Triple Flag Precious Metals (US:TFPM)2024-08-08 18:15Financial Data and Key Metrics Changes - Triple Flag reported sales of 27,000 GEOs in Q2 2024, contributing to a record first half of the year and positioning the company to meet its 2024 GEO sales guidance of 105,000 to 115,000 ounces [2][17] - Operating cash flow per share increased by 25% year-over-year, reflecting strong production and favorable gold and silver prices [7][8] - The company announced a 5% increase in its annual dividend to $0.22 per share, marking the third consecutive annual increase since its IPO in 2021 [8][4] Business Line Data and Key Metrics Changes - Northparkes remains the flagship asset, showing quarter-on-quarter growth in GEOs due to high open pit grades, with a processed gold grade of 0.34 grams per ton in Q2, up from 0.28 grams per ton in Q1 [12][2] - Cerro Lindo and Northparkes were the largest contributors to Q2 revenues, benefiting from rising silver prices and higher gold grades, respectively [7] Market Data and Key Metrics Changes - Q2 revenues were entirely derived from gold and silver, with silver accounting for 40% of revenues, driven by strong performance at Cerro Lindo and Buritica [10] - Gold prices are currently trading above $2,400, which is expected to translate into increased cash flows for shareholders [10] Company Strategy and Development Direction - The company is focused on organic growth, with expected sales of 135,000 to 145,000 GEOs by 2028, despite the removal of Pumpkin Hollow and Moss mine from the outlook [9][3] - Recent acquisitions include a royalty interest in the Tamarack project and new gold streams on the Agbaou and Bonikro mines, reflecting a disciplined approach to capital allocation during a period of strong precious metal prices [4][14] Management's Comments on Operating Environment and Future Outlook - Management expressed a structurally bullish outlook on gold and silver prices, citing continued central bank money printing and currency devaluation as key factors [27] - The CEO transition is proceeding smoothly, with internal promotions reflecting the company's commitment to developing talent and ensuring continuity in leadership [5][23] Other Important Information - The company exited the quarter with a small net cash position and nearly $640 million in available liquidity, providing the capacity for future capital deployment and shareholder returns [9][19] - The company has maintained a strong focus on sustainability, ranking second among 118 global companies in the precious metal sector by Sustainalytics [19] Q&A Session Summary Question: What is the basis of your expected gold and silver price for the future? - The company does not project forward prices but uses a range of pricing for investment decisions, remaining structurally bullish on gold and silver due to macroeconomic factors [27] Question: What about the impairment charges? - Management acknowledged the impairments related to underperforming assets, stating that they have incorporated these into their guidance and have taken a conservative approach by writing them down to zero [28][31] Question: Can you provide guidance on Northparkes' performance in Q3 and Q4? - Management indicated that Q3 is expected to be stronger than Q4 for Northparkes, but they do not provide specific quarterly guidance [35][36] Question: What is the expected internal rate of return for the recent acquisition? - The expected internal rate of return for the Agbaou and Bonikro mines is significantly superior to the 5% to 6% range typically seen in operating mines, with expectations of double-digit returns [37][38] Question: What is the current deal pipeline looking like? - The company maintains a strong pipeline of deals, primarily in the $100 million to $300 million range, while also being open to larger transactions if they present good value [40][43]