FORWARD LOOKING STATEMENTS

Transcription

1 CANACCORD ASIA NOVEMBER 2018

2 FORWARD LOOKING STATEMENTS This document includes certain statements that constitute forward looking statements and forward-looking information within the meaning of applicable securities laws (collectively, forward looking statements ). Forwardlooking statements include statements regarding Altius Minerals Corporation s ( Altius ) intent, or the beliefs or current expectations of Altius officers and directors. Such forward-looking statements are typically identified by words such as believe, anticipate, estimate, project, intend, expect, may, will, plan, should, would, contemplate, possible, attempts, seeks and similar expressions. Forward looking statements may relate to future outlook and anticipated events or results. By their very nature, forward looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward looking statements will not prove to be accurate. Do not unduly rely on forward looking statements, as a number of important factors, many of which are beyond Altius control, could cause actual results to differ materially from the estimates and intentions expressed in such forward looking statements. Forward looking statements speak only as of the date those statements are made. Except as required by applicable law, Altius does not assume any obligation to update, or to publicly announce the results of any change to, any forward looking statement contained herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward looking statements. 2

3 ONE CONTRARIAN STRATEGY, TWO COMPLEMENTARY BUSINESSES Royalty Business 15 Producing Diversified Mining Royalty Interests Project Generation Business Successful Track Record of discovering exploration projects and converting into equity profits and new royalties TWO COMPLEMENTARY BUSINESS UNITS THAT ARE MANAGED WITH COUNTER-CYCLICAL DISCIPLINE 3

4 IPO Number of Exploration / Royalty Creation Transactions 20 YEAR HISTORY WORKING WITH THE CYCLE Present 40 IPO COMMODITIES SUPERCYCLE BEGINS COMMODITIES SUPERCYCLE ENDS ROYALTY REVENUE GROWING FAST AS COMMODITY PRICES RECOVER Many exploration projects acquired PG business model launched Voisey s Bay royalty acquired as recovery begins from the Bre-X crash Three successful spin-outs and many JV s from project generation returning over $200M to Altius 13 producing royalties acquired Exploration project portfolio replenished 22 IOC royalty added Increased potash royalties Several earlier stage royalties created and acquired 54 project vend-outs and 2 spinouts completed Royalty Acquisition Interpreted Cyclical Position based on Dow Jones Mining Index, TSX-V and Gold Bugs Index 4

5 PERFORMANCE Royalty Revenue (FY2014 CY2018) $70M $46M $29M $33M $6M FY 2014 FY 2015 FY 2016 FY 2017 LTM Guidance $64M - $69M LTM EBITDA Margin 80% Royalty Revenue (YTD 2018 Performance) $15M $16M $17M Q EBITDA $13.9M Q EBITDA Margin 81% Altius converted its financial reporting period to calendar year-end in 2017 from its previous fiscal year-end of April 30. The 2017 revenues are pro-rated for Calendar year end. 5

6 CAPITAL STRUCTURE AND AVAILABLE LIQUIDITY ALS:TSX ATUSF: OTCQX Issued Common Shares Fairfax Preferred Securities Basic Market Capitalization Annual Dividend Outstanding Debt Cash and Public Equity Holdings Available Under Credit Revolver 43.0 million 10.0 million $575 million $0.16 per share $120 million $180 million $100 million Research Coverage Craig Hutchison Brian MacArthur Orest Wowkodaw Jacques Wortman Carey MacRury Debt Investments Cash $200M $150M $100M $50M $M F 2015 F 2016 F 2017 CY 2017 Q Q Q Net Debt $41M $11M -$19M -$126M -$46M -$62M -$59M All dollar figures are in Canadian dollars with market capitalization as of November 7, Altius converted its financial reporting period to calendar year-end in 2017 from its previous fiscal year-end of April 30. Cash and public equity holdings includes $34 million cash position at September 30, $145 million mining and other investments balance at September 30,

7 DIVERSIFIED MINING ROYALTY FOCUS PLENTY OF ROOM FOR GROWTH PRECIOUS METAL MINING MAJORS US$73B Market Capitalization DIVERSIFIED MINING MAJORS US$516B Market Capitalization PRECIOUS METAL ROYALTY COMPANIES US$28B Market Capitalization Market capitalization as of October 16, DIVERSIFIED ROYALTY COMPANIES US$3B Market Capitalization 110% 93% Diversified Royalties Companies Diversified Mining Majors 19% Precious Metal Royalty Companies -14% Precious Metal Mining Majors POST Q TROUGH, DIVERSIFIED ROYALTY COMPANIES HAVE OUTPERFORMED PRECIOUS & BASE METALS OPERATORS. AS WELL AS PRECIOUS METALS ROYALTIES COMPANIES 7

8 STRONG OPERATORS IN SAFE JURISDICTIONS Rocanville Mine Allan Mine Cory Mine Patience Lake Vanscoy Mine Potash Chapada Mine Saskatchewan, Canada Copper Esterhazy Mine Potash Copper 37% 777 Mine Goias, Brazil Saskatchewan, Canada Copper, Zinc, Gold & Silver Voisey s Bay Mine Nickel, Copper & Cobalt Potash Newfoundland, Canada 14% Genesee Mine Sheerness Mine Highvale Mine Paintearth Manitoba, Canada Thermal Coal Iron Ore Company of Canada Alberta, Canada Iron Ore (Pellets and Con.) Labrador, Canada Cheviot Mine Metallurgical Coal Alberta, Canada 8

9 COMMODITY DIVERSIFICATION Other 4% Revenue Potash Cory Last Twelve Months (LTM) $0.5M Zinc 8% Met. Iron Coal Ore 4% 7% Rocanville Allan Patience Lake Esterhazy $8.2M $0.6M $0.1M $5.3M Thermal Coal 20% Q Revenue Mix Copper 39% Vanscoy $0.1M Base metals Voisey's Bay $0.4M Chapada $17.9M 777 $11.8M Iron ore $6.5M Coal Genesee $6.4M Q VS. Q INCREASING POTASH, LOWER 777 PRODUCTION AND COPPER/ZINC PRICES AND A SMALL NICKEL CONTRIBUTION POST SETTLEMENT OF VOISEY S BAY ROYALTY LITIGATION Other 2% Zinc Met. 5% Coal 6% Potash 23% Nickel 2% Paintearth Sheerness Cheviot (Metallurgical) $0.4M $5.4M $2.8M Iron Ore 11% Q Revenue Mix Copper 33% Highvale Other $1.1M $2.8M Thermal Coal 16% Total $70.5M Potash 25% 9

10 Potash Coal Base Metals LONG LIFE ASSETS = EXPANSION OPTIONALITY IOC Total: 62 Years Chapada Total: 37 Years Voisey Total: 19 Years Reserve Mine Life (Years) M&I Resource Life (Years) Total: 5 Years Inferred Resource Life (Years) Metallurgical (Cheviot) Total: 24 Years Thermal (Various Mines) 9 Vanscoy M&I: 394 Years Inferred: 455 Yrs + Total: 950 Years Cory 73 M&I: 945 Years Inferred: 772 Yrs + Total: 1,790 Years Esterhazy 69 M&I: 52 Years Inferred: N/A + Total: 121 Years Allan 65 M&I: 639 Years Inferred: 1,048 Years + Total: 1,752 Years Rocanville 36 M&I: 204 Years Inferred: 294 Years + Total: 534 Years Mine lives calculated based on current mineral inventory and 2017 throughput. Thermal coal asset lives denote the 2017 weighted average revenue and expected plant closure and not based on reserves. 10

11 PRODUCING ROYALTY UPDATES CARDINAL RIVER A detailed design study is underway to develop a new mining area within the Cardinal River project area. This was noted to offer the potential to extend the mine life by 9 years to 2029 at a production rate of approximately 1.4MT per year added to existing production. IOC Operations have fully resumed following the resolution of a 9 week labour disruption during Q2. The new Wabush 3 pit development is expected to come online in the second half of 2018 and support efforts to increase annual finished product output levels. The industry leading quality premiums attracted by the high iron content, ultra-low alumina content of the pellets and concentrates produced by IOC continued to widen during the period. CHAPADA Yamana has in Q3 increased Chapada copper guidance for A 3-phase expansion program at Chapada is also underway, with the first phase focused on improved metal recoveries. Stage 2 expands the processing plant from 23 to 32 Mtpa and a stage 3 pit wall pushback are both under feasibility study. VOISEY S BAY 15 year mine life extension announced in June 2018 following completion of a cobalt based stream financing. Altius and its partner Royal Gold advanced a lawsuit against Vale to the point of a court trial in September 2018, at which time a settlement was reached and announced. The settlement allows for resumption of a Voisey s Bay royalty on copper, cobalt and nickel production from the existing ovoid open pit production and the new underground production to be processed at Long Harbour. 11

12 PRODUCING ROYALTY UPDATES 777 Hudbay annual guidance for 777 has pushed back its planned closure date by a year to late Hudbay also noted that it continues to evaluate options that could lead to further mine life extensions. Nutrien increased its potash guidance for the third time this year. It also noted an increase in year over year potash pricing (Altius estimates 15-25% depending on region), as a result of tight global supply. A modest production curtailment at Vanscoy was announced with concurrent increases in production rates at other lower cost operations. The curtailed capacity was noted as being available for future resumption as continuing market demand growth requires. Global Potash Consumption POTASH PORTFOLIO 70MT KCI 60MT KCI 50MT KCI 40MT KCI 30MT KCI 20MT KCI 10MT KCI 0MT KCI

13 RESOURCE STAGE ROYALTY UPDATES GUNNISON PROJECT Operator Excelsior Mining Corp. Copper 1.0% GRR, further option on additional 0.5% Excelsior announced Oct a US$75 million project financing package. The financing will enable Excelsior to transition the fullypermitted Gunnison Copper Project to producer status. Arizona, USA KAMI PROJECT Operator Alderon Iron Ore Corp. Iron Newfoundland/Labrador, Canada 3.0% GSR Alderon provided an updated Feasibility Study (FS) on the Kami Project. On a post-tax basis, the updated FS shows an NPV of $866 million at a cash flow discount rate of 8%. The post-tax IRR for the project is 18.2% and the payback period is 4.9 years. TELKWA PROJECT Operator Allegiance Coal Ltd. Metallurgical Coal British Columbia, Canada 1.5 3% price sliding scale GSR In November 2018, Allegiance announced the signing of a binding term sheet for a JV with Itochu who will become a 50% partner on the Tenas met coal project. Tenas has a target production rate of 750,000 saleable tonnes of metallurgical coal over a mine life of 22 years during Phase I. A September private placement and the first funding from Itochu are intended to provide funding through feasibility study and permitting. ANOTHER 60+ EXPLORATION STAGE ROYALTIES IN PORTFOLIO 13

14 PROJECT GENERATOR BUSINESS GROWTH Value Creation Through Project Generator Junior Portfolio $68M ~$1.57/share $22M $33M PG Portfolio Value April 2016 April 2017 September Projects converted to junior equity and new royalties since 2016 market bottom Does not include $10M equity convertible debenture in Champion Iron, or indirect holdings and in-the-money share purchase warrants 14

15 PROJECT GENERATION HIGHLIGHTS Copper-gold rich VMS deposit in westcentral Ecuador within the Curipamba project that possesses significant exploration upside Adventus is earning 75% in project through spending US$25M over 5 years Recent infill drilling results include: metres of 7.0% Cu, 1.61 g/t Au, 3.0% Zn, 18.4 g/t Ag, and 0.1% Pb (June 6, 2018) Recent drilling results from Moosehead Project in Central Newfoundland has confirmed a high grade discovery Drilling from the first three holes include: meters of g/t Au, 6.85 meters of 0.50 g/t Au and 6.42 meters of 8.18 g/t Au. The second phase of drilling is expected to begin in early fall of this year Cuale exploration program where Altius holds a royalty, yielded a discovery with trench sampling returning 1.67 g/t Au over meters and g/t Au over m in a second trench Newmont became a strategic investor in August 2018 First Majestic also completed a 100% earnin on Ermitaño West deposit where 13,000 meters drill program is progressing 15

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18 THANK YOU PRODUCING ROYALTIES DEVELOPMENT ROYALTIES PROJECT GENERATION PROJECT CONTACT INFORMATION Flora Wood Director, Investor Relations Phone: (416)