Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Triple Flag Precious Metals Corp (TFPM, Financial) achieved record sales of nearly 30,000 gold equivalent ounces in Q3 2024, placing the company on track to meet the top half of its annual production guidance.
- Operating cash flow per share increased by over 70% compared to the previous period, driven by record production, high gold prices, and stable margins.
- The company was added to the S&P TSX composite index, enhancing its exposure to a broader investor base and increasing liquidity.
- TFPM's portfolio achieved several milestones, including robust production from Zollino and increased production guidance for Camino Rojo.
- The company maintains a strong financial position with nearly $690 million in available liquidity, supporting future capital deployment and shareholder returns.
Negative Points
- TFPM exited the quarter with a small net debt position of $11 million due to drawdowns on the credit facility for new acquisitions.
- The company faces geopolitical risks, with a significant portion of its pipeline opportunities located in Latin America.
- There is competition from alternative financing options like gold prepay arrangements, which could impact the attractiveness of streaming deals.
- The focus on traditional royalties and streams limits TFPM's flexibility in exploring other financing models like debt or equity.
- The company's growth outlook is heavily reliant on maintaining high precious metal prices, which are subject to market volatility.
Q & A Highlights
Q: Can you provide an update on the deal pipeline, especially given the fluctuating gold prices?
A: The pipeline remains strong, with opportunities in the $100 million to $300 million range. We are also considering smaller transactions, like the recent Allied Gold deal. The focus is primarily on traditional royalties and streams, not debt or equity, with a significant portion of opportunities in Latin America. β Sheldon Vanderkooy, CFO
Q: Are there any changes in what counterparties are looking for in deal structures?
A: There hasn't been a significant change. The stream and royalty model has become more accepted, and it's often part of the financing package for projects. We focus on maintaining exposure to the entire life of the mine. β Sheldon Vanderkooy, CFO
Q: How do gold prepay arrangements compare with streams, and do they affect streaming opportunities?
A: Prepay arrangements are part of the total capital picture and can coexist with streams. Streams offer life-of-mine exposure and share production risk, which can be attractive to operators. Prepay is not our focus as it doesn't provide life-of-mine exposure. β Sheldon Vanderkooy, CFO
Q: Is there a focus on specific jurisdictions for future transactions, considering geopolitical risks?
A: We don't target specific jurisdictions but assess risks as part of the capital deployment decision. Our portfolio is centered in mining-friendly areas like Australia and the Americas. Latin America currently has a significant portion of our pipeline. β Sheldon Vanderkooy, CFO
Q: Would Triple Flag consider using prepay as a financing option in the future?
A: While we've used prepay in the past, our focus remains on providing life-of-mine exposure through streams, which aligns with our business model and shareholder expectations. β Sheldon Vanderkooy, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
