Altius Reports Q2 2023 Attributable Royalty Revenue of $18.7M and Adjusted Earnings (1,2) of $2.7M
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
August 8, 2023 | St. John’s, Newfoundland
Altius Reports Q2 2023 Attributable Royalty Revenue of $18.7M and Adjusted Earnings (1,2) of
$2.7M
Altius Minerals Corporation (TSX: ALS; OTCQX: ATUSF) (“Altius” or the “Corporation”)
reports second quarter revenue of $17.3 million compared to $27.4 million for the same period in
2022, while attributable royalty revenue (1,2) of $ 18.7 million ($ 0.39 per share (1,2)) compares to
$28.6 million ($0.61 per share) reported in 2022.
Brian Dalton, CEO commented, “Second quarter revenues primarily reflect lower realized prices
on a year over year basis but also the scheduled closure of the 777 mine during the year . We
continue to believe that most prices remain below those required to incentivize growth investment
and to offset projected market deficits over coming periods. The highlight from within our royalty
portfolio related to the release by AngloGold Ashanti of a n exploration target estimate of 6 -8
million ounces of gold from the Merlin deposit that is located adjacent to the south of the Silicon
Deposit, for which a reso urce estimate of more than 4 million ounces was published earlier this
year.”
Quarterly Highlights
• AngloGold Ashanti (“AGA”) on August 4th provided an update on the rebranded ‘Expanded
Silicon Project’, which now includes both the Silicon and Merlin gold deposits. AGA has
stated an exploration target for Merlin of 6 to 8 million ounces, with a grade-tonnage range
estimate of 230 -250 million tonnes of 0.8 to 1.0 g rams/tonne gold. A n initial Inferred
Mineral Resource estimate and Concept Study for the known mineralization is expected
in H2 2023. Merlin is located adjacent to the south of the Silicon Deposit for which a more
than 4 million ounce inferred resource estimate was published by AGA earlier this year. It
also announced that it expects to complete a pre -feasibility study by year end that
considers both Silicon and Merlin and that will include ‘synergies from the increased
economy of scale and integrated infrastructure, with potential for large scale mining’. Altius
holds a 1.5% NSR royalty related to the project.
• Lithium Royalty Corp . (“LRC”) distributed $8.9 million to the Corporation as a return of
capital to its pre-IPO shareholders.
• ARR Q2 royalty revenue of $1.3 million was up 72% from the same quarter last year, as
a result of continued renewable royalty portfolio growth.
• Nutrien has lowered potash production guidance for this year, following the temporary
curtailment of production at Cory and Rocanville due to the strike at the Port of Vancouver.
Nutrien also announced that it will pause its potash portfolio production expansion
program in light of market conditions and capital allocation prioritization decisions.
• Mosaic announced an increase in total nameplate capacity to 7.8 million tons at the
Esterhazy potash mine, which compares to 6 million tons in 2022. Further debottlenecking
at Esterhazy is expected to add an additional 400kt of capacity.
• Lundin Mining continued an aggressive delineation and expansion drilling program at the
Sàuva copper discovery within the Chapada district and commented that it expects the
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
work to result in increasing resource estimates in coming periods.
• Champion Iron continued to work towards completion of an updated feasibility study for
the Kami iron ore project located in Western Labrador , which is targeting production of
direct reduction grade pellet feed. Altius holds a 3% gross sales royalty on the Kami
project.
Adjusted EBITDA(1,2) of $13.7 million or $0.29 per share(1,2) during Q2 2023 compares to $24.4
million or $ 0.52 per share during the prior year quarter. The adjusted EBITDA margin in the
second quarter was 73% versus 85% in last year ’s comparable quarter owing to the lower
revenue. The Mineral Royalties segment had an EBITDA margin of 81% and 90% for the current
and prior year quarters, respectively.
Q2 2023 adjusted operating cash flow(1,2) of $14.1 million or $0.30 per share(1,2) compares to $16.6
million or $0.35 per share in last year’s comparable quarter. The decrease is largely reflective of
higher taxes and interest paid as well as lower royalty revenues.
Net earnings of $ 3.3 million or $0. 06 per share for Q2 2023 compares to net earnings of $ 8.7
million or $0.18 per share in Q2 2022. Adjusted net earnings per share(1,2) of $0.06 in the current
quarter compares to adjusted net earnings per share of $0. 23 per share in Q2 2022. The main
adjusting items in the second quarter of this year are unrealized losses on derivatives related to
the revaluation of share purchase warrants on junior mining equities, realized gains on the
disposal of such share purchase warrants, foreign exchan ge, and gains on disposal of mineral
properties.
In T ho usands o f C anadian D o llars
Adjusted Net Ear nings June 30 , 20 23 June 30 , 20 22
Net earnings attributable to common 3,078$ 8,21 3$
Addback (deduct):
Unrealized loss on fair value adjustment of derivatives 738 1 ,920
Foreign exchange (gain) loss (565) 1 ,071
Realized gain on disposal of derivatives (365) -
Gain on disposal of mineral property (1 61 ) -
Tax impact - (61 7)
Adjusted net earnings 2,725$ 1 0,587$
Adjusted net earnings per share 0.06$ 0.23$
Thr ee months ended
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
Portfolio Performance
The following table summarizes the attributable royalty revenue:
Summary of attributable royalty revenue
(i n thousands of Canadi an dol l ars)
Q2 2023 Q1 2023 Q2 2022
Base and battery metals 4,834$ 4,869$ 8,31 5$
Potash 6,081 9,032 1 1 ,450
Iron ore (1 ) 2,431 1 ,870 2,871
Thermal (electrical) coal 2,626 3,002 4,520
Renewable energy 1 ,31 0 1 ,345 763
Other 1 ,41 6 1 ,275 703
Attributable royalty revenue 18,698$ 21,393$ 28,622$
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 $4.8 million to revenue compared to $ 8.3 million in Q 2
2022. Revenue decreased compared to the second quarter of 2022 after the scheduled closure
of the 777 mine in Q2 of 2022, partially offset by higher revenue and volumes from Chapada.
At Voisey’s Bay production was impacted by longer than anticipated annual maintenance at the
Long Harbour processing facility.
On May 1, 2023 Altius received $8.9 million from LRC as a return of capital distribution to its pre-
IPO shareholders. Altius expects to receive a combination of cash and shares over the next 24
months as described in LRC’s prospectus. In the first quarter of 2023 LRC, of which Altius is a
co-founding investor, completed an initial public offering to raise $150 million. The Corporation
indirectly holds a 9.55% interest in LRC.
In addition, Altius holds minority partnership -based interests in each of LRC’s Grota do Cirilo
(commenced production during the quarter), Tres Quebradas and Mariana royalties (both of which
are expected to complete construction and begin operations later this year or early next year).
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 $6.1 million in Q2 2023 decreased from $11.5 million reported during
the comparable quarter last year reflecting lower average realized prices and price reconciliation
adjustments of $ 0.9 million that were recorded in the second quarter of 2022 relating to 2021
production.
Iron ore royalty revenue , in the form of dividends received from Labrador Iron Ore Royalty
Corporation (“LIORC”), of $2.4 million was received in Q 2 2023 compared to $2.9 million in the
second quarter of 2022. The decrease related to higher levels of sustaining and growth capital
investments that limited Iron Ore Company of Canada (“IOC”) equity dividends, partially offset by
a higher LIORC share ownership level. 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 located near its Bloom Lake Mine and is subject to a 3% GSR
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
royalty in favor of Altius. It noted during the quarter that preliminary metallurgical results indicate
potential for the production of DR pellet feed quality conc entrates, which are projected to meet
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 $2.6 million was received in Q2 2023 compared to $4.5 million
during the second 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 early next year.
Altius Renewable Royalties Inc. (“ARR”) (ARR: TSX) released its Q 2 2023 results on August
1, 2023 ARR Q2 2023 Results. The Corporation holds 58% of the common shares of ARR. ARR
reported increased Q2 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 acquired
development stage projects. Electricity prices in the first half of 2023 have been lower due to a
mild winter and lower competing natural gas prices, however prices have increased in recent
weeks due to warmer summer weather and increased power demand in certain of the markets in
which the GBR joint venture has operating stage royalty interests. 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.
Liquidity and Capital Allocation Summary
Cash and cash equivalents at June 30, 2023 were $79.3 million, compared to $82.4 million at the
end of 2022. Cash, excluding $54.5 million held by ARR, was $24.8 million.
At quarter end the approximate market value of various public equity holdings included:
• $173.3 million for shares of ARR (including the in -the-money value of share purchase
warrants)
• $116.2 million for shares of LIORC
• $55.6 million for the value of the investment in LRC
• $41.8 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. The Corporation also expended $2.1 million during the period in
the repurchase and cancellation of 98,100 shares under its Normal Course Issuer Bid. At quarter
end the Corporation carried a balance of $36 million under its fixed rate term debt facility and
$80.7 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
August 31, 2023. The dividend is expected to be paid on or about September 15, 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.
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
In order to be eligible to participate in respect of the September 15, 2023 dividend, non-registered
shareholders must provide instruction to their brokerage and registered shareholders must
provide completed enrollment forms to the transfer agent by September 8, 2023, five business
days prior to record date. Stock market purchases made under the DRIP for the September 15,
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 information, 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 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 have 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.
Second Quarter 2023 Financial Results Conference Call and Webcast Details
Date: August 9, 2023
Time: 9:00 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 Minerals Q2 2023 Financial Results, ID 46475901
Webcast Link: Q2 2023 Financial Results
TSX: ALS | OTCQX: ATUSF Altius Minerals Corporation
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 47,497,343 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 reaso nable
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