Triple Flag Precious Metals Corp. (with its subsidiaries,
“Triple Flag” or the “Company”) (TSX: TFPM, NYSE: TFPM) announced
its results for the fourth quarter and full year of 2022 and
declared a dividend of US$0.05 per common share to be paid on March
15, 2023. All amounts are expressed in US dollars unless otherwise
indicated.
“2022 was a year of solid performance and transformation for
Triple Flag – our first full year as a publicly listed company,”
commented Shaun Usmar, Founder and CEO. “We delivered our sixth
consecutive annual GEOs sales record (84.6 koz), achieved a new
quarterly GEOs sales record (25.4 koz) during the fourth quarter,
listed on the NYSE, built upon our top-tier ESG performance, and
announced the largest transaction since our inception with the
acquisition of Maverix Metals Inc. for $606 million. The
acquisition was a key highlight for the year, creating the leading
gold-focused, emerging senior streaming and royalty company.
Already the combined company has enjoyed materially increased
trading liquidity and we are well advanced on integration and
delivering the identified $7 million per annum in synergies. During
the year, Triple Flag received its inaugural Sustainalytics score
that ranked us 4th of 114 companies across the global precious
metals industry, and was accredited as a “Great Place to Work” in
Canada, showcasing important elements of our pragmatic commitment
to excellence in ESG.”
“We enter 2023 as the fourth-largest gold-focused streaming and
royalty company, with an enhanced portfolio, robust growth outlook,
materially increased trading liquidity, leading dividend yield, low
leverage, and over $600 million in available capital to deploy on
new deals amidst a busy pipeline. I’m excited about the
possibilities our enhanced platform offers our stakeholders as we
to continue our pursuit in growing value per share.”
Record Full Year 2022 and Q4 2022 Financial
Highlights
2022
Q4
2022
vs
vs
FY2022
2021
Q4
2022
Q4
2021
Revenue
$151.9 million
+1%
$43.9 million
+19%
Gold Equivalent Ounces
(“GEOs”)1
84,571
+1%
25,428
+23%
Operating Cash Flow
$118.4 million
-1%
$36.7 million
+27%
Net Earnings
$55.1 million ($0.35/share)
+21%
$15.5 million ($0.10/share)
+16%
Adjusted Net Earnings2
$61.8 million ($0.40/share)
+7%
$18.3 million ($0.12/share)
+36%
Adjusted EBITDA3
$117.7 million
-5%
$33.0 million
+14%
Asset Margin4
91%
nil
91%
Nil
Cash Cost per GEO5
$165
+2%
$157
-1%
Building the Next Senior Streamer
Disciplined Growth and Gold Focused
- Synergistic acquisition of Maverix
- Solidifies Triple Flag as the leading gold-focused, emerging
senior streamer
Diversified, High-quality Portfolio and Embedded
Growth
- 27% GEO growth from 2022 expected for 2023 from 27 assets
- Leading growth profile of +140 koz GEOs (2024-2028E avg.)
Robust Cash Flow and Strong Balance Sheet
- Generated $118.4 million in operating cash flow in 2022
- +$600M in available liquidity
Superior ESG Practices are Core
- Ranked 4th of 114 companies in the global precious metals
sector by Sustainalytics
- Committed to our long-term goal of net zero emissions by
2050
GEOs Sold by Commodity, Revenue by Commodity, and Financial
Highlights Summary Table
Three Months Ended December 31
Year
Ended December 31
($
thousands except GEOs, Asset Margin, Cash Costs per GEO, and per
share numbers)
2022
2021
2022
2021
GEOs1
Gold
11,199
10,614
44,786
41,143
Silver
12,684
8,586
34,052
38,229
Other
1,545
1,405
5,733
4,230
Total
25,428
20,605
84,571
83,602
Revenue
Gold
19,328
19,054
80,533
74,035
Silver
21,892
15,414
61,051
68,777
Other
2,666
2,522
10,301
7,609
Total
43,886
36,990
151,885
150,421
Net Earnings
15,460
13,381
55,086
45,527
Net Earnings per Share
0.10
0.09
0.35
0.31
Adjusted Net Earnings2
18,265
13,409
61,848
57,563
Adjusted Net Earnings per
Share2
0.12
0.09
0.40
0.39
Operating Cash Flow
36,721
28,997
118,376
120,015
Operating Cash Flow per Share
0.24
0.19
0.76
0.81
Adjusted EBITDA3
33,012
28,880
117,667
123,485
Asset Margin4
91%
91%
91%
91%
Cash Costs per GEO5
157
159
165
161
Corporate Updates
- Closing of Maverix Transaction: Subsequent to
quarter-end, on January 19, 2023, Triple Flag successfully
completed the acquisition of Maverix Metals Inc. (“Maverix”). In
aggregate, Triple Flag issued 45.1 million common shares of the
Company and paid $86.7 million to former Maverix shareholders. Upon
closing of the transaction, existing Triple Flag and former Maverix
shareholders owned approximately 78% and 22% of the pro forma
outstanding shares of Triple Flag, respectively. We are well
advanced with our integration of the two businesses and on track to
delivering the $7 million in annualized synergies.
- Appointment of Ms. Elizabeth Wademan to the Company’s Board
of Directors: Ms. Elizabeth Wademan has been appointed to
Triple Flag’s Board of Directors. Ms. Wademan is a corporate
executive and director with over 24 years of capital markets and
operational experience as a senior executive. Ms. Wademan is
currently President and CEO of the Canada Development Investment
Corporation. Prior to her current roles, Ms. Wademan had a long
career in investment banking at BMO Capital Markets, where she was
one of the firm’s most senior professionals and was Head, Global
Metals & Mining Equity Capital Markets, where she advised on
many of the most formative and transformational transactions in the
resource sector on the continent.
- Gross Revenue Return and Stream on Prieska: On December
13, 2022, Triple Flag announced that it had entered into definitive
agreements for the acquisition of the A$10 million gross revenue
return (“GRR”) and $80 million gold and silver stream (“Stream”) on
the Prieska Copper-Zinc Mine with Orion Minerals Ltd. (“Orion”)
that was previously announced in May 2022. The GRR provides Triple
Flag with an entitlement to 0.8% of gross revenue. The Stream
provides for Orion to deliver to Triple Flag 84% of payable gold
and 84% of payable silver, until 94.3 koz and 5,710 koz of gold and
silver, respectively, are delivered. The stream rate for each of
gold and silver is then reduced to 50% for the remaining mine life
upon reaching the respective thresholds. The Company will make
ongoing payments of 10% of the spot gold and silver price for each
ounce delivered under the Stream.
- ESG: Several important initiatives were advanced during
the fourth quarter of 2022:
- Sustainalytics (a Morningstar company) completed a review and
ranking of Triple Flag’s ESG initiatives, resulting in a 4th
percentile finish – 4th of 114 across the precious metals industry
and 2nd in our sub-industry of precious metals mining, with an
absolute risk rating of 9.2 (negligible risk). Further, we were
awarded two supplemental Top Badges for both Region and
Industry.
- Also during the quarter, Triple Flag received accolades as a
Great Place to Work in Canada. Great Place to Work Certification™
recognizes employers who create an outstanding employee experience
and an amazing workplace culture.
- Finally, in Australia, one of the most disastrous series of
flooding events in recorded history was experienced in Central West
New South Wales during the month of November 2022. The Northparkes
leadership team has been committed to providing ongoing support to
their people and communities. Triple Flag contributed A$50,000 to
assist Northparkes in their relief efforts.
- Dividend: Triple Flag’s Board of Directors declared a
quarterly dividend of US$0.05 per common share that will be paid on
March 15, 2023, to the shareholders of record at the close of
business on March 3, 2023. The annualized dividend of US$0.20 per
share represents a yield of 1.4% based on the closing share price
on February 17, 2023.
2023 Guidance
In 2023, we expect attributable royalty income and stream sales
to total 100,000 to 115,000 GEOs. The 2023 guidance is based on
public forecasts and other disclosure by the owners and operators
of our assets and our assessment thereof. While achieving record
GEOs sales in 2022, our portfolio was impacted by delivery timing
and the gold/silver ratio. The 2023 guidance assumes a continuation
of similar lags, particularly from assets that are ramping or
starting up new capacity, a persistence of a higher than historical
average gold/silver ratio, and certain allowances where appropriate
to account for recent operational performance. Of note:
- A portion of Northparkes GEOs will be deferred from 2023 to
2024, reflecting changes in the mill feed blending from ore sources
of differing gold grade contribution, specifically the deferral of
the ore from the higher grade E31N open pit that is expected to
start up towards the end of 2023.
- Fosterville’s 2022 production was lower than forecast,
primarily due to operating restrictions related to low-frequency
noise and lower gold grades than anticipated in the fourth quarter
of 2022. The operating constraints related to low-frequency noise
have been assumed to continue in 2023, resulting in the deferral of
approximately 3,000 GEOs attributable to Triple Flag for the
year.
- Negligible GEOs are assumed from construction and ramp-up
assets, specifically Pumpkin Hollow and Gunnison, until actual
performance is demonstrated, although both projects appear to be
making solid progress.
- Royal Bafokeng Platinum (“RBPlat”) experienced operational
disruptions in late Q3 2022 as a result of a tragic underground
mobile-equipment-related fatality and ensuing investigation –
further details are outlined below. This will impact 2023 GEOs
sales due to the timing lag between mine production, smelting,
refining and metals sales, resulting in a deferral of those GEOs to
future periods.
- As previously indicated, no contribution from the Omolon
royalty has been assumed.
2023
Guidance1
GEOs Sales
100,000 to 115,000 GEOs
Depletion
$65 million to $71 million
General administration costs
Cash G&A: $16 million to $17
million
Non-Cash G&A: ~$5 million
Australian Cash Tax Rate2
~25%
1
Assumed commodity prices of $1,850/oz
gold, $22.00/oz silver, $4.00/lb copper and $100/carat for diamonds
for the rest of the year.
2
Australian Cash Taxes are payable for
Triple Flag’s Australian royalty interests, specifically
Fosterville, Beta Hunt, Dargues, Henty, Mt Carlton and Stawell
Long-Term Production Outlook Reaffirmed
Triple Flag’s long-term production outlook builds on our
sector-leading GEOs growth profile since 2017, with a CAGR of 21%
through 2022. GEOs sales over the five-year period ending in 2028
are expected to average +140,000 GEOs per year, a significant
increase over current levels primarily due to:
- Northparkes – in the short term, increased gold production from
the E31N open pit (~0.8 g/t Au), and in the medium term, the
ramp-up of the E22 deposit (0.39 g/t Au), both of which host
materially higher gold grades than the current run-of-mine feed
forecast for 2023 (0.17 g/t Au).
- Construction-stage assets – the restart and ramp-up of
operations at Pumpkin Hollow and production from Gunnison
(commencing with the existing Johnson Camp mine).
- Fosterville – resolution of low-frequency noise
restrictions.
- Completion of production ramp-up at Styldrift (Royal Bafokeng
Platinum), Buriticá (Zijin) and Beta Hunt (Karora).
The majority of the production expected over the five-year
outlook is derived from mines that are currently in production and
supported by Mineral Reserve estimates. Above and beyond the
current outlook, exists further optionality associated with
development-stage projects that may be advanced to production
during the period. The long-term production outlook requires
minimal capital expenditures by the asset operators, and a number
of the development projects have been permitted, providing a
low-risk outlook. The long-term production outlook requires no
further funding from Triple Flag.
Q4 2022 Portfolio Updates
Australia:
- Northparkes (54% gold stream and 80% silver stream):
Sales from Northparkes in Q4 2022 and FY2022 were 3,914 GEOs and
14,058 GEOs, respectively, based on sales of 3,114 ounces of gold
and 57,779 ounces of silver in Q4 2022, and sales of 11,574 ounces
of gold and 206,350 ounces of silver in FY2022. Northparkes
processed just over 7.6 million tonnes during the year, attaining
the recently increased nameplate capacity. An order of magnitude
study is planned for the newly defined MJH zone in 2023.
- Fosterville (2.0% NSR gold royalty): Royalties from
Fosterville in Q4 2022 and FY2022 equated to 1,855 GEOs and 8,454
GEOs, respectively. Fosterville produced 88,634 ounces of gold in
Q4 2022 and 383,206 ounces of gold in the full year 2022. Agnico
Eagle Mines Limited (“Agnico Eagle”) lowered its guidance for
Fosterville in 2023 and 2024 due to ventilation operating
restrictions related to low-frequency noise constraints. Agnico
Eagle expects to return to full operating capacity once the
restrictions are lifted, which could contribute up to an additional
50,000 ounces of gold to Fosterville’s production forecast in 2023
and 2024. Agnico Eagle expects to spend approximately $20.8 million
for 105,300 meters of capitalized drilling and the development of
exploration drifts to replace mineral reserve depletion and to add
mineral resources in the Cygnet, Lower Phoenix and Robbins Hill
areas in 2023. Another $4.4 million is budgeted for 11,300 meters
of underground and surface expensed exploration with the aim of
discovering additional high-grade mineralization at
Fosterville.
- Beta Hunt (3.25% gross revenue (“GR”) gold
royalty): Karora Resources Inc. announced gold Measured and
Indicated Mineral Resource, net of depletions, at its flagship Beta
Hunt Mine has increased by 20% and the Inferred Mineral Resources
have increased by 34%. The update is highlighted by the net
additions to the Western Flanks zone of 146,000 ounces in Measured
and Indicated Resources and 338,000 ounces of Inferred Mineral
Resources. Gold Proven and Probable Reserves also increased by 12%,
or 56,000 ounces, to 538,000 ounces. Both resources and reserves
have an effective date of September 30, 2022.
- Dargues (5.5% GR gold royalty): Royalties from Dargues
in Q4 2022 and FY2022 equated to 510 GEOs and 2,339 GEOs,
respectively. Dargues produced 8,748 ounces of gold in the quarter
ended December 31, 2022, slightly lower than the prior quarter’s
production of 8,968 ounces. On December 20, Aurelia Metals Limited
received approval for a development consent modification (MOD5) at
Dargues from the NSW Government Department of Planning and
Environment. MOD5 increases the permitted processing cap for the
mine from 355 ktpa to 415 ktpa.
Latin America:
- Cerro Lindo (65% silver stream): Sales from Cerro
Lindo in Q4 2022 and FY2022 were 9,455 GEOs and 26,047 GEOs,
respectively, based on 715,161 ounces of silver sold in Q4 2022 and
2,111,018 ounces sold in FY2022. Cerro Lindo produced 0.8 million
ounces of silver during Q4 2022, a decrease from 0.9 million ounces
of silver in Q4 2021, but produced 4.1 million ounces of silver for
FY2022, up from 3.8 million ounces in FY2021. Nexa Resources S.A.
has increased 2023-2025 silver guidance, compared to the prior
year’s figures, with an increasing trend over the next three years,
from 3.5 to 3.8 million ounces in 2023 to 4.0 to 4.5 million ounces
in 2025 (referring to silver in concentrate). In Q4 2022, the
exploration program at Cerro Lindo continued to focus on extensions
of known orebodies to the southeast of Cerro Lindo, and at the
Pucasalla target, 4.5 km to the northwest of the mine. Currently,
there are five drilling rigs in operation.
- Buriticá (100% silver stream): Sales from
Buriticá in Q4 2022 and FY2022 were 2,356 GEOs and 5,133 GEOs,
respectively, based on 178,719 ounces of silver sold in Q4 2022 and
413,904 ounces in FY2022.
- Camino Rojo (2.0% NSR gold royalty): The Camino
Rojo Oxide Mine produced 32,017 ounces of gold in the fourth
quarter of 2022, for a total of 109,596 ounces of gold for the full
year 2022, achieving the high end of the increased production
guidance range of 100,000 to 110,000 ounces. Orla Mining Ltd.’s
initial production guidance for 2022 was 90,000 to 100,000 ounces
of gold and was increased at the end of the third quarter to a
range of 100,000 to 110,000 ounces of gold. Gold production from
the Camino Rojo Oxide Mine is expected to be 100,000 to 110,000
ounces in 2023.
- Eastern Borosi (2.0% NSR gold and silver
royalty): During the fourth quarter, Calibre Mining Corp.
(“Calibre”) announced that it had been granted the key
environmental permits for the development and production of the
open pit and underground mines within the Eastern Borosi project
from the corresponding Nicaraguan authorities. Calibre is advancing
the high-grade Eastern Borosi open pit and underground satellite
deposits, expected to be in production during 2023 and feed into
the Calibre’s Libertad processing facility.
North America:
- Young-Davidson (1.5% NSR gold royalty): Royalties
from Young-Davidson in Q4 2022 and FY2022 equated to 810 GEOs and
3,110 GEOs, respectively. Young-Davidson produced 44,500 ounces of
gold in Q4 2022, down from 51,900 ounces in Q4 2021. For FY2022,
Young-Davidson produced 192,200 ounces of gold. A total of $8
million has been budgeted for exploration at Young-Davidson in
2023, up from $5 million in 2022.
- Pumpkin Hollow (97.5% gold and silver stream):
Subsequent to quarter-end, Nevada Copper provided an update on the
restart and operational activities for Pumpkin Hollow. Nevada
Copper is targeting a mill restart in Q3 2023 with the goal of
achieving nameplate capacity by the end of 2023. Regional
exploration activities are also continuing to advance, and several
highly prospective targets of interest have been identified.
- Gunnison (16.5% copper stream): Subsequent to
quarter-end, Excelsior Mining Corp. (“Excelsior”) announced that it
entered into a collaboration agreement with Nuton LLC, a Rio Tinto
venture, to evaluate the use of its Nuton™ copper heap leaching
technologies at Excelsior's Johnson Camp mine in Cochise County,
Arizona. The Nuton technologies, developed by Rio Tinto, are an
extensive portfolio of advanced copper heap leaching technologies
targeted at primary sulfide minerals (including lower grade
minerals), which could not otherwise be processed using traditional
leaching or sulfide processing technologies. These technologies
offer the potential to produce additional copper in a
cost-effective manner that has significant environmental benefits
and reduces waste from new and ongoing operations.
- Hope Bay (1.0% NSR): Agnico Eagle Mines Limited
reported that drilling in 2022 confirmed the potential to upgrade
and expand mineral resources at Doris. Exploration in 2023 will
primarily shift to the Madrid deposit to further expand the mineral
resources with a focus on defining areas of higher-grade
mineralization. Work continues on evaluating larger production
scenarios (targeting 350,000 to 400,000 ounces of gold per
year).
Rest of World:
- RBPlat (70% gold stream): Sales from RBPlat in Q4
2022 and FY2022 were 1,843 GEOs and 7,653 GEOs, respectively, based
on 1,823 ounces of gold sold in Q4 2022 and 7,582 ounces in FY2022.
Tragically, in an underground mobile-equipment-related incident,
Ms. Sibilanga was fatality injured. Following this incident, the
resulting stoppage materially affected September production
performance with the loss of all remaining production shifts in the
month and only 98 kt being hoisted compared to the 220 kt hoisted
in September 2021. The stoppage will impact 2023 sales due to the
timing lag between mine production, smelting, refining and metals
sales. This will result in a deferral of some GEOs to future
periods.
- ATO (25% gold stream and 50% silver stream):
Sales from the ATO stream in Q4 2022 and FY2022 were 2,203 GEOs and
8,202 GEOs, respectively, based on sales of 2,101 ounces of gold
and 9,401 ounces of silver in Q4 2022, and sales of 8,007 ounces of
gold and 22,129 ounces of silver in FY2022. Sales from the ATO
prepaid gold interest accounted for 522 GEOs, bringing the total
GEOs from ATO to 8,724 in FY2022.
Conference Call Details
Triple Flag has scheduled an investor conference call at 10:00
a.m. ET (7:00 a.m. PT) on Wednesday, February 22, 2023, to discuss
the results reported in today’s earnings announcement. The
conference call will be broadcast live via a webcast and can be
accessed by visiting the Events and Presentations page on the
Company’s website at: www.tripleflagpm.com. An archived version of
the webcast will be available on the website for one month
following the webcast.
Live Webcast:
https://events.q4inc.com/attendee/445214868
Dial-In Details:
Toll-Free (U.S. & Canada): +1 (888)
330-2384
International: +1 (647) 800-3739
Conference ID: 4548984
Replay (Until March 8):
Toll-Free (U.S. & Canada): +1 (800)
770-2030
International: +1 (647) 362-9199
Conference ID: 4548984
About Triple Flag
Triple Flag is a pure play, gold-focused, emerging senior
streaming and royalty company. We offer bespoke financing solutions
to the metals and mining industry with exposure primarily to gold
and silver in the Americas and Australia, with a total of 229
assets, including 15 streams and 214 royalties. These investments
are tied to mining assets at various stages of the mine life cycle,
including 29 producing mines and 200 development and exploration
stage projects. Triple Flag is listed on the Toronto Stock Exchange
and New York Stock Exchange, under the ticker “TFPM”.
Forward-Looking Information
This news release contains “forward-looking information” within
the meaning of applicable Canadian securities laws and
“forward-looking statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995,
respectively (collectively referred to herein as “forward-looking
information”). Forward-looking information may be identified by the
use of forward-looking terminology such as “plans”, “targets”,
“expects”, “is expected”, “budget”, “scheduled”, “estimates”,
“outlook”, “forecasts”, “projection”, “prospects”, “strategy”,
“intends”, “anticipates”, “believes”, or variations of such words
and phrases or terminology which states that certain actions,
events or results “may”, “could”, “would”, “might”, “will”, “will
be taken”, “occur” or “be achieved”. Forward-looking information in
this news release include, but are not limited to, statements with
respect to the Company’s annual and five-year guidance, operational
and corporate developments for the Company, developments in respect
of the Company’s portfolio of royalties and streams and those
developments at certain of the mines, projects or properties that
underlie the Company’s interest, strengths, characteristics and
expected benefits and synergies of the acquisition of Maverix
Metals Inc., and our assessments of, and expectations for, future
periods (including, but not limited to, the long-term production
outlook for GEOs). In addition, any statements that refer to
expectations, intentions, projections or other characterizations of
future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not
historical facts but instead represent management’s expectations,
estimates and projections regarding possible future events or
circumstances.
The forward-looking information included in this news release is
based on our opinions, estimates and assumptions in light of our
experience and perception of historical trends, current conditions
and expected future developments, our assumptions regarding the
acquisition of Maverix Metals Inc. (including our ability to derive
the anticipated benefits therefrom), as well as other factors that
we currently believe are appropriate and reasonable in the
circumstances. The forward-looking information contained in this
news release is also based upon a number of assumptions, including
the ongoing operation of the properties in which we hold a stream
or royalty interest by the owners or operators of such properties
in a manner consistent with past practice; the accuracy of public
statements and disclosures made by the owners or operators of such
underlying properties; and the accuracy of publicly disclosed
expectations for the development of underlying properties that are
not yet in production. These assumptions include, but are not
limited to, the following: assumptions in respect of current and
future market conditions and the execution of our business
strategies, that operations, or ramp-up where applicable, at
properties in which we hold a royalty, stream or other interest,
continue without further interruption through the period, and the
absence of any other factors that could cause actions, events or
results to differ from those anticipated, estimated, intended or
implied. Despite a careful process to prepare and review the
forward-looking information, there can be no assurance that the
underlying opinions, estimates and assumptions will prove to be
correct. Forward-looking information is also subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking information. Such risks, uncertainties and other
factors include, but are not limited to, those set forth under the
caption “Risk Factors” in our most recently filed annual
information form which is available on SEDAR at www.sedar.com and
on EDGAR at www.sec.gov. For clarity, mineral resources that are
not mineral reserves do not have demonstrated economic viability
and inferred resources are considered too geologically speculative
for the application of economic considerations.
Although we have attempted to identify important risk factors
that could cause actual results or future events to differ
materially from those contained in forward-looking information,
there may be other risk factors not presently known to us or that
we presently believe are not material that could also cause actual
results or future events to differ materially from those expressed
in such forward-looking information. There can be no assurance that
such information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such information. Accordingly, readers should not place undue
reliance on forward-looking information, which speaks only as of
the date made. The forward-looking information contained in this
news release represents our expectations as of the date of this
news release and is subject to change after such date. We disclaim
any intention or obligation or undertaking to update or revise any
forward-looking information whether as a result of new information,
future events or otherwise, except as required by applicable
securities laws. All of the forward-looking information contained
in this news release is expressly qualified by the foregoing
cautionary statements.
Cautionary Statement to U.S. Investors
Information contained or referenced in this press release or in
the documents referenced herein concerning the properties,
technical information and operations of Triple Flag has been
prepared in accordance with requirements and standards under
Canadian securities laws, which differ from the requirements of the
U.S. Securities and Exchange Commission (“SEC”) under subpart 1300
of Regulation S-K (“S-K 1300”). Because the Company is eligible for
the Multijurisdictional Disclosure System adopted by the SEC and
Canadian Securities Administrators, Triple Flag is not required to
present disclosure regarding its mineral properties in compliance
with S-K 1300. Accordingly, certain information contained in this
press release may not be comparable to similar information made
public by US companies subject to reporting and disclosure
requirements of the SEC.
Technical and Third-Party Information:
Triple Flag does not own, develop or mine the underlying
properties on which it holds stream or royalty interests. As a
royalty or stream holder, Triple Flag has limited, if any, access
to properties included in its asset portfolio. As a result, Triple
Flag is dependent on the owners or operators of the properties and
their qualified persons to provide information to Triple Flag and
on publicly available information to prepare disclosure pertaining
to properties and operations on the properties on which Triple Flag
holds stream, royalty or other similar interests. Triple Flag
generally has limited or no ability to independently verify such
information. Although Triple Flag does not believe that such
information is inaccurate or incomplete in any material respect,
there can be no assurance that such third-party information is
complete or accurate.
Endnotes
Endnote 1: Gold Equivalent Ounces (“GEOs”)
GEOs are a non-IFRS measure that is based on stream and royalty
interests and calculated on a quarterly basis by dividing all
revenue from such interests for the quarter by the average gold
price during such quarter. The gold price is determined based on
the LBMA PM fix. For periods longer than one quarter, GEOs are
summed for each quarter in the period. Management uses this measure
internally to evaluate our underlying operating performance across
our stream and royalty portfolio for the reporting periods
presented and to assist with the planning and forecasting of future
operating results. GEOs are intended to provide additional
information only and do not have any standardized definition under
IFRS and should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS. The
measures are not necessarily indicative of gross profit or
operating cash flow as determined under IFRS. Other companies may
calculate these measures differently. The following table
reconciles GEOs to revenue, the most directly comparable IFRS
measure.
2022
($ thousands, except average gold
price and GEOs information)
Q4
Q3
Q2
Q1
Year ended December 31
Revenue
43,886
33,754
36,490
37,755
Average gold price per ounce
1,726
1,729
1,871
1,877
GEOs
25,428
19,523
19,507
20,113
84,571
2021
($ thousands, except average gold
price and GEOs information)
Q4
Q3
Q2
Q1
Year ended December 31
Revenue
36,990
37,126
40,939
35,366
Average gold price per ounce
1,795
1,790
1,816
1,794
GEOs
20,605
20,746
22,537
19,714
83,602
Endnote 2: Adjusted Net Earnings (Loss) and Adjusted Net
Earnings (Loss) per Share
Adjusted net earnings (loss) is a non‑IFRS financial measure,
which excludes the following from net earnings (loss):
- impairment charges
- gain/loss on sale or disposition of assets/mineral
interests
- foreign currency translation gains/losses
- increase/decrease in fair value of financial assets
- effects of the non-cash cost of sales related to prepaid gold
interests
- non‑recurring charges; and
- impact of income taxes on these items
Management uses this measure internally to evaluate our
underlying operating performance for the reporting periods
presented and to assist with the planning and forecasting of future
operating results. Management believes that adjusted net earnings
(loss) is a useful measure of our performance because impairment
charges, gain/loss on sale or disposition of assets/mineral
interests, foreign currency translation gains/losses,
increase/decrease in fair value of financial assets, effects of the
non-cash cost of sales related to prepaid gold interests and
non-recurring charges (such as IPO readiness costs) do not reflect
the underlying operating performance of our core business and are
not necessarily indicative of future operating results. The tax
effect is also excluded to reconcile the amounts on a post-tax
basis, consistent with net earnings. Management’s internal budgets
and forecasts and public guidance do not reflect the types of items
we adjust for. Consequently, the presentation of adjusted net
earnings (loss) enables users to better understand the underlying
operating performance of our core business through the eyes of
management. Management periodically evaluates the components of
adjusted net earnings based on an internal assessment of
performance measures that are useful for evaluating the operating
performance of our business and a review of the non-IFRS measures
used by industry analysts and other streaming and royalty
companies. Adjusted net earnings (loss) is intended to provide
additional information only and does not have any standardized
definition under IFRS and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. The measures are not necessarily indicative of gross
profit or operating cash flow as determined under IFRS. Other
companies may calculate these measures differently. The following
table reconciles adjusted net earnings to net earnings, the most
directly comparable IFRS measure.
Reconciliation of Net Earnings to Adjusted Net
Earnings
($ thousands, except share
and
Three months ended
December 31
Year ended December
31
per share information)
2022
2021
2022
2021
Net earnings
$15,460
$13,381
$55,086
$45,527
Impairment charges
3,600
-
3,600
-
Gain on disposal of mineral
interests
-
-
(2,099)
-
Loss on derivatives
-
-
-
297
Foreign currency translation
losses
63
1
352
25
(Increase) decrease in fair value
of financial assets
(733)
(60)
4,066
10,786
Non-cash cost of sales related to
prepaid gold interests
836
-
836
-
IPO readiness costs1
-
-
-
670
Income tax effect
(961)
87
7
258
Adjusted net earnings
$18,265
$13,409
$61,848
$57,563
Weighted average shares
outstanding - basic
155,793,370
156,158,978
155,950,659
148,025,464
Net earnings per share
$0.10
$0.09
$0.35
$0.31
Adjusted net earnings per
share
$0.12
$0.09
$0.40
$0.39
1.
Reflects charges related to a potential
U.S. listing that was not pursued.
Endnote 3: Free Cash Flow
Free cash flow is a non-IFRS measure that deducts acquisition of
other assets (excluding acquisition of financial assets or mineral
interests) from operating cash flow. Management believes this to be
a useful indicator of our ability to operate without reliance on
additional borrowing or usage of existing cash. Free cash flow is
intended to provide additional information only and does not have
any standardized definition under IFRS and should not be considered
in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. The measure is not necessarily
indicative of operating profit or operating cash flow as determined
under IFRS. Other companies may calculate this measure differently.
The following table reconciles free cash flow to operating cash
flow, the most directly comparable IFRS measure:
Three months ended December
31
Year ended December 31
($ thousands)
2022
2021
2022
2021
Operating cash flow
$36,721
$28,997
$118,376
$120,015
Acquisition of other assets
-
-
-
-
Free cash flow
$36,721
$28,997
$118,376
$120,015
Endnote 4: Adjusted EBITDA
Adjusted EBITDA is a non‑IFRS financial measure, which excludes
the following from net earnings:
- income tax expense
- finance costs, net
- depletion and amortization
- impairment charges
- gain/loss on sale or disposition of assets/mineral
interests
- foreign currency translation gains/losses
- increase/decrease in fair value of assets/investments; and
- non‑recurring charges
Management believes that adjusted EBITDA is a valuable indicator
of our ability to generate liquidity by producing operating cash
flow to fund working capital needs, service debt obligations and
fund acquisitions. Management uses adjusted EBITDA for this
purpose. Adjusted EBITDA is also frequently used by investors and
analysts for valuation purposes whereby adjusted EBITDA is
multiplied by a factor or ‘‘multiple’’ that is based on an observed
or inferred relationship between adjusted EBITDA and market values
to determine the approximate total enterprise value of a
company.
In addition to excluding income tax expense, finance costs, net
and depletion and amortization, adjusted EBITDA also removes the
effect of impairment charges, gain/loss on sale or disposition of
assets/mineral interests, foreign currency translation
gains/losses, increase/decrease in fair value of assets/investments
and non-recurring charges. We believe these items provide a greater
level of consistency with the adjusting items included in our
adjusted net earnings reconciliation, with the exception that these
amounts are adjusted to remove any impact of income tax expense as
they do not affect adjusted EBITDA. We believe this additional
information will assist analysts, investors and our shareholders to
better understand our ability to generate liquidity from operating
cash flow, by excluding these amounts from the calculation as they
are not indicative of the performance of our core business and not
necessarily reflective of the underlying operating results for the
periods presented.
Adjusted EBITDA is intended to provide additional information to
investors and analysts and does not have any standardized
definition under IFRS and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. Adjusted EBITDA is not necessarily indicative of
operating profit or operating cash flow as determined under IFRS.
Other companies may calculate adjusted EBITDA differently. The
following table reconciles adjusted EBITDA to net earnings, the
most directly comparable IFRS measure.
Reconciliation of Net Earnings to Adjusted EBITDA
Three months ended
December 31
Year ended December
31
($ thousands)
2022
2021
2022
2021
Net earnings
$15,460
$13,381
$55,086
$45,527
Finance costs, net
172
602
1,413
5,673
Income tax (recovery) expense
(247)
1,800
4,789
6,436
Depletion and amortization
14,697
13,156
50,460
54,071
Impairment charges
3,600
-
3,600
-
Gain on disposal of mineral interests
-
-
(2,099)
-
Loss on derivatives
-
-
-
297
Foreign currency translation loss
63
1
352
25
(Increase) decrease in fair value of
investments
(378)
(60)
4,636
10,786
Increase in fair value of prepaid gold
interest
(355)
-
(570)
-
IPO readiness costs1
-
-
-
670
Adjusted EBITDA
$33,012
$28,880
$117,667
$123,485
1.
Reflects charges related to a potential
U.S. listing that was not pursued.
Endnote 5: Gross Profit Margin and Asset Margin
Gross profit margin is an IFRS financial measure which we define
as gross profit divided by revenue. Asset margin is a non-IFRS
financial measure which we define by taking gross profit and adding
back depletion and non-cash cost of sales related to prepaid gold
interests and dividing by revenue. We use gross profit margin to
assess profitability of our metal sales and use asset margin to
evaluate our performance in increasing revenue and containing costs
and providing a useful comparison to our peers. Asset margin is
intended to provide additional information only and does not have
any standardized definition under IFRS and should not be considered
in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. The following table reconciles
asset margin to gross profit margin, the most directly comparable
IFRS measure:
($ thousands except Gross
profit
Three months ended
December 31
Year ended December
31
margin and Asset margin)
2022
2021
2022
2021
Revenue
$43,886
$36,990
$151,885
$150,421
Cost of sales
19,428
16,339
64,881
67,168
Gross profit
24,458
20,651
87,004
83,253
Gross profit margin
56%
56%
57%
55%
Gross profit
$24,458
$20,651
$87,004
$83,253
Add: Depletion
14,604
13,056
50,085
53,672
Add: Non-cash cost of sales
related to prepaid gold interests
836
-
836
-
39,898
33,707
137,925
136,925
Revenue
43,886
36,990
151,885
150,421
Asset margin
91%
91%
91%
91%
Endnote 6: Cash Costs and Cash Costs per GEO
Cash costs and cash costs per GEO are non-IFRS measures with no
standardized meaning under IFRS and may not be comparable to
similar measures presented by other issuers. Cash costs are
calculated by starting with total cost of sales, then deducting
depletion and non-cash cost of sales related to prepaid gold
interests. Cash costs are then divided by GEOs sold, to arrive at
cash costs per GEO. Cash costs and cash costs per GEO are only
intended to provide additional information to investors and
analysts and should not be considered in isolation or as
substitutes for measures of performance prepared in accordance with
IFRS.
Management uses cash costs and cash costs per GEO to evaluate
our ability to generate positive cash flow from our portfolio of
assets. Management and certain investors also use this information
to evaluate the Company’s performance relative to peers who present
this measure on a similar basis. The following table reconciles
cash costs and cash costs per GEO to cost of sales, the most
directly comparable IFRS measure:
($ thousands, except GEOs
Three months ended December
31
Year ended December 31
and cash costs per GEO)
2022
2021
2022
2021
Cost of sales
$19,428
$16,339
$64,881
$67,168
Less: Depletion
14,604
13,056
50,085
53,672
Less: Non-cash cost of sales
related to prepaid gold interests
836
-
836
-
Cash costs
3,988
3,283
13,960
13,496
GEOs
25,428
20,605
84,571
83,602
Cash costs per GEO
157
159
165
161
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230221005822/en/
Inquiries: Investor Relations: James Dendle Senior Vice
President, Corporate Development +1 (416) 304-9770
ir@tripleflagpm.com
Media: Gordon Poole, Camarco +44 (0) 7730 567 938
tripleflag@camarco.co.uk
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