Trident Royalties PLC (AIM:TRR, OTCQX:TDTRF) has updated on a mining project that has the potential to move the dial financially for the group.
It relates to Lithium Americas' award of a US Department of Energy (DoE) loan for $2.26 billion under the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program.
This will be used to finance the building of processing facilities at Thacker Pass, a lithium operation in Nevada, where Trident has a net 1.05% gross revenue royalty (after the expected exercise of a partial royalty buyback, which would bring in $13.2 million).
First production from the Nevada project is expected within three years, which would see the start of royalty payments.
Adam Davidson, Trident's CEO, said receipts from the royalty stream would have a "dramatic impact" on the company's revenue, with $10.5 million generated per year at Phase 1 production and a $25,000 lithium price, increasing to $21 million per year at Phase 2.
The award of the DoE loan by Lithium America essentially starts the countdown to production.
The project, which also has backing from General Motors, is designed initially to produce 40,000 tonnes per annum of battery-grade lithium carbonate and aligns with the US government's efforts to establish a domestic supply chain for critical minerals.
"Thacker Pass is a high-priority asset with considerable strategic value for the United States, and the commitment of a $2.26 billion loan from the US Department of Energy underscores the level of support to bring this asset to production," said Davidson.
"The DoE loan is expected to coincide with the release of the second tranche of funding from General Motors of $330 million, such that the capex for Phase 1 production is largely secured."