Trident Royalties PLC (AIM:TRR, OTCQX:TDTRF) is to acquire an existing lithium royalty in the Paradox Basin in Utah from vendor Atherton Resources for US$10 million.
Anson Resources is the developer of the Paradox lithium project, with the royalty comprising a 2.50% net smelter return tied to Anson's ownership of the projects.
Paradox is an advanced-stage lithium brine project, where a phase 1 definitive feasibility study outlined annual production of 13,074 tonnes of lithium carbonate (LCE) for the first 10 years of a 23-year operation.
A final investment decision on the project is scheduled for the end of 2023.
At spot prices of approximately US$35,000 per tonne LCE, the royalty would pay approximately US$11 million per annum for the first 10 years.
Trident will pay the US$10 million in three tranches: US$1.5 million in cash on closing; US$3.5 million when production starts and US$5 million on the second anniversary of the first royalty payment.
Adam Davidson, chief executive, said: “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.”