agreement, the long-stop date to complete the acquisition of the royalty is the earlier of 31 January 2025, or the date which is 6 months after the first Royalty payment.

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 favorably resolved. If Trident elects to exit the joint venture, the repayment date of an initial loan made by Trident to Sonoroy of $2.5 million is due six months from notification of termination of the Sale and Purchase Agreement or Joint Venture Agreement.