Triple Flag Precious Metals Corp. Common Shares

Good day and thank you for standing by. Welcome to the Triple Flag Precious Metals Q3 2021 results call. At this time, all participants will listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I'd now like to hand the conference over to Sean Usmar. Sir, please go ahead.

Good morning, and thank you for joining us to discuss Triple Flag's third quarter results. I'd like to start by taking a moment to express our gratitude on this day for the sacrifices made by veterans. This is a day that kindles fond memories of several loved ones in my family, and I know does the same for countless families around the world. This is our second quarter as a public company, and I'd like to start by thanking all our investors who recognize the fundamental quality and deep value on offer at Triple Flag. We as a management team are significant owners of this business and are truly aligned with our shareholders in generating value, growing our cash flow and net asset value per share, while showcasing and eliminating the deep valuation arbitrage to our peers as we season in the public market. The third quarter of 2021 was yet another strong quarter for gold equivalent ounces sold and free cash flow growth. Our 20,746 CEOs were up 62% over the same period in 2020, delivering a robust 53% increase in operating cash flow and 43% increase in adjusted EBITDA. Sheldon will share more detail on our financial results shortly. 2021 has been a year of growth for TripleFlag. By the end of the third quarter, our assets produced as many CEOs as in the entirety of 2020, reflecting strong contributions from our cornerstone assets and the ramp-up of new mines. Having built Triple Flag from the ground up since 2016, we're set to leading growth in GEOs over this period. We're proud to demonstrate the organic growth of our existing portfolio by highlighting Step Gold's ATO Phase 2 expansion. This was one of the many exciting catalysts during the quarter. The feasibility study announced in October includes a 10.5-year mine life extension, materially increasing the life of our stream by more than a decade. This is a testament to our rigorous due diligence approach and our ability to source and structure transactions on high-quality mining projects led by great partners around the globe. This is a significant value catalyst for all stakeholders in the ATO project. It's also worth considering the context of this milestone from a NAV for share, accretion context, and a demonstration of the intrinsic appeal of the streaming and royalty business model. Our long-term investment horizon and disciplined approach to deploying capital is core to our identity as managers and owners of this business. We aim to deploy capital and be a financier for mining companies throughout the commodity cycle, providing much needed capital to mining companies to fund their strategic priorities. Our investment in ATO is a perfect example of this. ATO is a great test study of the potential for this form of financing to be enabling to the capital needs of the mining sector by generating good investment returns with optionality that rewards our investors as well as those of our mining partners. Triple Flag has full exposure to the ATO Phase 2 expansion with its gold and silver stream, with no incremental investment from Triple Flag beyond the original capital of $28 million we provided to Step Gold as cornerstone investors, representing navigation for Triple Flag on the order of tens of millions of dollars. Our focus is on growing value for share, not pursuing size for size sake, and we'll maintain that discipline going forward. Moving on, we're extremely proud to have published our inaugural sustainability report during the quarter, demonstrating our integrated approach to ESG and rigorous standards in this area. I encourage investors who care about this key aspect of our activities to look at our commitment and work in this area and welcome any feedback as we continue to evolve and pursue substantive best practices in this area. In October, we announced the implementation of the dividend reinvestment plan and normal course issue of it. We believe that when our share price does not reflect the fundamental quality and value of our portfolio, buyback shares pursuant to the NCIB is a creative and an opportunity to capture this discount and create value for our shareholders, whilst being cognizant of the need to build over time a larger float and greater liquidity in the stock. We declared a quarterly dividend of 4.75 US cents per share, and our annualized dividend yield is set to leading at approximately 2%, allowing us to directly share the benefits of Triple Flag's cash flow with our shareholders. We intend to continue growing this dividend over time without compromising our disciplined growth strategy. 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. Triple Flag's current valuation provides significant upside for a re-rating to multiples that would be more in line with our peers, particularly in the context of the quality and longevity of our portfolio that aligns favorably with the best in the sector. We have already demonstrated repeatedly over the past five years that we have the scale and capability to compete in an intelligent manner with the best in the sector for the largest and highest quality precious metals opportunities. We believe that a re-rating will be driven by the broader recognition of investors, of our portfolio quality and management team capabilities, along with a continued performance of our business, consistent execution of our strategy, and prudent return of capital to our investors. Our commitment to our investors is to continue to remain disciplined in the execution of our business strategy. From the outset, we've been relentlessly focused on asset quality, Over time, this focus has translated into a portfolio that compares favorably to that of the largest, most valuable peers in the sector on key portfolio quality metrics. Each of our assets both compelling geology and the potential for significant exploration and production upside. Our core assets in particular are associated with large, low-cost ore bodies with good track records of reserve replacement and large prospective land packages, which our investors will benefit from through potential future success with the drill bit and possible expansions. Capable and responsible operators working to high ESG standards are prerequisites for our investments. A high proportion of our assets by net asset value are in production and operated by senior mining companies. Additionally, beyond the producing mines, we have a large portfolio of developments and exploration properties that will provide organic growth in the medium to long term. We have deliberately structured a portfolio with a long average mine life linked to assets with good track records of reserve replacement, social license to operate, 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 life expansions and discoveries through the drill bit. The vast majority of our producing assets are situated in the lower half of their respective industry cost curves. This is an important characteristic in an inflationary environment with rising materials and labor costs, like we're now beginning to witness across the industry, which 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. We've remained true to the model in our portfolio construction, avoiding exposure to equity positions and similar financial instruments, and focusing our activities on acquiring predominantly precious middle streams of royalties. We believe that is what our investors are seeking from us, and we will remain disciplined in executing on this model. I will now ask Sheldon to comment on our Q3 results and to provide some further context.

Thanks, Sean. We had another strong quarter, recording over 20,700 GEOs, representing a 62% increase in GEOs over the same period in the prior year. Year-to-date, we have realized nearly 63,000 GEOs, very close to our total GEOs for all of 2020. We have seen strong performance from Cerro Lindo, North Parks, Fosterville, RV Platte, and Bredica, which has helped to offset COVID-related production delays experienced by ATO. Adjusted net earnings of $13.7 million were increased 171% over the corresponding period in the prior year. Net earnings were affected by a non-cash mark-to-market decrease in the value of equity investments recorded in the quarter. We realized operating cash flow of over $29 million in the quarter and over $91 million in 2021 to date. We are debt-free and at quarter end had $27 million of cash on hand. Turning now to slide eight. Slide 8 sets out the growth in operating cash flow and free cash flow, as well as the high asset margins that we have continued to maintain. In 2020, operating cash flow increased by over 100% over 2019 to $84 million. This strong growth has continued with operating cash flows in the last 12 months of $122 million. A strength of the streaming model is that operating cash flow gets translated very efficiently into free cash flow. As a streaming company, we are not exposed to the sustaining capital expenditures that mining companies are exposed to. This leaves more cash available to shareholders. The streaming business model is also characterized by high margins. Slide 9 sets out our high margins, which are resilient despite gold price fluctuations. Crucially, our margins are well inflated from rising inflation as we are not directly exposed to mine level operating or capital cost inflation. In prior positive price cycles, producers were unable to fully enjoy the benefit of higher gold prices as underlying cost inflation could result in margin compression. Our high margin model is well suited for inflationary environments. I'll now turn matters back to Sean. Thanks, Sheldon.