Triple Flag Precious Metals Corp. Common Shares

At this time, I would like to welcome everyone to the Triple Flag Q2 2022 Results 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 during this time, Simply press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you.

Today, I'm joined by my partners, my CFO, Sheldon Vanderkooy, and my Vice President of Evaluations and IR, James Dendle. Next slide, please. We're pleased to report solid results from the time versus last year's record results for the same period. You must see the quarter-end timing of shipments and a higher gold-silver ratio. This bill represented our third-best quarter of operating cash flow in the life of the company. We expect full-year 2022 gold equivalent out-sales to be weighted to the second half of the year, with sales volumes of gold and silver on track for a record in 2022. Operating performance across the portfolio was broadly in line with our expectations, with underperformance of our two ramp-up assets at Pumpkin Hollow and Gunnison, both in the U.S. Offset had a bit more color in its asset update a bit later, and Sheldon will cover the financial results in more detail shortly. We're also pleased to announce that after our first full year as a listed company, we're increasing to $0.19 U.S. share, equating to a sector-leading dividend yield of around 1.8%. It is important to return capital to our shareholders

Our business as flagged is in the process of applying stock exchange to increase our trading liquidity and provide greater access to U.S. investors. Both the NYSE and the SX under the symbol TFPM. On the corporate development, that will be a lot of opportunities and usually aggressive over the past 12 to 18 months amongst larger tiers and implied consensus Significant Cost in Capital Inflation and Supply Chain Disruption. We see this as a temporary phenomenon and equity become more expensive and unreliable sources of capital for miners in this inflationary environment. No pressure to transact for the sake of growth at the expense of value. I will continue The Portfolio and Li Cheng from ATO Phase 1 in March and they're advancing the is currently undergoing a ramp-up expansion that is expected to be reached later this year of 682,000 tons on the many development highlights within the port. And we remain on track for the balance of 2022.

22 expected guidance of between $88,000 and $92,000 GEOs. Q2 metal sales were impacted by a high rate of return, but the portfolio continues to perform consistent with our expectations. Adjusted net earnings. A key measure for us is the operating cash flow we are able to generate. On a per share basis, we realized operating cash flow of $0.19 per share. We are very pleased to announce an increase in our dividend to $0.05 per share per quarter. We are pleased to achieve this dividend increase one year following our IPO. Turning to slide six, I'd like to comment on the consistently high margins we have realized. The dominant economic story of 2022 has been the sharp increase in inflation to levels not seen in over 40 years, and the consequent sharp increase in interest rates. The streaming and royalty model is very well suited to a high inflation environment. We have top line revenue exposure allowing us to benefit from general price increases but shielding us from operating and capital cost inflation. We don't experience the operating leverage that mining companies do and have experienced very consistent margins despite volatility and price levels and that in turn results in stable cash flows as illustrated on the next slide. Slide 7 sets out the strong and consistent quarterly cash flows we have realized over the past two years. These dependable cash flows give us the confidence to increase our quarterly dividend in the current inflationary environment. Since our IPO, we have already paid $30 million in dividends to shareholders and we are increasing our dividend rate going forward. On a quarterly basis, this now represents approximately $7.8 million in aggregate, which is comfortably supported by cash flow generation of the portfolio. Turning to slide 8, our cash balance at the end of the quarter was $74 million and we are debt free. We have maintained our discipline with respect to new stream and royalty acquisitions as conditions for acquisition of new streams and royalties have become more competitive over the past year. We believe that there will be good opportunities to deploy cash in the future, but we will continue to maintain discipline and are happy to build cash in the meantime. This management team are also shareholders with a significant stake in the business. We will always guard shareholder value and never pursue growth for growth's sake. The higher interest rate environment does not affect our financials. We have no debt drawn, and indeed, we benefit through higher rates on our cash deposits. Last, I'd like to turn to slide 9 to quickly highlight our asset diversification, our strong precious metals focus, and our strong focus on Tier 1 mining jurisdictions. We are well diversified by asset, with no asset exceeding 30% of Q2 revenues. Nearly 60% of our Q2 revenues were from gold, and nearly 35% were from silver, maintaining the strong 90% plus precious metals focus. And finally, our portfolio is predominantly focused on Tier 1 mining jurisdictions. Our single largest country exposure is Australia, and other than Australia, we are predominantly weighted in North and South America. Today's environment has an increased focus on jurisdiction risk, and our portfolio is very well positioned in that respect. I'll now ask James to speak to some of the asset highlights.

Thanks, Sheldon. Production across the portfolio was generally in line with expectations. As Sean mentioned, North Parks achieved record plant throughput in May of 682,000 tons, which represents an annualized rate of over 8.1 million tons per annum, which is significantly beyond the stated nameplate capacity of 7.6 million tons per annum following the completion of the recently completed expansion program. Ramp up of E26 Lift 1 North and the cave performance is in line with expectations. Rail disruptions have occurred between parks and Port Kembla due to severe weather causing flooding and landslips at points in the route utilized by North Parks. as well as industrial action by the Pacific National Bulk Rail. Concentrate shipments have continued using an alternative rail provider that takes a longer route between the mine and back on line in Q3. North Park has progressed which has not yet been included in the mineral resource and mineral reserve. will provide more updates as studies progress. Staying in Australia, Fosterville has delivered strong performance here today. Agnico expects third quarter production to be lower than second quarter. However, the fourth quarter is expected to be the strongest of the year. In the second quarter of 2022, the Robbins Hill and Lower Phoenix exploration declines were completed. The completion of these exploration drifts puts the company in a good in the second half of 2022. Also in Australia, we noted in the first quarter that the mine was impacted by record rainfall in southeastern Australia. During the second quarter, water levels reduced and it could be completed in September. Dardis has also progressed in terms of water levels. Cerro Lindo in Peru performed as planned, despite the challenges of processing higher proportions of harder volcanic ore during the year. Silver grades in the first half of the year have been higher than average, and we will continue to see the benefit of this in our sales during the second half of 2022, reflecting the roughly four-month lag between mine production and saleable metals. At ATO in Mongolia, mining proceeded ahead of schedule for the year, and heat bleaching is proceeding as planned. STEP is currently constructing the crusher and other surface infrastructure for the fresh rock expansion. The status of reagents is good, with additional deliveries expected in August. Turning to the U.S., at Pumpkin Hollow, Nevada Copper announced it had encountered weak rock structures in the main ramp of the East-South Zone. which restricted access to the planned stoking zones. Activities were adjusted to develop plans to address this while prioritizing development work through the dike structure on priority headings to the northeast mining zone, which has significantly higher copper grades and better geotechnical conditions. The work on this is close to complete, but liquidity constraints have forced the curtailment of underground mining activities. Last week, the company announced that it had advanced restart plans at Pumpkin Hollow, which were focused on accelerating capital items, followed by the development of significant-state inventory in advance of a mill restart and completion of the ramp-up. The company has secured interim financing and is in discussions with financing partners, including Triple Flag, to secure a longer-term funding package to finance the restart and ramp up to commercial production. Excelsior reduced operations at the Gunnison Project wellfield while work on the Johnston Camp mine restart and planning for wellfield stimulation trials aimed at improving flow rates and sweep efficiency of the wellfield is undertaken with the objective of overcoming the challenges associated with CO2 generation. Drilling results for JCM pits have been encouraging. Leach pad terminating is ongoing and test work and drilling activities are a continuous site. Delays in stream deliveries due to Pumpkin Hollow and Gunnison do not impact Triple Flag's 2022 guidance. Close to the home, we've been pleased to see mining rates exceed 8,000 tons a day for the fourth consecutive quarter at Young Davidson. Since we acquired the royalty in 2018, we've benefited from the excellent work that Alamos has undertaken to expand Young Davidson and provide a long-term lower mine infrastructure. I'll turn the presentation back to Sean.

Thanks, James. During the second quarter, we released our 2021 sustainability report, showcasing our contributions and commitment to helping evolve market-leading ESG performance. Our scholarship programs at ATO, North Parks, and RB Platt continue to provide support for young people interested in careers in the mining sector. We continue to be carbon neutral for all our Scope 1, 2, and 3 emissions since starting this business by purchasing offsets, and are now working on setting out our roadmap towards net zero emissions by 2050. Finally, we joined the World Gold Council in May and are proud to support responsible development across the gold supply chain as an active part of this industry forum. We built this business over the past six years with the major streaming and royalty competitors in mind as a way to create value for our investors and mining partners alike. For our mining partners, we held the view that precious metals royalties and streams presented an underappreciated opportunity to satisfy the growing capital needs for underserved miners in a competitive and symbiotic manner, satisfying the needs of the sector requiring large amounts of long-term capital. For our investors, we chose the demonstrated benefits of the precious metals streaming and royalty business model to create value over time and offer a preferred investment vehicle for precious metals exposure. The value of the business model is on full display, as Sheldon mentioned, during these generational inflationary times, where our low overheads and the high margins of our portfolio underpin strong cash flow generation at a time when operating mines and development stage assets are experiencing significant margin compression and growing liquidity pressures. Our 15 operating assets have generated $115 million in free cash over the past 12 months, allowing us to pay a sector-leading dividend yield of 1.8%, While our exploration and development stage assets in our portfolio of 80 streams and royalties offer substantial organic growth in a portfolio that has grown gold equivalent ounces at a sector-leading CAGR of 26% since 2017 and is on track to grow again this year for the sixth consecutive year. Our investing track record and portfolio performance over the past six years has enabled us to derive a portfolio net asset value that is approaching double our net cash deployment since we started the business. We trade at a modest multiple compared to our target peer set, allowing for ample re-rate potential as we continue to grow scale, diversification, liquidity, and portfolio quality. Our portfolio duration ranks amongst the best with the sector leaders at more than 20 years, highlighting the quality of the key assets and the predominance of byproduct ounces from long-life base metal and PGM mines in the portfolio, which accounts for roughly 70% of our GEOs. So finally, in summary, we delivered solid financial results in Q2 against a volatile market backdrop highlighting the quality and value of the portfolio. We increased our dividend by 5%, further enhancing our dividend yield and intend to list on the New York Stock Exchange to increase the investor access and trading liquidity in our shares. We're on track to meet our 2022 guidance of between 88 and 92,000 gold equivalent ounces are delivering on our ESG objectives. Our business is producing strong cash flows, which are positioned to increase as a fully funded embedded organic growth within the portfolio is delivered across a number of assets. We continue to consistently see a variety of deal opportunities that are concentrated predominantly in the 1 to 300 million US dollar size range at the moment, particularly for development stage assets, which are underserved in these challenging market conditions. We expect the outlook for deal opportunities to improve as more conventional forms of funding prove increasingly expensive and perhaps unreliable in this market, and miners require additional liquidity due to cost and capital inflationary pressures. Against this backdrop, having no debt and nearly US$700 million in available liquidity to deploy in value-enhancing deals for our portfolio is a strategic advantage that we will utilize intelligently and patiently in pursuit of growing our value per share. As major shareholders ourselves, our focus remains on disciplined deal execution and value creation, pursuing sensible and accretive deals in a patient manner rather than pursuing growth at any cost. I believe that the current market is setting up nicely for an acute need for knowledgeable, patient, long-term capital in the mining and metal sector, providing opportunities for us and our competitors to pursue further value-enhancing acquisitions. We're well-placed in this environment to grow value for our investors in time. We sincerely appreciate the support and trust of our stakeholders, and we look forward to providing further updates soon. Thank you. And we'll turn it back over to the operator, and we're happy to answer any questions anyone has.

At this time, I would like to remind everyone, if you would like to ask a question, please press star, then the number 1 on your telephone keypad. Your first question comes from the line of Mahat Tyree with Credit Suisse.

Hi, good morning. Thanks for taking my question. Maybe looking ahead to 2023, if you could discuss how we should think about this production guidance for next year, given the issues, particularly at Pumpkin Hollow and Gunnison. I appreciate that there's no impact to 2022 from the issues at those mines, but just trying to get a sense of, are you still confident in the 110,000 ounces average for the next several years? How do these issues impact next year in particular? Thanks.

Thanks for the question. Look, we're not providing 2023 and beyond guidance at this time. I think we've recently reaffirmed our outlook. And if you look at the combination of things that are included in our portfolio, and maybe you contrast that with some of the things that you and others have looked at that have taken place in the sector recently. I mean, there are NAVs that are being attributed to assets that are Thank you very much. You can see what the portfolio has done to date, what it's on track to do this year, and I think our portfolio continues to be well-placed. Stay tuned. We'll give you the timely guidance shortly.

Maybe without getting into the specifics, but do you feel there are offsets in the portfolio if, for example, underground development at Pumpkin Hollow remains delayed for some time or The Johnson Camp doesn't come online next year at Gunnison. I'm just trying to get a sense of are there offsets in the portfolio where you can see production growth?

I guess the best way to answer that would be to look at our natural orientation so far. If you consider that notwithstanding that the gold-silver ratio I think had gone from this time last year 68 to 83 and I think we're projecting over 90 for the remainder of the year. And then you look at the performance this year, even with the underperformance of those ramping assets, our actual volumes that we've included in guidance for this year are tracking at the top end or beyond the physical numbers, excluding the price movement. So you see our natural orientation, and we'll continue to maintain that posture. So that just points to, I think, just the reality that we always have things in the portfolio that You know, it could be pluses and minuses, and we're always going to maintain a sort of sluggy, conservative posture, as we said. So, yeah, I believe it's there. And we can't really comment to this point as to what's going to happen in 2023 and beyond. I just think our portfolio, when you compare it to the TSA, is actually generally more mature than many others out there from a risk perspective.

Okay, great. Appreciate that color. And maybe just one last question. On the deal pipeline, you mentioned most of the opportunity set that you're looking at right now is between $1 and $300 million. Can you just touch on the types of geographies that you're looking at? I know there's a certain preference for triple flag. I'm just trying to get a sense of where these development assets that are in the opportunity set, where are they located? Thanks.

Yeah, look, we are seeing, I'd say, I've sort of highlighted the one to 300 almost like on a histogram. We're seeing a lot that are much smaller. I think we've seen the deal activity that took place probably the last year or so in that sort of smaller end become a little more subdued. And then on the big end, we've seen a lot of activity quite recently, including something of a half a billion quite recently. We are active on some larger opportunities, but I think the fuse of those is longer and it remains something that's sort of less predictable. And jurisdictionally, I think as Sheldon sort of alluded to in his comments, we've always said that our primary jurisdictions are really, call it Australia and the Americas. and only in circumstances where we've got a very solid case, good return, security of tenure where we go elsewhere. And I think that framework, particularly in these times, remains as relevant right now as it ever has been. Jurisdictionally, it's definitely concentrated more in those areas. Thank you, Sean. Thanks.

Your next question comes from the line of Josh Wilson with RBC Capital Markets.

Thanks. On the topic of Benison, just because I'm a little bit less familiar with the different parts of the camp, with the recent operating changes, is it reasonable to expect any production for the remainder of the year or 2023 in the event that the economics are pending the economic decision? Hi, Josh.

James. Yeah, look, the way it's stood out is you essentially have the very large in-situ leach deposit, and then there's the Johnson Camp mine, which is a series of open pits and related mineralization that is connected to the SXEW plant that treats the fluids from the in-situ leach. So for the balance of the year, we expect to receive small quantities of copper in a manner broadly consistent with what we have received to date this year. As to 2023, the company is working through their analysis of the restart of the Johnson Camp open pits, as well as their analysis and test work associated with getting the in-situ leach up and running again. So we'll have to await their determination on those two elements before making any sort of statement on what we expect from that operation in 2023. But there will be some contribution this year. There's essentially residual copper in the leach system.

Okay, and sorry, beyond the residual component, is there any additional production we can expect? Or is it until they determine the economic outcome?

Yeah, that's it until they determine the outcome of the work that's ongoing at the moment. But that residual production is sort of not far off what we've been receiving year to date, which is obviously a fairly modest figure.

Okay. And along the same lines, I know the company doesn't provide the 2023 guidance, at least as of today, but looking at the existing five- and ten-year guidance, what proportion of that would have been represented by Gunnison and Pompkin Hollow?

Josh will confirm. I think it was around or just under 10% over that timeframe. And so then there's just a question of absolute timing that's associated with that. I think particularly in the Nevada Copper case, our team's been to site fairly recently. You know, we see the line of sight to the production we're working on with the team, you know, on liquidity side. And I think importantly, you know, we're actually very supportive of what we're seeing with the CEO and his senior team. And I think the key thing, just given some of the earlier comments, we've got members on our team like John Cash who, you know, spent decades in Nevada and actually confirmed that, you know, from their point of view, some of the best ground conditions that they've seen in Nevada. So I think for us it's just a question of, you know, timing associated with that.

And then one last question. With the new U.S. listing that opens the stock up, obviously, to a lot of potential shareholders, is there any evaluation of ways or mechanisms to improve liquidity along with the listing, or is that sort of a secondary thought?

Hi, Josh. It's Sheldon. I'll take that one. I mean, I think the first thing we should maybe just make explicitly clear is that, you know, no offering of shares is contemplated at this time in connection with the listing. So this is just a listing where we'll have, you know, the access to the U.S. market that'll free up U.S. retail. And there's some case studies out there in which, you know, Canadian companies have cross-listed to the States and seen nice increases in their liquidity. So we see that as a positive catalyst for the liquidity. Great.

Okay, those are my questions. Thank you. Thanks, Sean.

Your next question comes from the line of Greg Barnes with TD Securities.

Thank you. Sean, as far as I can tell from reading through the Nevada copper disclosure, they're looking for a funding package in the range of, I believe, around $70 million. Is that your understanding as well?

Look, I'm not going to front-run Greg the team on that. Look, we've been working with them, and I think our priority with the management team is ensuring that they've got the liquidity they need to get through to commercial production. So, you know, they will be putting statements out when they're ready. They've got a number of supportive shareholders, and I just think the context for us, other than the site visit that we've been on, When you look around and you saw BHP's announcement, or at least they didn't announce, I guess it was all the minerals and others, you saw Matza last year, there's not a lot of U.S. copper mines with near-built underground mines and open-pit projects in this situation. They're pretty scarce, and you've got nearly, I think it's $900 million or so of actual assets associated with this already. We're very constructive on copper and the copper outlook and I think that team will find the supported needs and will be part of helping them get through that.

James, then, on this higher grade zone that they're trying to get to, how far away, in terms of development work required, are they getting there through this more tricky zone?

Yeah, I mean, if you look at the dike crossings, there's basically three dike crossings. When we were at site, they were virtually completed one, but partway through the second, and the third is not required imminently. But, you know, in reality, Greg, the dike crossings, whilst they have represented a challenge for the company, you know, there's no material reason that they should represent a challenge going forward. The dike, the actual bad ground associated with the dike is only about five, ten feet thick, depending on the angle of the It's not a hugely problematic zone, so it should really be a non-event. And then the total meters of development are pretty limited. I haven't got a figure to hand, but the figure that I do have in mind is the development one has to do to set up all the stoping infrastructure and all the cross-cuts, which is still a set of work to do. But really, there shouldn't be any impediments to setting up that east-north zone. for productive mining at the rates contemplated in the study.

Timing on that, assuming they get the funding, James, are we talking six months, five months, a quarter?

The company is working through the engineering of that, Greg, but with the development that's ongoing, some of the additional infrastructure work that's required to complete that, I think it's going to take a bit of time, but I won't comment specifically on that timing right now. Again, I don't want to get ahead of the company's disclosures.

Thanks. I'm turning to Gunnison and looking through the technical report they put out earlier this year. As far as I can tell, the washing or the cleansing of the well field will take 12 to 15 months to wash out the CO2 and what have you. So likely no production there in 2023. And then the Johnson Camp development is still a question mark how that goes ahead. And that would take a year or so, I assume. So just judging from that, we're at least a year away from, probably a year and a half away from additional production from Cunningham. Is that fair?

Yeah, I think that again, you know, Excelsior are in a position where they're currently drilling out parts of the Johnson Camp. There is historical drilling that they're looking to set and prove up. So we don't have a clear picture right now as to what the ramp-up of Johnson Camp would look like, presuming they go ahead with it. On the in-situ leach, There's the raffinate neutralization and the well-filled stimulation. Depending on the performance of the well-filled stimulation, it might negate the need for the raffinate neutralization, which could speed things up. But again, they've got work to do in order to determine which of those options or which combination of options between stimulation and raffinate neutralization is the best one. So until they've come to that determination, I think it will be challenging to put an exact Timing on when we can expect to see the ramp-up commence or recommence on the wellfield.

Okay, that's helpful functions.

Once again, if you would like to ask a question, please press star, then the number one on your telephone keypad. Your next question calls from the line of Cosmos 2 with CIBC.

Hi, thanks, Sean, Sheldon, James, for the conference call. Maybe first on North Parks, you know, good to see that there was record plant throughput in May, 682,000 tons. I think, James, as you mentioned, that's, you know, higher than nameplate. Could you maybe talk about is this a sustainable level of throughput that we can expect, or could it go even higher with the expansion now complete?

Yeah, good question, Cosmo. Thanks. The mine had the opportunity to run at those throughputs as they had good levels of surface stockpiles. The E26 Lif1 North block cave is actually slightly exceeding plan, which led to part of that outperformance. What it does point to is that there is potentially more capacity in the plans. There are other expansion opportunities to take it beyond even that, you know, plus 8 million ton level. So those expansion opportunities are very much dependent on the availability of new mining areas and ore feed. So, you know, with some of the studies that mine is doing at the moment, you know, it does represent an opportunity in the future to see further output from North Park's above the 7.6 million ton per annum There are various studies ongoing at the moment. That's something we're watching closely and we look forward to providing an update when those studies work through. I think particularly with E22 there's a good opportunity around that. Any additional discovery that they might make with our deposits? They've got a lot of mineralization there, and it's really about maximizing the underground infrastructure in order to fill the surface capacity.

Yeah, and Cosmos, it's good to chat with you. Yeah, hi. I think just to add this broader color as well, and I think it's a point we try to emphasize in the headlines and then in some of the details. James did mention the operating piece where the controllables are going well, but you have seen these weather and logistic events that have created sort of timing issues, so hence the commentary on call it the year over year and then moving to the back end of the year. And we've even seen, I think I might have seen Greg's comments even on things like Beritica where they're performing really well. They're doing great stuff, but there's just timing differences on a quarterly lens. So we're very happy with how the operating teams themselves are performing. Just at times, there's lags between when they get there and when we finally get the turnout. And they're not significant. We don't have huge working capital delays, as you know.

Of course. And speaking of new discoveries, maybe switching gears a little to Sierra Lindo. Sheldon Vanderkooy Pukasala. Just wondering, you know, is there any kind of timing in terms of when some of those new discoveries could come in? Maybe not so much, you know, maybe it's Pusakala, but maybe some of the other ones that you might have highlighted in the MDMA as well.

Yeah, I'll ask James a comment. We're actually heading out both to Beredica as well as Cerro Lindo in the next few weeks now that we can travel again. So we'll certainly have more colourful subsequent calls, but James, do you want to expand?

Yeah, so Tukasaya is quite a long way north of the mine. It's outside of the stream area. The stream area extends to the southeast, which is a very prospective area for BMX mineralization. And they've actually been mining these zones for the last couple of years that have been discovered since we made the investment. So OB9, which is a zone that's being mined at the moment, is a copper zone with very high silver grades, which is part of the driving the silver at performance we've seen of late. What we expect for that mine is for them to continue to find extensions to Cerro Lindo towards the southeast. At the same time, Pucasaya represents the opportunity to provide incremental additional mill feed to keep the concentrator going long after the current reserve life. And then there are certain areas within the stream area that have the potential to yield Cerro Lindo-sized deposits. and a number of others. significantly replaced the Silver Reserve from the time of our investment to today. So they have the track record. And it is next to flagship assets, but heavily incentivized to extend the life of it through exploration expenditures.

Great. Thanks, James. And maybe one last question, switching gears a little bit once again. You know, it's always good to see, it's great to see that Renard contributing once again. Sean, could you maybe talk about, you know, diamond prices? I'm sure you're closer to the market than I am. It's been a while since I last got married. And then, you know, profitability at the asset and, you know, the sort of longer term projections here.

Yeah, Cosmo, I'm close to the city for my wedding day, so I'm not quite sure about the diamond market myself. But no, look, I think when you look at the, we call it the restart case that was there, it was diamond prices close to, I think, $55 a carat. I think the last number was more like $132 a carat, the last batch. And so that obviously points to quite significant demand. You know, contribution margins that are coming from that operation. I think it also points to the resilience and also the experience of this team of, you know, really wading through and being patient to, you know, to realize value on assets. So I know there's been questions around timing associated with, you know, certainly the ramping assets that we've talked about. Bear in mind, we've had, you know, five assets ramped, three of them we've had two delays. and this is something that was about 1% in NAV that I think we've really demonstrated the ability to not just conserve value but move forward with that and realize value for our investors. On the go forward, I'm going to see if Sheldon has anything he wants to add to that. I think obviously we're part of the consortium there. The diamond market appears to be reasonably robust. So maybe you wish to add.

Yeah, so thanks, Sean. Thanks, Cosmos. Precious Metals Corp. Common Shares, Fraser Cunningham, James Edward Dendle, We've actually seen stronger pricing, and part of that is the diamond supply chain, and part of that is Argyle going offline, and that's actually been a positive catalyst. And that's something that I think was a long time coming, and was a little slower in coming, I think, than some people thought, but that's now happened, and we're seeing some good tailwinds there. One of the things is, you know, the Renard Stream, we had... As you know, we've not been getting the cash flow from that for a while. That's now been turned on. We're getting the full cash flow from that, and they're actually paying back some of what had been effectively picked before. We saw that in Q2, and I expect we'll see that going forward because the underlying operation is generating positive cash flows, and that's what it's all about. So we're actually really excited about that story. It's a good one.

Yeah, and I guess the only other thing, Cosmo, is obviously the world's a pretty complicated place right now with Russia, Ukraine, you know, what's happening with Ross's supply, and that is probably, you know, fairly supportive for the supply outlook for this mine.

Great. Yeah, thanks again, Sean, Sheldon, and James. Those are all the questions I have, and thanks again for answering my questions. No, thanks. Thanks, Cosmo.

Your next question comes from the line of Tanya Dukusnik with Scotiabank.

Great. Good morning, everybody. Thank you for taking my questions. And just a gentle reminder that I know, Cosmo, you mentioned diamonds for weddings, but diamonds are beyond just weddings. So I have a couple of questions. Just an admin first. Maybe, Sheldon, just on the... The listing on the New York Stock Exchange, when are you expecting that? And what sort of cost should we think about going forward beyond 2022 for this listing?

Hi, Tanya. I would say it's pretty imminent. I would look to see filings being made in the next couple weeks. And by filings, I mean SEC filings of documentation. and then the shares would actually be trading probably on a one or two leg after that. So I would expect the shares to be up and trading, if not by the end of the month, then shortly into the next month. In costs, we wanted to give people some guidance. And so there's a number of one-time costs that are going to be coming through in H2. And so we kind of see about $600,000 in U.S. of Costs, and H2 of 22. On a run rate basis, it'll be a little less than that, so it's probably going to be... You know, maybe one or two million dollars on a run rate basis, you know, going forward. And those are really just, you know, the D&O insurance premiums go up, the audit fees go up when you have a U.S. listing, there's New York listing fees, and there's probably some incremental legal spend as well when you have to, you know, just be cognizant of the U.S. rules.

Antonio, as I said, I mean, we were going through it yesterday. We've actually, even though there's increases, I think we've been Pleasantly surprised compared to expectation about a year ago on things like DNO. So that was reasonably positive compared to expectations not that long ago with what's happened to that market. And to your other point, having just gone through my wife's 50th and contributing to demand on earrings, I agree, it's not just weddings. Good.

Okay, so yeah, thank you for that. And Sheldon, so the $1 to $2 million 2023 per annum going forward would be reasonable to your G&A?

That's right.

Okay. So I'll leave diamonds and, although I could talk about diamonds all the time, but I'll leave diamonds and G&A for now. And if I could move on to... Preska Royalty and Precious Metals Stream. Can I just get an update on where we are and some of the critical steps to get this going through? Just as a reminder, there was just very little in the release.

Yeah, I'll start and I'll ask Sheldon to expand. I think the rate determining step from our vantage point is twofold. One is just the documentation which is taking its course But primarily, you know, the ability of them to raise the additional 20, because importantly, we've set this up so that really the funds that we put in, as you've seen in other deals, are really contingent upon them achieving the minimum funding requirements that are there. I believe they're advancing and advancing quite nicely with that. But it's up to them to, you know, be able to finalize the 20 to secure the 10. And then, of course, the other will be contingent on the studies and things like that that are there to follow. Anything you wish to contribute to that?

No, I think that covers it. I mean, the legal documentation, I would expect that to be completed in Q3, but it's really the 20 million Australian, that's the gating item.

Okay. Okay, so thanks for that. That's what I thought. I just wanted to know if there was anything else. And then maybe just lastly, if I could ask, just back on the transaction environment, M&A environment, and thank you for the size of $100 to $300 million. Can I ask, you mentioned more in the development or helping fund development stage project. I was quite surprised about the royalties available still there in the market, so I just wanted to ask whether You are seeing any royalty portfolios and or other out there that would be of interest or are there any more or are there not besides this funding as a development project?

Yeah, it's a really good question. You know, the funny thing is if I look back, I suppose, you know, the six years now, some of the stuff you can forecast and you put a lot of time in, even the recent transaction, I think I heard Bill say, Some of these things emerge and they're quite visible. But I'm always surprised at how some of these things seem to emerge which are less visible. And even last week we've seen some things in the Americas come to the fore which just really were not visible. I think that fairly steady cadence of opportunity sets seems to be a consistent theme that's there. The one thing, and you saw my comments, we've seen particularly single asset producers and even intermediates, we've seen majors. Look at some of the issuers in the last period. Some on this call have talked about year-on-year Operating Cost and Capital Cost Increases for Majors and Others of 7.5% to 15%. We've seen some logistical challenges, and then we've seen big issues like new months and others, 12 to 18-month delays in key projects and 15% to 25% increases in capital. So I think the sector as a whole... is starting to really reveal some of those pressures. And I think if you're a large company, as some of those guys are, they're well capitalized and it's a bump in the road. But I do believe that for other businesses, particularly if this inflationary environment, and you saw the jobs report on Friday, we're going to see more rate increases. And I do think the inflation situation is perhaps with us for some time. Debt's more expensive, margins have definitely compressed, and we've seen some issues with our equity from a year or so ago down 70%, 80%. So equity is very dilutive. I think it's a very constructive environment. So to your question, yes, we continue to see these royalty portfolios, variable quality as always. But I think for broader funding, particularly the stream funding byproducts and otherwise, I think it's setting up a very interesting environment for the next 12 months plus.

Do you see opportunities of creating royalties? I understand that streams... Precious Metals Corp.

Yeah, the short answer is yes. I mean, we're active on some right now. The caveat is they're not usually then particularly large checks for the reasons you've alluded to. And I just say tactically for us, you know, the analysis I just took our board through yesterday is looking at some of the recent deal activity, the terms they're on, just challenging our full process, saying, you know, what if anything, if we deployed, would we perhaps feel different about how do we think about this? We've got significant growth. We've got a lot showing there. But once you've deployed some of this capital, it does restrict your degrees of freedom as you go through it. So I think for us as we look through it, our prioritization, if you remember, Tanya, on formation, I think is as relevant today as it was six years ago. And by that I mean Normally one to $500 million checks. We've done smaller, we've done bigger. But usually producing or new producing assets with a lot of optionality on the back end because I think particularly in this environment, there's more likely to be a lot of these studies which NAVs have been built on are wayward looking. I think you will see revisions of those in the sector. And I think you will see more delays over time. And I don't believe that's priced in at the moment. So I think that creates a time lag, but I think it creates opportunity.

So 100 to 300 million sort of streams and under 100 million, let's say, on royalties. Yeah.

I think that's fair.

Okay, great. Thank you so much. Thank you.

Your next question comes from the line of Brian McArthur with Raymond James.

Good morning, and most of my questions have been answered, but can you just remind me on ATO, because it looks like you said they're getting leech in there. How much delay there is until you get it? Because it looks like your third quarter is supposed to be pretty good. And the second part of the question, then, is how that cap works again. I mean, is it on a true annual basis with a quarterly run rate? Just any guidance on how you think that might play out now that that looks like it's catching up?

Yeah, Brian, it's great to chat to you. It's always unfortunate when other people feel your thunder in the sequence, right? Yeah, so look, ATO, I think you've seen it's another example, I think, of the patience of this model. If you're an equity investor, you carry the The fixed costs and the cash associated with the delays that they experienced with reagent shortfall. They've done well to secure supply. They are not limiting the ramp up with ounce provision and rock on the pad, crushed rock on the pad. It's really more taking a cautious approach on just as they look at access to reagents from multiple sources. So you can see the guidance. I think they are guiding, as you said, for they did pretty well restarting earlier this year, and they're guiding for that to continue to run through into Q3 and beyond. The cap is not a function of the current oxide arrangement, which is really the initial basis of our investments. Recall it was sort of a high team's return on that back at 1250 Gold and it was something which really had a pretty quick payback so we'll have our cash back on the original investment likely this year. The cap applies really to the Fresh Rock where we've got no incremental investment due and that you know that study is ongoing and you know I think the company's provided some meaningful guidance and they're also making major progression on the crusher that they've been installing on that but James if anything you wish to add to that.

The actual cap amount, Brian, comes in after we've streamed 46,000 ounces. And then the annual cap is 7,100 ounces of gold and 59,300 ounces of silver. And that basically takes you slightly beyond the originally stated mine life for the oxide deposits.

So as you catch up here effectively in the near term, you get everything. There's nothing that's going to cut you off or anything.

No, we don't get cut off. No.

Okay. Thank you very much. Thanks, Brian.

Your next question comes from a line in McHale. I have a solo capital management.

Hello. Well, thank you for taking my question. I think that my question has been partially addressed, but I think from a different angle. The thing is, I see stock prices of junior and senior miners coming down. And cash flow is still healthy despite cost inflation that you've mentioned. I mean, in that environment, shouldn't capital be deployed in buying stocks rather than developing mines? Do you see that happening? And if that is the case, I mean, wouldn't the logic suggest that a small miner, instead of talking to triple flag for... Precious Metals Corp.

Yeah, it's a very good and quite broad question. You know, you're talking about the fundamental make or buy decision that I think every management team confronts as they sort of consider the strategic alternatives of the time. And, you know, to your point, I think, you know, we've seen In the news just this week, the BHP moves on Oz Minerals, which of course the management team sort of described as opportunistic, despite, as I recall, I think a 32% premium that was implied by that bid. To your point, I don't think it's easy to make broad generalizations for different businesses at completely different ends of the development spectrum from exploration pre-revenue development where they are dealing with some of these Thank you very much. Is that the right time for them to be able to do that, or is it an opportunistic time for the acquirer to be able to do that? So I think there's enough. You don't want to sell from a position of weakness. If the teams believe they have the ability to successfully execute in this environment, usually that can actually have a significant discount. A lot of those assets would trade at, unlock that. and set themselves up for a more valuable icon for their shareholders. Of course, there's risk associated. So I don't think there's any one general rule that can be applied. I think it's very specific to each situation. But I do think you're going to see a lot of guys out there shopping for copper assets at this time. Well, not just copper assets. I think it's an interesting environment for shopping, perhaps, for some of these strategics.

Okay, well, thank you. And if I may, looking at your presentation and looking again at the accounts, I see when you adjust, when you go from net earnings to adjusted EBITDA, I see a line that says decrease, increase in fair value of investments, and I see a decrease of $3.8 million. What's in your portfolio of investments? Is that stakes in miners?

I lost Sheldon's comments on the specifics, but I'll just say a lot of the people on this call know, but for the last six years, our strategy has been very clear that We take very limited equity exposure in our approach to investing in streams and royalties. And ordinarily, when we do, it's part of a much larger funding package. So where we've had limited equity alongside putting a new stream in place, it's been a small check on a relative basis. And ordinarily, we will look to monetize and cycle out of that in order to minimize the volatility. Sheldon?

As Sean said, we have a relatively small portfolio of equity investments. You'll find that on the balance sheet. It's listed as the investments and then there's reference to Note 7. At the quarter end, it was about $5.3 million. and then note seven gives you the detail as to what that consists of. You know, we've harvested some gains, gold spot in talent and we've also, as you see, have some losses reflected through there and it's somewhat volatile and it comes through the income statement and we don't regard that as part of our core business.

Okay, thank you very much. Thanks, thank you. Thank you.

At this time, there are no further questions. Are there any closing remarks?

Lisa, thank you. We're trying to evolve the format, obviously, to touch on the high points and really have the sort of engagement that I think we've got in this call, which we really appreciate. I think the questions are thoughtful. I believe the environment is really interesting at the moment for not just ourselves, but for the sector at large. I think it sets the table for good opportunity. And look, at the end of the day, You've seen the track record and really quite an undermining multiple and implied valuation for a diverse, significantly growing high margin portfolio that at the moment is trading at a dislocated value compared to where we've seen single assets trade in the market with peers. So I think this team continues to stay the course. We will continue to be transparent, keep you informed. and on a parting point, I just encourage those of you with the interest there, we put out our second sustainability report. I think the best form of flattery there is when you've got competitors reaching out, actually looking to engage on our approach which we've been receiving and we'll continue to be part of evolving that process and full process. I think it is very key to be a good catalyst for this in the sector and that's what we aim to do. So thanks, everyone, and enjoy the rest of your day.

This concludes today's conference. You may now disconnect.