Altius Reports Q3 2023 Attributable Royalty Revenue of $17.8M and Adjusted Earnings(1) of $2.6M
Altius Minerals Corporation TSX: ALS | OTCQX: ATUSF
November 08, 2023 | St. John’s, Newfoundland
Altius Reports Q3 2023 Attributable Royalty Revenue of $17.8M and Adjusted
Earnings(1) of $2.6M
All references in thousands of Canadian dollars, except per share amounts, unless otherwise indicated
Altius Minerals Corporation (TSX: ALS; OTCQX: ATUSF) (“Altius” or the “Corporation”) reports
third quarter revenue of $15.2 million compared to $25.9 million for the same period in 2022, while
attributable royalty revenue (1) of $17.8 million ($0.38 per share (1)) compares to $26.2 million ($0.55 per
share) reported in Q3 2022.
Brian Dalt on, CEO c ommented, “ Third quarter revenue primarily reflects substantially lower realized
potash prices relative to the record levels of last year as well as the scheduled closure of the 777 mine in
2022. We continue to believe that most prices remain below those required to incentivize growth
investment and to offset projected market supply -demand deficits over coming periods. Despite the
continued weakness in prices, positive progress at several potential development and expansion based
assets continued during the quarter, as noted in the quarterly highlights below.”
Quarterly Highlights
• AngloGold Ashanti (“AGA”) provided an update on August 4 th 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 that is in addition to the more than 4 million
ounce inferred resource estimate that it has published for Silicon. An initial Inferred Mineral
Resource estimate for Merlin and a pre -feasibility study for the Expanded Silicon Project that
considers ‘synergies from the increased economy of scale and integrated infrastructure, with
potential for large scale mining’ are expected to be completed by year end. Altius holds a 1.5%
NSR royalty related to the project.
• The Corporation recognized its first e ver royalty revenue related to lithium production from its
ownership interest in Grota do Cirilo.
• ARR Q3 royalty revenue of $2.6 million was up 27% from the same quarter last year, as a result
of continued renewable royalty portfolio growth and stronger power prices experienced due to
warmer summer weather and increased power demand. Included in ARR's financial results is a
$2.9 million loss in joint venture associated with Great Bay Renewables equity investment in an
early-stage renewable energy development entity. In addition, ARR recently announced that the
jointly controlled entity Great Bay Renewables closed a US$247 million credit facility that will
enable it to continue to grow its renewable royalty business on a non dilutive basis.
• Coal related royalty revenue is expected to end by year end as the Genesee power plant
completes its conversion to natural gas based fuelling.
• IOC has reduced their production guidance for the remainder of 2023 following extended plant
downtown and conveyor belt failures while also recovering from wildfires in northern Quebec.
• Nutrien has indicated a strong third quarter rebound in potash fertilizer demand, led by North
American and Brazilian growers, and increased its full year 2023 and 2024 global shipment
expectation guidance. The decrease in potash prices from prior year record levels appears to
have stabilized and prices are expected to increase slightly throughout the third quarter in certain
key markets.
• 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. It has commented that it expects the work to result
in increasing resource estimates in coming periods while ongoing expansion study work
continues.
Altius Minerals Corporation TSX: ALS | OTCQX: ATUSF
• Champion Iron continued to progress updated feasibility studies concerning the potential
development of the Kami Iron Ore project in the Labrador Trough with full results expected later
this year or early next year. Altius holds a 3% gross sales royalty on the Kami project.
Adjusted EBITDA(1) of $12.5 million or $0.26 per share (1) during Q3 2023 compares to $23.7 million or
$0.50 per share during the prior year quarter. The adjusted EBITDA margin in the third quarter was 69%
versus 84% in last year’s comparable quarter reflecting lower revenue against relatively stable fixed
costs. The Mineral Royalties segment had an EBITDA margin of 76% and 87% for the current and prior
year quarters, respectively.
Q3 2023 adjusted operating cash flow(1) of $11.0 million or $0.23 per share(1) compares to $25.9 million or
$0.54 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 $ 3.5 million or $0.08 per share for Q3 2023 compares to net earnings of $11.5 million or
$0.22 per share in Q3 2022. Loss in joint venture includes $2.9 million of losses associated with Great
Bay Renewables equity investment in an early -stage renewable energy development entity reflecting
increased levels of expenses with minimal offsetting revenues. Adjusted net earnings per share (1) of $0.05
in the current quarter compares to adjusted net earnings per share of $0.20 per share in Q3 2022. The
main adjusting items in the third quarter of this year are unrealized gains on deriv atives related to the
revaluation of share purchase warrants on junior mining equities, foreign exchange losses, and gains on
disposal of mineral properties.
Three months ended
Adjusted Net Earnings September 30, 2023 September 30, 2022
Net earnings attributable to common $ 3,703 $ 10,712
Addback (deduct):
Unrealized gain on fair value adjustment of derivatives (1,471) (843)
Foreign exchange loss 460 2,196
Gain on disposal of mineral property (276) –
Non-recurring other income – (2,070)
Tax impact 166 (223)
$ 2,582 $ 9,772
Portfolio Performance
The following table summarizes the attributable royalty revenue:
Three months ended
Summary of attributable royalty revenue September 30, 2023 June 30, 2023 September 30, 2022
Base and battery metals 4,231 $ 4,834 $ 5,535
Potash 3,869 6,081 10,276
Iron Ore# 3,553 2,431 3,740
Thermal (electrical) coal 2,000 2,626 3,768
Renewable energy 2,648 1,310 2,089
Interest and other 1,507 1,416 827
Attributable royalty revenue $ 17,808 $ 18,698 $ 26,235
(#) Labrador Iron Ore Royalty Corporation dividends
Altius Minerals Corporation TSX: ALS | OTCQX: ATUSF
Base and battery metals contributed $ 4.2 million to revenue compared to $ 5.5 million in Q3 2022 .
Revenue decreased compared to the third quarter of 2022 as a result of the scheduled closure of the 777
mine at the end of June 2022, as well as lower copper stream deliveries from Chapada.
At Chapada, the operator has increased full year copper production guidance to a range of 45,000 -48,000
tonnes due to an expected improvement in grade and recovery profiles in the latter part of the year.
Revenues during the third quarter were however impacted by the timing of sales relative to production
and lower throughput and scheduled grades. Studies relating to mine and plant expansion continued
during the quarter and 11,713 metres of drilling were completed at the recent high -grade Saúva discovery
and at near-mine targets.
At Voisey’s Bay, nickel production decreased by 19% year over year mainly due to the continued
transitioning of Voisey’s Bay production to two new underground mines from a previous single open pit.
The operator has noted that it expects underground operations to deliver ramped up production levels
beginning from the third quarter of 2024.
The Corporation recognized its first ever lithium based royalty revenue as Phase 1 production continued
to ramp up and obtain premium quality product pricing at the Grota do Cirilo mine during the third quarter.
The operator also continues to advance its planned Phase 2 and 3 expansion programs while also
announcing that recent ongoing exploration efforts indicate the potential for an approximately 25%
increase in overall project mineral resources.
Potash royalty revenue of $ 3.9 million in Q3 2023 decreased from $ 10.3 million reported during the
comparable quarter last year mainly reflecting lower average realized prices versus prior year record
levels. Attributable royalty volumes were slightly lower for the quarter as compared to 2022 reflecting the
timing of annual maintenance programs and impacts of curtailment at the Cory and Rocanville mines.
Nutrien has reported that it has increased its current year forecast for global potash shipments to 65 -67
million tonnes on the strength of increased second half demand and has also noted its expectation for
2024 global shipments to increase to a range of 67 - 71 million tonnes.
Iron ore royalty revenue, in the form of dividends received from Labrador Iron Ore Royalty Corporation
(“LIORC”), of $3.6 million was received in Q3 2023 compared to $3.7 million in the third quarter of 2022.
Operations at IOC were impacted by extended plant downtime, a conveyor belt failure and regional
wildfires that have collectively resulted in reduced full year production guidance to 15.8 - 16.7 million
tonnes from 17.0 -18.7 million tonnes previously. Average Q3 2023 high grade fines and pellet prices
were down 8% and 10% respectively over the same quarter in 2022.
Champion is expected to announce the results of an updated feasibility study for the Kami project towards
the end of the current year or early next. It has recently commented that its test work to date has
indicated the project's amenability to delivering a globally rare premium grade product that is suitable to
serve the rapidly growing Electric Arc Furnace based steel making segment. Altius holds a 3% gross
sales royalty interest in the Kami project.
Thermal coal royalty revenue of $ 2.0 million was received in Q3 2023 compared to $ 3.8 million during
the third 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
convert to natural gas based fuelling and the Corporation expects to receive no further royalty revenue
related to coal mining beyond the current year.
Altius Renewable Royalties Corp. (“ARR”) (ARR: TSX) released its Q3 2023 results on November 6,
2023 ARR Q3 2023 Results . Over the pa st several years the Corporation has been actively allocating
the remainder of its coal based royalty revenues into supporting the growth of 58% owned Altius
Renewable Royalties. ARR reported that Q3 2023 attributable royalty revenue continues to ramp up,
reaching US$1.9 million (~C$2.6 million) as compared to US$1.6 million in t he prior year quarter. This
represents the first period in which renewable energy based attributable royalty revenue has eclipsed coal
based revenue within the portfolio.
The increase reflects recently acquired operating stage royalties as well as the commencement of
operations at two previously acquired development stage projects. Electricity prices have increased in the
current quarter due to warm weather and increased power demand in certain of the markets in which the
GBR joint venture (50% ARR / 50% Apollo) has operating stage royalty interests. ARR also indicated that
the joint venture continues to advance a strong pipeline of new royalty investment opportunities and
subsequent to quarter end the GBR joint venture entered into an up to US$247 million credit facility to
support the potential funding of these opportunities. Further details regarding ARR and its activities can
be found in the ARR MD&A and financial statements.
Altius Minerals Corporation TSX: ALS | OTCQX: ATUSF
Liquidity and Capital Allocation Summary
Cash and cash equivalents at September 30, 2023 were $67.2 million, compared to $82.4 million at the
end of 2022. Cash, excluding $51.0 million held by ARR, was $16.2 million.
At quarter end the approximate market value of various public equity holdings included:
• $158.9 million for shares of ARR (including the in-the-money value of share purchase warrants)
• $120.2 million for shares of LIORC
• $50.5 million for the value of the indirectly held interest in the shares of Lithium Royalty
Corporation
• $44.6 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 $ 5.7 million during the period in the repurchase
and cancellation of 274,600 shares under its Normal Course Issuer Bid. At September 30, 2023 the
Corporation carried a balance of $ 34.0 million under its fixed rate term debt facility and $ 81.6 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 November 30,
2023. The dividend is expected to be paid on or about December 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.
In order to be eligible to participate in respect of the December 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 November 24, 2023 , five business days prior to
record date. Stock market purchases made under the DRIP for t he December 15, 2023 paym ent 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
previously will continue to be enrolled unless they direct otherwise. For more information, please see
https://altiusminerals.com/investor-information/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). 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.
Altius Minerals Corporation TSX: ALS | OTCQX: ATUSF
Third Quarter 2023 Financial Results Conference Call and Webcast Details
Date: November 09, 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 Q3 2023 Financial Results, ID 46475901
Webcast Link: Q3 2023 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 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 based electricity, several
key battery metals (lithium, nickel and cobalt), clean ir on 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 47,227,903 common shares issued and
outstanding that are listed on Canada’s Toronto Stock Exchange. It is includ ed 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 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