It was recently announced that you’re going to be stepping in as CEO and Director of Triple Flag Precious Metals Corp. Can you give us a bit of background to your career so far?
I was one of the three original founding management team members for Triple Flag. When we started Triple Flag in May 2016, we did not have any assets, revenue, or cash flow, and since then, we’ve grown Triple Flag into the fourth largest precious metals focused royalty and streaming player globally. I’ve had the good fortune to have been an integral part of every transaction and milestone throughout the growth of this business, initially as General Counsel, and then as Chief Financial Officer commencing in 2019, including our first investment at Cerro Lindo and our successful US$264M initial public offering in 2021. So while I am new to the CEO role, I have been with Triple Flag from the beginning. It has been a fantastic experience thus far. I am looking forward to this next stage, and feel that the future is very bright for Triple Flag going forward as we benefit from the strong foundation established over the prior eight years.
Before Triple Flag, my career was also focused on the mining sector. I started out as an accountant at Ernst & Young, working on the audits of mining clients such as Falconbridge. After a few years as an accountant, I decided to attend law school, where I graduated first in my class. Following law school, I joined a leading Toronto law firm, Blake, Cassels & Graydon LLP, starting out as a tax lawyer before shifting my practice predominantly to mergers & acquisitions and public market financings, including acting for a number of mining clients on significant transactions. A few years following my promotion to partner, I wanted the challenge of joining an executive team to help build a successful mining company. In 2011, I joined Inmet Mining Corporation as Senior Director, Legal Affairs, and then became the Assistant General Counsel at First Quantum Minerals Ltd. following First Quantum’s acquisition of Inmet in 2013.
What are some of your plans to continue the company’s growth under your leadership?
Triple Flag has a powerful track record and I will be working hard with the team to continue this growth as we move forward. We have an organic growth target to grow from sales of 105 to 115K gold equivalent ounces (“GEOs”) in 2024 to 135 to 145K GEOs by 2028, driven by top-tier, long-life assets that will provide gold and silver exposure to our shareholders for decades to come such as Northparkes, Cerro Lindo, Impala Bafokeng, and Beta Hunt. This is something that could not have been achieved without our world class portfolio, the support of our investors, and the team that have made this happen.
The strategy for Triple Flag is certainly not changing – we will remain focused on cash flow per share, completing accretive acquisitions, and increasing shareholder value. Our proven business model will continue to be based upon cash flow generation, diversification within our portfolio, the open-ended optionality of our assets, consistent high margins, and driving a scalable business with low overhead.
Importantly, I believe that the execution of our strategy has placed us in the right position to deliver further growth. The portfolio generates robust cash flow, which allows us to both pay an increasing dividend and to reinvest in new streams and royalties in order to accelerate the growth in the portfolio. This drives growing GEOs and cash flow per share, as we can fund future acquisitions from cash flow and without needing to issue more shares.
Can you talk a bit about your criteria for investment or acquisitions? Do you have specific regions that you’re more favourable towards?
The ideal opportunity for us is to stream by-product gold and silver from a base metal mine. Copper mines frequently have a gold by-product, and zinc mines often have a silver by-product. In each such case, the operator is primarily concerned with the base metal, but the by-product gold or silver can be quite valuable to us, and this presents the opportunity to strike a deal that is beneficial both to ourselves and the operator.
What we are looking for are top-tier mines with competitive cost structures, that are operated by high-quality operators with the technical ability and the financial strength to sustain operations throughout the operating cycles. Top ESG performance is also essential, as we assess the social license to operate and the management teams’ ESG performance. Good management teams are on top of ESG, and if we are not satisfied on this front, we will not invest. We also carefully assess jurisdiction risk, with a strong preference to Australia, North America, and established mining jurisdictions in South America. Currently, Australia is our highest concentration country.
We prefer long duration assets that allow for exposure to multiple price cycles, favouring assets that are amenable to expansion, have a demonstrated track record of extending mine life as well as yielding new discoveries. Maximizing the prospective land packages associated with our streams and royalties is also critical to providing the optionality we seek, and this is reflected in our existing portfolio. We also target assets that are either producing or construction-ready, and fully permitted, though we also make prudent investments across earlier stages of the mine life cycle to maintain our exposure to development-stage assets and provide portfolio growth in the longer term.
Ultimately, the goal in our investment process is on identifying, attracting, and executing upon high-quality opportunities where our shareholders can expect sustainable returns, while offering miners competitive, highly customized financing to meet their strategic priorities. We manage risk through rigorous due diligence that relies on our lean, highly capable and engaged team that draws upon both their own experiences and those of a global network that is holistic across geology, engineering, legal, ESG, financial, and commercial considerations.
How are the current precious metals markets impacting your decisions?
We have built Triple Flag to generate cash flow in any precious metals price environment. The strength of the royalty and streaming model is that it provides us with exposure to precious metals prices without being directly impacted by operating costs.
In the current high precious metal price environment, this effectively translates into increased cash flows for us – which in turn goes straight towards shareholder returns. We return value towards our shareholders through dividends and we’ve increased our quarterly dividend by approximately 5% each year since our initial public offering in 2021, paying out over US$100M of dividends to date.
As always, any excess cash flows over and above our commitment to the dividend is allocated towards potential reinvestment in accretive acquisitions. We evaluate our pipeline of deals across a wide range of precious metal price decks, including spot, consensus and breakeven prices to assess and understand potential per share returns as part of our diligence framework for each transaction.
