Operator
Thank you for standing by. My name is Kathleen and I will be your conference operator today. At this time, I would like to welcome everyone to the Triple Flag Precious Metals 2nd Quarter 2025 Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press the star one again. And now I would like to turn the call over to Sheldon Van Der Kooij, CEO. Please go ahead.
Thank you, Kathleen. Good morning, everyone, and thank you for joining us to discuss Triple flag second quarter of 2025 results today i'm joined by our cfo even barry triple flag achieved another record quarter in q2 sales of nearly 29 000 geos drove record adjusted ebitda of 76 million dollars and most importantly record operating cash flow of 38 cents us per share given our strong margins that consistently exceed 90 these record results demonstrate Triple Flag's ability to realize higher per-share cash flows in today's strong gold and silver price environment. This strong performance has also positioned us well to deliver our 2025 guidance of 105,000 to 115,000 ounces over the balance of the year. On the deal front, we have maintained a solid pace of accretive acquisitions during the first half of 2025. Most of these transactions have focused on tuck-in investments into near term production starts, including the Tre Corbatis lithium mine in Argentina, the Arcata and Azucca silver mines in Peru, as well as the newly announced additional 1.5% gross revenue royalty on the Johnson Camp copper mine in Arizona. All of these three acquisitions are expected to deliver first revenue in the second half of this year. Notably, we also completed our acquisition of a 1% NSR royalty on the world-class Arthur Gold Project, located in Nevada, formerly known as the Expanded Silicon Project. Operated by Anglo Gold Ashanti, this project offers exceptional long-term growth potential, underpinned by a rapidly expanding resource base and significant exploration upside. This asset represents tremendous value for our shareholders, and I would like to thank the Triple Flag and Origin teams for their hard work and dedication in completing this transaction. We are very excited about the Arthur project. Anglegold CEO made quite positive statements about Arthur last week, and I think that our shareholders are really going to benefit from our exposure to this project in the future. Turning back to organic growth, the most powerful and value-driving aspect of the Royalty and Streaming model is the free-carried optionality that Triple Flag has on our assets as our operators continue to search for new exploration discoveries, replace reserves, and expand their assets. TripleFlag has 4.75% exposure to Westgold's Beta Hunt mine in Australia. In Q2, Westgold declared a maiden resource for the Fletcher Zone of 2.3 million ounces. This nearly doubles the total resource base at Beta Hunt, with significant exploration potential at depth and a long strike. west gold's rapid progress from the announcement of the initial discovery target at the fletcher zone last september to to the declaration of a maiden resource in june is a testament to the quality and embedded value within our portfolio i'll touch more on the fletcher zone later on in the presentation finally an important pillar of our capital allocation strategy remains returns to shareholders we are pleased to announce our fourth consecutive annual increase of our dividend end since we listed in 2021. I will now ask Eban to discuss our financials for the second quarter of 2025.
Thank you, Sheldon. As noted, we had a very strong second quarter with portfolio producing nearly 29,000 GOs, resulting in a record first half of over 57,000 GOs. This puts triple flag right on track to achieve our 2025 sales guide. These strong volumes were delivered amid the backdrop of record precious metals prices as well as continuing strong margins. Accordingly, we're pleased to highlight that operating cash flow per share, the single most important metric we focus on as a company, has increased by over 50% year over year to a new quarterly record. We view a progressively growing dividend as a core part of our capital allocation strategy. Our dividend has been increased to $0.23 U.S. on an annualized basis, up 5% from prior dividend. I'm proud that we have increased our dividend every year since our IPL. Lastly, I'd like to comment on our balance sheet. We exited the quarter with zero debt, and even with the capital deployed early in Q3 for the Arthur Royalty, we expect to be in net cash position by the end of Q3 at current metal prices. Overall, a clean and strong balance sheet, robust operating cash flows, and total liquidity available of nearly a billion dollars gives us the capital to continue to deploy dollars into creative opportunities to drive future growth for the benefit of shareholders moving ahead we highlight three key aspects for our investment pieces that remain unchanged namely top tier assets precious metals focus and a portfolio which is predominantly centered in australia and america north parks and sarah lindo continue to be the two largest contributors to revenues. North Parks had a record quarter due to processing of higher open pick grades from stockpile door, while Sarah Lindo received a strong benefit from the rapid rise in silver prices towards the end of the quarter. Overall, revenues derived 100% from precious metals with roughly two-thirds from gold. This pure play exposure ranks among the highest in the sector. and offers investors exposure to the many favorable tailwinds for both gold and silver. Finally, our portfolio is predominantly located in mining-friendly jurisdictions. A key criteria, we look to expand our portfolio through acquisitions. In Q2, 90% of our revenue was derived from assets in Australia and the Americas. I will now turn it over to Sheldon to discuss the Beta Hunt and the new maintenance resource at the Fletcher Zone.
Thank you, Ibn. Beta Hunt is an underground gold mine located in Western Australia and operated by Westgold. We have several gold royalty interests on the asset, including a 3.25% on gross revenue and a 1.5% NSR. These royalties were acquired through our acquisition of Mavericks Metals in early 2023 and last quarter represented our third largest source of revenue. The positive news flow from this asset has been meaningful over the past year. In addition to exploration success currently anchored by the Fletcher Zone maiden resource, Westgold is advancing an expansion project for the asset to achieve consistent mine throughput of 2 million tons per annum. With the declaration of a maiden resource of 2.3 million ounces at Fletcher Zone that nearly doubles the previous resource base at Beta Hun, there is also now scope for further expansion potential above 2 million tons per annum. This is particularly important as the Fletcher Zone is located only 50 meters from the western flank system, which is currently the main source of ore at Beta Hun. This maiden resource was achieved from only 1 km of a known 2 km strike, highlighting the potential for upside at Beta Hunt. The resource is also open at depth. Given this significant discovery, we look forward to seeing how the Fletcher Zone will ultimately be optimized within an expanded Beta Hunt operation by Westgold. Several catalysts are upcoming, which should provide a preview of the near-term future, including a three-year company-wide outlook in September and an initial reserve for the Fletcher Zone in Westgold's fiscal year 2026. To close, I'd like to state that we had a strong first half in 2025 and are well positioned to achieve 2025 guidance over the remainder of the year. We saw robust growth in operating cash flow per share and delivered both tuck-in and large-scale transactions that will benefit our shareholders for decades to come. TripleFlag has a strong track record of GEO growth, and we look forward to seeing the delivery of several catalysts across our portfolio. These include the commencement of production at Johnson Camp Mines, Arcata and Trey Curbatas, as well as development progress with the E48 sublevel cave at North Parks and at the Kone, Hope Bay and Arthur projects. I'd also like to specifically call out some positive news announced by our operators yesterday. Sentara announced that it will rapidly advance its Nevada Goldfield project. TripleFlag holds a 5% royalty on the Gemfield deposit, which accounts for approximately 80% of Goldfield production. Talon Metals also announced very interesting drill results on its Minnesota Tamarack project. These results are within our royalty coverage. Looking ahead, our transaction pipeline remains very robust, and we are excited by the significant opportunity ahead for our business to deliver further value. Kathleen, please open the floor to questions.
Operator
Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you would like to withdraw your question, simply press the star one again. If you are called upon to ask your question and listening by a loud speaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, please press star 1 to join the queue. Your first question comes from the line of Josh Walson of RBC Capital Markets. Your line is now open.
Thank you very much. First question is just on Gunnison. The Royalty additional purchase here looks to be done at a very attractive price, sub three times cash flow based on what the company's guidance is. I'm just wondering, from the overall Royalty, what should we be expecting as a steady state production that TripleFlog is estimating?
Thanks, Josh. yeah so so the johnson camp royalty um it's it's not a large amount in total as you pointed out it's fairly small uh purchase price we have on that um i don't believe we're going to be giving any like asset specific guidance on on that but um you know it's a little bit of incremental copper exposure we think it's quite attractive um and i think as you noted in addition to this we picked up an additional 1.5 we already held a 1.5 and the johnson camp mine is also subject to the stream area, so we'll benefit in that way. But we're not giving asset by asset guidance.
Okay, got it. And then on ATO and some of the additional disclosures here, I guess first, you know, what would be the process here for TripleFlag to enforce their security on the stream?
And then as a follow up, you know, how does that affect the operator's credit situation and their i guess their current restructuring process yeah thanks thanks josh i just want to set the the context for this uh the skept gold uh disclosure that we had um the current amount of the arrears that step owes us is circa eight million dollars us so it's not a tremendous amount of money and step actually has over a 300 million dollar canadian market cap so i believe that they're able to pay um historically we've had a very good relationship with the step gold management team We actually made our initial investment in STEP in 2017. Our initial investment was $28 million. To date, we have realized over $50 million in cash flows from that investment, so it's been really lucrative for us. In July of 25, sorry, 24, I'm getting mistaken up here, Brew acquired a controlling interest in STEP Gold, and the relationship changed. So, Buru is a private mining company. It's based in Singapore. They're quite a successful group. They acquired the Lagunas Norte asset from Barrick in 21, and they've done very well with that. And they acquired STEP in order to get access to the Phase 2 development at ATO. Buru was well aware that the stream was in place when they acquired their interest in STEP. Parties related to Buru approached us and asked us about buying out our interest. We were not interested in that and the phase 1 oxides at ATO are coming to an end and STEP is targeting phase 2 production in 2026 and 2027 and that's based on their public disclosure. We didn't agree to the delivery halt. We do have a parent guarantee from STEP Gold. They are a producing gold company, according to their public disclosure, they've called for over 74,000 ounces of production in 2025. and there's value in the phase two project to me it's very clear there's value in phase two uh the price of gold has increased significantly some borough acquired its interest in step so i don't want to talk about the specifics of how you know things might be enforced i feel very comfortable with our position we are in dialogue with step they understand our position very clearly and i really can't say anymore as it's a legal dispute good thank you um and then maybe one last question on that is there any uh ability uh to quantify i guess what triple flags assumed uh production from this asset is maybe in 2025 within the current guidance yeah again i don't give asset by asset uh guidance but i guess i'll say this i feel very comfortable with our guidance for 2025 and even if we don't get a single ounce from ato i'm still comfortable with our guidance for 2025 but thank you very much thank you your next question comes from the line of fahad tarik of jeffries please go ahead hi thanks for taking my question um maybe just looking ahead to 2026 it looks like production is declining mainly due to north parks the high grade stockpiles deplete
by the end of this year from e31 and then you also have a step down in the stream rate at sarah lindo can you just maybe walk through i know you don't want to do asset by asset uh guidance but maybe just at a high level where could potential offsets come from to get to you know to offset some of the lower production at North Parks and Sierra Lindo? Thanks.
Yeah hi Fahad. Like as you noted like we'll get a better picture on where North Parks is coming in as the year goes on. Evolution Mining has a June 30 year end and so we'll solidify what we're seeing from 2026 you know as we get uh further into into this year and as you point out sarah lindo does have a step down coming which is really a testament to the uh the success of that and that investment and it's still going to be a quite a successful asset for us going going forward um in in terms of uh offsets i mean it's quite a it's quite a robust portfolio profile going forward i mean one of the things i'd point to is uh the arcata mine um should be coming on stream later later this year uh we also have uh you know the Johnson camp mine coming online this year we'll see some production from that existing portfolio we are also seeing step ups in production at a few other sources as well but as you kind of correctly pointed out and I said before I don't want to give any asset by asset specific guidance too much.
Okay I appreciate that and then maybe just second question and last one for me on kind of deal flow and kind of what's in the pipe what you're you're seeing out there effectively. It looks like you've done a couple of smaller deals on non-precious metals. There was the Arthur Gold that was a bit larger. Maybe talk through what you're seeing in the deal pipeline and just thoughts philosophically on even corporate M&A.
Yeah, I'm going to give you an answer, I think, which is pretty similar to what everyone else is saying, which is it's a really full pipeline. We continue to be active looking at many opportunities. It's a real mix of larger and smaller opportunities. I think our sweet spot remains in the $100 million to $300 million range, and we're definitely looking some that fall even at the higher end of that range. We are looking at some opportunities that are below that range as well. If we see a chance to add value, we'll certainly take advantage of that. The pipeline right now is really focused on good jurisdictions that I think our shareholders would really like. I don't know what colour I can give you really beyond that um you did ask about like corporate consolidation uh in theory i think in general i'm quite in favor of consolidation um you know and corporate mna opportunities uh we had a very successful experience with the the mavericks metals acquisition um you know i talked about beta hunt on the presentation that was a mavericks asset uh hope bay has done really well kensington has done well kone has done really well out of that so i think there's tremendous value opportunity for value there. So in general, we think that there's attractive opportunities.
Operator
Your next question comes from the line of Tanya Jakuskinek of Scotiabank. Please go ahead.
Good morning, everybody. Thank you for taking my questions. Some have been already asked, so I'll just refine a few other points I needed clarification on. Just on your pipeline, the 100 to 300 million range, I'm assuming it's all precious metals, that lithium one was just an offset, would that be correct?
Yeah. Hi, Tanya. Predominantly, the pipeline is full of precious metals opportunity. And you're right. But lithium was very much an opportunistic investment where we thought we had a very attractive opportunity. So we're not focused on lithium or battery metals.
Okay. And would you say your $100 million to $300 million, is that mainly development, or are you looking at more near-stage production, a production portfolio, let's say?
Again, it's a mix. There's actually probably a good number of actual producing opportunities in there.
Okay. Okay. And would I assume also that the, you know, any streams that you're looking at would also involve equity investments and or debt participation as well?
No, I wouldn't assume that at all. I think that's really specific opportunity by opportunity sort of thing. um you know we've been quite clear uh we prefer to focus our investment dollars on streams and royalties i think that's what our investors are looking for um we are open to it kind of in uh fairly small proportions on as needed basis and um but but that's certainly not our focus okay and then my last question on the on just on this is uh safe jurisdictions that you've talked about a lot of uh some of the other opportunities we've seen lately have been in africa um is it safe to assume that you're still focusing on the americas and australia yeah definitely the focus
Operator
is america is in australia um you know africa i think you have to distinguish between different jurisdictions but you know the the bulk of the pipeline is actually uh you know america's in australia okay thank you so much for taking my questions thank you once again if you would like to ask a question please press star one to join the queue we'll pause for just a moment to compile the q a roster and there are no further questions at this time i will now turn the conference back over to shelton van der koe for closing remarks yeah thank you kathleen and thank you everyone
for joining us uh we feel you had a really great quarter and we're looking forward for the balance of the year thank you all bye ladies and gentlemen that concludes today's call thank Thank you everyone for joining, you may now disconnect.
