Q3 2025 Triple Flag Precious Metals Corp Earnings Call
Speaker #2: Good morning , and thank you for standing by . My name is John , and I will be your conference operator today . At this time , I would like to welcome everyone to the Triple Flag Precious Metals Corp.
Speaker #2: third quarter 2025 conference call . All lines have been placed on mute to prevent any background noise after the speakers remarks , there will be a question and answer session .
Speaker #2: If you would like to ask a question during this time , simply press star , followed by the number one on your telephone keypad .
Speaker #2: To withdraw your question , simply press star one . Again . I would now like to turn the conference over to Sheldon Vanderkooy CEO .
Speaker #2: Please go ahead .
Speaker #3: Thanks , John . Good morning , everyone , and thank you for joining us to discuss Triple Flag's third quarter results . Today I am joined by our CFO , Eban Bari , and our chief Operating officer , James Dendle .
Speaker #3: 2025 has been an exceptional year so far , and triple Flag has achieved another record quarter in Q3 . We recorded 27,000 GEOs in the quarter , which drove record adjusted EBITDA of 79 million and record operating cash flow per share of 30 of $0.39 .
Speaker #3: US shareholders are directly benefiting from the higher gold prices through higher cash flow per share . We should continue to benefit in Q4 and beyond as well as current gold prices are well in excess of the average gold price realized in Q3 .
Speaker #3: We expect to achieve 2025 GEOs between the midpoint and the high end of our 2025 guidance range . I am very pleased with the additions we have made to the portfolio year to date , year to date .
Speaker #3: Triple flag has now deployed over $350 million of capital over five investments in H1 . We announced our investments in the track , lithium mine in Argentina .
Speaker #3: The Arcata Silver mine in Peru , and an additional interest in the Johnson Camp copper mine in Arizona , all of which have now started production , either in line or ahead of our investment case .
Speaker #3: Early in the third quarter , we completed our acquisition of a 1% NSR royalty on the Arthur project in Nevada , operated by AngloGold Ashanti and most recently , we have acquired a royalty package on Pan American's producing Minera Florida Gold mine in Chile for $23 million .
Speaker #3: James will provide further details on Minera Florida later in the presentation . This is exactly the sort of royalty that drives shareholder value over time in the royalty sector .
Speaker #3: As we have open ended exposure to top line revenues and resource expansion over time . Together , our investments year to date are providing near increasing cash flows as well as longer dated optionality .
Speaker #3: They are also located in the right jurisdictions. The bulk of the value is in the western United States, and the remainder is in Peru and Argentina.
Speaker #3: They are also located in the right jurisdictions . The bulk of the value is in the western United States , and the remainder is in Chile ,
Speaker #3: I will now hand over to Evan to discuss our financials for the third quarter of 2025 .
Speaker #4: This puts triple flag on track to achieve between the midpoint and high end of our 2025 GEOs guidance . These strong volumes in Q3 were delivered amid the backdrop of strong metal , precious metals prices , which reached a record quarterly average of nearly $3,500 per ounce for gold and nearly $40 per ounce for silver .
Speaker #4: Accordingly , we are pleased to highlight that operating cash flow per share the single most important metric we focus on as a company , has increased by over 25% year over year .
Speaker #4: Lastly , I'd like to comment on our balance sheet . We exited the quarter with essentially zero net debt despite deploying significant capital during the third quarter .
Speaker #4: For the acquisition of the Arthur Gold Royalty and the Minera Florida Royalty . Today , we're in a net cash position . Overall , a strong balance sheet record operating cash flows and total liquidity available of nearly $1 billion provides us with a capital to continue deploying dollars into accretive opportunities to drive future growth for our shareholders .
Speaker #4: It also allows us to continue returning superior returns to shareholders , and we're pleased to declare a quarterly cash dividend of 5.7 $0.05 US per share .
Speaker #4: Triple flag remains focused on top tier precious metals assets , with revenue that's nearly 90% sourced from mining friendly jurisdictions in both Australia and the Americas .
Speaker #4: North Parks and Cerro Lindo continue to be two largest contributors to revenues . In third quarter , with North Parks achieving another record quarter due to continued processing of higher open pit grades from stockpile door , triple flag sales mix remains 100% derived from precious metals , including nearly three quarters from gold .
Speaker #4: We do not expect this to materially change , and this will continue to provide investors with exposure to this strong gold and silver price environment .
Speaker #4: I will now turn it over to James to discuss the producing Minera Florida Gold mine in Chile .
Speaker #5: Thank you . Iban Minera Florida is located approximately 75km southwest of Santiago in Chile and is owned and operated by Pan American Silver .
Speaker #5: It's an underground mine that produces gold and silver doré with zinc concentrate byproduct . During the third quarter , we were pleased to acquire a package of three net smelter return royalties on Monero Florida , ranging from 0.8% to 1.5% , for a total cash consideration of $23 million from a third party .
Speaker #5: Monero Florida has a long history of consistent performance, continuous operation and reserve replacement, and has produced over 2.5 million ounces of gold and 14 million ounces of silver since commissioning in 1986.
Speaker #5: The mine has always operated with a relatively short reserve life . Over the last 20 years , the mine has had approximately half 1,000,000oz of gold in reserves .
Speaker #5: At any one time , which equates to about 4 to 5 years of visible reserve life . Historic annual production at Minera Florida has ranged between 75,000 and 100,000oz of gold per annum .
Speaker #5: Driven by mill expansion potential to increase the nameplate capacity , Triple Flag expects to GEOs from Florida to increase to approximately 1000oz by 2028 .
Speaker #5: The exploration potential is minus and given Monero is impressive , track record of reserve replacement since 1986 , we see this asset continuing to perform for decades to come .
Speaker #5: I'll pass it back to Sheldon for closing remarks .
Speaker #3: Thank you . James . In closing , Triple Flag is performing very well and is positioned to continue this performance . Going forward .
Speaker #3: Our shareholders are benefiting from our strong current production and the increase in gold prices , which are translating into record cash flows per share .
Speaker #3: I am very pleased at our success in reinvesting those cash flows in further streams and royalties , which will benefit our shareholders for decades to come .
Speaker #3: There are a number of near-term catalysts across our portfolio . First , Johnson Camp mine tray and Arkada have all recently started production and will continue to ramp up into 2026 .
Speaker #3: Second on the project front , economic studies for Arthur and Hope Bay are on track for completion in the first half of 2026 , and we look forward to ongoing exploration updates on the Fletcher Zone from Beta Hunt .
Speaker #3: And finally , the cone project continues to make good progress targeting production in 2027 . That concludes our presentation . Operator , please open the floor to questions .
Speaker #2: Thank you . Ladies and gentlemen , we will now begin the question and answer session as a reminder to everyone in order to ask a question , please press star , followed by the number one on your telephone keypad .
Speaker #2: And if you would like to withdraw your question , simply press star one again . We will pause for a moment to compile the Q&A roster .
Speaker #2: Thank you . Our first question comes from the line of Fahad Tariq with Jefferies . Please go ahead .
Speaker #6: Hi . Thanks for taking my questions . Just on the deal pipeline , maybe talk a little bit more about how the Minera Florida transaction was sourced .
Speaker #6: Was this I mean , it was a third party royalty from a family . Just curious if there was any sort of process or was this a relationship that was pre-existing any more color there would be helpful ?
Speaker #5: Yeah . Fahad . Hi . I can take this . Yeah , it was a a fairly concentrated process . We developed a bit of a rapport with the family over the course of negotiating the deal , and that was good because we actually were able to undertake a site visit .
Speaker #5: And very often , as you know , with these third party royalty sales , you can't do that . Whereas we actually had a team down in Chile earlier on in the year , spending a couple of days at site .
Speaker #5: So we had access to Pan American silver in this instance and the whole mindset team .
Speaker #6: Okay , great . Yeah . That's helpful . And then maybe just switching gears to the ATO stream , looks like there was an international arbitration that was started in early October .
Speaker #6: Can you maybe just give us an update on how the discussions are going with Step Gold and what's Triple Flag's expectation for a potential resolution ?
Speaker #7: Yeah . Hi . Hi , it's Sheldon .
Speaker #3: I'll take this one . We tried to be really transparent in the in the press release and gave give everyone like , direction on the legal proceedings .
Speaker #3: We've started . I'm a little limited in what I can say , but I can . I can provide some background and direction to to you in the market .
Speaker #3: First of all , I'm going to start by saying we're just extremely confident in our legal position . You know , we're owed about $10 million US steps market cap is a is a little over 500 million Canadian .
Speaker #3: They have production . They have cash flow . They clearly have the ability to pay . We are in dialogue with steps controlling shareholder .
Speaker #3: There is no doubt in my mind that they are building phase two . And the last thing I'd note is , you know , we're going to land in the top half of our guidance range , even if we don't receive a single ounce from from step gold .
Speaker #3: You know , here to the end of the year , I really can't go any further into how this is going to get resolved .
Speaker #3: But , you know , I you know , we are in discussions and we are very confident in our legal position .
Speaker #6: Okay . And then just sorry , just maybe a follow up if you can answer this part , you're in discussions with the largest shareholders .
Speaker #6: Are you in discussions directly with Step Gold .
Speaker #7: I would take the largest shareholder .
Speaker #3: As being in discussions with Step Gold .
Speaker #6: Okay . Fair enough . Thank you .
Speaker #2: Your next question comes from the line of Sam overwater with Scotiabank . Please go ahead .
Speaker #8: Hi . Good morning everybody . I just had a question on the transaction opportunities . I think the last time we spoke , you guys were evaluating opportunities between 100 and $300 million .
Speaker #8: I just wanted a little bit more color on that . Like what geographies and jurisdictions are these opportunities in ? What are the structures of these deals ?
Speaker #8: Debt , equity stream , etc. ? Is there any royalty opportunities ? And then on top of that too , like what are the a lot of the purposes of this transaction in terms of , you asset sales , construction , funding , etc.
Speaker #8: ?
Speaker #3: Yeah . Hi . Thanks , Sam . I appreciate that . Yeah . The opportunity set I think still is squarely in the 100 to 300 .
Speaker #3: Obviously we've done deals that are smaller than that . We'll look at those . There are larger ones as as well . It's probably instructive to look at what we've done already year to date .
Speaker #3: You know , we've done $350 million of deals year to date . It's a pretty good mix of you know , smaller royalties than we had the larger Arthur transaction , which was actually a corporate transaction , which is just another way to find good assets at reasonable prices for for our portfolio .
Speaker #3: The , the , the opportunity set . It's a real mix . I mean , it streams , its royalties . I would say it's it's concentrated in jurisdictions that investors would be very happy with .
Speaker #3: You know , I would say like the Americas traditional mining jurisdictions and the use of proceeds are what's driving it . It really runs the gamut .
Speaker #3: I think you kind of summed it up pretty , pretty well . It's people need money for various things , and that creates the opportunity for for companies like ours to step in with , with , with financing .
Speaker #8: Great . Thank you . And then just on top of that as well , corporate transactions . How are you guys associated or assessing corporate transactions relative to sort of other opportunities in the current landscape ?
Speaker #8: Is there anything you're currently considering ?
Speaker #3: Yeah , I mean , I don't view it big distinction between corporate transactions and other transactions . I mean , we we acquired that .
Speaker #3: Arthur royalty . It was via an acquisition of of origin and then a spin out , you know , the Mavericks acquisition was a way to acquire a great portfolio at a reasonable price .
Speaker #3: So we're always looking for ways to add good assets to our portfolio at returns that are attractive and accretive to shareholder value .
Speaker #8: Great . Thank you . Then lastly , just currently have like a equity portfolio to sell or you considering any sales in an equity portfolio or anything like that .
Speaker #3: No .
Speaker #8: Great . Thank you . It's all for me .
Speaker #3: Thank you .
Speaker #2: Your next question comes from the line of Brian MacArthur from Raymond James . Please go ahead .
Speaker #9: Good morning , and thank you for taking my question . I just wondered if you could comment a little bit on Prieska and what's going on there .
Speaker #9: I mean , there's a statement , you know , Orion looks like they've signed a term sheet with Glencore , but what actually needs to happen there for you to move that forward ?
Speaker #9: Post , other than the , you know , South African regulatory approvals .
Speaker #5: Hi Brian , it's James I'll pick that up . So as you recall Prieska was always contemplated as a single integrated project comprising two zones that what they refer to as the uppers , which is the upper remnant areas of the historical mine , and the deeps , which is the sort of untouched sulphide ore body .
Speaker #5: The deeps is of great interest to us because it hosts the precious metals . It also has the exploration upside , and it's the part of the body we're most focused on .
Speaker #5: The company through looking to stage . There capital expenditures has disaggregated the project to the uppers , which they'll develop first in the deeps that they'll develop progressively thereafter .
Speaker #5: There is a dewatering component to that . And as you noted , they've received , I think , a very supportive , non-binding letter of intent from Glencore , which they're working through at the moment .
Speaker #5: So that is all very positive given our primary economic interest is in the deeps . We will be evaluating the right , but not obligation to fund the stream into the deeps when they actually are at the stage to make final investment decision on that project .
Speaker #5: So we expect the company to make investment decision on the uppers this year . And an investment decision on the deeps next year .
Speaker #5: So as a reminder , we have no obligation to fund the stream , but we like the asset . So it's a funding decision for triple flag in 2026 .
Speaker #9: But just to be clear , so can you . I mean , can they develop the upper if you think of it that way , with the money they have and you just get the option to wait and then just come in on the lower , or do you have to execute once they make a decision to do the upper ?
Speaker #9: If I want to look at it that way , that's just what I'm trying to figure out , is when you're asking , I get it , you've got you , don't you have the option to do it or not to do it ?
Speaker #9: But I don't know if there's a drop dead part of the contract that makes you decide or whether you can wait and see how the second part goes .
Speaker #9: If you see what I'm saying .
Speaker #5: Yeah , we can wait until until the second part is ready to go . But the nice thing is that the company will be progressing with the dewatering of the deeps while mining the uppers .
Speaker #5: So that they continue to to de-risk and develop the project whilst we get the opportunity to wait to to make the investment decision .
Speaker #5: The deeps . So there's no drop dead in that sense . We just have the the opportunity to to wait a little longer .
Speaker #5: You'll recall we have a small royalty on on the projects as a whole . So on the upper start producing obviously the royalty will pay because that applies to both zones .
Speaker #9: Great . Thanks very much , James . That's very clear . Now .
Speaker #5: Yeah . No problem .
Speaker #2: Your next question comes from the line of Derek Ma with TD Cavan . Please go ahead .
Speaker #10: Thank you . On the . L stream disposal you got a fair amount of consideration . So perhaps a win win situation for both parties .
Speaker #10: But could you discuss how the situation arose and how you evaluate these types of situations versus retaining optionality in the portfolio ?
Speaker #3: Yeah , sure . Derek . It's Sheldon . I'll speak to that . It's a fairly small mine . It's based in Honduras .
Speaker #3: We acquired as part of the the Mavericks portfolio . It was undercapitalized . And they were having difficulty . You know , servicing the stream as part as part of their of their operations .
Speaker #3: Eventually what we did and we're close to the operator there are private company . And we were looking for ways to get additional capital that was not our capital into that , into that project .
Speaker #3: So they could be in a position to start paying out on the stream . Basically , I think this was a win , win , win situation where we found the outside capital .
Speaker #3: They're bringing that in and then we're structuring ourselves to come out on on these terms . It's it's good value for us . And I think it allows them to move forward without the stream in place .
Speaker #10: Okay . And how do you how do you evaluate these types of situations versus retaining optionality ? When you look across your portfolio , when other opportunities come up like this ?
Speaker #3: I mean , every situation is different . I think I put it this way . I'm very happy with the structure of this , of this and the way this is being resolved .
Speaker #3: It's getting us good value out . It allows them to go on . Generally , we're not looking at selling streams , but this is a a structured sale of a stream .
Speaker #3: But it's really based on an asset by asset basis .
Speaker #10: Okay , Claire . Thank you .
Speaker #2: Once again , if you would like to ask a question , please press star followed by the number one on your telephone keypad .
Speaker #2: Our next question comes from the line of cosmos Chu with CIBC . Please go ahead .
Speaker #11: Thanks , Sheldon . Eben and James , maybe my first question is on Minera Florida . James , you mentioned that you were on site .
Speaker #11: My understanding is that , you know , this past quarter or this past year , there's been some issues in terms of negative grade reconciliation , unplanned mine sequencing into lower grade ore zones .
Speaker #11: I think you mentioned that as much as well in your guidance . You said , I think Florida long term was capable of doing 75 to 100,000oz this past year , 78 to 90 .
Speaker #11: So the top end is lower . So I guess my question is , James , how much of that have you factored in into your valuation ?
Speaker #11: And is it just really a one-off? And it's really going to bounce back? Or how do you look at it?
Speaker #5: Yeah . Good question . You know the valuation and the production assumptions over a short period of time . Of course , you know , you consider what's actually happening on the short term as a guide to the long term .
Speaker #5: But the interesting thing is , you know , about Florida is there's a very , very long history of of operations here . So we actually had access to full history of production records that gave us great confidence in the forecast .
Speaker #5: And at the end of the day , you know , quarterly variance in a gold mine is not a new thing . So for sure , there's quarterly variance .
Speaker #5: And , you know , on a month scale that that exists and I'm sure it will occur in the future . But in the long term , we think the mine will operate in accordance to how it's operated historically , which is in the range we stated .
Speaker #5: .
Speaker #11: Of course . Thanks . Maybe switching gears a little bit bigger picture . You know , shelter , as you mentioned , reiterated in the in your release as well , 2029 guidance , outlook , outlook is you're still looking for 135 to 145,000oz GEOs .
Speaker #11: That's a very good increase . From what level you're at today . Could you maybe summarize for us what goes into that thinking ?
Speaker #11: You know , what needs to come on for you to hit that growth into 2029 ?
Speaker #5: Yeah , sure . Because I can take that . We've got a few assets ramping up this some new assets to , you know , Sheldon mentioned the Arcata silver mine that is literally shipped concentrate for the first time this week .
Speaker #5: That'll be ramping up into 2026 . There are other assets . You know , obviously adding Minera Florida as a small addition . Three Q Johnson camp all ramping up .
Speaker #5: Montage is building cone , which which will will be additive to that outlook . But there's also we expect production increases from some of the operating mines .
Speaker #5: We expect after a lower year next year from North Park . That to start building back up again , we expect increased volumes from RB Platts , although incremental same with Beta Hunt there .
Speaker #5: You know West Gold has been very public within expansion to Beta Hunt for 2 million tons per annum , which is on track .
Speaker #5: So all of those , all of those additions build up to the to the outlook number . So there isn't one specific asset that drives that increase .
Speaker #5: It's actually nicely diversified across a large suite of of well assets .
Speaker #11: Great . Thanks . And then maybe one last question . The 2025 GEOs , the gold silver ratio you've used is 85 to 1 in terms of the calculation to GEOs , converting silver into gold , I just want to confirm , you know , silver is actually outperformed a little bit compared to gold in 2025 .
Speaker #11: That benefits triple flag . Am I correct in the sense that I think there's a good percentage of your revenue ? Actually coming from silver ?
Speaker #11: That's number one . Number two , it also benefits your geo calculation . If I'm not mistaken . If you can confirm that as well .
Speaker #11: And then third , when do you consider I guess changing that ratio or you know , I guess it's not too late in 2025 .
Speaker #11: It's not needed in 2025 . But how do you consider that into 2026 ?
Speaker #3: Hey , Sheldon , I'll take that . Hey , you know , 85 to 1 . That's pretty close to what it is right now .
Speaker #3: Obviously , it's volatile . It moves around . It's been various places during the year . I think year to date as a whole .
Speaker #3: And you're right , obviously , as the gold as the silver price is stronger relative to the gold price . That helps geos .
Speaker #3: And the opposite , when the opposite occurs , the year as a whole , we've actually had a bit of a headwind on the average silver price because just the timing of when the silver price ran .
Speaker #3: And I think that's come across in ourselves and all our peers , we always make an allowance for that . We're pretty conservative when trying to set our guidance .
Speaker #3: And and so we we just accommodated that within our production . Right now it's coming in line . And in terms of assessing it , I mean , we just every time we put out a new , new guidance or anything like that , we , we look at what the current gold silver ratio is and make sure we're not too far out of line .
Speaker #3: And and that is properly conservative . Obviously , when we do our 2026 guidance , we'll look at what the conditions are at that time .
Speaker #3: And you know, react accordingly.
Speaker #11: Yep . Sounds like a good plan . I guess the important part , Sheldon , as you mentioned , is that you're now aiming for the top end of guidance .
Speaker #11: For 2020 .
Speaker #12: That's right . Perfect . Thanks again . Gold . Silver prices all the way through .
Speaker #11: Yep . Amazing . Thanks , Sheldon and Evan and James for answering all my questions . And congrats on a solid Q3 .
Speaker #3: Hey , thanks .
Speaker #12: Guys .
Speaker #2: At this time , we have no further questions . I will now turn the call over to Sheldon Vanderkooy for closing remarks .
Speaker #3: Yeah , thanks everyone . Q3 was another good quarter , and we're actually having just a great year in 2025 . Really appreciate the support from all of our our investors .
Speaker #3: Thank you all . By .
Speaker #2: Ladies and gentlemen . This concludes today's conference call . You may now disconnect your lines . We thank you for your participation . Have a pleasant day .