Triple Flag Precious Metals Corp. is pleased to announce that its wholly-owned subsidiary, Triple Flag Mining Finance Bermuda Ltd. has entered into a stream agreement with certain subsidiaries of China Molybdenum Co., Ltd. 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%). 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.
“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,” 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. 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.”
Terms of the Agreement
Triple Flag Updated 3-Year Outlook
With the addition of Northparkes and as other mines in the portfolio continue to ramp up and increase output through 2023, Triple Flag anticipates annual metals sales increasing over that same period to approximately 120,000 GEOs per annum. This outlook is based exclusively on existing mineral reserves and fully-funded assets that are currently in production or ramping up during 2020; additionally, this growth does not factor in any new acquisitions that are likely over this period, given Triple Flag’s visible deal pipeline and successful deal-making track record.
Northparkes is a well-established, producing copper and gold mine located in central New South Wales, Australia, approximately 27 kilometers north-northwest of the town of Parkes. Discovered in 1976, the mine has been operating since 1993 and is one of the lowest cost copper mines in the world, driven by its highly mechanized and efficient block caving and sub-level caving mining methods. Ore is processed through a 6.4 million tonnes per annum conventional floatation plant, which is undergoing a throughput expansion to 7.6 million tonnes per annum with completion targeted for late 2020. Northparkes has a decades-long mine life based on an existing reserve base of 0.73 million tonnes of copper, 0.95 million ounces of gold and 8.2 million ounces of silver as of December 31, 2019, additional resources of 2.67 million tonnes of copper, 3.11 million ounces of gold and 28.91 million ounces of silver, and a significant exploration potential on a large 1,060 square kilometer land position with limited drilling below 200 meters on the mining licenses. Northparkes has a long history of reserve replacement and mine life extension, with approximately 0.9 million tonnes of copper and 1.0 million ounces of gold produced since 2001, and a production of 36 thousand tonnes of copper, 25 thousand ounces of gold and 308 thousand ounces of silver in 2019.
Northparkes was operated by Rio Tinto from 2000 to 2013 following Rio Tinto’s acquisition of North Limited. CMOC acquired Rio Tinto’s 80% stake in December 2013, with the remaining 20% stake held by SC Mineral Resources Pty Ltd. (6.7%) and Sumitomo Metal Mining Oceania Pty Limited (13.3%).
About Triple Flag
Triple Flag is a precious metals streaming and royalty company offering bespoke financing solutions to the metals and mining industry. Our mission is to be a sought-after, long-term funding partner to mining companies throughout the commodity cycle while generating attractive returns for our investors. Since our inception in 2016, we have rapidly developed a diversified portfolio of streams and royalties providing exposure primarily to gold and silver in the Americas and Australia. With the addition of Northparkes, we now have 40 assets, comprising 9 streams and 31 royalties. These investments are tied to mining assets at various stages of the mine life cycle, including 10 producing mines, 2 mines that are ramping up, 3 mines that have had operations temporarily suspended amidst the COVID-19 pandemic, and 25 development and exploration-stage projects.
CMOC is an international mineral resources company engaged in exploration, mining, processing, refining, marketing and trading of mineral products. With its main business presence in Asia, Africa, South America, Oceania and Europe, CMOC is a leading producer of tungsten, molybdenum, cobalt and niobium as well as an important copper producer in the world. CMOC is also the second largest producer of phosphate fertilizers in Brazil. CMOC’s wholly-owned subsidiary IXM is the third largest base metals merchandizer in the world. CMOC is dual-listed on the Hong Kong Exchanges (HK03993) and Shanghai Stock Exchange (SH603993).
Advisors and Counsel
BofA Securities is acting as financial advisor to Triple Flag and Torys LLP is acting as legal advisor. Citigroup is acting as financial advisor to CMOC and McCarthy Tétrault LLP is acting as legal advisor.
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