Next up for precious metals: An IPO for a company that funds mining projects – by Gabriel Friedman (Financial Post – November 27, 2019)

It’s the latest sign that rising gold prices are giving Canada’s mining market a shot in the arm

In the latest sign that rising gold prices are giving Canada’s mining market a shot in the arm, Toronto-based Triple Flag Precious Metals Corp. has announced plans to raise $360 million through an initial public offering scheduled for next year.

The company, which finances mining projects for a cut of the revenue produced by the mine, known as royalties or streams depending on the details, was founded in 2016 by former Barrick Gold Corp. executive Shaun Usmar with backing from Elliott Management, a U.S. hedge fund known for its activism.

Now, with gold prices rising and the equity financings still slow for mining companies, Triple Flag said it plans to open up a 17 per cent stake in the company to public investment, by issuing 20 million shares, priced between $15 and $18. Elliot Management would retain control of 83 per cent of the company, or about 97 million shares.

“We didn’t invent the streaming and royalty business model, but we have embraced it for its record of superior performance relative to bullion and gold mining company equities,” Usmar wrote in the prospectus, “whether prices are rising, declining or stable, as evidenced by the equity performance of our peer companies.”

The IPO comes in a year when the mining companies on the TSX and TSX-Venture exchange, through October, had raised just $10.4 million through IPOs, and about $1 billion through public offerings versus nearly $3 billion in private placements.

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