Q: After acquiring MMX last year what is the earnings growth outlook for TFPM? They seem to have a lot of non-producing streams/royalties, how many of these projects are expected to be producing assets in the next decade? Would 5i consider it a buy at current price levels or would you prefer a more senior royalty play like FNV?
5i Research Answer:
TFPM EPS is expected to go from 33c this year to 44c in 2024, on a 15% forecasted increase in sales. It beat on both the top and bottom lines in the last quarter. Guidance calls for 110,000 gold-equivalent ounces in 2023, and a 5-year next average of 140,000. It has 234 assets, 32 which are producing revenue. 40 of its assets are 'in development' and the rest are exploration, but in its corporate presentation it does not break out a timeframe on these. With a market cap of $3.5B it is near the senior category already. We think it is attractive. But we would prefer FNV is just one royalty company is to be owned.