Altius Reports Q2 2022 Attributable Royalty Revenue of $28.6M and Adjusted Earnings (1,2) of $10.6M Annual Dividend Increased to $0.32 per share
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
August 8, 2022 | St. John’s, Newfoundland
Altius Reports Q2 2022 Attributable Royalty Revenue of $28.6M and Adjusted Earnings (1,2) of
$10.6M
Annual Dividend Increased to $0.32 per share
Altius Minerals Corporation (TSX: ALS; OTCQX: ATUSF) (“Altius” or the “Corporation”)
reports second quarter revenue of $27.4 million compared to $21.2 million for the same period in
2021. Q2 2022 attributable royalty revenue (1,2) of $ 28.6 million ($0.61 per share (1,2)) was 31%
higher than the $21.9 million ($0.53 per share) reported for the comparable quarter in 2021. On
a year-to-date basis, attributable royalty revenue of $54.1 million is higher by 36% compared to
the $39. 7 million reported for the six months ended June 30, 2021. These figures represent
quarterly and six-month period revenue records for the Corporation, mainly based upon higher
realized commodity prices.
Adjusted EBITDA(1,2) of $24.4 million or $ 0.52 per share(1,2) during Q2 2022 increased by 38%
compared to $17.7 million or $0.43 per share during the prior year quarter. The adjusted EBITDA
margin in the second quarter was 85% versus 81% in last year’s comparable quarter. The Mineral
Royalties segment had an EBITDA margin of 91% and 89% for the current and prior year quarters
respectively. On a year-to-date basis, adjusted EBITDA of $48.0 million is up 49% from the year-
over-year comparable adjusted EBITDA of $32.3 million. The increase in adjusted EBITDA follows
the increase in attributable revenue but was partially offset by an increase in public company
related expenses within the Renewable Royalties segment , as Altius Renewable Royalties Inc.
completed its initial public offering in March 2021.
Q2 2022 adjusted operating cash flow(1,2) of $16.6 million or $0.35 per share(1,2) compares to $5.8
million or $ 0.14 per share in last year’s comparable quarter. On a yea r-to-date basis, adjusted
operating cash flow (1,2) of $30.8 million compares to $14.6 million for the six-month period ended
June 30, 2021. Adjusted operating cash flow benefitted from increased 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 junior mining equities portfolio.
During the quarter and year-to-date periods new Project Generation investments exceeded equity
sales for a net cost of $1.2 million and $2.6 million respectively. In the same period in 2021, equity
sales exceeded investments by $1.1 million and $3.7 million.
Net earnings of $8.7 million or $0.18 per share for Q2 2022 compares to net earnings of $14.5
million or $0.38 per share in Q2 2021. Adjusted net earnings per share(1,2) of $0.23 in the current
quarter is consistent with Q2 2021. The main adjusting items in the second quarter of this year
are $1.9 million ($0.04 per share) and $1.1 million ($0.02 per share ) for unrealized losses on
derivatives related to the revaluation of share purchase warrants on junior mining equities and
foreign exchange revaluation. The prior year quarter was adjusted for gains related to associates
and joint ventures, derivatives, sale of mineral properties and impairment charges.
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
In T ho usands o f C anadian D o llars
Adjusted Net Ear nings June 30 , 20 22 June 30 , 20 21
Net earnings attributable to common 8,21 3$ 1 5,61 2$
Addback (deduct):
Unrealized loss on fair value adjustment of derivatives 1 ,920 975
Foreign exchange revaluation 1 ,071 (446)
Impairment charges - 2,889
Realized gain on disposal of derivatives - (1 ,076)
Gain on disposal of mineral property - (1 ,962)
Gain on equity investments and joint ventures
(1) - (7,445)
Tax impact (61 7) 993
Adjusted net earnings 1 0,587$ 9,540$
Adjusted net earnings per share 0.23$ 0.23$
Thr ee months ended
(1) Includes the following items from the consolidated statement of net earnings (loss): (loss) earnings from joint ventures, gain on loss of control of
subsidiary, dilution gain on issuance of shares by an associate and joint venture, and gain on reclassification of an associate.
Portfolio Performance
The following table summarizes the attributable royalty revenue:
Summar y of attr ibutable r oyalty r evenue
( in t ho usand s o f C anad ian d o llars)
Q2 20 22 Q1 20 22 Q2 20 21
Base and battery metals 8,31 5$ 9,960$ 9,394$
Potash 1 1 ,450 9,903 4,51 6
Iron ore
(1) 2,871 1 ,437 5,029
Thermal (electrical) coal 4,520 3,1 1 3 2,1 40
Other royalties and interest 1 ,466 1 ,079 827
Attr ibutable r oyalty r evenue 28,622$ 25,4 92$ 21,90 6$
See non-GAAP financial measures section of our M D&A for definition and reconciliation of attributable royalty revenue
(1)
Labrador Iron Ore Royalty Corporation dividends received
Base and battery metals (primarily copper) revenue of $8.3 million for the quarter compares to
$9.4 million reported for the second quarter of 2021 due to reduced attributable production
volumes. Mine production at the 777 mine ended during the quarter upon the depletion of
reserves, with small royalty payments expected for the balance of this year related to residual
processing and sales. Revenue from Chapada in the second quarter and for the balance of the
year reflect s Lundin Mining’s revised operating guidance announced in July 2022 which now
targets copper production of 45,000 to 50,000 tonnes, compared to 52,019 tonnes in 2021. Early
year rainfall levels were higher than usual, which had the effect of reducing production. Revenue
from Voisey’s Bay has been lower than 2021 both in the quarter and the first half of the year due
to the ongoing transitional period between the depletion of the Ovoid mine and ramp -up to full
production of the Voisey’s Bay underground Reid Brook and Eastern Deeps operations and is in
line with guidance provided by the operator. Adventus Mining and Salazar Resources reported
during the quarter that they have received technical approval of their Environmental and Social
Impact Assessment, a Certificate of Technical Feasibility for the construction of tailings and waste
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
rock facilities, and a preliminary commitment with regard to an Investment Protection Agreement
for the Curipamba - El Domo copper-gold project in Ecuador, which is subject to an Altius NSR
royalty. Lundin Mining reported that it continues to aggressively advance its new high -grade
Saúva discovery, which is located 15 km north of current mining operations at Chapada on lands
subject to Altius’s copper streaming agreement. A maiden resource estimate for the discovery is
expected early in 2023 and Lundin has indicated that it will now include the potential for the
incorporation of Saúva as part of its ongoing expansion studies.
Potash portfolio revenue during the quarter was $11.5 million, which compares to $4.5 million in
the comparable quarter of 2021, reflecting significantly higher average realized prices as well as
price reconciliation adjustments of $0.9 million related to 2021 sales. On a year -to-date basis,
potash revenue of $21.4 million exceeds the $19.3 million revenue reported for the full year 2021.
On June 9, 2022 Nutrien Ltd. announced plans to increase its potash production by approximately
5 million tonnes to approximately 18 million tonnes per annum, a 40% increase over 2020 levels,
by 2025. Mosaic has reported that Esterhazy K3 reached its operating run rate target of 5.5
million tonnes per year at the end of the first quarter, and Mosaic plans to continue the optimization
of the complex with the addition of three new underground mines over the next year, resulting in
an incremental one million tonnes of production capacity.
Iron ore revenue in the form of dividends from Labrador Iron Ore Royalty Corp. (LIORC) was
$2.9 million compared to $5.0 million in Q2 2021 largely due to higher sustaining and growth
capital spending and lower declared equity dividends by the Iron Ore Company of Canada (IOC).
LIORC serves as a pass -through vehicle for IOC production -based royalty revenues and equity
dividends.
Thermal coal revenue of $4.5 million during the current quarter compared to $2.1 million during
the second quarter of last year. The current quarter revenue included approximately $1.6 million
as an adjustment to royalties received during 2021 and Q1 2022 that mainly r elates to inflation-
based rate escalation provisions of the Genesee royalty agreement.
Altius Renewable Royalties Inc. (“ARR”) (ARR: TSX) released its Q2 2022 results on August 4,
2022 ARR Q2 2022 Results. The Corporation holds 59% of the common shares of ARR. ARR
reported Q2 2022 attributable royalty revenue of US$0.7 million, which represents its 50% joint
venture interest in Great Bay Renewables (“GBR”). The royalty revenue was generated mainly
by Northleaf’s Cotton Plains and Old Settler wind projects and Longroad Energy ’s Prospero 2
solar project, which are described in greater detail in the ARR MD&A and financial statements.
On May 4, 2022, ARR announced a US$32.5 million investment into a new global renewables
platform, Bluestar Energy Capital LLC and its U.S. development subsidiary, Nova Clean Energy,
LLC. Subsequent to quarter end, on July 29, 2022, the Corporation announced that GBR has
entered into a US$40 million transaction with U.S. renewable energy developer Hodson Energy
LLC (“Hodson”), to gain future royalties related to Hodson’s portfolio of solar plus battery storage
development projects.
Gold
AngloGold Ashanti continued an aggressive delineation and exploration focused program at its
new Silicon Project gold discover y in Nevada, while Altius indicated during the quarter that it is
considering various strategic alternatives for the 1.5% NSR royalty interest it holds over the
project.
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
Additional information on the Corporation’s results of operations and developments in its Project
Generation division are included in the Corporation’s MD&A and Financial Statements which were
filed on SEDAR today and are also available on the Corporation’ s website at
www.altiusminerals.com.
Capital Allocation Summary
The Corporation’s capital allocation priorities are linked to its strategy of creating per share value
growth through a portfolio of assets that relate to long-life, high margin operations while providing
growing shareholder capital returns.
On April 14, 2022 the Corporation announced that Fairfax Financial Holdings Limited, through
certain of its affiliates (collectively, “Fairfax”) , exercised 6,670,000 common share purchase
warrants (the “Warrants”) at an exercise price of $15 per common share in the ca pital of Altius
(each, a “Common Share”) for gross proceeds of $100 million. Fairfax elected to pay the exercise
price of the Warrants by surrendering its $100 million Preferred Securities to Altius for
cancellation, in full satisfaction of such exercise price. Altius now has no outstanding Warrants,
Preferred Securities or resulting distribution obligations after this transaction, and Fairfax has
become the holder of approximately 13.9% of Altius issued and outstanding common shares. The
Corporation made interest and other payments of $2.1 million on closing.
During the quarter, the Corporation made scheduled debt repayments of $2.0 million and paid
cash dividends of $3.2 million. The Corporation also expended during the period $1.9 million in
the repurchase and cancellation of 1 00,000 shares under its Normal Course Issuer Bid . The
Corporation drew down $10 million on its revolving credit facility during the quarter for the
acquisition of investments.
On June 7, 2022 the Corporation funded a US$10 million investment in the form of common
shares in Invert Inc. ("Invert"), a carbon streaming and investment company making investments
in carbon credit projects and building a platform to place the credits with corporate and individual
participants to reach their decarbonization objectives. This was part of a US$30 million financing,
subscribed by pension funds and a combination of retail and institutional investors. This
investment follows earlier transactions with Altius by way of a US$5 million secured convertible
note this year and an equity investment of US$0.5 million funded in 2021.
Liquidity
Cash and cash equivalents at June 30, 2022 were $107.4 million, compared to $ 100 million at
the end of 2021. Cash, excluding $79.7 million held by ARR, was $28 million. The value of publicly
traded Project Generation business equity holdings was $ 47.4 million at June 30, 2022 . The
market value of LIORC shares was $ 90.4 million and the market value of ARR shares including
the in-the-money value of share purchase warrants was $140 million.
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
Dividend Declaration
The Corporation’s board of directors has declared a n increased quarterly dividend of $0.08 per
share, which represents a 14% increase over recent quarterly levels . The current quarterly
dividend is payable to all shareholders of record at the close of business on August 31, 2022. The
dividend is expected to be paid on or about September 15, 2022.
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 September 15, 2022 dividend, non-registered
shareholders must provide instruction to their brokerage and registered shareholders must
provide completed enrollment forms to the transfer agent by August 24, 2022, five business days
prior to record date. Stock market purchases made under the DRIP for the September 15, 2022
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 dividends
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. Dividends paid by Altius on its common shares 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 Rep orting 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 have a standardized meani ng, 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.
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
Second Quarter 2022 Financial Results Conference Call and Webcast Details
Date: August 9, 2022
Time: 9:00 AM ET
Toll Free Dial-In Number: +1 (888) 440-2151
International Dial-In Number: +1 (438) 803-0555
Conference Call Title and ID: Altius Q2 2022 Results, ID 6430950
Webcast Link: Q2 2022 Financial 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 in cluding 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 based 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 47,680,588 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
This new s 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 regulation.
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