TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) told shareholders that Ganfeng Lithium has officially commenced production at the Mariana Lithium salt-lake project in Argentina, marking a significant milestone for the company, which holds a 1.5% net smelter return (NSR) royalty on the project.
Ganfeng, one of the world's leading lithium producers, held a ceremony last week, to celebrate the start of formal production at the first phase of the Mariana project.
Mariana has total lithium resources of approximately 8.12 million tons of lithium carbonate equivalent (LCE), according to Ganfeng.
The first phase of the Mariana project features an annual production capacity of 20,000 tons of lithium chloride. Ganfeng said it plans to accelerate the ramp-up of production, aiming to optimize its supply and cost structure while enhancing profitability and competitiveness in the global lithium market.
Kirill Klip, executive chairman of TNR Gold, highlighted the royalty company's transition to cash flow generation.
"We are very pleased that Ganfeng officially inaugurated Mariana Lithium’s start of production at a 20,000 tons-per-annum lithium chloride plant," Klip said. "We are looking forward to our first NSR royalty cash flow payments from the Mariana Lithium Project."
Klip emphasized that TNR Gold’s business model allows it to benefit from major mining projects without requiring capital contributions. The company also holds royalty interests in the Los Azules Copper Project and the Josemaria Project, operated by industry leaders such as Ganfeng Lithium, McEwen Mining, Lundin Mining, and BHP.
TNR Gold recently repaid its investment loan in full and has no outstanding debt.
Klip noted that the company’s transformation into a cash flow-generating royalty business could serve as a catalyst for its market valuation.
“The essence of our business model is to have industry leaders like Ganfeng Lithium as operators on the projects that will potentially generate royalty cashflows to contribute significant value for our shareholders,” the chairman said.
“We are building the green energy metals royalty and gold company and now we are graduating to the cash flow generating royalty company."