Triple Flag Precious Metals: A High-Conviction Buy as Gold Royalty Sector Enters a New Growth Cycle

The gold royalty sector is undergoing a transformative phase, driven by surging gold prices and a robust pipeline of growth opportunities. At the forefront of this renaissance is Triple Flag Precious Metals (TFPM), a company whose financial performance and strategic positioning suggest it is significantly undervalued in terms of risk-adjusted returns. As global economic uncertainty persists and central banks continue to accumulate gold, the case for TFPM as a high-conviction buy has never been stronger.

Gold's Resurgence: A Tailwind for Royalty Companies

Gold prices in the third quarter of 2025 surged by 16%, reaching an average of US$3,456.54 per ounce-a 40% year-over-year increase. This surge was fueled by a confluence of factors: ETF inflows rose by 222 metric tons, central bank purchases added another 220 metric tons, and even jewelry demand, despite a 19% decline in volume, saw a 13% increase in value due to higher prices. For royalty companies like Triple Flag, which derive revenue from a percentage of gold production, this price surge translates directly into higher cash flows.

Triple Flag's Q3 2025 results underscore this dynamic. The company reported record operating cash flow of $81.37 million and adjusted EBITDA of $78.51 million, despite a 9% decline in gold equivalent ounce (GEO) production compared to the prior year. This resilience highlights the high-margin nature of the royalty model, where earnings are less sensitive to production fluctuations and more tied to gold prices.

Strategic Expansion and a Robust Growth Pipeline

Triple Flag's growth is not solely dependent on gold prices. The company has aggressively expanded its royalty portfolio, acquiring stakes in projects such as the Arthur mine and Minera Florida, which have bolstered its cash flow per share to record levels. These acquisitions, coupled with a $350 million allocation for strategic deals in 2025, position Triple Flag to target GEO production of 135,000–145,000 ounces by 2029.

The company's financial discipline further amplifies its appeal. With a debt-to-equity ratio of 0.42-well below the industry average of 0.75-Triple Flag maintains a conservative leverage profile. Its liquidity is equally impressive, with a current ratio of 12.35 and a quick ratio of 12.10, metrics that far exceed the 1.0 benchmark. This financial fortitude allows the company to pursue growth without overexposure to debt, a critical advantage in volatile markets.

Undersold Risk-Adjusted Returns: A Case for Triple Flag

While the gold sector as a whole has benefited from the price surge, Triple Flag's risk-adjusted returns appear to be underappreciated. The company's shares have more than doubled in 2025, closing at C$44.26 as of November 13. This performance is underpinned by a 93% asset margin-a testament to the efficiency of its royalty model-and a buyback program authorized to repurchase up to 10.3 million shares through 2026.

Comparatively, the broader gold sector lacks the same level of financial prudence. Many gold miners face higher volatility due to operational risks, such as production delays or cost overruns. Triple Flag, by contrast, operates with minimal capital expenditure and is insulated from such risks. Its focus on cash flow stability and disciplined capital allocation-evidenced by its debt reduction plan and strategic acquisitions-positions it to outperform peers in terms of risk-adjusted returns.

A Compelling Long-Term Investment

The gold royalty sector is entering a new growth cycle, and Triple Flag is uniquely positioned to capitalize on it. With gold prices projected to remain elevated due to geopolitical tensions and inflationary pressures, the company's high-margin model and conservative balance sheet offer a compelling risk-reward profile. For investors seeking stable, compounding returns in an uncertain macroeconomic environment, Triple Flag represents a rare opportunity to participate in the gold boom without the volatility of direct mining exposure.

In conclusion, Triple Flag Precious Metals is a high-conviction buy. Its combination of surging gold prices, strategic growth initiatives, and robust financial metrics makes it a standout in the royalty sector. As the company executes on its long-term vision, the market is likely to reassess its risk-adjusted returns-and reward shareholders accordingly.