Executive Summary / Key Takeaways

• Triple Flag Precious Metals Corp. (TFPM) demonstrates a robust investment thesis, leveraging its capital-efficient royalty and streaming model to deliver consistent growth and record cash flows, particularly in a strong precious metals market.
• The company achieved record Q2 2025 results, with nearly 29,000 gold equivalent ounces (GEOs) sold, record adjusted EBITDA of $76 million, and record operating cash flow of $0.38 per share, positioning it firmly to meet its 2025 guidance of 105,000 to 115,000 GEOs.
• TFPM's strategic focus on accretive acquisitions in mining-friendly jurisdictions, including the world-class Arthur Gold project and several near-term production assets, underpins its organic growth projection to 135,000 to 145,000 GEOs by 2029.
• The company maintains a pristine balance sheet with zero debt and substantial liquidity, supporting a progressive dividend policy—including a recent 5% increase to an annualized $0.23 per share—and opportunistic share buybacks.
• TFPM's "free carried optionality" business model, characterized by consistently high margins exceeding 90%, acts as a significant differentiator, insulating it from direct operational costs and inflationary pressures while capturing exploration upside.

The Enduring Strength of the Royalty Model in Precious Metals

Triple Flag Precious Metals Corp. (TFPM) operates at the intersection of capital markets and mining, employing a highly specialized royalty and streaming business model that offers investors unique exposure to the precious metals sector. Founded in 2016, TFPM has rapidly established itself as a significant player, building a diversified portfolio of royalties and streams on gold, silver, and other metals. This model, which involves providing upfront financing to mining companies in exchange for a percentage of future production or revenue, is inherently capital-efficient and designed to thrive across commodity cycles.

A core differentiator for TFPM, often considered its "technological moat" in a business context, is the "free carried optionality" embedded within its royalty and streaming agreements. This unique structural advantage allows Triple Flag to benefit from its operating partners' exploration successes, reserve replacements, and asset expansions without incurring any additional capital or operating costs. For instance, when an operator like Westgold (WGX) declares a maiden resource for a new zone, such as the 2.3 million ounces at Beta Hunt's Fletcher Zone, Triple Flag's existing royalty immediately gains value without further investment. This model consistently delivers high margins, often exceeding 90%, which insulates the company from inflationary cost pressures typically faced by direct mining operations. The tangible benefit for investors is a direct realization of higher per-share cash flows, particularly in a robust gold and silver price environment. This financial architecture is the cornerstone of TFPM's competitive edge, enabling superior cash flow conversion and a resilient business structure.

The broader industry landscape for precious metals remains compelling. Gold and silver prices have been strong, acting as a consistent tailwind for royalty and streaming companies. The royalty and streaming model itself has gained increasing acceptance as a preferred financing mechanism for mining projects, further expanding the opportunity set for companies like TFPM. While the company made an opportunistic, smaller investment in a lithium royalty, its strategic focus remains firmly on precious metals, ensuring pure-play exposure to these favorable market dynamics.

Competitive Positioning and Strategic Advantages

In the competitive landscape of precious metals streaming and royalties, Triple Flag Precious Metals holds a solid position as a mid-tier player, distinguishing itself through a focused portfolio and regional expertise. Its primary direct competitors include industry giants like Franco-Nevada Corporation (FNV), Wheaton Precious Metals Corp. (WPM), Royal Gold Inc. (RGLD), and Osisko Gold Royalties Ltd. (OR).

Triple Flag's strategy emphasizes agility and a targeted approach, particularly in mining-friendly jurisdictions such as Australia and the Americas, which accounted for approximately 90% of its Q2 2025 revenue. This regional concentration, with Australia as its largest single focus, allows for specialized expertise and potentially more efficient asset management. While larger competitors like FNV boast broader diversification across geographies and commodities, TFPM's focused strategy enables it to be more agile in pursuing emerging opportunities. For instance, TFPM's price-to-earnings (P/E) ratio of 32.60, while higher than FNV's 26.55 and WPM's 19.18, reflects market expectations for its focused growth and strong cash flow generation, particularly given its zero-debt balance sheet. Its EBITDA margin of 108.88% also highlights exceptional operational efficiency, converting top-line revenue into cash flow effectively.

TFPM's competitive advantages, or moats, are multifaceted. Its diversified portfolio of 78 assets across multiple regions reduces single-asset risk and provides reliable revenue streams. This diversification, while not as broad as FNV's, offers focused expertise in key regions, enhancing TFPM's pricing power in niche markets and improving capital efficiency. Furthermore, TFPM benefits from strong partnerships with reputable operators and the backing of its subsidiary structure, which can facilitate faster deal execution and operational efficiency. This differentiates it from WPM's streamlined model by providing resources to adapt quickly, leading to improved profitability through recurring revenue.

However, TFPM also faces competitive vulnerabilities. Its relatively smaller scale and more limited diversification compared to industry leaders could lead to higher customer acquisition costs and potentially reduced margins in certain scenarios. This exposure is particularly evident when compared to RGLD's more mature and extensive global asset base. Additionally, TFPM's geographic concentration, while a strength in terms of expertise, could expose it to regional political or regulatory risks more acutely than a globally diversified peer. Despite these, high barriers to entry in the streaming sector—including substantial capital requirements, regulatory complexities, and the need for established relationships—help TFPM defend its market position.

A History of Accretive Growth and Financial Strength

Triple Flag's journey since its founding in 2016 has been marked by a consistent trajectory of growth. The company achieved its eighth consecutive year of GEO growth in 2024, boasting a compound annual growth rate of approximately 20% since 2017. Following its successful IPO in 2021, TFPM instituted a progressive dividend policy, increasing its payout annually, a testament to its commitment to shareholder returns.

Strategic acquisitions have been a cornerstone of this growth. The 2023 acquisition of Maverix Metals (MAMX) significantly expanded TFPM's portfolio, bringing in interests in key assets such as Koné, Eskay Creek, Camino Rojo, and Beta Hunt, which continue to be strong contributors. In late 2024, TFPM made an opportunistic $28 million acquisition of a 0.5% gross overriding royalty on the Tres Quebradas lithium mine in Argentina, providing near-term cash flow from a long-life project. The first half of 2025 saw further strategic expansion, including a $35 million tuck-in acquisition of 5% silver and gold streams on the Arcata and Azuca mines in Peru, and an additional 1.5% gross revenue royalty on the Johnson Camp copper mine in Arizona. All these new acquisitions are expected to commence revenue generation in the latter half of 2025. A particularly significant move was the acquisition of Orogen Royalties (OGN), completed in July 2025, which secured a 1% Net Smelter Return (NSR) royalty on the world-class Arthur Gold project (formerly Expanded Silicon) in Nevada. This asset, operated by AngloGold Ashanti (AU), has rapidly grown to 16 million ounces of total resource and offers exceptional long-term growth potential.

Record Performance and Robust Capital Allocation

Triple Flag's financial performance in the first half of 2025 underscores the effectiveness of its business model and strategic execution. In Q2 2025, the company reported record sales of nearly 29,000 GEOs, driving record adjusted EBITDA of $76 million and, critically, record operating cash flow of USD 0.38 per share. This represents a substantial year-over-year increase of over 50% in operating cash flow per share. The first half of 2025 saw total GEO sales exceeding 57,000 ounces. These results were bolstered by strong contributions from key assets; Northparkes, for example, achieved a record quarter due to processing higher-grade open pit ore from stockpiles, while Cerro Lindo benefited significantly from rising silver prices.

For the full year 2024, Triple Flag delivered a record 113,000 GEOs, landing in the upper half of its guidance range, and generated $214 million in annual operating cash flow. This strong cash flow generation is a hallmark of the royalty and streaming model, with TFPM consistently converting top-line revenue into cash available to shareholders, supported by its high margins.

The company's balance sheet remains exceptionally strong. Triple Flag exited Q2 2025 with zero debt and nearly $1 billion in total liquidity, expecting to be in a net cash position by the end of Q3 2025 even after funding the Arthur royalty acquisition. This financial strength provides substantial "firepower" for future accretive deals, with over $700 million available to deploy for new transactions.

Triple Flag is equally committed to shareholder returns. The company announced its fourth consecutive annual dividend increase in Q2 2025, raising the annualized payout by 5% to USD 0.23 per share. Opportunistic share buybacks are also a core component of its capital allocation strategy, with approximately 490,000 shares repurchased in Q1 2025 at an average price of CAD23.55.

Outlook and Growth Catalysts

Triple Flag is well-positioned to achieve its 2025 guidance of 105,000 to 115,000 GEOs. Management has expressed confidence in this target, even indicating that the guidance is robust enough to absorb any potential non-contributions from the ongoing legal dispute with Steppe Gold (STGO) regarding approximately USD 8 million in gold ounces in arrears.

Looking further ahead, the company projects significant organic growth, targeting 135,000 to 145,000 GEOs by 2029, representing over 25% growth from the 2025 midpoint. This growth is expected to be driven by brownfield development and advanced projects across its portfolio. Key catalysts anticipated in the second half of 2025 include the commencement of production at the Johnson Camp Mine, Arcata, and Tres Quebradas. Development progress is also expected at the E48 sublevel cave at Northparkes, with commissioning anticipated in the second half of 2025, and at the Koné, Hope Bay, and Arthur projects. The Arthur Gold project, in particular, is poised for further development, with AngloGold Ashanti expected to release a pre-feasibility study within the next 12 months. Exploration success at Westgold's Beta Hunt mine, including the new 2.3 million ounce Fletcher Zone resource, also provides significant long-term upside.

From a cost perspective, TFPM expects 2025 depletion to be between $70 million and $80 million, with General & Administrative (G&A) expenses remaining consistent at $24 million to $25 million. The Australian cash tax rate for royalties is projected at approximately 25%. The transaction pipeline remains robust, with a "sweet spot" for deals in the $100 million to $300 million range, predominantly focused on precious metals opportunities in the Americas and Australia, with Latin America being a notable area of activity.

Risks and Challenges

While Triple Flag's model offers inherent resilience, certain risks warrant investor attention. The ongoing legal dispute with Steppe Gold over approximately USD 8 million in gold ounces in arrears highlights the counterparty risk inherent in streaming agreements. Although management is confident in its 2025 guidance even without contributions from this asset, the situation underscores the importance of diligent legal enforcement.

Operational challenges at underlying mines can also impact revenue. The Buritica mine, where TFPM has exposure, continues to contend with illegal mining activities, described as "criminal syndicates and gangs." While operator Zijin (ZIJMY) has effectively managed production and is investing in expansion, this situation is expected to be an ongoing challenge. Asset-specific transitions, such as the depletion of high-grade open pit ore at Northparkes and the anticipated step-down in stream rate at Cerro Lindo, necessitate successful development of new ore sources like the E48 sublevel cave to maintain production profiles. Furthermore, while TFPM prioritizes mining-friendly jurisdictions, geopolitical shifts and regulatory changes in any region where it holds assets could impact future cash flows.

Conclusion

Triple Flag Precious Metals Corp. presents a compelling investment case, rooted in its highly effective royalty and streaming business model. The company's "free carried optionality" acts as a powerful differentiator, enabling capital-efficient exposure to precious metals upside while insulating it from direct operational risks and costs. TFPM's consistent track record of GEO growth, culminating in record financial performance in the first half of 2025, demonstrates the model's ability to translate strong metal prices into superior per-share cash flows.

With a robust balance sheet, a disciplined approach to capital allocation through progressive dividends and opportunistic buybacks, and a strategic focus on accretive acquisitions in top-tier jurisdictions, Triple Flag is well-positioned for continued expansion. The company's clear guidance for 2025 and ambitious organic growth targets for 2029, supported by a strong pipeline of development projects and exploration successes, reinforce its long-term value proposition. While challenges such as counterparty disputes and regional operational complexities exist, TFPM's strategic positioning, financial strength, and the inherent advantages of its business model suggest a resilient and growth-oriented future for discerning precious metals investors.