Trident Royalties PLC (AIM:TRR) said Sonoroy Holdings, its 50%-held joint venture with Marmottes Capital, has extended the longstop date to complete the acquisition of a 3% gross royalty interest over the Sonora lithium project in Mexico.
Sonoroy is acquiring the royalty from the estate of Colin Orr-Ewing (The Estate) with completion now set to be the earlier of 31 January 2025 or the date six months after the first royalty payment.
The Estate is in a dispute with Sonora's former owner Bacanora Minerals, where Colin Orr-Ewing was the founder and former chairman, which is appealing a court decision to uphold the royalty.
A date of 13 January 2023 had been set for the hearing of Bacanora’s appeal against that decision, said Trident.
The royalty specialist added that its terms of funding to Sonoroy have also been changed to include a provision over material changes in Mexico's regulatory regime that might affect Sonora.
The repayment date for Trident’s initial US$2.5mln loan deposit to Sonoroy will also now be extended to six months under certain circumstances, the statement said, including if it elects to exit the joint venture.
Sonoroy has the right to acquire the Sonora royalty for a total consideration of US$52mln in cash (US$26mln attributable to Trident).
Bacanora was acquired by Chinese metal giant Ganfeng late last year.
Broker Liberum added: "The long-stop date of the Sonora royalty has been extended to Jan 2025, which delays the need to fund the option by two years.
"A provision has been added, protecting Trident from material changes in the regulatory regime of Mexico. These changes further de-risk this option, purchased in January.
"Court date is now set for 13 January 2023, for which we expect a positive outcome for Trident, prompting a re-rate in shares."
The broker's price target has been lifted by 1.4%.to 68p.
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