Trident Resources PLC (LON:TRR) is acquiring a royalty from Moxico Resources PLC over production from the operating Mimbula copper mine and associated stockpiles in Zambia's prolific Copperbelt Province.
The royalty is being acquired in exchange for a cash consideration of US$5mln, and Trident will be entitled to royalty payments on production commencing from 1 July 2020 and extending in perpetuity.
Initially, the royalty rate will be 1.25%, but it will drop once Trident’s US$5mln outlay has been covered, down to 0.3%, and then subsequently down to 0.2% once the royalty has been paid on 575,000 tonnes of copper cathode.
The Milumba copper mine is currently ramping-up production, having sold its first London Metal Exchange registered Grade A copper with a 99.99% purity in June 2020;
The Mimbula mine has a large, well-defined JORC (2012) compliant total Mineral Resource of 84mln tonnes of ore grading 0.95% copper for a total of 798,000 tonnes of contained copper at a 0.3% cut-off;
Moxico has a high-quality management team led by Alan Davies, the former chief executive of Rio Tinto's Minerals and Energy division.
"We are delighted to announce the acquisition of a cash generative royalty over the Mimbula mine, a long-life asset with favourable production and cost profiles,” said Adam Davidson, chief executive of Trident.
“The royalty will provide our investors with exposure to an attractive commodity produced from an asset located in a prolific region in the Zambian Copperbelt, operated by an experienced management team. In addition, the royalty is structured attractively such that Trident will rapidly recover its invested capital, while retaining long-life exposure to the growth of the asset. We are very pleased to have concluded transactions on two cash generative royalties within a short time frame and I look forward to reporting further on our progress as we continue to build a diversified portfolio of mining royalties and streams."