Altius Reports Q1 2023 Attributable Royalty Revenue of $21.4M and Adjusted Earnings (1,2) of $3.4M
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
May 10, 2022 | St. John’s, Newfoundland
Altius Reports Q1 2023 Attributable Royalty Revenue of $21.4M and Adjusted Earnings (1,2) of
$3.4M
Altius Minerals Corporation (TSX: ALS; OTCQX: ATUSF) (“Altius” or the “Corporation”)
reports first quarter revenue of $22.7 million compared to $ 27.1 million for the same period in
2022, while attributable royalty revenue (1,2) of $ 21.4 million ($ 0.45 per share (1,2)) compares to
$25.5 million ($0.62 per share) reported in 2022. In addition, the Project Generation segment
recognized revenue of $2.8 million during the current quarter relating to the liquidation of assets
of Alderon Iron Ore Corp.
Brian Dalton, CEO commented, “First quarter revenues were largely in line with our expectations
across the portfolio given the scheduled closure of the 777 mine last year, copper delivery and
sales timing variances at Chapada and slightly lower average commodity prices. The first quarter
was particularly notable for the number of potential option value realization signals that were
delivered from across the broader long-term royalty portfolio.”
Quarterly Highlights
• Capacity expansion investment projects continued at potash royalty mines.
• Lithium Royalty Corp. (“LRC”) completed a successful IPO that daylights significant value
creation for Altius shareholders; asset advancement progress continues to ramp-up.
• First directly held lithium royalty interest reaches production subsequent to quarter end.
• Maiden resource published for high -grade Saúva discovery at Chapada with
mineralization noted to remain open in most directions – Saúva now being considered as
part of district level production expansion studies by Lundin.
• ARR continues growth of operational asset count and revenue.
• Higher level of growth and sustainability investment continued at Rio Tinto controlled IOC
iron ore mine.
• Preliminary results from Kami metallurgical studies indicate potential for production of
high-purity (DRI pellet feed) iron ore concentrate grades.
• Resource increases announced from emerging Silicon gold district in Nevada and strong
ongoing exploration potential signaled by AngloGold Ashanti.
• Approximately 300 km of exploration drilling programs expected to be completed across
portfolio in 2023.
Adjusted EBITDA(1,2) of $19.1 million or $0.40 per share(1,2) during Q1 2023 compares to $23.6
million or $ 0.57 per share during the prior year quarter. The per share difference includes the
impact of the common share issuances related to the 2022 exercise of share purchase warrants
by affiliates of Fairfax Financial Holdings as it became the largest shareholder of the Corporation
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
(approximately 14% ownership). The adjusted EBITDA margin in the first quarter was 79% versus
83% in last year’s comparable quarter. The Mineral Royalties segment had an EBITDA margin of
86% for both the current and prior year quarters.
Q1 2023 adjusted operating cash flow(1,2) of $4.5 million or $0.09 per share(1,2) compares to $14.2
million or $0.35 per share in last year’s comparable quarter. The decrease period over period is
largely reflective of higher taxes and interest paid as well as lower royalty revenues. Adjusted
operating cash flow does not include net cash proceeds or acquisition costs (sales minus new
investments) related to the Corporation’s Project Generation segment.
Net earnings of $5.5 million or $0.11 per share for Q1 2023 compares to net earnings of $12.5
million or $0.29 per share in Q1 2022. Adjusted net earnings per share(1,2) of $0.07 in the current
quarter compares to adjusted net earnings per share of $0. 21 per share in Q1 2022. The main
adjusting items in the first quarter of this year are $2.8 million in non-recurring other income related
to the Alderon distribution referenced above ($0.06 per share), impairment of exploration and
evaluation assets of $0.6 million ($0.01 per share) as well as o ther adjustments for unrealized
losses on derivatives related to the revaluation of share purchase warrants on junior mining
equities, foreign exchange, and gains on disposal of mineral properties. Q1 2022 also included
adjustments for non-recurring investment income relating to Chile.
In Thousands of Canadian Dollars
Adjusted Net Earnings March 31, 2023 March 31, 2022
Net earnings attributable to common 5,061$ 12,088$
Addback (deduct):
Unrealized loss on fair value adjustment of derivatives 213 313
Foreign exchange gain (247) (539)
Non-recurring other income (2,820) (2,879)
Exploration and evaluation assets abandoned or impaired 590 -
Gain on disposal of mineral property (107) (996)
Tax impact 750 841
Adjusted net earnings 3,440$ 8,828$
Adjusted net earnings per share 0.07$ 0.21$
Three months ended
Portfolio Performance
The following table summarizes the attributable royalty revenue:
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
Summary of attributable royalty revenue
(in thousa nds of Ca na dia n dolla rs) Q1 2023 Q4 2022 Q1 2022
Base and battery metals 4,869$ 4,702$ 9,960$
Potash 9,032 9,816 9,903
Iron ore (1) 1,870 2,618 1,437
Thermal (electrical) coal 3,002 3,774 3,113
Renewable energy 1,345 1,171 772
Other 1,275 1,041 307
Attributable royalty revenue 21,393$ 23,122$ 25,492$
See non- GAAP financial measures section of our MD&A for definition and reconciliation of attributable royalty revenue
(1) Labrador Iron Ore Royalty Corporation dividends received
Base and battery metals contributed $4.9 million to revenue compared to $10.0 million in Q1
2022. Revenue decreased compared to the first quarter of 2022 after the scheduled closure of
the 777 mine in Q2 of 2022 and from lower revenue from Chapada. Chapada sales in Q1 2022
benefited from the timing of delivery and sales related to prior period production amounts.
Lundin Mining Corp (“Lundin”) continues to expand its new Saúva copper-gold deposit discovery,
located 15 kilometers north of the Chapa da Mine, and on lands encompassed by our copper
stream interest. Lundin has reported a maiden resource for Saúva, which indicates notably higher
copper grades than those being mined at Chapada presently. It also highlighted continuing strong
resource growth potential for Saúva while commenting that the discovery is now being evaluated
within the context of its ongoing broader Chapada expansion studies.
Royalty revenue from the Voisey’s Bay nickel-copper-cobalt mine was lower than that of the first
quarter of 2022 as lower production volumes were only partly offset by higher realized prices.
Underground mining continues to ramp up from the new Reid Brook mine, while development of
the Eastern Deeps mine approaches completion. Exploration efforts also continued to indicate
the potential for mine life extensions, particularly beneath the currently defined resource areas at
Reid Brook where long intervals of high-grade nickel and copper mineralization are being
encountered.
During the quarter, LRC, of which Altius is a co -founding investor, completed an initial public
offering to raise gross proceeds of approximately $150 million. Following the offering the
Corporation indirectly holds 9.55% of LRC with an estimated net fair value at quarter end of $77
million. Altius expects to receive a combination of cash and shares over the next 24 months as
described in LRC’s prospectus. On May 1, 2023 Altius received $8.9 million from LRC as a return
of capital distribution to the pre -IPO shareholders of LRC. During the quarter the Corporation
recognized unrealized gains of $55,977,000 related to its holding of LRC.
In addition, Altius holds minority partnership -based interests in each of LRC’s Groto do Cirilo
(commenced production subsequent to quarter end), Tres Quebradas and Mariana (both of which
are expected to complete construction and begin operations later this year or ea rly next year)
project royalties. These will collectively add three new operating stage mines to the Corporation’s
portfolio and introduce its first ever royalty revenue related to lithium production.
Potash royalty revenue of $ 9.0 million in Q1 2023 decreased from the comparable quarter last
year when revenue of $ 9.9 million was reported reflecting lower average realized prices and
similar attributable portfolio production volumes. Price reconciliation adjustments of $2 .2 million
which relate to 2022 sales have been recorded in the first quarter of 2023 and compares to similar
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
adjustments of $ 0.9 million that were recorded in second quarter of 2022 relating to 2021
production.
Our Canadian based potash mine operators continue to make capital investments to increase
production capacity to address the current, and likely future, global supply deficits that partly result
from sanctions and logistical constraints in Belarus and Russ ia. Nutrien has indicated plans to
increase its potash volumes from approximately 15 million tonnes to 18 million tonnes annually
by 2026, while Mosaic is increasing production capacity at Esterhazy by approximately one million
tonnes through current debottlenecking investments.
Iron ore royalty revenue of $1.9 million was received in Q1 2023 compared to $1.4 million in the
first quarter of 2022. The increase related to a higher share ownership level while both the current
and comparable period quarters w ere impacted by increased levels of sustaining and growth
capital investments that limited Iron Ore Company of Canada (“ IOC”) equity dividends. These
capital investment levels are expected to continue to impact near term dividend distributions from
IOC while enhancing reliability and production levels in the medium and longer term.
Champion Iron is expected to announce the results of an updated feasibility study for the Kami
project later in 2023, which is loc ated near its Bloom Lake Mine and is subject to a 3% GSR
royalty in favor of Altius. It noted during the quarter that preliminary metallurgical results indicate
potential for the production of DR pellet feed quality concentrates, which are projected to me et
with increasing demand as the global steelmaking sector transitions towards electric arc furnace
based (no coal input requirements) manufacturing processes.
Thermal coal royalty revenue of $3.0 million was received in Q1 2023 compared to $3.1 million
during the first quarter of last year reflecting lower attributable production volumes at the Genesee
Mine that were offset by a higher inflation-linked royalty rate. The operator of the Genesee power
plant continues to invest in a conversion to natural gas-based fuelling and plans to bring an end
to coal usage by the end of the year.
Altius Renewable Royalties Inc. (“ARR”) (ARR: TSX) released its Q1 2023 results on May 5,
2023. The Corporation holds 58% of the common shares of ARR . ARR reported increased Q1
2023 attributable royalty revenue of US$1.0 million relating to its 50% joint venture interest in
Great Bay Renewables (“GBR”). The increase reflects recently acquired operating stage royalties
as well as the commencement of operations at two previously acquir ed development stage
projects. The GBR joint venture reiterated its guidance of US$11.5 million to US$13.5 million for
2023. ARR also indicated that it continues to advance a strong pipeline of new royalty investment
opportunities which could potentially further augment its growth profile. Further details regarding
ARR and its activities can be found in the ARR MD&A and financial statements.
Silicon Gold
AngloGold Ashanti Limited (“AGA”) continues to advance the discovery of a potential major new
gold district, centered around its Silicon Project located near Beatty, Nevada. On February 22,
2023 AGA reported an increased and higher-confidence mineral resource estimate for the Silicon
deposit of 4.22 million ounces (“Moz”) of gold (3.4 Moz as Indicated and 0.8 Moz as Inferred) and
further mineral resource estimates totaling 4.18 Moz from 3 nearby deposits within the district
(North Bullfrog – 1.19 Moz measured and indicated and 0.36 Moz inferred; Motherlode – 1.55
Moz indicated and 0.17 Moz inferred; and Sterling - 0.91 Moz inferred). It also reported that it will
evaluate the Merlin deposit discovery on an integrated basis with Silicon, as part of a combined
pre-feasibility study, with further results expected in 2023. No resource estimate has yet been
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
reported for Merlin, however it was recently publicly described by AG A as the “real gem” in its
Nevada portfolio.
The Corporation also recently initiated arbitration proceedings in British Columbia, as per
mechanisms prescribed in its Silicon royalty agreement , to resolve differences in interpretation
that have arisen with respect to the extent of lands within the Silicon district that are subject to its
royalty rights.
Liquidity and Capital Allocation Summary
Cash and cash equivalents at March 31, 2023 were $76.8 million, compared to $82.4 million at
the end of 2022. Cash, excluding $65.7 million held by ARR, was $11.2 million. Subsequent to
quarter end Altius received a distribution of $8.9 million from LRC as a return of capital distribution
to the pre-IPO shareholders of LRC and as further described in its prospectus filings.
At quarter end the approximate market value of various public equity holdings included:
• $165.3 million for shares of ARR (incl uding the in -the-money value of share purchase
warrants)
• $119.7 million for shares of Labrador Iron Ore Royalty Corp.
• $77 million for shares of LRC
• $51.8 million for publicly traded shares held within the Project Generation equity portfolio
During the quarter, the Corporation made scheduled debt repayments of $2.0 million and paid
cash dividends of $3.6 million. There were no shares repurchased under its normal course issuer
bid during the first quarter of 2023. At quarter end the Corporation carried a balance of $38.0
million under its fixed rate term debt facility and $81.8 million under its floating rate revolving credit
facilities.
Dividend Declaration
The Corporation’s board of directors has declared a quarterly dividend of $0.08 per share. The
current quarterly dividend is payable to all shareholders of record at the close of business on June
15, 2023. The dividend is expected to be paid on or about June 30, 2023.
This dividend is eligible for payment in common shares under the Dividend Reinvestment Plan
(DRIP) announced by press release May 20, 2020, and available to shareholders who are
Canadian residents or residents of countries outside the United States.
In order to be eligible to participate in respect of the June 30, 2023 dividend, non-registered
shareholders must provide instruction to their brokerage and registered shareholders must
provide completed enrollment forms to the transfer agent by June 8, 2023, five business days
prior to record date. Stock market purchases made under the DRIP for the June 30, 2023 payment
will be satisfied by issuance from treasury at the 5 day volume weighted average price ending at
the close of trading the day before payment date. Shareholders who have already provided
instruction to be enrolled earlier this year will continue to be enrolled unless they direct otherwise.
For more informat ion, please see http://www.altiusminerals.com/dividend-reinvestment-
plan. Participation in the DRIP is optional and will not impact any cash dividend s payable to
shareholders who do not elect to participate in the DRIP. The declaration, timing and payment of
future dividends will largely depend on the Corporation’s financial results as well as other factors.
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
Dividends paid by Altius on its common share s are eligible dividends for Canadian income tax
purposes unless otherwise stated.
Non GAAP Financial Measures
1. Management uses the following non -GAAP financial measures: attributable revenue,
attributable royalty revenue, adjusted earnings before interest, taxes, depreciation and
amortization (adjusted EBITDA), adjusted operating cash flow and adjusted net earnings
(loss).
2. Management uses these measures to monitor the financial performance of the Corporation
and its operating segments and believes these measures enable investors and analysts to
compare the Corporation’s financial performance with its competitors and/or evaluate the
results of its underlying business. These measures are intended to provide additional
information, not to replace International Financial Reporting Standards (IFRS) measures,
and do not have a standard definition under IFRS and should not be considered in isolation
or as a substitute for measures of performance prepared in accordance with IFRS. As
these measures do not ha ve a standardized meaning, they may not be comparable to
similar measures provided by other companies. Further information on the composition and
usefulness of each non -GAAP financial measure, including reconciliation to their most
directly comparable IFRS measures, is included in the non -GAAP financial measures
section of our MD&A.
First Quarter 2023 Financial Results Conference Call and Webcast Details
Date: May 9, 2023
Time: 9:30 AM ET
Toll Free Dial-In Number: +1(888) 396-8049
International Dial-In Number: +1(416) 764-8646
Conference Call Title and ID: Altius Q1 2023 Results, ID 50613738
Webcast Link: Q1 2023 Results
About Altius
Altius’s strategy is to create per share growth through a diversified portfolio of royalty assets that relate to
long life, high margin operations. This strategy further provides shareholders with exposures that are well
aligned with sustainability -related global growth trends including the electricity generation transition from
fossil fuel to renewables, transportation electrification, reduced emissions from steelmaking and increasing
agricultural yield requirements. These macro-trends each hold the potential to cause increased demand for
many of Altius’s commodity exposures including copper, renewable base d electricity, several key battery
metals (lithium, nickel and cobalt), clean iron ore, and potash. In addition, Altius runs a successful Project
Generation business that originates mineral projects for sale to developers in exchange for equity positions
and royalties. Altius has 47,634,571 common shares issued and outstanding that are listed on Canada’s
Toronto Stock Exchange. It is included in each of the S&P/TSX Small Cap, the S&P/TSX Global Mining,
and the S&P/TSX Canadian Dividend Aristocrats indices.
Forward-looking information
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
This news release contains forward ‐looking information. The statements are based on reasonable
assumptions and expectations of management and Altius provides no assurance that actual events will
meet management's expectations. In certain cases, forward ‐looking information may be identified by such
terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Although
Altius believes the expectations expressed in such forward‐looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and actual results or
developments may differ materially from those projected. Readers should not place undue reliance on
forward-looking information. Altius does not undertake to update any forward-looking information contained
herein except in accordance with securities regulations.
For further information, please contact:
Flora Wood
Email: [email protected]
Tel: 1.877.576.2209
Direct: +1(416)346.9020
Ben Lewis
Email: [email protected]
Tel: 1.877.576.2209