Altius directly and indirectly holds diversified royalties and streams that generate revenue from 15 operating mines. These are located in Canada and Brazil and produce copper, zinc, nickel, cobalt, iron ore, potash and thermal (electrical) and metallurgical coal. The portfolio also includes development stage royalties in copper and most recently, renewable energy. In addition, Altius holds a large portfolio of exploration stage projects which it has generated for deal making with industry partners that results in newly created royalties and equity and minority interests.
Altius has 42,861,796 shares issued and outstanding as of March 12, 2019 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.
Altius is focused on growing its royalty business through prospect generation and the creation and acquisition of royalties.
Altius holds royalty interests in 15 producing assets in Canada that include a 4% NSR royalty on Hudbay's 777 copper-zinc mine in Manitoba, 6 potash mines and 5 coal mines located in western Canada,and a royalty on the Voisey’s Bay nickel-copper-cobalt mine in Labrador as well as a 3.7% "stream" interest in Yamana's Chapada Mine in Brazil. The Company also receives regular dividend income from is equity ownership in Labrador Iron Ore Royalty Company, which is treated as iron ore royalty revenue, being a pass-through vehicle. Collectively these royalties are anticipated to generate approximately $67 - 72 million in royalty revenue in 2019 as per the royalty revenue guidance provided in January 2019 and reaffirmed in the March 13, 2019 year end results conference call.
For additional information regarding each of the royalties please see the Royalties section of this website.
|PROJECT||OPERATOR||*Last 12 Months ($ millions)||COMMODITY||MINE LIFE|
|Voisey's Bay||VALE||1.0 nil||Ni-Cu-Co||20|
|IOC (LIF:TSX)||Iron Ore Company (IOC)||5.9||Iron Ore||25|
|Chapada||Yamana Gold||$17||Copper (Cu)||28|
|TOTAL||as of Dec 31, 2018||$67|
The Company also holds several other royalties on projects ranging from "shovel ready" development stage to exploration stage which it has primarily created as part of its original, and core project generation exploration business. The project generation pipeline contains a diversified portfolio of exploration stage projects and royalties, many of which are currently being advanced through various partner-funding arrangements.
JUNIOR EQUITIES PORTFOLIO
Altius has also built a portfolio of directly and indirectly held junior resource investments that have been generated from founding and earn in option related payments through its joint venture strategy to advance projects as well as selective investing in other top quality juniors employing a project generation and joint venture business model. As of December 31, 2018, the net market value of Altius’s portfolio of public junior company equities was approximately $54 million.
After 22 years, Altius has successfully evolved into a diversified mining royalty company that generated $67 million in 2018 attributable royallty revenue across its portfolio of 15 producing royalties. Even with this added financial capability, the Company remains committed to managing risk and exercising financial discipline. While Altius continues to seek out royalty acquisition and/or royalty financing opportunities to augment its current portfolio, the current early stage bull market in base metals has created opportunities to generate significant shareholder value in the Company's exploration and project generation business, which is where Altius began.
Project Generation/Exploration Strategy
Altius has built a portfolio of directly and indirectly held junior resource investments that have been generated from founding and earn in option related payments through its joint venture strategy to advance projects as well as selective investing in other top quality juniors employing a project generation and joint venture business model. As of June 30, 2019, the net market value of Altius’s portfolio of public junior company equities was approximately $53.7 million.
Altius' PG strategy is simple but requires a longer cyclically based strategy than most of our industry peers. We organically assemble and generate prospective geological real estate around the globe during periods of bear sentiment when capital for most is sparse, hence competition is light. To put this into perspective from 2012 to 2016 Altius assembled nearly 2 million of hectares of land in 9 different jurisdictions covering prospective terranes for copper, nickel, zinc, iron ore, coal, gold and even diamonds. When the market finally turned in 2017 Altius was poised to sell its portfolio of lands to well capitalized juniors in return for equity stakes and underlying royalty interests.
In the past couple years Altius has effectively sold 57 global exploration projects as part of 17 agreements with various industry partners. This has resulted in the conversion of most of the mineral lands that it assembled during the preceding cyclical downturn into new royalties and the portfolio of 20+ junior equities. Currently, we have shifted our focus to supporting these partners, technically and otherwise, to assist in enhancement of the value of these projects and, in turn, the related royalties and equity positions.
OUR model has worked well by allowing exposure to multiple opportunities while minimizing negative impacts to the capital structure of the company all the while creating royalties at a zero to often negative cost for future benefit to all shareholders. Earnings generated from the prospect generation business are either re-circulated into the exploration business or used to acquire third party royalties to augment the internally generated royalties held by the business.
A Virtuous Cycle of Royalty Growth and Creation
A Growing Project Generation Business
The Benefits of Project Generation:
- A portfolio of 26 public junior company equities that have resulted primarily from the vend-out of a large bank of global exploration lands that was aggressively built during mining sector down-turn - http://altiusminerals.com/projects/junior-equities
- In 2019, we expect almost 140,000 metres of drilling to be carried out by project generation partners, although some of the drilling will be conducted on land where Altius holds no royalty exposure (only equity).
- The portfolio not only exposes shareholders to the wealth creation generated by discovery but also organically creates royalties generally at a free to negative cost to the Company.
Financial discipline and protection of capital structure are enduring hallmarks of Altius business plan and serves as the platform for its continued growth. Altius balances its capital allocation between debt repayment, shareholder capital returns (via dividends or share buybacks), direct royalty acquisition opportunities and low cost exploration initiatives. In April 2015 the Company initiated a dividend of $0.08 / share per year which it later increased to $0.12 / share and subsequently (2018) to $0.16/share.
Officers and directors of the company hold approximately 5.9% of the issued shares, providing powerful incentive to those at the helm to continue to enhance the shareholder value of the business. The Company also has a continual Normal Course Issuer Bid ("NCIB"). The reason for the bid is that when the market price of Altius shares is trading below the fundamental value of Altius, based on anticipated cash flows and underlying asset values, the acquisition of common shares under the bid represents an appropriate use of funds.
|Market Facts||As of March 31, 2019|
|Common Shares Issued/Outstanding||42,861,796|
|Fairfax Preferred Shares||10,000,000|
|Fairfax warrants (@$15)||6,670,000|
|Annual Royalty Revenue||$77-81 million 2019 guidance revised upward April 2019|
|Annual Dividend||$0.16 per share|
|Total Debt||$135 million|
Committed to ethical business conduct
Altius and its subsidiaries and affiliates are committed to conducting business with people in the same respectful manner and applying the same ethical principles and standards that we would expect and seek from others. The employees, officers and consultants of Altius Minerals Corporation represent Altius and are expected to always act in a manner that enhances the reputation of the company for honesty, fairness, competency and professionalism. The integrity of Altius relies upon the uncompromising personal integrity of each employee. This Code of Conduct applies to employees, officers and consultants of Altius, and to anyone retained by Altius in a similar capacity. It is the responsibility of each employee to use common sense and apply high personal ethical standards in cases where there is no corresponding guideline in this Code of Conduct. While Altius expects the best from each employee, senior personnel are expected to lead by example.
This policy establishes procedures which are designed: (i) to permit the disclosure of information about Altius Minerals Corporation (Altius) to the public in an informative, timely and broadly disseminated manner in accordance with all applicable legal and regulatory requirements, (ii) to ensure that non-publicly disclosed information remains confidential, and (iii) to ensure that trading of the Company's securities by directors, officers and employees of Altius, its affiliates and subsidiaries remains in compliance with applicable securities laws and restrict trading by persons who have Material Information about Altius which is not publicly disclosed. The implementation of these policies and procedures is important to develop sound disclosure practices and maintain investor confidence, as well as complying with securities laws and stock exchange rules on disclosure and trading.
This policy has been approved by the directors of Altius.
Commitment to Safety
Altius' Board, Officers, Managers and Employees are committed to health, safety and mitigation of the environmental footprint resulting from our varied mineral exploration activities.
Altius' employees are required to adhere to all aspects of the Company's Health and Safety program to ensure that not only they, but their coworkers as well as contractors, consultants, observers and visitors remain healthy and safe at all times. Safety policies, procedures and regulations have been established for all individuals and/or companies involved in our activities. However, should an affiliate have policies superior to those of Altius, the higher standard will be followed and vice versa.
Since inception of the Altius health and safety program in 2005, Altius has remained compliant with the Occupational Health & Safety Legislation and strives to exceed minimum requirements. Altius considers its health and safety program to be a "living document" that will change, update and adopt to meet with our own ever increasing health and safety standards as well as the evolving culture of safety in our industry and workplace.
To summarize, Altius:
- has successfully maintained PRIME status since 2005.
- has successfully completed a Newfoundland and Labrador Workplace Health and Safety Compensation Commission Occupational Health and Safety audit in 2011
- has never had any lost days from work due to injury days since inception in 1997.
- has received national safety awards for 2008 and 2009 from The Association for Mineral Exploration British Columbia (AMEBC) / Prospectors & Developers Association of Canada (PDAC).
- staff is properly trained with respect to Occupational Health & Safety (OH&S) Legislation, Regulations and safe work practices.
- not only follows provincial guidelines, but adheres to national mineral exploration best practices with respect to health, safety and the environment.
- is a recognized leader in the field of environmental mitigation and mineral exploration best practices.
- wants to ensure to that all employees, contractors, consultants, observers, visitors, etc., remain healthy and safe regardless of the activity
Confirmed this 12th day of May 2015 by
Brian F. Dalton, Altius President and CEO
Rod Churchill, Employer Co-Chair; Altius Occupational Health and Safety Committee
Jeff Morgan, Employee Co-Chair; Altius Occupational Health and Safety Committee
Carol Seymour, Secretary; Altius Occupational Health and Safety Committee