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Triple Flag on target for 100,000oz GEOs

Canadian royalty and streaming company Triple Flag Precious Metals says despite the near-term impacts of the COVID-19 pandemic on its producing and development assets, it remains on track to top 100,000oz of gold-equivalent sales by 2023.
Triple Flag on target for 100,000oz GEOs Triple Flag on target for 100,000oz GEOs Triple Flag on target for 100,000oz GEOs Triple Flag on target for 100,000oz GEOs Triple Flag on target for 100,000oz GEOs

Triple Flag Precious Metals expects the ongoing suspension of operations at Stornoway Diamonds' Renard mine, in Quebec, to defer revenue

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The Toronto-headquartered company said this week the outlook was based on existing mineral reserves and fully-funded construction assets planned to be brought online this year, and didn't factor in any new acquisitions.

It expects five of its construction and ramp-up-stage assets to be completed this year, while other producing assets continue to ramp-up and increase output through to 2023.

The buoyant production profile come on the back of a record year for the company, after it reported 24% year-on-year growth in gold-equivalent ounces sold in 2019 to 42,406oz, near the upper-end of its guidance of 40,000-43,000oz. The sales translated to record revenue for the year of C$59.1 million (US$43 million), up 37% on 2019.

The performance resulted in adjusted EBITDA rising 40% to $48.3 million for 2019, with the cash margin coming in at 82%.

The company also started two new operating partnerships with Royal Bafokeng Platinum and Zijin Mining Group during the March quarter.

However, the quarter also saw the spread of the COVID-19 pandemic which founder and CEO Shaun Usmar said had resulted in "varying degrees" of short-term business interruption, mainly through stoppages aimed at containing the spread of the deadly virus.

"Some of our partners have also experienced minor supply-chain disruption and constraints on key talent availability associated with travel restrictions; these issues are particularly impactful to businesses working through construction, ramp-up and commissioning," he said.

Despite scuttling a planned $360 million IPO on the TSX late last year, the pandemic-related challenges and the uncertain outlook, Triple Flag said it had no material financing obligations, had "ample" liquidity and available headroom in its $400 million (US$288 million) credit facility.

"Along with Elliott's steadfast support we can write large cheques for quality assets, for which only the largest in the sector are capable of competing, and we are able to execute deals even with the global travel restrictions. Our business finds itself in a highly competitive and advantaged position as we look to acquire new streams and royalties in the months ahead, while providing critical financing to the mining sector during a likely period of acute need," Usmar said.

Government-mandated mine shutdowns were expected to only defer revenue for the company.

At present, Cerro Lindo (Peru), RBPlat's PGM operations (South Africa) and Pumpkin Hollow (USA) have been suspended. Excelsior Mining has delayed the ramp-up of its Gunnison copper project (Arizona, USA) and Stornoway Diamonds said Tuesday it would keep the Renard mine, in Quebec, on care and maintenance for longer because the pandemic had "resulted in the entire marketing chain and diamond price to collapse".