Trident Royalties Plc (AIM:TRR)(OTCQX:TDTRF), the diversified mining royalty company, notes the recent announcement by Ganfeng Lithium Co, Ltd ('Ganfeng') regarding the Sonora Lithium Project, in Mexico.
Ganfeng stated that the General Directorate of Mines ('DGM') in Mexico issued a formal decision notice to Ganfeng's Mexican subsidiaries in August 2023 indicating that nine lithium concessions, which comprise the Sonora Lithium Project, were cancelled.1 Ganfeng indicated that it believes that its Mexican subsidiaries have complied with their obligations as required by Mexican law, and further notes that the cancellations issued by the DGM are not final, but that the cancellation may result in an asset impairment loss.
Ganfeng's position is that the DGM resolutions cancelling the concessions violate both Mexican law and international law as they are arbitrary, unsubstantiated in both fact and law, and infringe upon Ganfeng's and its subsidiaries' fundamental due process rights. Therefore, Ganfeng and its Mexican subsidiaries have filed administrative review recourses before the Secretary of Economy against the aforementioned resolutions.
Transaction Background
On 27 January 2022, Trident announced that Sonoroy, a 50%-held joint venture between Trident and Marmottes Capital Limited, entered into an agreement to acquire a 3.0% Gross Revenue Royalty (1.5% attributable to Trident) over the Sonora Lithium Project. In accordance with the terms of the agreement, the long-stop date to complete the acquisition of the royalty is the earlier of 31 January 2025, or the date which is 6 months after the first Royalty payment.
The conditions requiring Trident to provide funding in respect of Sonoroy to enable it to complete the acquisition remain at Trident's discretion and includes a provision that, at the time of funding, no changes in Mexico's regulatory regime materially affects the Sonora project and that ongoing litigation regarding the royalty is favorably resolved. If Trident elects to exit the joint venture, the repayment date of an initial loan made by Trident to Sonoroy of $2.5 million is due six months from notification of termination of the Sale and Purchase Agreement or Joint Venture Agreement.
Adam Davidson, Chief Executive Officer of Trident commented:
'Trident is disappointed by the recent developments in Mexico announced by Ganfeng, which add risk to the transaction in addition to the ongoing litigation in Alberta, whereby the validity of the royalty is being challenged. We were cognizant of these risks at the time of the original transaction and structured the deal accordingly to protect against both political and litigation risk, such that we may recover our initial $2.5 million secured loan. We will continue to monitor the situation carefully and, at the present time, intend to maintain our rights in respect of the asset.'
Competent Person's Statement
The technical information contained in this disclosure has been read and approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM, MIMMM, FGS), who is a qualified geologist and acts as the Competent Person under the AIM Rules - Note for Mining and Oil & Gas Companies. Mr O'Reilly is a Principal Consultant working for Mining Analyst Consulting Ltd which has been retained by Trident to provide technical support.
Contact:
Tel: +1 (757) 208-5171
About Trident
Trident is a growth-focused diversified mining royalty and streaming company, providing investors with exposure to a mix of base battery, precious, and bulk metals.
TRIDENT ROYALTIES PLC 
