Triple Flag Precious Metals Corp. Common Shares

ladies and gentlemen thank you for standing by my name is brent and i will be your conference operator today at this time i would like to welcome everyone to the triple flag fourth quarter and fiscal year 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 at that time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. It is now my pleasure to turn the call over to the CEO, Mr. Sean Asmar. Sir, please go ahead.

Thanks very much, Brent. Good morning, everyone, and thank you for joining us to discuss Triple Flag's fourth quarter and full year 2022 results. Today, I'm pleased to be joined by my CFO, Sheldon van der Kooij, our Senior Vice President of Corporate Development, James Dendel, our Vice President of Talents and ESG, Katie Board, and our Vice President of Finance, Iban Bari. Turning to the next slide, 2022 was an important year of delivery against our strategic and operational priorities, a triple flag on almost every metric. And we're all well positioned going into 2023 with the enlarged platform afforded to us by the Mavericks transaction. I view 2022 as one of the top three or four most consequential years in our nearly seven year journey in building this business. Our founding and concluding the Cerro Lindo deal to get us on the map in 2016, doing the North Park deal at the start of COVID and preparing the business for a successful IPO during 2020, the successful TSX IPO and transition to public life in 2021, and now a disciplined step change on multiple metrics during our first full year as a public company that included our largest deal with Mavericks, the New York Stock Exchange listing, our inaugural Sustainalytics rating, growing our dividends, and new quarterly and annual records for the business, to name but a few. My team's going to go into more detail in the slides ahead. On slide five, We announced the $606 million Mavericks transaction on November 9th, our largest transaction to date. The deal has grown our portfolio to 229 assets, with nearly 80% of the NAV coming from 29 cash generating assets, offering our investors more than 90% precious metals exposure and favorable geographic concentration, with greater than 80% located in Australia and the Americas. We emerged with a nicely diversified portfolio, an enhanced shareholder register, a projected 27% increase in GEOs for the year ahead to add to our 21% CAGR since 2017, and a portfolio of 200 exploration and development property interests offering our investors additional growth optionality beyond the 140,000 GEO average we've identified over the next five years that requires no additional funding commitment. The immediate inclusion in the GDXJ and tenfold increase in trading liquidity we've witnessed has been an important and welcome facet of the transaction. Integration is essential to value realization in any M&A transaction. I'm pleased to report that the integration is in an advanced stage and progressing well towards a rapid conclusion, having only closed the transaction five weeks ago. We can confirm the delivery of our announced annual synergies of more than $7 million will be achieved. The breakdown is reflected on this slide. I'm also happy to report that we haven't discovered any material surprises relative to our expectations going into the transaction now that we have the keys to the company. Warren Beale has slotted seamlessly into our team as general counsel, offering valuable capability, experience, and continuity to the legacy Mavericks portfolio. We're also pleased to welcome Jeff Burns and Blake Rhodes to our board whose vast industry experience made an immediate contribution to the depth and perspectives on display in our boardroom yesterday. We're also excited to welcome Elizabeth Wedman to the board with her extensive capital markets and sector experience. I'd like to pay tribute to the professionalism of the Mavericks management team during this intensive period of handover and express my gratitude to my team who've done a remarkable job of absorbing this additional workload during year-end demands while executing to a high standard. I'll now turn it over to Sheldon to discuss our financials for Q4 and the financial year we've just gone through. Sheldon.

Thank you, Sean. We had a record fourth quarter, realizing over 25,400 gold equivalent ounces due to a very strong performance at Cerro Lindo in the quarter. For the quarter, our adjusted net earnings of $0.12 US per share was an increase to that of a year ago, and our asset margins remained strong at 91%. Our operating cash flow in the quarter was nearly $37 million, which was another record, due largely to record gold equivalent ounces that were slightly offset by lower average metal prices. For the year as a whole, we realized results that were quite consistent with that in 2021. Our gold-equivalent ounces were steady with the prior year, despite experiencing timing delays, which resulted in our sales and deliveries lagging underlying production at Cerro Lindo, and the headwinds of a lower silver price, which resulted in our silver sales translating into less gold-equivalent sales. Adjusted earnings for the year equaled $0.40 per share, slightly ahead of $0.39 per share realized in 2021. I also want to highlight that during 2022, we paid a total of over $30 million in dividends. Since our IPO, we have paid out over $45 million in dividends, directly sharing underlying cash flow with shareholders. In 2022, we increased our dividend from an annual rate of 19 cents per share to 20 cents per share. Our dividend is well covered. For the year, it represented 25% of cash flow, leaving significant additional cash flow for deployment into new opportunities as they present themselves. I'd like to turn to slide seven to show the progression of the business since our founding in 2016. Triple Flags was formed in May of 2016, and we acquired our first asset, the Cerro Lindo Silver Stream, in December of that year, and we received our first cash flow in January of 2017. Since that time, we have accretively grown the portfolio, realizing over $150 million in revenue in 2022 and poised for further growth in years ahead. After rapid cash flow growth in 2019, 2020, and 2021, due primarily to increasing production, in 2022, we realized results which were largely consistent with the prior year. In 2022, our 84,500 gold equivalent ounces resulted in operating cash flow of just under $120 million US. This was with 2022 silver prices averaging $1,800 per ounce for gold and less than $22 an ounce for silver. Later in the presentation, James will speak to our five-year forecast of 140,000 gold equivalent ounces. As we scale from our current level of production, the cash flow will scale accordingly, assuming consistent gold and silver prices. Of course, if prices increase from current prices, the cash flow will increase even more. So we expect that cash flow will resume a course of growth going forward, again, assuming consistent prices as the embedded growth in the portfolio is realized. We have managed to maintain consistent margins of over 90% Even a few years ago, this didn't get the level of investor attention that it does now, as many operators strive to maintain margins in an inflationary cost environment. The defensive margin characteristics are a real highlight of the streaming and royalty model, and it allows for a very effective translation of revenue into cash flow for shareholders. I'll now turn it over to Triple Flag's Vice President of Finance, Iban Bari.