Triple Flag Enters Agreement for Tres Quebradas Royalty

Triple Flag Announces Acquisition of Tres Quebradas Royalty

Triple Flag Precious Metals Corp., also known as the Company, is excited to share its latest strategic move. The firm has finalized a definitive agreement to acquire a 0.5% gross overriding revenue (GOR) royalty on the highly anticipated Tres Quebradas lithium project. This acquisition is valued at US$28 million and is set to strengthen Triple Flag’s involvement in the lithium space.

Key Transaction Insights

The 0.5% GOR royalty covers all mineral properties of the Tres Quebradas lithium project, which is owned and operated by Zijin Mining Group Co., Ltd. through its subsidiary, Liex SA. This project holds significant potential for lithium production, especially as the world increasingly turns to battery technologies. The site is fully permitted, and as of now, construction is underway as part of Phase 1.

Phase 1 Production Expectations

Zijin invested around $600 million into the development of Tres Quebradas, having acquired it for $770 million in a notable acquisition. The expected annual production capacity from this phase is around 20,000 tonnes of battery-grade lithium carbonate, known in the industry as LCE. Initial royalty revenue from this production is anticipated to start in the second half of 2025, with further growth projected to approximately 1,000 gold equivalent ounces annually as operations ramp up over the following three years.

Strategic Growth and Expansion Potential

During the initial phases, Zijin has already hinted at plans to expand production capacity significantly, potentially reaching between 40,000 to 60,000 tonnes under a Phase 2 expansion. This expansion could unlock further value for both Zijin and Triple Flag, providing significant resource upside.

Discovering Lithium Brine Asset

Tres Quebradas, discovered in 2015, represents a valuable lithium brine asset. This location in Argentina is notable not only for its resources but for its strategic importance in the global lithium industry. Production here would place it among the lowest-cost lithium operations globally, capitalizing on Argentina’s position as a leading producer of lithium brine.

The battery-grade lithium produced will be derived through a conventional brine process involving evaporation and precipitation methods, making it a sustainable option for the growing EV market.

Company Overview of Triple Flag Precious Metals

Triple Flag is a renowned precious metals streaming and royalty company that provides financing solutions focused on gold and silver, primarily in the Americas and Australia. With a robust portfolio of 235 assets including streams and royalties, the company enjoys a diversified risk profile across various stages of mining operations. They indicate a sound strategy by engaging with projects beyond traditional precious metals, such as the acquisition of Tres Quebradas in the growing lithium sector.

Significant Market Context

The lithium market is expanding rapidly, with worldwide production increasingly centered in Argentina due to its rich geological features. The country's significant mineral resource endowment has positioned it as the fourth largest producer globally. Notably, industry activities are being propelled by major players like Rio Tinto, whose recent acquisitions underscore the robust growth trajectory anticipated in lithium production. Triple Flag’s proactive positioning in this sector via the Tres Quebradas royalty acquisition showcases its strategic foresight in capitalizing on future market demands.

Frequently Asked Questions

1. What is Triple Flag’s latest acquisition about?

Triple Flag acquired a 0.5% gross overriding revenue royalty on the Tres Quebradas lithium project for US$28 million, aiming to diversify its asset portfolio.

2. What is the expected production capacity of Tres Quebradas?

The initial production capacity from Phase 1 is set at 20,000 tonnes of battery-grade lithium carbonate per year.

3. When will the royalty revenue start coming in?

Royalty revenue is expected to commence in the second half of 2025, with a ramp-up to steady production over the next three years.

4. Why is this acquisition significant for Triple Flag?

This new royalty adds a high-quality asset to Triple Flag’s portfolio, providing exposure to the high-demand lithium market, which is crucial for battery production.

5. Who is operating the Tres Quebradas project?

The project is operated by Zijin Mining Group Co., Ltd. through its subsidiary, Liex SA, ensuring a well-capitalized partner in the venture.

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