Altius Reports Q2 2020 Attributable Royalty Revenue of $13.0M and Adjusted Operating Cash Flow of $13.4M
Date:
Ticker Symbol:
06-Aug 2020
ALS.TSX
Civic Address:
Altius Minerals Corporation
2nd Floor, 38 Duffy Place
St. John’s, NL, A1B 3M5, CANADA
Website: www.altiusminerals.com
Toll Free: 1.877.576.2209
Fax: 709.576.3441
e-mail: [email protected]
Mailing Address:
Altius Minerals Corporation
P.O. Box 8263 Stn “A”
St. John’s, NL, A1B 3N4, CANADA
Altius Reports Q2 2020 Attributable Royalty Revenue of $13.0M
and Adjusted Operating Cash Flow of $13.4M
St. John’s - Altius Minerals Corporation (TSX: ALS; OTCQX: ATUSF ) (“Altius” or the “Corporation”) reports attributable
royalty revenue(1) of $13.0 million or $0.31 per share(1) for the second quarter ended June 30, 2020 compared to $ 19.5
million or $0.46 per share in the comparable quarter last year and $16.3 million or $0.39 per share in Q1 2020.
Adjusted EBITDA of $10.0 million or $0.24 per share compares to $16.3 million or $0.38 per share in Q2 2019 and to $12.7
million or $0.30 per share in Q1 2020. Adjusted operating cash flow(1) of $13.4 million or $0.32 per share is higher than
both its year over year comparable period of $11.8 million or $0.28 per share and last quarter’s $13.2 million or $0.32 per
share due to lower general & administration expenditures and lower corporate income taxes paid. The Adjusted EBITDA
margin in the second quarter was 77%.
Adjusted net earnings of $1.4 million or $0.04 per share compares to $6.5 million or $0.15 per share in Q2 2019 (see table)
and to $3.4 million or $0.08 per share in Q1 2020. The decline in adjusted e arnings per share follows the trend of lower
revenue and is impacted this quarter by non-cash share based compensation charges in Q2 2020 ($2.6 million compared
to $0.7 million in Q2 2019 or $0.5 million in Q1 2020) . These charges encompassed both annual incentive compensation
grants to executive management and grants of options to Altius Renewable Royalties (“ARR”) management that are
convertible to equity in ARR.
Portfolio Performance
Base metals (copper, nickel, zinc and cobalt) (37% of total revenue in Q2 2020)
Base metal revenue contributed $ 4.8 million in the second quarter compared to $6.4 million in the year ago comparable
quarter and $6.6 million in the first quarter, with most of the decline attributable to lower average realized prices. Chapada
and 777 provided $2.5 million and $2.2 million respectively while Voisey’s Bay contributed approximately $0.1 million, while
the mine was on care and maintenance and processing only stockpiled material . In the second quarter, Vale stated that
operations at Voisey’s Bay would resume progressively in July and that this resumption would also include critical path
items related to the underground expansion.
Potash (31% of total revenue in Q2 2020)
Potash royalty revenue of $4.0 million in the second quarter this year compared to $5.2 million in the comparable quarter
last year and $ 4.4 million in the first quarter of 2020. Volumes remained stable during the quarter while prices remained
weak.
Iron ore (10% of total revenue in Q2 2020)
Iron ore revenue related to dividends received from Labrador Iron Ore Royalty Corp. (“LIORC”) was $1.3 million in the
quarter compared to $3.5 million a year ago and $ 1.0 million in Q1 2020. For the second consecutive quarter, Iron Ore
Company of Canada opted not to pay a dividend to its shareholders despite strong product pricing and improved production
levels. This has in turn translated into significantly lower dividends paid by Labrador Iron Ore Royalty Corporation. Altius
continues to hold 2.9 million shares of LIORC.
Thermal coal (17% of total revenue in Q2 2020)
Thermal coal revenue contributed $2.2 million in the quarter compared to $3.1 million a year ago and to $2.5 million in Q1
2020. Declines in revenue and volumes resulted from a combination of lower industrial power usage by the oil and gas
sector and broader COVID-19 lockdown related demand reductions. The lower electricity demand has translated into lower
than forecast coal production levels at Paintearth and Sheerness in particular, while Genesee has continued to operate at
Date:
Ticker Symbol:
06-Aug 2020
ALS.TSX
Civic Address:
Altius Minerals Corporation
2nd Floor, 38 Duffy Place
St. John’s, NL, A1B 3M5, CANADA
Website: www.altiusminerals.com
Toll Free: 1.877.576.2209
Fax: 709.576.3441
e-mail: [email protected]
Mailing Address:
Altius Minerals Corporation
P.O. Box 8263 Stn “A”
St. John’s, NL, A1B 3N4, CANADA
or near capacity. Genesee is a more modern and efficient generating facility that is less impacted by lower prices and carbon
tax related cost increases.
Subsequent to quarter end, on July 27, 2020 Altius announced an agreement with Liberty Metals & Mining Holdings, LLC
(“LMM”), to acquire its 44.9% interest in the thermal coal royalty based limited partnerships, increasing Altius’s ownership
to 97.3% from its prior level of 52.4%. The transaction has since closed, with an adjusted purchase price of approximately
$9 million after taking into account working capital adjustments , compared to revenue last year from the LMM interest of
$13.5 million, which included $2.7 million for the Cheviot metallurgical coal royalty also held under the same partnership
structure.
Metallurgical coal (4% of total revenue in Q2 2020)
Metallurgical coal provided $0.5 million, which compares to $1.0 million in the comparable quarter last year and $0.6 million
in Q1 2020. Royalty revenue from C ardinal River will decrease as inventory stockpiles are depleted , consistent with
disclosure from Teck Resources Limited that the mine is currently in decommissioning after a 51 year operating life. None
of the closure or remediation costs will be borne by Altius as a royalty holder.
The following tables summarize the financial results for the quarter ended June 30, 2020 and comparable quarters ended
March 31, 2020 and June 30, 2019:
IN THOUSANDS OF CANADIAN DOLLARS (except per share amounts)
June 30, 2020 March 31, 2020 June 30, 2019
Revenue
Attributable royalty 13,035$ 16,279$ 19,533$
Project generation - - 5
Attributable revenue (1) 13,035 16,279 19,538
Adjust: joint venture revenue (2,765) (3,230) (4,353)
IFRS revenue per consolidated financial statements 10,270 13,049 15,185
Total assets 598,873$ 566,567$ 613,937$
Total liabilities 208,932 209,328 182,841
Cash dividends declared & paid to shareholders 1,945 2,090 2,143
Adjusted EBITDA (1 ) 10,048 12,723 16,344
Adjusted operating cash flow (1 ) 13,378 13,228 11,849
Net earnings 4,105 (3,167) (1,868)
Attributable revenue per share (1 ) 0.31$ 0.39$ 0.46$
Adjusted EBITDA per share (1 ) 0.24 0.30 0.38
Adjusted operating cash flow per share (1 ) 0.32 0.32 0.28
Net earnings per share, basic and diluted 0.10 (0.08) (0.05)
(1) See non-IFRS measures section for definition and reconciliation
Three months ended
Date:
Ticker Symbol:
06-Aug 2020
ALS.TSX
Civic Address:
Altius Minerals Corporation
2nd Floor, 38 Duffy Place
St. John’s, NL, A1B 3M5, CANADA
Website: www.altiusminerals.com
Toll Free: 1.877.576.2209
Fax: 709.576.3441
e-mail: [email protected]
Mailing Address:
Altius Minerals Corporation
P.O. Box 8263 Stn “A”
St. John’s, NL, A1B 3N4, CANADA
IN THOUSANDS OF CANADIAN DOLLARS
June 30, 2020 March 31, 2020 June 30, 2019
Revenue
Base metals
777 Mine 2,224 2,299$ 3,246$
Chapada 2,518 4,133 2,905
Voisey's Bay 93 127 252
Metallurgical Coal
Cheviot 466 590 982
Thermal (Electrical) Coal
Genesee 1,494 1,326 1,270
Paintearth - 75 98
Sheerness 565 1,030 1,535
Highvale 147 82 216
Potash
Cory 271 223 335
Rocanville 2,318 2,976 3,323
Allan 188 196 158
Patience Lake 100 139 -
Esterhazy 1,127 861 1,304
Vanscoy - 9 44
Lanigan 8 2 6
Iron ore (1) 1,293 1,006 3,494
Other
Renewables 112 907 111
Coal bed methane 72 134 100
Interest and investment 39 164 155
Attributable royalty revenue 13,035$ 16,279$ 19,533$
(1)LIORC dividends received
See non-IFRS measures section of this MD&A for definition and reconciliation of attributable revenue
Summary of attributable royalty revenue Three months ended
Notes
1. Attributable revenue, adjusted EBITDA and adjusted operating cash flow (and respective per share amounts) are intended to provide additional information only and
do not have any standardized meaning prescribed under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in
accordance with IFRS. Other companies may calculate these measures differently. The attributable revenue, adjusted EBITDA and adjusted operating cash flow per
share metrics divide the respective values by the basic weighted average number of shares outstanding during the period. For a reconciliation of these measures to
various IFRS measures, please see the Corporation’s MD&A which is available at http:/altiusminerals.com/financial-statements.
2. Adjusted earnings and respective per share amounts are intended to provide additional information only and do not have any standardized meaning prescribed
under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance wi th IFRS. Other companies may
calculate these measures differently. The calculations used for the adjusted earnings per share are as follows:
June 30, 2020 March 31, 2020 June 30, 2019
Reported earnings (loss) per share 0.10$ (0.08)$ (0.05)$
Adjusted for:
Equity accounted for losses/impairments 0.01 0.08 (0.01)
Impairment charges - - 0.25
(Gain) loss on adjustment of derivatives (0.04) 0.02 (0.02)
(Gain) loss on foreign exchange (0.03) 0.02 0.01
Tax expense (recovery) on adjustments - 0.04 (0.03)
Adjusted earnings per share 0.04$ 0.08$ 0.15$
Adjusted Earnings per Share
Three months ended
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.
Date:
Ticker Symbol:
06-Aug 2020
ALS.TSX
Civic Address:
Altius Minerals Corporation
2nd Floor, 38 Duffy Place
St. John’s, NL, A1B 3M5, CANADA
Website: www.altiusminerals.com
Toll Free: 1.877.576.2209
Fax: 709.576.3441
e-mail: [email protected]
Mailing Address:
Altius Minerals Corporation
P.O. Box 8263 Stn “A”
St. John’s, NL, A1B 3N4, CANADA
Liquidity and Dividend Declaration
Cash at June 30, 2020 was $30.6 million, with debt of $147 million after repayment of $5 million principal on the term debt
facility. The value of the LIORC equity position and junior project generation portfolio was $69.7 million and $48.4 million
respectively at quarter end.
The Corporation advises that its board of directors has declared a cash dividend of five cents per common share payable
to all shareholders of record at the close of business on August 31, 2020. The dividend is expected to be paid on or about
September 15, 2020. 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, 2020 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, five business days prior to record date. Stock market
purchases made under the DRIP for the September 15, 2020 payment will be satisfied by issuance from treasury at a 5%
discount to 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.
Q2 2020 Financial Results Conference Call and Webcast Information:
A conference call and webcast to discuss additional details relating to individual royalty performances and asset level
developments will be held tomorrow, August 7 2020:
Time: 9:00 a.m. EST on Friday, August 7, 2020
Dial-In Numbers: +1-(866) 521-4909 toll free (US/ Canada) or +1-(647) 427-2311
Conference Call Title and ID: 9361679, Altius Q2 2020 Financial Results
Webcast URL: Altius Q2 2020 Financial Results
The call will be webcast and archived on the Corporation’s website for a limited time.
Forward Looking Statements
This press release contains forward-looking statements that are introduced with language such as “we believe”, or which refer to opinions
and expectations of management. By their nature, these statements involve risks and uncertainties, many of which are beyond t he
Corporation’s control, which could cause actual results to differ materially from those expressed in suc h forward-looking statements.
Readers are cautioned not to place undue reliance on these statements. The Corporation disclaims any intention or obligation to update
or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Altius
Altius’s strategy is to create per share growth through a diversified portfolio of royalty assets that relate to long life, h igh 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, reduce d emissions from
steelmaking and increasing agricultural yield requirements. These 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), c lean iron
ore, and potash. Altius has 41,477,026 common shares issued and outstanding that are listed on Canada’s Toronto Stock Exchange. It
is a member of both the S&P/TSX Small Cap and S&P/TSX Global Mining Indices.
For further information, please contact Ben Lewis or Flora Wood at 1.877.576.2209 or [email protected].