Proactive Investors - Trident Royalties PLC (LON:TRR)’s house broker Liberum has reacted positively to the diversified mining company’s first-quarter earnings, noting a “good start to the year” with royalty revenues up 63% year on year and 4% quarter on quarter.
Liberum’s analysts said Trident’s cash position, which was boosted to US$37mln from the disposal of pre-production gold royalties, puts the group on a “strong footing for the year ahead”.
Royalty revenues of US$3.64mln (£2.9mln) “met our expectations for the quarter”, said Liberum, with the marginal decrease in Koolyanobbing iron ore royalties “materially offset” by higher iron ore price realisations.
Liberum did note that gold volumes were down 16%, but run rates should recover in the coming quarters.
Despite the good news, Trident's shares were unfairly dragged down by falling lithium prices, despite having no impact on near-term cash flow, analysts contended.
Furthermore, the bounce in gold, which is Trident's biggest price driver, was ignored.
Trident's medium-term outlook is expected to improve as more marginal supply is pushed back due to the sharp collapse in lithium prices.
Trident is a buy, with Liberum giving a target price of 72p against a publication price of 45%, suggesting a 60% upside.