Conference Transcript - TFPM 2026-02-24

Operator

All right, Triple Flag is a precious metals streaming and royalty company with a portfolio of over 230 royalties and streams. We are pleased to have Sheldon Van Der Kooij, CEO and Director of Triple Flag, present today.

Sheldon Vanderkooy, CEO

Good morning, everyone. My name is Sheldon Van Der Kooij. I'm the CEO of Triple Flag Precious Metals. Very pleased to be here again at the BMO conference. I'll be making forward-looking statements, and the customary cautions apply. so we formed triple flag in 2016 we're actually coming up on our 10th anniversary I couldn't be more pleased with how it's gone we have a market cap right now about 7.6 million billion dollars that's what's on the slide I think this morning it's around eight billion dollars due to the recent performance we're actually the fourth largest streaming company by pressure in the precious metals space by GEOs. In 2026, we're expecting to have 95 to 105,000 ounces. The last two years, we finished in the top half of our guidance range. We feel that the portfolio has performed exceptionally well. It's now a portfolio of 239 assets. When we started in 2016, we did not have an existing portfolio. There was nothing in the portfolio. Everything here has been sourced by this management team, and we generated significant shareholder value, which I'll go into later in the presentation. There's significant embedded growth in the portfolio. When you look at the 2030 figure, it's 140,000 to 150,000 ounces, and that's already bought and paid for. That's already in the portfolio right now. It doesn't take into account any new deployment that we might make in the future. And then I'm also going to touch on some of the fantastic growth assets we have that are going to be contributing in the period following 2030. This is a fantastic business model for generating cash flow. It's a robust portfolio. We share that cash flow with shareholders. We IPO'd in 2021. We had an initial dividend of $0.19 US per share at that time. We've increased it every year. It's now $0.23 a share. When you look at the percentage of our cash flow that we distributed to shareholders, it's actually been coming down. We were over 20% of cash flow back in 2021. This upcoming year, I expect it to be less than 10% of cash flow. And the reason for that is simple. We're finding very good opportunities to deploy and create further shareholder value over and above the dividend. We look to be increasing this going forward indefinitely. And we have a clean balance sheet. We have no debt. At the end of the year, we had a little over $70 million in cash on the balance sheet. Right now, that's higher, of course. We have a billion dollars of available credit between our RCF and the accordion feature. And the last point I want to dwell on is really our insider ownership. The management has a very significant stake. Most of our net worth is tied up in TripleFlag. That's a function of us being still led by people that were there in 2016 and built the company over the 10 years. And that causes us to really be aligned with shareholders and its inner DNA. I'm going to give an overview of the portfolio we built here. The diversification you get on the streaming model is quite impressive. And you'll see that by asset NAV, we have one asset, which is North Parks, which has a 25% weighting. And then everything else is under 10%. And when you look at North Parks, you couldn't pick a better cornerstone asset. First, it's been in operation for over 30 years. It's a copper mine with a gold byproduct. We stream the gold and silver. it's located in Australia and it's run by a tier one operator in evolution mining so again jurisdiction risk low very well capitalized very capable operator in the right jurisdiction and good community relations in terms of commodity exposure we are a precious metals vehicle it's gold and silver focused mostly gold good contribution from silver of course everyone's been enjoying that lately there is some copper exposure there but we're always going to stay keenly focused on the gold and silver exposure. In terms of geography, we're a bit unique in that we have a very high concentration relative to our peers in Australia. Australia is a fantastic tier one jurisdiction, obviously very mining friendly, rule of law, good geology, very capable workforce, just a great mining ecosystem. I think that that really helps drive value over the longer time. Other than Australia, the second highest concentration is in North America. By that, we mean Canada and the United States. And then we have a good proportion in quality mining-friendly jurisdictions in Latin America, such as Peru, Colombia, Chile, and others. The rest of the world is, again, we focus on mining-friendly jurisdictions. So with the mix, we've really tried to make sure our portfolio is centered in the sort of jurisdictions that make us comfortable and make our shareholders comfortable. You can't talk about an investment in triple flag without talking about the gold. Gold, to my mind, it's a monetary asset. When we talk about the gold price, it's really an exchange rate. And gold is just fundamentally stronger than U.S. dollars. There's a lot of reasons for that, and I'm sure everyone in this room is quite familiar with a lot of it. But when you look at the performance of gold over the years, like I was born in 1972, and someone from 72 would have said, and I wasn't following the gold price at that point, But they would have said gold should be worth about $35 an ounce, and that's long gone. You can't print more gold, and that's the beauty of it. There's a tremendous amount of U.S. dollar debt out there. $39 trillion is the latest figure that we found. We think it's grown by about $2 trillion in the last year. I saw an article in the Wall Street Journal the other day saying the annual interest cost is over $1 trillion. I really believe in gold. I feel very fortunate to have my portfolio centered in gold. And I think there's a lot of people really waking up to the value that gold brings to an investment portfolio. So a company like Triple Flag, we're a compound growth business model. The portfolio produces robust cash flows. We reinvest those cash flows into further streams and royalties. And if we're successful in investing at good rates of return and generating value for our shareholders, that really builds significant value over time. So, what you're seeing on the page is actually the track record that we have since 2016. So, it's from the beginning. We've deployed about $2.8 billion into that portfolio of streams and royalties. We've harvested about $1.4, $1.5 billion in cash flows from that. And the current NAV of that portfolio is $3.7 billion. So, there's significant value creation. This actually understates the value creation from the shareholder's perspective. shareholder the share capital in the portfolio is actually 1.8 billion dollars because of course we've reinvested the balance the extra billion came from the cash flows of the of the earlier investments so the shareholders have put in 1.8 billion the market cap is 8 billion and you can see there's a quadrupling of what the shareholders have put in and most of that capital was put in since 2020 now that has definitely benefited from the gold and silver exposure but it's not just that. It's also about underwriting good minds. And then when you look at the returns, you realize you actually invest on the basis of a certain volume of metal that you receive. And with the fullness of time, you get more. And that's the beauty of this model. Here's a number of the case studies. And they illustrate what I just stated. I'm not going to go through all of these in the interest of time, but I'm going to focus a little bit on Sarah Lindo, the top right there on your page. It was our very first investment. We invested $250 million on a silver stream in a zinc copper mine in Peru called Cerro Lindo. It was operated by Milpo at the time. Now it's operated by Nexa. When we made our investment, we underwrote 17.5 million ounces of silver in the life of mine. And we had a life of mine of about 10 years. And it was about 10 years ago. In the next quarter, we expect to receive our 19.5 million ounces. So 19.5. So we'll receive an extra 2 million ounces that we never really factored into our investment case. And right now, that mine has about a nine-year life of mine. Now, it might be that five years from now, it only has four years left. But it wouldn't surprise me if five years from now, they're still five years ahead of us. And that's kind of the beauty of this model. The analyst NAV says this investment is still worth $176 million. Our investment case said it should be worth zero now. That analyst NAV is based on a consensus long-term silver price. That's about $40 right now. Obviously, silver is a lot higher, so I would not sell that for $180 million in any way, shape, or form. It just builds value over time. And it's a consistent story with the other examples on the page. Per-share metrics are the most important metrics for shareholders. We have the operating cash flow there, but the two metrics that I really want to see drive forward over time are cash flow per share and NAV per share. We went public in 2021. So what this shows is the performance in our first full year as a public company on these metrics to the latest year. So you can see the cash flow per share driving very nicely. That's a function, of course, of gold and silver exposure, but also of increasing GEO growth. And I'll touch on the track record of delivering growth in our GEOs. NAV per share, you can see, again, going up consistently over time. And again, that NAV per share reflects analyst consensus view on long-term gold price. That's about a $3,500 gold price implicit in that figure there. If you use spot prices, it increases dramatically. This is the GEO growth of the company for the entire history of the company. Our first asset was acquired in December of 2016. Our first revenues in January of 2017. Every year it's gone up. You see that increasing profile. In 2026, we expect to receive between 95,000 and 105,000 ounces, and then we're really poised for growth going forward from there again. In 2030, we see ourselves as producing between 140,000 and 150,000 GEOs. That's a 45% increase midpoint to midpoint. We're going to go through some of the assets that contribute to that. Also very exciting is beyond the 2030 horizon, we have some very exciting assets driving growth again. So, again, very robust growth ahead for Triple Flag without doing another investment. These are a number of the growth catalysts. In the interest of time, I'm not going to go through each of these, but the hidden story of 2025 was just how well our development projects performed in 2025. When you go through this list, like you look at Arcata, you look at Kone, Eskay Creek, Eridurada, it's just every one of these performed as good or better than we would have expected coming into the year. And, you know, anyone with familiarity with investing in mining has to account for some expected delays. And to me, the wonderful part when you got to the back end of 2025 is going down this list and seeing every one of these projects just hitting all their marks or even coming in earlier. The Kone deposit. I mean, Martino and the montage team have done an excellent job. They were talking about 2027. We have a very nice royalty on that mine. And now they're talking about coming into production in, you know, late 26. Again, usually the slippage is the other way as opposed to coming forward. This is probably my most favorite slide in the deck. This is the view on the 2030-plus time horizon. I'm going to start on the left there, the Arthur project. Angle Golda Shanty released some very nice news about that project the other day. We acquired a 1% royalty on it. It's located in Nevada. I'm going to go into some more detail later. But what a fantastic asset that's going to be contributing in the next decades to come. Comess, Sentara has released some PEA on that project. We actually entered into that contract back in 2018, and we had the right to fund $45 million to get 100% of the silver from that development project. Now, it's a copper-gold project. The silver is a relatively small portion of the revenue mix, about 2%, so it's not a big burden on the project. We priced that stream in 2018 when the silver price was around $15 an ounce. The $45 million doesn't change, but the value of the silver has changed dramatically. We don't put a penny into this project until they announce a construction decision. And, you know, you won't even be able to see my hands as I reach for my checkbook when they ask us to write that $45 million check. It's going to be fast. um cope bay is another fantastic project being advanced by ignico uh it's up in nunavut we're expecting a construction decision in may of this year uh ignico is talking about this as a 400 to 425 000 ounce a year uh producer um it's district scale uh you know they're talking about this as potentially decades of exposure our royalty is uh an immense land package it covers all the know mineralization and targets. Agnico is a premier operator up in the far north. It's just a fantastic asset that's going to be driving value for a very long time. And then the last is North Parks. And we're in the fantastic position right now where we're seeing North Parks, our largest asset, turning into a very strong growth asset for Triple Flag. And hats off to Lori and the entire Evolution team with what they've done on that property since they acquired it a short time ago. I'm going to go into more detail on all the catalysts there, but particularly in the 2030 plus territory, we have contracted guaranteed minimum ounce deliveries, 45,000 ounces between 2031 and 2037. Meaningful increase in ounces coming from that project. I'm going to touch on other catalysts as well. And when you step back and look at these, these projects are all located in tier one jurisdictions. They have fantastic operators with the financial and technical ability to build them and deliver them, and they're just high-quality projects. Arthur is in Nevada, Kames is in Canada, Hope Bay is in Canada, and North Parks is in Australia. So I think we're really all positioned for that period. The North Parks news has been absolutely fantastic for basically since evolution came on the property. It's been fantastic. So the big development during 2025 was they were developing the E48 sub-level cave that has relatively high gold grades associated with it and we're going to benefit from that in 2026. Throughout the year in 25, I was always looking at the monthly report seeing how that development was coming online. You know, of course, afraid of slippage, but really hats off to the Evolution team. They're fantastic operators and they just delivered this right on schedule and we're going to be benefiting from the E48 sub-level cave in 2026. And next I'm going to get into the announcements that Evolution made and also we made about a week and a half ago. There's actually three significant components. When there's three components, it's easy for one or the other to get lost, but each of them are significant for Triple Flag. First, the E22 blockade was approved. E22 has very attractive gold grades to it. It's a copper deposit with a gold byproduct. Our stream covers the gold. We're going to benefit as they bring that into production. We always thought that that would be best exploited as a block cave, but Evolution was going through the process of comparing the trade-off studies between a block cave and a sub-level cave. What's preferable for Triple Flag was the block cave, and it's also preferable for Evolution, and they've announced the results of that determination, and that's being approved. So that's going to benefit us in the 2030-plus period. There's long lead times associated with a block cave development. So that's fantastic. It was consistent with our investment case, but nice to see that coming along as we thought it would. Very significantly, Evolution is looking at the potential. They're studying the potential to increase the capacity of North Parks from the current 7.6 million tons per annum. Now, North Parks has a very large resource endowment, has over 600 million tons in the resource, and 7.6 million tons is relatively small, relatively 600 million tons. We never underwrote in our investment case anything more than the current capacity, but we always thought there was the potential for new capital to be deployed, increase the capacity, and bring forward production and benefit the operator. And we live in a copper-hungry world. Everyone's looking for more sources of copper. North Park's an established copper mine in a Tier 1 jurisdiction. And what Evolution is studying is the potential to increase that throughput from the current 7.6 up to the 10 million plus territory. So we are looking forward to the results of that study. We think there's a lot of logic that kind of drives towards that sort of answer. We don't want to get ahead of them, but that would be a fantastic catalyst for Triple Flag because that increasing throughput will benefit us as we get the gold byproduct from that copper production. And then the last, and this has gotten the most attention and it's probably the most exciting, is the E44 deposit. So the triple flag stream at North Parks is really a byproduct stream. We get 60% of the gold revenue, of Evolution's gold revenue. And that works when you're talking about a copper deposit with a gold byproduct because the bulk of the revenue is from the copper. What E44 is, is it's not a copper deposit, it's a gold-only deposit. There's no copper there. There's a very large land package at North Parks. And this mine illustration shows the land package we have of over 1,000 square kilometers. And on the map, you can see the existing mine and infrastructure is actually 21 kilometers away from E44. Now, Evolution identified the potential of E44 as a gold-only deposit. And it looks quite attractive. But then they came to us and said, it doesn't work when you have 60% going to triple flag as a gold-only deposit. And that, of course, made sense to us. So we're in this situation where we couldn't make them exploit E44 unilaterally. They're the operator. They make those decisions. They could not unilaterally force us to take any less than 60% of the revenue of E44. So what we had to do is we had to come together. And what we kept saying was we're looking for win-win. What I'm really proud of is I think between the two teams we actually did get to win-win and also when people search for win-win, one part or the other feels that they need to win a little more or they're winning too little and it doesn't happen but really appreciate the constructive dialogue with the Evolution team we tried to echo the same in kind and we got to a result which I am very happy with and the Evolution team is very happy with Very significantly, the market, the shareholder bases of both companies have also received this very well. I think that that's really gratifying to see that this is something that truly was win-win. We got there. There's tremendous value there. And when I look at the potential going forward, what really excites me is initially North Parks was actually a place that people did gold mining on. And then they found the copper deposit. And then that's where the direction of that mine went. But there are a number of gold targets on this property. And if we can find more E44s, that could drive very attractive value for both Evolution and for Triple Flag. So I don't think this is going to be the end of the story. E44 on its own can drive very attractive economics for both Evolution and Triple Flag. And we have guaranteed ounces associated with a deal we cut with them. So we're funding $83 million to Evolution later this year. And they have guaranteed 45,000 ounces of gold to us in the 2030 period to 2037 period. I also want to touch on the Arthur project because we got some great news flow in Arthur this year. Sorry, last week as well. Tier 1 potential at Arthur is being developed by Anglegold Ashanti. Some of the quotes that they made, I really enjoyed hearing. We acquired this royalty last year. I think it's really completely validated the vision that our technical team had, where they went through the data, interpreted the geology, and made an assessment of what this represented. And it's absolutely come to bear the way we thought it would. It's actually come into bear better than what we underwrote. This is going to be a marquee asset for Anglo-Goldashanty. They're talking about this into the 2050s. This is going to be a large-scale project. And this is exactly the sort of project that tends to get bigger and bigger over time. Quality projects in Nevada, there's a low barrier to attracting capital. It's much easier to expand a mine in Nevada than it is in more dangerous parts of the world. It's this mining country. We have a lot of people on our team that come from Barrick, and they really like the analogs between this project and some of the great mines that Barrick has had in Nevada. Clearly, Anguigold Ashanti is on a pathway to production. The exploration upside is immense in our view and Anglegolda Shanty's view. And this is just a tier one asset for a marquee operator. These illustrations are from the Anglegolda Shanty materials. I won't go through those in detail in the interest of time, but there's a lot more there than the initial reserve that they released. And there's a lot more prospectivity there. So I think this is going to be the sort of asset that just keeps looking better and better and growing bigger as time goes on. I'm going to close up on the investment case. What Triple Hague has is a fantastic portfolio. We produce lots of cash flow. It's anchored by quality assets and quality jurisdictions with quality operators. There's embedded growth in the portfolio, and that growth is high-quality growth located in the right places. What we're going to do to generate value for shareholders is we're going to reinvest our cash flows into further investments that drive the sort of value that we've created over the last 10 years. We're going to keep doing more of the same, and we're going to be looking for good assets with good operators and good jurisdictions. Thank you very much.

Speaker 1

One of the questions coming through on the app here is, can you talk about the recent developments at Talon Metals and what that means for Tamarack?

Sheldon Vanderkooy, CEO

I'm sorry, Rene.

Speaker 1

There was a question about Talon Metals? Yeah, and what that can mean for Tamarack.

Sheldon Vanderkooy, CEO

I mean, we acquired our interest on the Tamarack project, which is located in Minnesota, I think back in 2018 or so, and have just been really impressed, first of all, with the potential of that project. It keeps being unveiled. It's a nickel project. I think the political climate is exactly right for advancing a critical minerals project in the United States right now. The team has done a fantastic job. We've seen the Lundin group come into that project now, which I think is very much a positive sign. We have a very nice royalty on that project. Anyway, we have a ton of respect for the team there. We really like having the Lundin involvement on that now. And what's already there is very impressive, and there's the potential to have a whole lot more.

Speaker 1

I guess one of the questions that came through is just with respect to deal structuring. in a rising metals price environment are people asking for more conditions whether that be buybacks or step downs and how does that kind of fit into the opportunities that you're seeing right now?

Sheldon Vanderkooy, CEO

Yeah, it's like we have the perspective of 10 years and I think no one has ever been comfortable with the ability for streaming companies to deploy. There's kind of this constant story that, okay, now it's going to be harder and people are asking for more difficult terms. I think people it's, you know, these are engagements where you negotiate with another party and you find something that works for both sides. Operators have always wanted step-downs and buybacks and caps and all those sorts of features. We've always wanted guarantees and protections and covenants and those features, and it's just that dialogue between the two. I wouldn't say there's been any real sea change. I think each one is highly specific and individualistic, and I think we do our best by our shareholders and only agree to deals that we feel comfortable deploying our capital into.

Speaker 1

Thank you very much for the update, Sheldon. Thank you.