Triple Flag Precious Metals Corp. (TFPM) Earnings Call Transcript & Summary

We're very pleased this morning to host Shaun Usmar, the CEO, Director and Founder of Triple Flag Precious Metals. We knew Shaun and his prior roles, CFO of Barrick and other good jobs. Triple Flag is unique. It was founded by the Elliott Management Edge fund, put up money for Shaun and other founders. And it's a very savvy company that's grown very rapidly, and I should let Shaun tell the story, please.

John, thanks. It's great to see you again. And thanks for hosting today. Yes, just our story is a fairly simple one. We actually turn 8 next month, how time flies. And we were formed, as I said, with capital out of Elliott in New York as a private business where at the time, this was back in 2016. I think what brought us together was a view that the sector, and we're seeing it right now, the mining sector and launch is chronically underfunded through more conventional forms of funding. It's a long-term capital deployment business and the equity capital markets and the debt markets often tend to be -- well, they present windows, which can be pretty narrow. And then depending where you are in the cycle at times balance sheets and liquidity can be very constrained. And if you can access equity, it can be super expensive. And so being able to provide patient long-term competitive capital that's structured. Our focus was really competing at the top end with Franco, Wheaton and Royal given our backgrounds in mining on operating executive roles and on financing, we felt that there was an area we could successfully source deal flow and compete globally. And so that's what we set out to do. Our idea was we wanted to deploy roughly around USD 1 billion of Elliott's funds. And in the process, look to see once we had a critical mass that we transitioned to the public markets. And that's pretty much what we did with the TSX who actually deployed about USD 1.7 billion gross by the time we listed in Toronto, once we harvested cash from the portfolio and asset divestments, net was about USD 1.1 billion. So pretty close to what we set out to do and the returns are very similar. I think you'll see that quite distinctive for our business because you mentioned we were not spun out with other people's existing assets. We built this company, first put a team together. We got in the deal flow very quickly. There's so much opportunity in this space as I see it. And what we've seen is we have, I think, the highest insider ownership as a result of that in the space. I own about 2.5 million shares in this company as a result of this. I've invested more since IPO. And indeed, my team will have substantial part of their net worth tied up in the creation of this company, which is quite unique. So we list in Toronto, May will be our third anniversary. At the time, it was the biggest mining-related IPO in 8 years in the TSX. And I think in 10 years for Precious Metals globally. It was about USD 264 million we raised. We listed in New York a year later under the NJDS. And so what I'm going to share with you is our story because our strategy is very clear. It's deploying meaningful amounts of capital. I'd like to stack the odds in our favor. So what that meant is typically deploying more like $100 million to $500 million check sizes in the sweet spot where you're focusing on often polymetallics, where we're streaming byproducts. I spent most of my career and base metal businesses. And I understand that the cash flow multiple that you can get from a gold or a silver stream or byproduct -- it's just worth less to investors for those sorts of businesses than it is to ours, so we can offer a competitive cost of funding, structure it well so they can get deferred revenue or favorable rating adjunct treatment. And it gives our investors a very lucrative stream on often very long-dated multi-decade-long assets like copper mines with gold, silver byproducts as an example. And that creates this flywheel of cash generation, which allows you to pay dividends, continue to generate a lot of cash, which you can then redeploy and really invest on the multiple horizons. So you can get the longer-dated development and exploration investment opportunities that will pay off in some subset of those in years ahead. But in the meantime, you also participate not just through the price cycles but really through mine life extension and expansion, it really makes this model work very, very well while avoiding the inflation. I know you're very familiar with all of that. So that's what we've been up to, and I'll take you through this. I'll just share my screen. Hopefully, you can see that. So today, I think we're actually at about USD 2.7 billion market cap now. I'll be speaking in U.S. dollars today unless some of the audience will focus on Canadian. I'll touch on our growth rate that we've delivered, but you'll see that this year, we're guiding to 105,000 to 115,000 ounces. And we've got substantial growth that we're projecting in 5 years and beyond. And essentially, you can think of that as largely fully financed. It's not like we've got a lot of our balance sheet that's still tied up in order to deliver that growth. You'll see at this stage, we've got 234 assets in the portfolio, of which 32 are producing. So that growth is really coming from a small subset. So you can think of this again as sort of these larger chunkier, longer-life cash-generating assets that are highly diversified and then a really substantial portfolio over 200 in that other category, which over some time in the future are going to generate some subset will generate ounces and cash flow. We pay one of the leading dividends in the sector. We've grown that 5% year-on-year. And you can see we've got a lot of liquidity. Just to orient you, post the Maverix transaction that we closed last year, we took on a little debt from that. We did a few transactions, but you'll see at the moment, we've got about net debt on the balance sheet of about USD 40 million. Our trailing cash generation is at around USD 40 million a quarter. So roughly 1/4 is cash flow, obviously, to pay that down. And then the dividend consumes just over 40%. So balance sheet is in strong condition. We've got a credit facility of USD 0.5 billion plus 200 accordion. And you can see nearly USD 700 million and growing of available liquidity. And then it's interesting, there's a lot of colorization that we see on sustainability topics. So for us, even as a private company coming out of the mining sector, we thought as capital providers. We know that what mining companies really are subjected to. And so for us, we wanted to deploy capital with good partners. We do a lot of work on that because if you have guys who perhaps are on the wrong side of some of the sustainability initiatives, whether that's with their local communities, they're privileged to operate tailings dams, things of that nature. You're not going to fix that stuff very often through just a high rate of return. So getting the diligence of partnerships right is key. And then for us, we do invest alongside our partners where we can on some of the community investments and elsewhere. We've also attracted our carbon footprint. We've maintained our neutrality since inception. And it's just about being part of the ecosystem and doing that right. The model, I think, needs no introduction. I know there are several of our peers who will be talking to this point. But I think we've come through a period of inflation where this model has really shown its benefits. We've continued to grow substantially with new records through this period and actual ounces. Our margins have not been compressed because of cost increases. We don't have a lot of sustaining capital or anything of that nature to deploy it once we've made our investments. So you can see these high margins, you see the benefits that we've witnessed already as a young company with mine life extensions, benefiting from the exploration success of our underlying partners as well as the expansions at times that they engage in, which we benefit from. These portfolios because you can actually -- you're not operating and so you can create a level of diversification that you simply cannot replicate in an operating business, which just goes to risk, and you see that, and I'll show you some of that in a minute. And then this is just highly scalable. We've got a modest team. I've built this team the same way that we really built the corporate structure in extra order, wee as one of the early executives. So we grew that company from, I don't know, $0.5 billion to 60-or-so over a decade. And over all that time is 50,000 employees globally. We only had about 12 people in the corporate office as capital allocators and people that deal with the markets and investors. So you'll see we have, I think, by headcount, one of the smaller teams. But importantly, we leverage our networks, both in sourcing deal flow and assisting us in complementing our existing bench to get to the best answers when we allocate capital and structured deals. It keeps our overhead low and it keeps us agile and hungry. And I'll remind you on the insider ownership that really is a part of our DNA. We are a founding management team and that really does inform how we think about value creation. So this is our track record on display. You can see the substantial growth in operating cash flow and the direct translation of operating to free cash flow. We don't have those sustaining CapEx and other sacrifices that you get in operating businesses. And you'll see, as we've grown the portfolio, bear in mind, 2016 was when we started. We had nothing in that year other than building the team and the expenses for offices and more office allocation and headcount growth. You'll see that as mine labs get extended, units of production get extended, your depletion charges are spread over long periods of time. And so robust, pretty consistent cash margins, but also the profile where with time your earnings profile tends to improve. And you can see that this has been a very robust business over time. On this slide, investors often ask us, how do we think about you as being any different to any of your competitors? I think when we started in '16, [indiscernible] around Toronto, I don't think there was a bank out there who candidly took us seriously at the time. It was a view that there's not a lot to do in this sector. There's 3 or more very strong incumbents with a low cost of capital and very capable teams, all of which is true. But our view is that the sector is underserved from conventional funding, and we really believe that we had a slightly different approach as to how we would build our business, both from our mining networks and our businesses where our careers, we spent time in those executive seats like when I was Barrick's CFO and the gold price had plummeted down to 1050 the month, the business had lost money over 3 years prior to that and the balance sheet out of USD 13 billion of debt, I wasn't about to issue more debt. We're trying to pay down debt, issuing equity would have been super dilutive selling assets, some of which we did, you were selling EBITDA and very often, you're making your credit metrics worse. So a stream as part of that solution and structuring it was part of the insights. I've seen that competitive landscape was, I think, quite unique to us in many ways. But importantly, it does put you in the seat of that executive trying to think about these trade-offs in a substantive way and understanding that the form of funding really is competing ultimately with debt and equity. And you'll see that we built this company with the majority of our deals, and we've seen over 800 opportunities over the last 8 years now to build the portfolio we have. The majority of these deals have come by to leather and putting ideas in front of mind is where occasionally, there is a legitimate use of proceeds, and we can structure a deal that meets their requirements and also gives our investors a very good investment and return and adds to the portfolio. Part of this is we didn't go up as a team really in Toronto and a more narrow, say, Americas-centric and gold focus, a lot of the businesses I came to Canada when we took over the Falconbridge, for example, to be CFO for the Global Nickel business, the insights for polymetallics, the networks from around the world that has enabled us to do that work has really been, I think, very helpful in sourcing deal flow, but also in being able to diligence these opportunities. So we've seen that. I think as a bonus, we've really deployed capital very carefully. In theory, you're trying to be countercyclical. And you can see the growth that we've developed because I think in a sector where everything sounds world-class and it's low cost and I think it's important for investors to go back and see what management teams have said and then what they've delivered. And I believe we are delivering what we said we would, and you'll see that in our growth. We are shareholders first, I've talked about the insider ownership. We focus, and you'll see this in our short-term incentives, very much on the short term on the scorecard. That's a very important part of who we are. And then I think strategies often sound fairly undifferentiated. But the culture you create, the level of engagement, ownership in your team really can make the difference. That can be the X factor. And I do believe it is at the heart of really the performance we've been able to demonstrate a lean, highly motivated, talented team with deep experience coincident more than half of my team have come out of places like Barrick, some of which guys like John Cash, helped build Goldstrike back in the day. We've got people that have got experience well beyond the size of this organization that really helps us as we think about capital allocation, due diligence and investment. I think we've demonstrated discipline on this. And our money backgrounds have been a very key part of how we've gone about building this company sourcing and executing. And sustainability I already talked about. We try to make this authentic. We had a lot of well-meaning hand holders during our IPO with checklists, we religiously avoided that. We're not going to blow with the winds to what the latest fad is. We're really trying to focus on authenticity and how we go about as part of the mining ecosystem, deploying capital and partnering. So this is what we've got today. Yes, you'll see well diversified. We do play primarily in good locations like Australia where our largest concentration by value is located. And then you'll see by a number really in the United States and in Canada, but most of our value concentration is in the Americas and Australia. We will go elsewhere if we've got great geology, good partners, good mineral endowments and a privilege to operate with the right commercial structure that gives us a sensible risk reward return. This topic, as you'd appreciate, in the last 6 or so months has been a core focus for almost every investing engagement we've had as to how we think about country risk managing that. And I think you can see it in our portfolio, part of it's a diversification story, but really, our primary assets are very well located in great jurisdictions like Australia.

So Shaun, could you explain how the portfolio came to be. You're in Peru, Colombia, El Laguna, I believe is Honduras in Mexico, but you have less exposure, for example, to Latin America than most other companies. Just explain kind of how it all came together with deliberate or not deliberate actions gave you that geographic spread.

So look, I think, John, as you'd appreciate, first and foremost, we've got to live the best deals of the deals you can do. And so at any point in the cycle, at some point, you're doing balance sheet repair, liquidity improvements. There's always mine development opportunities. And I think you could blow your capital on an irresponsible way on doing too much of that at any given time. So we've been very discerning as to how we thought about that. And then occasionally, there's acquisition opportunities. We tend to fund those from time to time where you're part of the capital stack. So as you appreciate, these things happen on the tone scale that happen. I think we found as a public company just a lot more passive deal flow coming to us than given our increased visibility perhaps then we had when we were private.

When you say passive, you mean the people call you and you now take an action.

Yes. So the problem with some of that is -- and I say it's a problem, we just spent time in December as the team just reevaluating our strategic choices, reconfirm those as being relevant to the ones that we had when we created this company, but also thinking about our track record. And what is the actual live experience of our portfolio performance against what we underwrite. And that's worked out, I think, quite well compared to what we'd looked at. So we were very pleased to see that. But I think part of that is around how much of your time, your actual physical internal resource do you put on things that are proactive, which is how we built this company, the outreach to minus where you think -- knowing what you think you know about their company, you can add the new stream to your portfolio, we're helping them with some of their strategic imperatives and less time on some of that stuff that just comes in every single day, which often is I'd describe it as low calorie. So we've got a lot more of that. And I think a lot of that is noise. So you have to have the discipline to focus on it. But to answer your question, our strategy, I think we've lived it in execution. So what does that mean? It means we wanted to deploy meaningful checks. We are not in one of these incubated businesses or guys that are accumulating royalties on the smaller end. There's guys who do that well and we just don't want it. So we wanted to deploy meaningful capital to this space, often by product related. So our first deal, to your point, was Cerro Lindo down in Peru, a VMS-style deposit, about a 4 5-hour drive from Lima. We stream a silver byproduct on a copper at zinc mine. And it is nonstrategic to the team. They have an incredible track record of very low capital development there, and they've done this in a very good way with the communities and the environment in mind. So all of that was fantastic. We've already recouped our initial capital investments on it, and they've demonstrated a great track record of reserve replacement. But that was the genesis that we closed, we started this end of April in 2016 and by December, we had already closed our first transaction. So our first real revenues from that came in, and that was around 30-odd thousand ounces a year in the form of solar were coming in through Cerro Lindo at that point. So in that year, we are highly concentrated in 1 country and 1 commodity, silver. And then you can see how this portfolio is diversified and grown from that. Our second investment, just to give you a sense of the opportunism was a greenfield project on the eastern border of Mongolia in the form of ATO. And here is an example where there was no way for a lot of money. This management team could take this very simple, technically small pets, heap leach opportunity and be able to finance it on the TSX. So we found the opportunity, we diligenced it. We accessed our networks. We help them IPO. And we underwrite an investment case at the time with a high-teen return 1,250 gold size for the portfolio as you think about country risk, it was a million investment. And we importantly, just given our unknowns around changes in administration, we wanted to get our initial capital back within 4 years and then benefit from the optionality beyond that. And that's really what's happened. This team, notwithstanding challenges during COVID, bought center production we've recouped that capital, and we've seen the mine life get extended by 12, 12.5 years as they enter into fresh rock expansion, which is really at the early stages that they're underway. So what I'm trying to give you a sense of is we're taking calculated risks. We're capital allocators. We're investors. We are looking to focus the bulk of the business on things that are cash generating or ideally permitted 2 to 3 years to cash flow usually. And we want to make sure that we can participate with the bulk of the portfolio from a NAV and investment point of view in those sorts of low-risk opportunities that creates the flywheel for cash generation that we can continue to grow and we invest with over time. And so you'll see that, how that's unfolded. And also we've stuck to our listing. There were periods where we would have investors and others come to us to say, "Hey, battery metals is high. You should dump this gold stuff and just focus on battery metals." We're unashamedly -- we're nearly 100% gold and silver, the rest is copper and nickel. And a lot of that, my best way to help the energy transition is to do a gold or solder stream on a copper mine, for example, which we've done several. We have the career experience and networks to do streams and royalties on PGM or base metal assets. We have done some, we've got room to do more, but we've not blunt the win we stuck to the strategy. And then to your point as well, you can see we've been very thoughtful about our geographic location and diversification. So Northparkes in Australia is our biggest cornerstone, 25%. That's not too different to what you'd see with Franco, Wheaton, Royal from a single asset concentration point of view. But this is New South Wales, it's a 35-year asset with decades ahead of us. And then nothing above 10%, so nicely diversified and rate geographically. So this is just doubling down on that. You'll see here some of the cornerstone assets, you'll see a mix of base metal mines like Northparkes, where we stream gold and silver. You'll see, again, base metal none like Cerro Lindo, couple examples where we stream silver. The PGM line, we reached out to this management team several years ago, where they just bought out Anglo Platinum from a joint venture on the Styldrift mine, which this is a decade of investments in the infrastructure to create this mechanized underground mine. And we helped them displace high-cost debt. We've got a 3-decade multi ore source low-cost gold stream on a [indiscernible] message that's been taken out recently by implants. Another example where we do really conventional funding and it was practice deliver that opportunity. And then there's royalties on like Fosterville, Young-Davidson and others, but a mix of both royalties and streams, old mines, but also the bulk of the ounces coming really from polymetallics. And then I would be remiss if pointing out that ultimately, we are not operators. So we are highly dependent on the quality of the operators that we have as a guy came out of mine many companies like BHP Pilot extradite [indiscernible]. We made a lot of shareholder value over time in Extra, for example, by acquiring assets out of majors and then taking, say, third or fourth tier businesses, investing capital might be upgrading talent and taking those into second or first quartile with great mineral endowment. And so I think it is important as we look at these opportunities and these operators to actually look beyond the brand names to the individuals and the mining teams in these individual assets. And we do a lot of due diligence on that. So it's not as simple as just saying, "Hey, great, we've got operator X on the grades. They're listed in there big." It does come down to those individual management teams that we put a lot of work into. So there's a lot of other as you'd appreciate often in the mining sector. So I think what matters is and it's the only thing that has when you're private, it seems to be less of an issue somehow when you're public, but it's what have you done for investors lately? And what is your track record? I mentioned again, we started with nothing in '16. This is what we've delivered. And you'll see it's been consecutive records for the last 7 years. Our actual ounce growth has been the highest in the sector, 20% year-on-year. We're projecting -- I think we're the only issuer amongst intermediates and seniors this year to actually project further growth in 2024. Everyone else is down and you'll see we're projecting a growth beyond that, which is really coming mostly from ramping assets. So as you think about risk for that growth, it's not like we're waiting for permits to come to deliver this or a lot of uncertainty on those, the bulk of that future is really coming from assets that are producing in that portfolio have reserves associated with them, and I well advanced if there's a growth component or a contingent proponent on it. And then this is before you factor in the nonproducing there's more than 200 actually nonproducing assets that it's on a different time horizon. What subset of those will continue to deliver growth for us? So this is a bit of a window into that. You'll see that we've got several assets in here that are ramping, that really delivers the bulk of that. So Northparkes, I'll talk about that more in a minute. But you'll see we've the E31 north. These are shallow open pits that are a multiple source mine. So you have to blend this as you think about Buritica, when we invested, it was a 6.4 million tons per annum asset, it's now at 7.6 million tons per annum, E31 north, I'll touch on a minute, but those are high-grade zones from a gold perspective. We will see that flowing through this year and next into our ounces from this operation. And then a little beyond that horizon is the next major ore body on E22. That's also higher gold grade, roughly triple the running mine grade that will come in. So you'll see considerably more ounces as a result from this cornerstone asset. Assets like Beta Hunt that have been ramping. The Buritica mine steel growth is ramping. So we're seeing a lot of that. And then ATO is focusing on this Phase II expansion. On the development side, there's a list here, you see 41 assets in that category. There's a subset in here, including Hope Bay, with Agnico and Eskay Creek and others that within the 5-year time horizon, some subset of these represent really good ounce growth opportunities for our portfolio. And then there's things beyond what's captured, I believe, in NAV and ounces in that exploration category. And this is before you really factor in, we've got a lot of dry powder. We grew this company through deals, and there's, I'd say, at the moment, when I look at our deal pipeline, this is, I think, the best yield environment that we're living in right now that I've seen in the last 8 years. So it's a very interesting environment.

That's a pipeline because the juniors can't sell stock.

That's part of it. But that's always been a bit of an issue, candidly, John. So I think it's a bit more -- you would have seen in that 2014, '15 time frame, you saw these, frankly, the majors doing large streaming transactions that really benefited the big 3, almost generational assets that have been super lucrative to those portfolios. We then saw those disappear roughly around the time we started, which is part of the reason I think Bay stream thought there wasn't much to do in this space. I think we've seen in the last 6 months -- frankly, in the last 3 months, we've seen major companies and intermediates in base metal businesses, PGM businesses take massive write-downs given what's happened to pricing and everything from nickel to Lithium to PGMs cobalt. So I think there's opportunities we're seeing starting to reemerge for the first time in our existence where companies are looking ahead to their growth requirements, their capital requirements, their funding sources, their on equities. We have seen big divergence in underlying commodity prices in gold except for example, and the underlying equity values of these companies. So equity issuance, if you can do it is more expensive. And if there are polymetallic or things of that nature, the ability to boost their balance sheets or repair them is on display. So I think it's a very interesting time right now. I want to review this slide because some of the listeners might not recognize all of the property names.

So the expansions are 2 in Australia, 1 in Mongolia and 1 in South Africa. The development projects are 6 in the U.S. and Canada, one in Ivory Coast, 1 in Chile and Preska, Orion also South Africa, right?

Yes. That's right.

Then the exploration are 5 in the U.S. and Canada and 1 in Chile. And some of the U.S. projects might be considered risky. Minnesota has not permitted a copper nickel project yet. Some of these are earlier stage. Queensway doesn't have a resource yet, they set at PDAC giving a paper that they're going to drill 650 kilometers before they do a maiden resource. So they have a lot of data. TANGEN is 4 million ounces at 1 gram, Lake Shore Gold that went from Lake Shore to Tahoe to Panama and Cipher, I don't remember who it was the late short front. Some of these projects have been around Buffalo Valley was in Santa Fe Pacific Gold in the '90s. So they're not all fast moving.

So let's think about producing assets that are maybe of great mineral endowments like Northparkes, just as an example. So 35 years in operation, decades of my life ahead on a 26 square kilometer package, more than 0.5 billion tons of resource at reserve grade mining at 7.6 million tons, and they were at 6.4% when we did the deal a while ago and multisource just acquired by Evolution in a great location. So they're align the potential for throughput expansion. And when you consider that the stream is in a prospective belt and it's not on 26 square kilometers, a sign over 1,000. That's a pretty good way to start thinking about future life extension expansion and our investors to participate in that. At least that's how we think about it. So when you look at our growth from assets like that and the growth that I just projected over the 5 years plus, and you consider our track record that hasn't come from us saying, "I'm really banking here on those 41 development assets and 154 exploration assets coming in anytime this side of my retirement debt." There's some subset of those there will. But when you look at the growth that we're projecting in the portfolio construction and risk, this is a sector that has not had a great track record of delivering things on time and on budget. I've always been on the other side of the table, mining is hard. And the reality is you want to develop a portfolio where the odds are hopefully more in your favor than not. So your point is exactly bang on, and we've not constructed the portfolio with that in mind. My growth that I'm projecting is not contingent on some of these things that are being listed in that development and exploration phase coming into this time horizon that we've projected. There's some subset of those that will. So for example, I think, look, Northparkes, ATO, Beta Hunt and Polo Sur these things are producing they're operating, and there's so much more ahead of that. So I view those as low risk. And when you consider the proportion of our ounces that are coming from things in production, it's in line more with the majors that traded a premium multiple. So 70%, 80% of NAV is in that category, and that is not accidental for exactly the reason you're alluding to.

4 of your development projects are mine restarts, Hope Bay, Eskay Creek, McCoy-Cove and DeLamar. So the geological is down pretty cap in South Africa, I don't know as well. And the South railroad is right in the middle of the Caledonia trend, So they're established districts.

I'll use Price as an example. During PDAC I was at a CEO event where there was a go from the U.S. administration President talking about some of the gaps on how they're going to hit 2035 copper supply and other things. And if you think about what's happened in Panama recently with 1.5% supply falling away, ongoing grade declines and underperformance on supply side out of Chile and elsewhere. And then even recently in Zambia with the power cuts, 25% power cuts or so supply is hot. And when I look at the ability of, say, Greenfields in assets like copper assets to go from discovery to coming online, that's nearly 2 decades. So I think if you've got greenfield situations where these things have perhaps been exited during low points in price cycles, you've got the right mineral endowment and perhaps a lot of sun capital, that is a great way for euro-term supply, particularly if it's on private land, it's permitted. I think that's just a sensible way for that to come on. So exactly to your point, there's several of these. Like we know that Agnico is doing extensive work, the right operator in that location and a mine the team are investing substantially in that. The projections I'm seeing are perhaps something more towards the middle to the back end of the time frame that we've got in that 2025 unrealized coming online. And they're talking about perhaps a 4,000 ton a day operation and being able to bring that online. That's just a very useful geo contributor that will, I think, in all at come in at some point during a 5-year time horizon for exactly the reasons you mentioned, Eskay Creek, similar sort of thing. Golden Triangle, I think the mine operated from 94 to 2008. It's got great infrastructure, all year round access, a 270 power line. And it's got 5.5 million ounce resource on that with gold equivalent on a 4.6 million ounce of gold equivalent reserve. So that, at the moment, is looking like a 12-year life of mine. The first 5 years alone, they're looking at 455,000 ounces of gold equivalent on that. And the metallurgy is seemingly straightforward good recoveries. So those are the sorts of assets plus the potential for a regional play that I think have a much greater probability of contributing meaningfully. But if you look at the diversification chart again, you'll see that a lot of these things as a collective come quite nicely in, but it's not like it's a cornerstone asset as a collective, these generate really nice ounce additions. And when you look at the growth that we're putting into the public domain, we aren't just aggregating what the operators adding it up and saying, "Hey, this is where we're going to get to because that 5-year outlook would be some tens of thousand ounces higher." What we're doing is we're handicapping given the realities of the sector. So I can go on a bit Prieska is another example. There's 100 million tons of bauxite before they even get into the sulfides. The infrastructure, I was undergrounded just a few months ago again. It looks like they lifted yesterday. They've got some deordering to do. They've got to get their funding and their plan in place. That's an option purity at our election to invest $80 million if we're satisfied with the life of mine plan, the partnerships. We put a small check in in order to secure that alongside the IDC. Those are the sorts of things if you can an option that makes sense, the right partnership, the right plan like those odds and I like that optionality.

I'm wondering about recent trends is for countries to change the rules. And you're almost not in any of these countries, but Kiwi proposed 2 constitutions and then decided Pinochet's rules from the '80s were better. One of the things they rejected was quasi nationalism, where our state within a state, which is in the constitutions of Bolivia and Ecuador where you were not where they essentially have indigenous sub-countries. Then over door proposed a ban on open-pit mining in Mexico, new open pits. The same speech offer to raise the minimum wage, improved pensions, give free fertilizers, increased free scholarships for universities and it was sort of a sunset manifesto. Guatemala proposes to revise all mine licenses. The word in Spanish was revisa, revised, not reviewed. And Alishia my assistant is Mexican translates the press for me in South America. So we try to read in Spanish. In Canada, the constitutionality argument presumes that the executive was correct. And essentially argues that the executive had no right to make a mining contractor permit and wanted to have at each phase, judicial review, legislative improvement, indigenous review and national referendum. So you're very lucky or very prudent or very wise in the countries you're in or not in. Are any of your countries are jurisdictions changing rules.

I think what we can show now with literally 8 years of hindsight is we have been thoughtful about issues that you've mentioned because I think in my career, in 2 separate companies have been, I've had to work through expropriation situations where you're taking governments to task the Paris Court of Arbitration elsewhere you finally get the awards, but it takes time. I'd like to think that [indiscernible]will prevail in Panama, for example, and that First Quantum and Franco by extension will ultimately a common sense will prevail, just even just from an economic point of view. But when we look at country risk, I do think people do themselves a disservice sometimes looking at it just on a national level at the moment in time. You've just like several examples of places that 1 minute, it's fine, next minute, it's maybe not. I think that if you've got an environment like Australia, like Canada, to a lesser extent, the United States, but where mining is actually an integral part, a pretty meaningful contributor to GDP, and there is actually an ecosystem, it's a meaningful employer, that is a different risk profile to countries where perhaps there's large mines, but they maybe have 1 or 2 meaningful mines that we've seen play out in Panama. And just on that, you mentioned Minnesota, like Tamarack and the team have got back in with the , the DOE grants, the Department of Energy, Department of Defense, they are looking at alternatives for processing outside just because of some of those complexities. But I think they're on a good footing. And it's pretty hard in some parts of Canada to go and get permitting, same as in the United States, I think the specifics do matter. If you are looking at where Cerro Lindo is located and how they engage with communities and that part of Peru virus, the challenges that M&G has had recurringly over the last 10 years or more, where you located, who the communities are the context, the infrastructure, all of those should factor into that risk assessment and also how you actually go about your privilege to operate. It's part of our investment and decision-making process. So I've also seen when Xstrata we took over Falconbridge and then I saw later in Barrick in the Dominican, after the capital was invested, then essentially the government renegotiated. And that's the point of maximum apparel. The job has been created. The capital is invested. This is highly a novel or new thing, but eventually sale prevalent went forward. And that's highly unique. We've seen it elsewhere. What we have seen just a year or 2 ago, where investors saying, who Peru, this changes occurring there and what about Chile to the point you just raised. But we saw that in Australia back in 2010, a great jurisdiction. But ultimately, what happened in Australia was maybe the best example where the mineral resource tax, super profit tax really the communities actually helped lobby around the mining companies. And ultimately, that was portents, common sense prevailed and the importance of mining, particularly in more remote communities, I think, on the day. And I think as a sector, we don't do a good enough job of advocating for the essential nature of what we bring to society and also use our advocates outside the cities as effectively as we can. So there's a lot in there, but I think it's an important part of our portfolio construction to not just say, "Oh, great, Canada is a wonderful place to have an investment." In which it is, you have to really look at the specifics, whether it's in any of those jurisdictions you've outlined, which, thankfully, we don't have, I think, any exposure to. But I think that's also the benefit of having a diversified portfolio. It really does matter and who the operators are and how good they are at being able to manage the local circumstances in that region. Just to put some of those projects, I won't dwell on the slide, but you can see some of the things that we think would fall within that sort of 5-year horizon, which are not in the core ramping components. On an individual basis, none of these are substantial ounce contributors over there. But as a collective, that diversification ends up quite nicely. And I've seen even in the last year, there are things in that nonproducing category that have ended up coming into the producing category, which we weren't forecasting. So again, I think the benefit of stacking yards in a portfolio is quite useful. I think Franco has had a good history of that. Most analysts can't keep up with just so many assets the only model the more material ones. I think over time, if you include these, it's almost like a financial slide at hand where when you incorporate your more material assets into guidance and over time, these things below the readout can come in, you have the ability to incorporate those. And hopefully, if you demonstrate more of the track record, not only of meeting guidance, but exceeding guidance over time, and that's really our focus and ambition. So track record here matters, just to orient you on the slide, I remember Mick Davis, who I worked with for a couple of decades and was on our Board as a mentor of mine. But I often say it's easy to make a small fortune. You just have to start with the big one. And so the point being just drawing money around to generate growth has been a course for the sector sometimes. This year, we've anonymized but these are the intermediates and our seniors in the space. Bear in mind, they all have capital deployed before we existed because we're the newest in the space. So this is the entirety of our capital deployment, and there's also predates in a meaningful way. But you'll see that our capital deployment is in line or even behind some of those. But in actual ounces to date as well as in the 5-year outlook, we generated roughly 2x to 4x the level of ounce growth over this period of time. That's just empirical. It's there. So it's not like we bought our way into growth. I think we've been fairly astute we're generating cash yields on net invested capital, and they're very much in line with the best in the space. And that's part of how we've kind about building this portfolio. And then again, if you're a private company, you don't get the benefit or at least the benefit or the dismay times of staring at a Bloomberg screen being the happiest at on any given day, it would to be done. And this slide, some of our cornerstone assets is the gray buys being the cash hectare rose at a point in time. And then on differs, the dark curve quite below is how much cash we've harvested to date. And indeed, on a go forward, these are consensus numbers with mine life extension that the math other streams or royalties at any given time. And you'll see a mix year by design of longer-dated assets like Impala Bafokeng. Northparkes is a great example where after the turn of the decade was sort of the millennium, there you had about 1 million ounces of gold in reserve. Gold again is a high-product over the ensuing 20 years took out about 1.1 million ounces, and they've got just under 1 million ounces of Golden reserve. So having assets like that in the portfolio with a great cadence replacement, harvesting cash and then being able to continue to extend mine life. Those are really nice ballast, if you will, to the portfolio. And then you've got these token investments like a metal with ATO, $28 million check. We've already harvested 41. There's a 12.5-year extension. That's a pretty good multiple on invested capital. And that's how we've planned the country risk aspect and some of those components as we constructed the portfolio. Cerro Lindo, great we've recouped that investment. They've continued to extend mine life, no great assets. And I know John we spoke last time when I was on your conference about Buritica because I know you were quite close to that. And that's one where for an asset we have expanded 30% over where we underwrote last year alone, I think they added about 1.2 million ounces through exploration. We've really recouped that investment, and I think there's so much more to come. That's not visible in the NAV just given the relative scarcity of disclosure from the operator these days. Fosterville will be another one with the work that Agnico is doing there at the moment. We underwrote that just this one was being unfound or unfilled. And you'll see that that was before there was the Orion segment. I think they've invested about USD 250 million on the declines in exploration. We look forward to the updates because I think it's a sort of asset in the portfolio, which is quite likely in years to come to unveil things that are not included in now at any point in time. So Northparkes, I'll spend a minute on this. It is a cornerstone. We had China Moly is really great operators on this asset. But really with their disclosure requirements, as almost as if this didn't exist, I think, in the minds of many of our investors, particularly in North America. So Evolution acquired this in December, I was actually in the CFO role at Barrick when Jake and his team acquired CAL back in 2015, and they've done a great job on that asset. And in fact, I was in Xstrata when we took over MIM, when I was at Ernest Henry list, it was an open pit and they acquired that, and they've got some great expertise in [indiscernible] underground heating. So the right address, the right operators in that organization with the track record and talent, and we're really I'm very excited to have their team on board with that asset. And I think it's more material to them in their backyard. And so we're looking forward to working with them to actually reveal what we see is just an incredible top-tier assets for anyone in the sector going forward. So that's a material development for us. Just to reorient you, this, again, it's been operating 35 years. There was the first fully automated underground mine in the world and so incredibly sophisticated. When Ronamine grade owned it prior to CAL they drive this extensively down to 200 meters looking more for shallow open pits. And you'll see there's a mix of open pits and the segala porphyries, so multi-resource open at depth. They're currently really extracting mostly from E26 lift on north the E48 is open at depth, and we expect that Evolution will probably do some exploration there and elsewhere as well as actually focus on some new infrastructure shallower targets on exploration, similar to the playbook they use at CAL. And then the next capturing touched on earlier, will be 22 more towards the end of the decade. But yes, we're really looking forward to seeing what Jake and Lawrie and the team do on the asset. Given the multi-source nature of it. So to put it in context, the Ronamine grade last year was around 0.16 grams a ton. You'll see that E22 that I mentioned as sort of the next large porphyry online. And it is conceivable that instead of doing a block cave that Jake and his team the sort of referenced possibly doing a sublevel cave to access that ore body sooner. That's nearly triple-grade there, 0.37. And I did mention E31 north, we'll see that, that is 5 to 6x grade, which are they're mining now in the next couple of years. So that already contribute very nicely to the ounces that we will receive over the next couple of years. And then yes, this is just again a bit around Evolution's track record at Cal, 340% increase in reserves in the ownership, a lot of good exploration success, investment in the ground and expansion. We've been very astute in adding value for their shareholders in the necessity. On the sustainability side, I think I've touched on this a lot already, but for us, as a private business, I view the ratings we've received now is really the report card, not pandering to an audience, but really the output of the work we've been doing. You'll see what that's meant is we were fourth and now we're third in 117 global precious companies under Stanlytics. We've got good ratings. And we've continued to invest very proactively in scholarship and other programs. I don't know we have touched on this with you previously, but I wouldn't be talking to you today if scholarship programs from mining companies were not available to me for my engineering degree and for my MBA in the states. And so I feel there's a lot less of that in the mining system where we need to attract and develop talent for this sector. And so that's one way our company can contribute both to the mining ecosystem, but also to the frontline communities and the employee bases of our partners. So we really focused on that as a real priority within this. And that's just some of the ratings that crude as a consequence of our work. So this is who we are. I mean it's been 8 years really next month. We've grown ready to, I think, this year alone at the midpoint of our guidance range where the intermediates, when we started in 2016 where we had nothing, we're already producing 330 plus and 50-plus ounces a year on gold equivalents. Last year, we did 105 and they were in the 90s. And this year, the midpoint of our range would be about 26% ahead of what they're projecting. So I think we've delivered substantively. We've got 234 assets now, highest growth rate that we've demonstrated in our sector, strong cash margins, the best balance sheet amongst the intermediates and the best dividend, highest insider ownership and a lot of growth potential in what is, as I said, the busiest pipeline with a good balance sheet to continue to play for. So that really is our story. And happy to answer any questions that.

Certain questions are welcome through the question box in the upper right-hand corner of your screens to the listeners. Shaun, are there any properties where you have step downs or caps in your royalty or stream agreements?

We have some. We've seen those. I think we've seen some of the majors recently issued some of the guidance and you're seeing step downs in the collective portfolio volumes in the 26-plus time frame. So those features are there. You have depleting ore bodies sometimes it step downs. But I think as a collective in our portfolio, just to contextualize, you see continued growth and beyond the 5-year view, our internal projections of for ongoing growth. So I think that's an important point just…

Are there any individual contracts that have stepped down for you?

There are. So we've got a few. Cerro Lindo is the most obvious one, which just over 19 million ounces where we still got about 4 million or 5 million ounces. We have a step down. We have a right of first refusal on that contract for any further stream investment or otherwise. And I think we're very well positioned if there was an opportunity to offset that, but that is one -- that is baked into our guidance numbers. So when you look at the outlook beyond it's all factored in. In Northparkes, there is one, but you can think of that as pretty much in a 30-year time horizon before you would see that kick in. So there is one, but it's been put outside of, call it, the visible mine life, at least on a reserve basis. So you can think of that there. And I don't know there will be, by the time that step down kicks in, but it's going to be a hell of a long time from now. We do have one cap that we've inherited, which would be Kensington, which is a thing which we'd expect to contribute some ounces which has been currently in our projections.

That's [indiscernible] in Alaska?

Yes, that's right. They're operating currently. I know they're doing extensive work on that currently. But yes, exploration work to continue that. But yes, that's something that should kick in in due course for us.

So is Fosterville, the shortest mine life among your operating properties?

I'd say on a material basis, it's the short is a visible mine life. I look at Fosterville -- you'd appreciate this, John. You get some of those mines like a big open pits or a mine like Northparkes that has -- or probably at Impala Bafokeng in South Africa which has decades of visible mine life based on the reserves and what's out there. But then when you look at the resources and the land packages, the expectation is even there that you will expect to see a lot more to come just given the cost structure. But then you get some of these mines that are at a 2- or 5-year visible mine life for the last 20, 50 years, whatever it is. And so first of all, I think a bit more in that light. It's one that at one point was -- when was in its head, it was contributing about 10,000 GEOs for us a year. It's coming in a little under half of that. They've indicated at Agnico that they're looking at exploration to demonstrate more sustainable, longer life for, say, 170,000 to 200,000 ounces per annum. And I think they'll be unveiling their plans fairly I think later this year or 2025 as to where that is. And then also deciding whether or not they include this as a continued part of the portfolio divested. I think this is very much one of those assets that you will continue to see that increase. We do have some others like they're very small in Australia Star City private business. We've just actually increased our investments in last year. It's by one of the wealthiest funds in Australia called Morgans, the various cuts and we really like what we've seen there. So even though the visible life is seemingly quite short, what we see in the geology and beyond is very exciting as well as in their partnership. So there are some small things that usually would be below people's radar, but postal is probably the best visible example.

We have a question about the ownership Triple Flag, how much is Elliott versus others?

So Elliot, just for those who are less familiar, so you remember Elliot was our sole capital provider under management's equity when we're private. So they wrote all the checks until we own private management earned our equity by virtue of exceeding the cost of funding on our free carried interest. So when we did our IPO, we bought in that USD 264 million. At that point, Elliott diluted down through the IPO down to about 82%. And we almost had the opposite challenge that you see with a lot of growing companies, most miners or companies like this start off with the retail following and over time, get research following and then they calculate institutional for end we had the opposite issue, very little retail, obviously, a large media position. And then on the , we had the really some great blue chip investors from the Qataris where I think it might have been the first time we saw them invest in IPO since the Genco, Fidelity and others like that. So our liquidity was and still remains low, but when we did the Maverix transaction, that increased our liquidity about tenfold that we saw substantial index inclusion. There's obviously a lot more room for that to grow. And we saw a number of accounts that liked our story, but we're liquidity-constrained you came in George Gabelli and only one and others who come into the story at that time. So I think that's our trajectory. Elliot, at that time was diluted down from 82% to 62%. And you remember there were a few strategic blocks with our Mavericks have grown. Very supportive shareholders on our transaction we like Michael Simon, the Pan American sold his block because he was doing the Humana deal. We know Kinross obviously a stake which they're very patiently held until that enlightened that position. And then most notably, is Newmont. And that about a 30 million share position, they placed $10 million of that when they're working on the Newcrest transaction. We had a 5 million share residual, which they offered really to either ourselves or Elliott take out the overhang in the market, which earlier did. So that takes earlier now to about 67%. Elliot has not sold a share. We've been at it 3 years in the public round now. We had a lot of people saying, "Well, when we go public, Elliott, this is their exit." But Elliott, as I think you know, John, is an evergreen fund, they've been at it for over 40 years. It's really a single quarter capital, about $65 billion AUM. When I started with them, it was about USD 29 billion. It's not like the resource funds that you see in the mining sector and the private equity side, they usually invest in 5 years and have to find a way to liquidate and say 2 or 3. Elliot's held some positions for 30 years. So they're value focused. There will be potentially a source of sensible liquidity. We're either going to continue to grow in a nondilutive way like we did on Maverix, which will take the position down and grow liquidity or perhaps there will be a source of secondary at the right share price environment.

So Shaun, we've got a little over an hour, and I need to open up the window for the 12/15 speaker turning the coach with Discovery Silver. Thank you very much. Congratulations most to stand out of trouble.

Yes, it's a daily task. We'll continue to do our best to do that. Don't do that stuff so well.

Thank you. It's good to see that you got on so well. Bye.

Thanks, John. It's great to talk to you. Bye.