Trident Royalties PLC (AIM:TRR, OTCQX:TDTRF) has retained its position among Liberum’s top picks, with the broker seeing a significant upside as the mining capex cycle turns up again.
“Right now, the upswing in the mining capex cycle is being led by the Juniors rather than the Majors.
“High commodity prices are prompting miners to invest in resource and capacity expansions, lifting the value of royalty streams at no cost to their owners,” said the house.
Royalty companies are a key source of funding for junior metals, adds Liberum, especially those engaged in the delivery of base metals and battery inputs needed in the global push to decarbonise.
“This offers investors diversified commodity exposure, without the miners’ cost inflation.”
Trident, meanwhile, is in an excellent position to benefit from both structural ‘greening’ and a cyclical lift, adds the broker.
“No mining equity offers similar rates of growth (20% compound annual revenue growth to 2028) for the same risk profile.”
A major catalyst over the next six months is the Sonora legal case pending Mexico nationalisation where Trident owns a 50% share in 3% royalty over this lithium asset.
Liberum’s share price target is 72p against the current market price of 35p.