Trident Royalties PLC (AIM:TRR) has adjusted the payment arrangements over the Lincoln gold mine in California following a change of strategy by Seduli Sutter, the developer.
Sedile now wants to suspend Stage 1 production and prioritise mineral resource expansion and study activities to facilitate the funding and development of Stage 2 production (1,000 tonnes per day for around 80,000 ounces gold per year).
Trident said it has agreed to provide various waivers in relation to its security position in exchange for implementing a minimum payment schedule (MPS) to replace the revenue expected from deferred Stage 1 production.
A first payment of US$173,500 under the MPS was received on 1 September 2022. Additional payments are scheduled on a quarterly basis until Trident has received a total of US$3mln, at which point the MPS ceases and a residual net smelter return royalty rate of 0.75% will apply.
Adam Davidson, Trident’s chief executive, said: "Trident is supportive of the proposed re-focus on resource expansion and fast-track plans for Stage 2 production.
“Indeed, Trident's original investment thesis was centred on the exploration potential of the highly prospective Mother Lode, with Seduli owning the only permitted processing plant in the region.
“Seduli is now able to focus on maximising the value of Lincoln with additional exploration and study work to support a larger operation in due course.
“With the implementation of the minimum payment schedule, which has been sized to replace the delayed revenues expected from Stage 1, we have clearer line of sight to revenue from the royalty whilst retaining full exposure to future value added by the proposed strategy."