Trident Royalties’ 50%-held joint venture Sonoroy has extended an agreement to acquire a 3% gross revenue royalty over the Sonora lithium project in Mexico until December 31, 2026.
Sonoroy is working with the estate of the late Colin Orr-Ewing in an action in Canada against Sonora’s former owner Bacanora.
Trident has also agreed that other than in limited circumstances, the repayment date for its loan to Sonoroy to fund the litigation will run either until December 2026 or the completion of the transaction.
Sonora’s current owner, Chinese group Ganfeng Lithium, meanwhile, is in dispute with the Mexican government over proposals to cancel the nine lithium concessions that comprise the project.
Trident added it is not required to provide funding in respect of Sonoroy to enable it to complete the acquisition if there are changes to Mexico’s regulatory regime that materially affect the Sonora project.
Adam Davidson, Trident’s chief executive, said: "The Sonora royalty has the potential to become a Tier 1 royalty, providing exposure to a long-life lithium project with expansion optionality and operated by a world-class lithium specialist.
The transaction structure provides Trident with the ability to participate in the potential significant upside associated with the project from a low-cost and protected position.
“This extension to complete the Sonora royalty acquisition gives sufficient time to allow a resolution to both the Alberta litigation, as well as the administrative review filed by Ganfeng regarding the cancellation of the project concessions.”