Esterhazy

Location
Saskatchewan, Canada

Operator
The Mosaic Company

Commodity
Potash

Asset Profile
2019 Royalty Revenue C$3.8 million
Annual Production Capacity 6.3 million tonnes per annum
Estimated Mine Life 73-75 years (Proven and probable reserves at Dec 31 2019)

The Esterhazy K1 and K2 mines are located on existing CNR sidings at Yarbo and Gerald, approximately 85 km southeast of Yorkton, Saskatchewan. When the Esterhazy K3 expansion is completed (Mosaic is guiding mid-2022), the operation is expected to be the largest underground potash operation in the world. Finished product production in 2019 was 3.9 million tonnes MOP. The estimated mine life in the table above is based on the published 2019 10-k, with a range provided to reflect voluntary curtailment rates in 2019 and intent to migrate production fully to the higher capacity K3 shaft in 2022.

Altius’s royalties encompass all three unitized areas, with mining expected to transition from K1/K2 (current) to K3. Royalty rates for all the potash assets are set by the province of Saskatchewan (3% in 2019), and are the function of the number of tonnes owned under unitization agreements × price × indexed multiplier. See The Subsurface Mineral Royalty Regulations, 2017