Triple Flag Precious Metals Corp. Common Shares

Good morning, ladies and gentlemen, and welcome to Triple Flag Precious Metals Corp's Q2 2021 results conference call. I would like to remind participants that today's presentation contains forward-looking information, and we refer you to the cautionary statements in the presentation. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. I would now like to turn the conference over to Shawn Uzmar, founder and CEO of Triple Flag.

good morning everyone and thank you for joining us to discuss triple flag's inaugural quarter as a public company i'm really excited to be sharing this moment with you and my team today it really does represent the culmination of years of great work and dedication by this exceptional team i'd like to start by thanking all the investors who participated in our ipo in may we placed the utmost value in their support and trust And as significant owners of this business ourselves, we're truly aligned in ensuring Triple Flag's continued disciplined growth in value per share. The second quarter of 2021 set yet another record of gold equivalent ounce sales and operating free cash flow. Just over 22,500 gold equivalent ounces were up 40% over the same period in 2020, delivering a remarkable 100% increase in net earnings. Sheldon will share more detail on our financial results shortly. For the first time, we're publishing our five- and ten-year average annual gold equivalent ounce outlook, demonstrating that Triple Flag's portfolio is projected to continue our sector-leading GEO growth from the past four years. Supporting this is our strong near-term organic growth backed by a stable, high-quality production profile over the next decade and beyond, with a portfolio average mine life in excess of 20 years. Having built Triple Flag from the ground up since 2016 with sector-leading growth in global equivalent ounces over this period, we're proud to demonstrate the ongoing growth and duration of our existing portfolio by showcasing our expectation of sustainable average production of 105,000 GEOs over the next five years and the next 10 years. We see this profile as a solid, high-margin, strong cash-generating foundation from which we will continue to grow net asset value, free cash flow, GEOs, and reserves and resources per share, while providing us with the financial strength to return capital to our shareholders through meaningful dividends. On this topic, our board has approved our first dividend of $0.475 per common share. This equates to a dividend yield of approximately 1.7% and allows us to directly share the benefits of Triple Flag's cash flow with our shareholders on an ongoing basis. We believe this is a robust dividend yield which we intend to continue growing over time without compromising our disciplined growth story. Our focus will remain on delivering reliably strong results and returns as we pursue our strategy of disciplined and accretive growth through the acquisition of precious metal streams and royalties. Turning to slide five. From the outset, we've been relentlessly focused on asset quality. Over time, this focus has translated into a portfolio that compares favorably on key portfolio quality metrics alongside the largest, most valuable peers in the sector. Each of our assets boasts compelling geology and the potential for significant exploration and production upside. Capable and responsible operators working to high ESG standards are prerequisites for each of our investments. A high proportion of our assets by net asset value are in production and operated by senior mining companies. Additionally, beyond the operating mines, we have a large portfolio of exploration and development properties that will provide organic growth in the medium to long term. We have very deliberately structured a portfolio with a long average mine life, leading to assets with good track records of reserve replacement, social license, and proactive environmental management, which we believe ultimately leads to longer and more sustainable mines. This, in turn, provides investors with long-term visibility to future cash flows and exposure to multiple commodity price cycles, in addition to the optionality that comes from future ounce additions through the drill bit. The vast majority of our producing assets are situated on the lower half of their respective industry cost curves. This is an important characteristic in an inflationary environment with rising materials and labor costs that we are seeing early evidence of and have historically put pressure on mining companies' margins. As a streaming and royalty company with low-cost position assets, we are broadly insulated from these headwinds, particularly sectoral margin compression. As a precious metals royalty and streaming business, we've remained true to the model in our portfolio construction, avoiding exposure to equity positions and similar financial instruments and limiting our activities to overwhelmingly focus on acquiring precious metal streams and royalties. We believe that is what our investors are seeking from us and will remain disciplined in executing on this model. Turning to slide six. TripleFlag's current valuation provides significant potential for a re-rating to metrics that would be more typical for our senior and intermediate peers, particularly in the context of the quality and longevity of our portfolio that aligns favorably with the best in the sector. We believe that a re-rating will be driven by the continued performance of our business and consistent execution of our strategies. Our commitment to our investors is to continue to remain disciplined in the execution of our business strategy, as we have done in building this business over the past five years. I'll now ask Sheldon to comment on our Q2 results and to provide some further context.

Thanks, Sean. Turning to slide seven, I'd like to first review some of the highlights of our very strong quarter. I will start with the record the triple flag set in the quarter. First, we set a quarterly record for production, recording over 22,500 gold equivalent ounces in Q2. This represents a 40% increase over the corresponding quarter last year and a 14% increase over Q1 of 2021. For H1, we have realized over 42,000 gold equivalent ounces, a 50% increase over H1 last year. We have enjoyed particularly strong performance from Cerro Lindo in 2021 as they have delivered stronger than expected silver grades. It is very gratifying to see the production growth that the portfolio is delivering. And as we have a number of ramping assets, there is still further growth to come. Sean will speak to the duration of our production profile later on in the call. The second record is perhaps the most important to our shareholders, and that is the record operating cash flow of over 32 million in the quarter, representing a 48% increase over the corresponding quarter last year. In H1 2021, we realized over 61 million in operating cash flow. A strength of the streaming and royalty model is that all of our operating cash flow is also free cash flow, as we do not have the sustaining capital expenditures that mining companies do. Bottom line earnings doubled over the corresponding quarter last year to over $18 million. The share count was higher in 2021 than it was in 2020, both due to the shares issued on the IPO and shares issued in 2020 as part of the funding of the North Park's transaction. Nonetheless, we still realized earnings per share growth of over 40% over Q2 2020. Adjusted net earnings saw even more dramatic growth, increasing over tenfold in the quarter, and adjusted earnings per share increased sixfold over the same period last year. I'll now turn to slide eight. Slide eight sets out some of the measures in graphical form, with revenues, operating cash flow, and adjusted EBITDA increasing by 48 or 49%, and net earnings doubling year over year. The strength of the royalty and streaming model is that the revenue increases from increased production and higher prices are directly translated into free cash flow available to shareholders without the drag from margin compression and sustaining capital expenditures. We believe that it is important to directly share the benefits of this cash flow with shareholders through a robust dividend. Sean has already touched on our first quarterly dividend of 4.75 cents U.S. per share. This quarterly dividend represents less than 23% of our free cash flow in the quarter. Turning now to slide nine, we set out our consistently high margins over the past five quarters. We have also set out the average gold price in each of those quarters, illustrating our resilience against cost inflation and margin compression at different gold prices. I'll now turn to our 2021 guidance on slide 10. With a strong Q2 in the books, we are reaffirming Triple Flag's full-year 2021 production guidance of 83,000 to 87,000 gold equivalent ounces. We are also providing guidance on 2021 depletion of between 53 million to 57 million on a full-year basis. I'll now turn matters over to Sean, who will introduce our long-term production guidance. Sean, over to you.