Triple Flag Precious Metals Corp. (TFPM) Q1 2026 Earnings Call Transcript

Hello and welcome to Triple Flag Precious Metals Q1-2026 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 at that time, just press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, just press star one again. Now I would like to turn the call over to Sheldon Van Der Kooij, Chief Executive Officer. Sheldon, please go ahead.

Good morning, everyone. And thank you for joining us to discuss TripleFlag's first quarter 2026 results. With me on the call this morning are Iban Bari, our Chief Financial Officer, and James Dendel, our Chief Operating Officer. TripleFlag is also a record start in 2026, with Q1 representing the strongest quarter in the company's history across every key metric. This includes over 30,000 GEOs, $129 million of adjusted EBITDA, and operating cash flow per share of $0.55 US. These are all quarterly records. The Q1 result is a straightforward demonstration of the model working as intended. High margin, top line exposure to higher gold and silver prices, translating into per share cash flow growth of 67% year over year. On the transaction front, we kicked off 2026 by unlocking the high-grade E44 Gold deposit at North Parks, which was not previously included in Evolution's Life of Mine plan. triple flag will receive guaranteed minimum deliveries from e44 over seven years starting in 2030 which aligns with evolutions approved plans for a block cave at e22 and a potential mill expansion to 10 million tons per annum all of which position north parks as a clear growth asset for triple flag then in march we acquired a three percent gross revenue royalty on the gunnison copper project in Arizona for $23 million. James will walk you through the details, but this is an asset that fits precisely within our strategy of highly accretive transactions for projects in mining-friendly jurisdictions, in this case, the United States. For our existing portfolio, our assets are performing ahead of our expectations. Hope-based construction decision is expected later this month with a production profile of at least 400 000 ounces per year the mill at beta hunts has been approved for expansion to 2.6 million tons per annum with a further potential growth to 4 million tons per annum conase oxide circuit remains on track for production later this year fosterville is planning a 65 throughput increase that will boost production over the next three years and last arthur's feasibility work permitting submission and drilling is underway on what Angla Gold sees as a world-class deposit that will continue to grow for decades to come. Our first quarter performance, as well as the underlying achievements made by the assets within our portfolio, have us on track to deliver our 2026 guidance and our 2030 outlook of 140,000 to 150,000 GEOs. I will now turn it over to Yvan to discuss our financial results for Q1-2026.

Thank you, Shelton. As Sheldon highlighted, 2-1 was a record quarter on every run item on this chart, with adjusted earnings up 125%, adjusted EBITDA up 82%, and most importantly, cash flow per share up 67% year over year. Operating cash flow per share is the metric that most directly compounds shareholder value over time. This strong cash flow generation continues to support all of our capital allocation priorities given our high margin business, including shareholder returns and external growth opportunities. We aim to pay a progressively growing dividend that's sustainable across all metal prices. And we have increased our dividend every year since our IPO by about 5% mid-year. we will continue to assess the right pace of further increases against the broader growth in capital deployment opportunities. In addition to our dividend, we have an active NCID and as always, we'll buy back shares in the open market on an opportunistic basis. We have a pristine balance sheet and exit of the quarter with $144 million worth of cash, no debt, and over a billion dollars of liquidity available this gives us meaningful flexibility to continue executing on a creative growth opportunity while funding our progressive dividend and to buy back shares when warranted with that i will turn it over to james to walk you through hope bay gunnison and our growth expectations beyond 2030.

Thanks, Iban. We hold a 1% NSR royalty in Hope Bay, which is one of the most exciting development assets in our portfolio. We expect meaningful developments in the next several weeks. The asset is an 80-kilometer greenstone belt in Nunavut, with over 90 regional exploration targets identified across the property. Our royalty covers well over 1,000 square kilometers. Agneco's unparalleled Arctic operating capabilities are essential in ensuring the successful development and operation of a project at this scale in remoteness. A technical evaluation update and construction decision is expected by Agneco in May, which will highlight a 6,000 tonne per day operation with the potential to be a 400 to 425,000 ads per year gold producer. Boat Bay's exploration potential is also significant in areas such as Patch 7 of Madrid, but also has the geological potential to support a multi-decade district across the broader 80-kilometre As Sheldon mentioned, in late March, we completed the acquisition of a third-party 3% gross revenue royalty on the Gunnison Copper Project in Arizona for $23 million, which is strongly increasing on a per-share basis. There are a few things we particularly like about this transaction. First, it is an existing royalty on a large-scale U.S. copper project that is designed to be mined and processed using conventional methods. The updated PEA, released in February this year, supports approximately 125 million pounds of annual copper cathode production, totaling roughly 3.2 billion pounds over a 21-year life of mine. Second, the location is genuinely top tier. The project sits on a combination of private and state land in Arizona, which we expect to help streamline the permitting with onsite power, rail, and water infrastructure already in place. Domestic U.S. carbon production is a strategic priority in the current environment, and Gunnison is positioned to deliver into this need. And finally, I want to discuss the growth that our portfolio is expected to deliver beyond 2030. Outside of our formal outlook, Arthur, Comence, Hope Bay, and North Parks represent world-class long-line assets located in the most established mining jurisdictions. They provide substantial growth potential beyond our 2030 outlook. At Arthur, a pre-feasibility study was released in February to drive the commencement and permitting in 2027. The current mine plan has been described by Anglo as the top of the iceberg and they further noted that Arthur is a marquee asset that will anchor the portfolio into the 2050s. We're very excited about the development trajectory and potential of this tier one gold asset. Acumet's triple flag holds a 100% silver streak. The January 2026 PEA supports a large-scale copper gold silver operation reaching production by 2031, leveraging existing brand field infrastructure and permits from previous mining operations. Notably, the PEA mine plan only represents 47% of the total indicated and inferred resource times, providing further upside potential for subsequent economic studies. Hope Bay have already covered, but its place in this slide is worth noting. A potential 400 to 425,000 ans per year producer with district-scale exploration upside along the 80-kilometer belt and construction decision expected this month. And finally, North Parks is triple-plug's largest asset. Numerous growth projects have been recently approved which will unlock value of more world-class copper gold and diamonds, including the E22 blockade, the E44 gold open pair with minimum guaranteed deliveries, and most importantly, a potential mill expansion to at least 10 million tonnes. which is currently being studied over the next year we believe that the mill expansion is the optimal path forward time lock value from not only the 575 million tons of current measured indicator resource inventory but other prospective and underexplored targets that can potentially and materially add to the potential production profile associated with the improved scale and processing optionality of north parks Taken together, these four assets are diversified across long-life, district-scale systems in Nevada, British Columbia, and other most in Australia. They all operate by high-quality counterparties and represent the foundation for further organic growth beyond 2030. I'll now pass back to Sheldon for closing remarks.

Thank you, James. We had a record start to the year, and we are positioned to achieve our 2026 guidance. We saw record growth in operating cash flow per share and deliver transactions that will benefit our shareholders for decades to come. Beyond 2030, TripleFlag shareholders can expect significant additional GEO growth from long life, district scale assets, including at North Parks, Arthur, Chemess, and Hope Bay. Overall, TripleFlag is exceptionally well positioned to deliver long-term and organic value to our shareholders from a diverse portfolio of producing and developing assets. Our balance sheet remains pristine. We are debt-free with over $140 million in cash and over $1 billion in available credit, providing us with substantial financial flexibility to continue pursuing creative growth opportunities for the benefit of our shareholders. That concludes our prepared remarks. Operator, please open the floor to questions.

We will now begin the question and answer session. If you would like to ask a question at this time, see the press star followed by the number 1 on your telephone keypad. And your first question comes from the line of Sam Aberwater with Scotiabank. Sam, please go ahead.

Good morning, everyone, and congratulations on another great quarter. Could you please walk us through an M&A and transaction outlook update, specifically the size of transactions that Triple Flag commonly engages, the mine life stage, the commodity, and any more information? Thank you.

Yeah, certainly, Sam. I'll take that. This is Sheldon. um first of all like i'm just really pleased that we deployed 100 million plus in q1 on very good terms uh there continue to be many opportunities and i'm confident we'll manage to do more in 2026 um with regards to what we're looking at like it's mostly precious um mostly good jurisdictions a range of sizes uh certainly in that 100 million to sub 500 million range um and again generally good jurisdictions that would be attractive for our shareholders great thank you just one more tag on um what's the transactional look in australia has uh triple flag been engaging any opportunities there we we really like australia of course um it's our single highest country uh concentration um we are active in australia uh we're also active in many other jurisdictions around the world great thank you that's all for me thank you again if you would like to ask a question, just press star followed by the number one on your telephone keypad.

And our next question comes from the line of Brian McArthur with Raymond James. Brian, please go ahead.

Good morning. My question relates to the buyback options on the Gunnison agreement. And there's two parts of it. The royalty part, I think, is clear to me. But can you just go through? I thought there was a $65 million stream expansion payment.

Now you're talking about a termination for 35 can you can you just update me exactly what's left and how the stream is working these days please yeah certainly brian this is sheldon i'll take uh i'll take that so the um yeah so the so the the royalty buy down option is uh is pretty straightforward really what we want to do is set the context is we want to provide a pathway for uh a potential on a change of control to have a lower royalty burden on the property which we think could unlock value for all parties. And it's not an attractive price for a triple flag. With respect to the stream, we have an option to fund an additional $65 million. And effectively, it's almost double the stream rate. What this would do is instead of us funding $65 million to double the stream rate, they would pay $35 million to us in order to cancel that option on our part i don't think anyone values our expansion option right now so uh i think 35 million dollars would be a pretty nice win for trouble flight right so this you just get 35 for that option but the you know the three and a half the next percent the 16 and a half percent that all stays in place there's no change in step downs or adjustments or exactly your payout of the option okay great exactly it's not a reduction in our current stream at all thanks very much child and that's very clear thanks brian and your next question comes from the line of adam marsky with bank of america adam please go ahead uh hi thanks for taking my question um i've had a question on the buyback program which has been underutilized to date uh perhaps you could comment on uh why there's been little activity there relative to other companies with buyback programs and what the outlook is going forward yeah thanks adam um we've always been opportunistic with respect to the uh the ncib and um and we've been uh you know we've shown a willingness to deploy on that from time to time um all i would say is we uh do view our shares as being undervalued and maybe i'll uh i'll stop there but you know noted thank you very much there's there's no further

question at this time i will now turn to go back over to sheldon vandercore for closing remarks Sheldon?

Yeah, thank you, everyone. I really appreciate your attendance. It's been a fantastic start to the year, and I think it's going to be a, you know, a fantastic finish to the year as well, so appreciate all your time. This concludes today's call. You may now disconnect.