Triple Flag Announces US$550 million Gold and Silver Stream on CMOC's Northparkes Mine

TORONTO, July 12, 2020 /CNW/ -A Triple Flag Precious Metals Corp. ("TFPM") is pleased to announce that its wholly-owned subsidiary, Triple Flag Mining Finance Bermuda Ltd. ("Triple Flag Bermuda" and collectively with TFPM, "Triple Flag") has entered into a stream agreement with certain subsidiaries of China Molybdenum Co., Ltd. (collectively, "CMOC"), to receive gold and silver deliveries determined by reference to production from the Northparkes copper-gold mine located in New South Wales, Australia. Northparkes is operated by CMOC on behalf of the Northparkes Joint Venture, an unincorporated joint venture between CMOC (80%), SC Mineral Resources Pty Ltd. (6.7%) and Sumitomo Metal Mining Oceania Pty Limited (13.3%) (the latter two collectively, "Sumitomo") . Triple Flag Bermuda will make an upfront cash payment of US$550 million and on-going payments equal to 10% of the spot gold price and spot silver price at the time of delivery for gold and silver equal to 54.0% of the gold and 80.0% of the silver produced at Northparkes (the "Stream"). "Northparkes will be a new cornerstone asset, with robust cash flows over a very long mine life in a top-tier mining jurisdiction. This is a globally recognized mine with an excellent track record of safety, operations, reserve replacement and community involvement further bolstering and diversifying our portfolio,"A commented Shaun Usmar, Founder and CEO of Triple Flag. "Mining at Northparkes commenced in 1993 with a Reserve of 68Mt; 25 years later the mine has created significant value for its owners and their local stakeholders, and stands with a Reserve of 133Mt, a Resource of 483Mt and a long future ahead of it. Triple Flag is extremely pleased to be part of that future and will be joining Northparkes in their community investment program by committing A$50,000 annually that will go towards scholarships and community initiatives. We are extremely pleased to be embarking upon a long-term partnership with CMOC, who have had an impressive track record of rapid growth through world-class international M&A mining deals, offering the potential for further strategic financing opportunities together in the future."CMOC Executive Director Li "Steele" Chaochun commenting on the transaction said, "This transaction provides CMOC with a long-term financing arrangement at a compelling cost of capital and demonstrates significant value from the gold and silver by-product production from Northparkes, an operation that delivers an outstanding safety record, consistent performance and presents outstanding resource potential. Additionally, CMOC maintains its core exposure to copper production in alignment with our future plans for the mine.A  We are excited to have formed this financing partnership with a company of the quality and reputation of Triple Flag and look forward to working with them."Transaction Highlights

New high-quality cornerstone asset with significant exploration potential:A Northparkes is a low-cost, long-life copper-gold underground mine located in the state of New South Wales, Australia, that has been a consistent producer since the mine commenced operations in 1993.

Northparkes had C1 + Sustaining Capex cash costs of US$1.15/lb copper1 in 2019, placing it in the first quartile on the global copper mine cost curve.

Multi-decade mine life, providing robust cash flows for many years to come.

Long history of reserve replacement and large stream area of 1,060 square kilometers (covering all known deposits and exploration licenses) provide significant exploration, extension and throughput upside.

Northparkes is one of the world's most automated underground block cave mines, with highly efficient and innovative operations driving productivity, cost performance and enhancing safety.

Partnering with CMOC:A CMOC is a proven operator with a strong track record of successful operations.

CMOC is a well-capitalized, global base metals producer with a portfolio of world-class assets.

Northparkes is a core asset in CMOC's global portfolio, with a highly experienced management team.

In early 2019, CMOC and Sumitomo announced the approval of the E26L1N block cave mine and the throughput expansion project. These projects represent an investment of over $300 million in Northparkes.

Under CMOC's stewardship, Northparkes has been recognized as one of the best performing mines from an environmental, social and governance ("ESG") perspective in Australia.

2020 cash flow: Triple Flag will receive a proportion of all gold and silver metal deliveries from Northparkes for all shipments that occur after July 1.

Increasing medium to long-term cash flow:A Based on Northparkes' current mine plan, an annual average of approximately 22,000 GEOs is expected to be delivered over the life-of-mine to Triple Flag from Northparkes, increasing to approximately 30,000 GEOs whilst the E22 cave is in production. Triple Flag forecasts that Northparkes will represent approximately 20% of 2021 GEOs, based on current spot metal prices.A 

Due Diligence: Triple Flag has conducted extensive due diligence, leveraging its internal team as well as a team of external, Australian-based experts with specific geological, block caving, mineral processing and tailings expertise to undertake the site visit.A  Triple Flag utilized its extensive network to assemble this team of experts, and the individuals comprising it are well known to Triple Flag as past colleagues and through prior projects.

Elliott Support: Triple Flag will fund the transaction using cash on hand, drawing on its revolving credit facility, and through issuing equity to funds managed byA Elliott Management Corporation ("Elliott").A  Elliott continues to be extremely supportive of Triple Flag and its growth objectives. This transaction is reflective of Triple Flag and Elliott's shared desire for growth and evidences Triple Flag's continuing access to capital for further investments.

Terms of the Agreement
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