Triple Flag closes US$550M gold and silver stream on Northparkes mine

Triple Flag has a gold NSR royalty on Kirkland Lake Gold’s Fosterville gold mine in Australia. Credit: Kirkland Lake Gold.

Mine financing company Triple Flag Precious Metals has closed a US$550 million gold and silver stream on future production from China Molybdenum’s Northparkes mine in Australia.

The deal gives Triple Flag rights to the majority of the gold and silver that will be produced at the mine in New South Wales until it receives 630,000 oz. gold and 9 million oz. silver. At that point, Triple Flag will continue to receive less than half of the mine’s gold and silver production. In addition to the upfront payment, Triple Flag will pay China Molybdenum 10% of the spot gold and spot silver price for each ounce at the time of delivery.

Triple Flag was founded in 2016 by Shaun Usmar, a former executive at Barrick Gold (TSX: ABX; NYSE: GOLD) from 2014 to 2016, and is backed by hedge fund Elliot Management. Prior to Triple Flag and Barrick, Usmar was an early senior executive member of the management team at Xstrata, which was acquired by Glencore (LSE: GLEN) in 2013.

Triple Flag’s portfolio has eight streams and 31 royalties, including Kirkland Lake Gold’s (TSX: KL; NYSE: KL) Fosterville mine in Australia, Alamos Gold’s (TSX: AGI; NYSE: AGI) Young-Davidson mine in Ontario, and Zijin Mining’s Buritica project in Colombia. It also has deals with Nexa on its Cerro Lindo mine in Peru and RBPlat’s platinum group metals operations in South Africa.

The royalty and streaming company had planned an initial public offering (IPO) but cancelled it in December 2019 due to poor market conditions.

The company had planned to issue 20 million common shares at an offer price of between $15 and $18 per share. At a mid-point price of $16.50 per share, the IPO would have raised $330 million, which would have made it the biggest mining IPO in Canada in more than two years.

Usmar noted in the company’s Nov. 22 IPO prospectus that since the company was created in 2016, the management team had reviewed more than 400 opportunities and completed 15 transactions.

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