Trident Royalties’ gold offtake portfolio is the key near-term earnings driver, according to house broker Liberum.
Gold price and volatility picked up with the Israel-Hamas war, and are likely to drive a strong year-end finish for the gold offtake portfolio
Gold ounces increased steadily to 72,600 oz, from 65,000 oz in the second quarter and are expected to lift further into next year.
A price floor also appears to be forming for lithium prices, at .$23,000/t, after a large year-to-date pullback.
Liberum said this implies upside to its current long-term price forecast of $18,000/t if spot proves to be its lows.
Price volatility will also hurt lithium supply investment and, in turn, support medium-term prices.
“We have been surprised by the underperformance in Trident Royalties’ share price, given that there have been no negative catalysts – with the gold offtake portfolio being its key earnings driver.
"We suspect that a combination of profit-taking and a preference for less growth-orientated stocks are drag factors.
“With a cash position of US$25.6m, the company can take advantage of opportunities in the market without the need for external capital."
Liberum’s target price is 77p.