$65,002,000. 4,643,000 Common Shares

Transcription

1 No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. The securities offered hereby have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the U.S. Securities Act ), or any state securities laws, and, may not be offered, sold or delivered in the United States, except in transactions exempt from the U.S. Securities Act and applicable state securities laws. Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Secretary of Altius Minerals Corporation at 66 Kenmount Road, Suite 202, Box 8263, Station A, St. John s, Newfoundland and Labrador A1B 3N4, telephone (709) , which is its head office, and are also available electronically at SHORT FORM PROSPECTUS New Issue May 6, 2014 $65,002,000 4,643,000 Common Shares 12APR This short form prospectus qualifies the distribution (the Offering ) of 4,643,000 common shares ( Common Shares ) of Altius Minerals Corporation (the Company or Altius ) at a price of $14.00 per Common Share, for aggregate gross proceeds of $65,002,000. The Common Shares are being offered for sale pursuant to an agency agreement (the Agency Agreement ) dated May 6, 2014 among the Company, Scotia Capital Inc. and Haywood Securities Inc. (the Co-Lead Agents ), BMO Nesbitt Burns Inc., Sprott Private Wealth L.P., Raymond James Ltd. and Salman Partners Inc. (collectively, with the Co-Lead Agents, the Agents ). On December 24, 2013, Altius and Altius Prairie Royalties Corp. ( Royalty Acquiror ), a wholly-owned subsidiary of Altius, entered into the Arrangement Agreement (as defined herein) with, inter alia, Sherritt International Corporation ( Sherritt ), Prairie Mines & Royalty Ltd. ( PMRL ), a former wholly-owned subsidiary of Sherritt, and Westmoreland Coal Company ( Westmoreland ) pursuant to which Altius agreed to indirectly acquire a % interest in the PMRL Royalty Business (as defined herein). Altius agreed to fund $240.9 million of the $460 million aggregate purchase price for the PMRL Royalty Business (the Royalty Purchase Price ) alongside Liberty Metals & Mining Holdings, LLC ( Liberty ), a subsidiary of Boston-based Liberty Mutual Insurance, and the Chairman of Haywood Securities Inc., and certain trusts controlled by him (the Minority Royalty Partner ), who agreed to acquire the remaining interest in the PMRL Royalty Business. The Arrangement Agreement also provided for the acquisition of Sherritt s 50% interest (the Sherritt CDP Interest ) in Carbon Development Partnership ( CDP ), an Ontario partnership owned 50% by Sherritt and 50% by OTPPB (as defined herein) for a purchase price of $21 million (such amount, together with Altius pro rata share of the Royalty Purchase Price, being referred to herein as the Sherritt Purchase Price ). The acquisition of the PMRL Royalty Business and the Sherritt CDP Interest, which is referred to herein as the Royalty Acquisition, closed on April 28, 2014 (the Royalty Acquisition Closing ). In addition to acquiring the Sherritt CDP Interest pursuant to the Arrangement Agreement, Altius will also indirectly acquire OTPPB s 50% interest in CDP (the OTPPB CDP Interest ) immediately following the Offering Closing (as defined herein) (the OTPPB CDP Acquisition ) for a purchase price of $21 million (the OTPPB Purchase Price ). The Royalty Acquisition and the OTPPB CDP Acquisition are referred to herein collectively as the Acquisition. The PMRL Royalty Business is comprised of five electrical (also referred to as thermal) and metallurgical coal royalties and six potash royalties located in the Canadian provinces of Alberta and Saskatchewan. CDP holds a portfolio of small production stage royalties on potash and electrical coal operations and exploration stage coal projects with more than 7.2 billion tonnes of measured and indicated resources of coal and approximately 4.7 billion tonnes of inferred resources of coal. CDP also holds potash properties with approximately 77.3 million tonnes of proven and probable reserves of potash and approximately 1.6 billion tonnes of inferred resources of potash in Saskatchewan. The aggregate purchase price payable by Altius for the acquisition of the PMRL Royalty Business and CDP is approximately $283 million. Approximately $261.9 million was paid to Sherritt at the time of the Royalty Acquisition Closing in respect of the Sherritt Purchase Price and $21 million is payable to OTPPB following the Offering Closing in respect of the OTPPB Purchase Price. The Sherritt Purchase Price was financed by a drawdown under the Credit Facility (as defined herein) in the amount of $140 million, the Unsecured Loan (as defined herein) in the amount of $7.2 million and available cash and marketable securities on hand, whereas the OTPPB Purchase Price is expected to be financed by a portion of the net proceeds of the Offering. Following payment of the OTPPB Purchase Price, the remainder of the net proceeds of the Offering will be used to repay the Unsecured Loan, repay $20 million of the Credit Facility and for general corporate purposes. See Details of the Acquisition, Financing the Acquisition and Use of Proceeds.

2 Price: $14.00 per Common Share Price to Agents Net Proceeds to the Public (1) Fee (2) the Company (3) Per Common Share... $14.00 $0.70 $13.30 Total Common Shares... $65,002,000 $3,250,100 $61,751,900 Notes (1) The terms of the Offering and the price of the Common Shares were established by negotiation between the Company and the Agents. See Plan of Distribution. (2) Pursuant to the terms of the Agency Agreement, the Agents will be paid a fee (the Agents Fee ) of 5.0% of the gross proceeds from the sale of the Common Shares. (3) After deducting the Agents Fee, but before deducting the expenses of the Offering estimated to be $700,000, which will be paid from the proceeds of the Offering. There is no minimum amount of funds that must be raised under the Offering. This means that the Company could complete this Offering after raising only a small proportion of the Offering amount set out above. The outstanding Common Shares of the Company are listed on the Toronto Stock Exchange (the TSX ) under the trading symbol ALS. On May 5, 2014, the last trading day before the date of this short form prospectus, the closing price per Common Share on the TSX was $ The TSX has conditionally approved the listing of the Common Shares distributed under this short form prospectus. Listing will be subject to Altius fulfilling all of the requirements of the TSX on or before July 27, The Agents, as agents of the Company for the purposes of the Offering, hereby offer the Common Shares for sale on a best efforts basis, subject to prior sale, if, as and when issued by the Company and delivered to the Agents in accordance with the terms and conditions of the Agency Agreement referred to under Plan of Distribution and subject to the approval of certain legal matters on behalf of the Company by Stikeman Elliott LLP, Toronto, Ontario and on behalf of the Agents by Cassels Brock & Blackwell LLP, Toronto, Ontario. An investment in Common Shares is subject to a number of risks that should be considered by a prospective investor. See Risk Factors. The Chairman of Haywood Securities Inc., who, through certain trusts controlled by him, acquired a 2.696% interest in the PMRL Royalty Business, is one of the lenders under the Credit Facility and provided the Unsecured Loan. An affiliate of Sprott Private Wealth L.P. is also one of the lenders under the Credit Facility. Accordingly, in connection with the Offering and pursuant to applicable securities legislation, the Company may be considered a connected issuer of Haywood Securities Inc. and Sprott Private Wealth L.P. for the purposes of securities regulations in certain provinces and territories of Canada. See Plan of Distribution. Subject to applicable laws, in connection with the Offering, the Agents may over allot or effect transactions intended to stabilize or maintain the market price of the Common Shares at levels other than those that might otherwise prevail on the open market. See Plan of Distribution. Subscriptions for Common Shares will be received subject to rejection or allotment in whole or in part, and the right is reserved to close the subscription books at any time without notice. It is anticipated that the Offering will be conducted under the book-based system. A purchaser of Common Shares will receive a customer confirmation from the registered dealer from or through whom Common Shares are purchased and who is a CDS Clearing and Depositary Services Inc. ( CDS ) depository service participant. CDS will record the CDS participants who hold Common Shares on behalf of owners who have purchased Common Shares in accordance with the book-based system. No certificates are anticipated to be issued at the Offering Closing. Closing of the Offering (the Offering Closing ) is expected to occur on or about May 13, 2014, or such later date as the Company and the Agents may agree. See Plan of Distribution. The head office of the Company is located at 66 Kenmount Road, Suite 202, St. John s, Newfoundland and Labrador A1B 3V7. The registered office of the Company is located at Bannister Road SE, 3 rd Floor, Calgary, Alberta, T2X 3J3.

3 TABLE OF CONTENTS Page GENERAL MATTERS... 1 TECHNICAL AND THIRD PARTY INFORMATION... 1 PRESENTATION OF FINANCIAL INFORMATION... 2 FORWARD-LOOKING INFORMATION... 2 ELIGIBILITY FOR INVESTMENT... 3 DOCUMENTS INCORPORATED BY REFERENCE... 4 MARKETING MATERIALS... 4 PROSPECTUS SUMMARY... 5 SUMMARY FINANCIAL INFORMATION ALTIUS MINERALS CORPORATION OVERVIEW OF THE ACQUIRED BUSINESSES INVESTMENT HIGHLIGHTS INDUSTRY OVERVIEW DESCRIPTION OF THE ROYALTY PORTFOLIO TECHNICAL INFORMATION DETAILS OF THE ACQUISITION FINANCING THE ACQUISITION USE OF PROCEEDS CONSOLIDATED CAPITALIZATION PRICE RANGE AND TRADING VOLUME PRIOR SALES GENERAL DESCRIPTION OF SHARE CAPITAL DIVIDEND POLICY PLAN OF DISTRIBUTION EXPERTS LEGAL MATTERS AUDITOR AND TRANSFER AGENT RISK FACTORS STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION GLOSSARY OF NON-GEOLOGICAL TERMS GLOSSARY OF GEOLOGICAL TERMS INDEX TO FINANCIAL STATEMENTS... F-1 CERTIFICATE OF THE COMPANY... C-1 CERTIFICATE OF THE AGENTS... C-2 i

4 GENERAL MATTERS Unless otherwise noted or the context otherwise indicates, Altius, the Company, we, us and our refers to Altius Minerals Corporation and its direct and indirect subsidiaries and predecessors or other entities controlled by them. See Altius Minerals Corporation Inter-corporate Relationships. Prospective investors should rely only on the information contained or incorporated by reference in this short form prospectus. Neither the Company nor the Agents have authorized any person to provide information that differs from the information contained herein. If anyone provides prospective investors with additional or different or inconsistent information, including information or statements in media articles about the Company and the Acquisition, prospective investors should not rely on it. The Common Shares being offered for sale under this short form prospectus may only be sold in those jurisdictions in which offers and sales of such securities are permitted. This short form prospectus is not an offer to sell or a solicitation of an offer to buy the Common Shares in any jurisdiction where it is unlawful. The information contained in this short form prospectus is accurate only as of the date of this short form prospectus, regardless of the time of delivery of this short form prospectus and the Company does not undertake to update the information contained or incorporated by reference herein, except as required by applicable securities laws. In this short form prospectus, unless otherwise specified, all dollar amounts are expressed in Canadian dollars. All references to dollars or $ are to Canadian dollars. Certain capitalized terms and phrases used in this short form prospectus are defined in the Glossary of Non-Geological Terms and Glossary of Geological Terms beginning on page 70. TECHNICAL AND THIRD PARTY INFORMATION This short form prospectus includes market share information, industry data and forecasts obtained from independent industry publications, market research and analyst reports, surveys and other publicly available sources. Although the Company and the Agents believe these sources to be generally reliable, market and industry data is subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Accordingly, the accuracy and completeness of this data is not guaranteed. The Company and the Agents have not independently verified any of the data from third party sources referred to in this short form prospectus nor ascertained the underlying assumptions relied upon by such sources. Except where otherwise stated, the disclosure in this short form prospectus and the documents incorporated by reference herein relating to properties contained within the Royalty Portfolio (as defined herein) included under the sections entitled Description of the Royalty Portfolio and Technical Information, as well as the disclosure relating to properties and operations on the properties in which the Company holds a royalty interest, is based primarily on information publicly disclosed by the owners or operators of these properties as is customary for royalty portfolio transactions of this nature. Specifically, as a royalty holder, Altius has limited, if any, access to properties included in the Royalty Portfolio and its existing properties in which it has a royalty interest. Altius generally relies on publicly available information regarding these properties and operations and generally has no ability to independently verify such information. Additionally, Altius has, and may from time to time, receive operating information from the owners and operators of these properties, which it is not permitted to disclose to the public. In reliance upon Section 9.2 of NI , all technical information in this short form prospectus regarding the Kami Project, Genesee Mine and Sheerness Mine was sourced by the Company from the Kami Feasibility Study, the Sherritt AIF, the Genesee Report and the Sheerness Report (as defined herein), as applicable. Keith Wilson, P.Eng. of Norwest Corporation ( Norwest ), who is a qualified person as such term is defined in NI and is independent of the Company, has reviewed and approved the scientific and technical information in this short form prospectus regarding the Coal Royalties and the coal information with respect to CDP, including the relevant coal mineral reserves and resources. A. Dave Mackintosh, P.Geo. of ADM Consulting Inc., who is a qualified person as such term is defined in NI and who is independent of the Company, has reviewed and approved the scientific and technical information in this short form prospectus 1

5 regarding the Potash Royalties and the potash information with respect to CDP, including the relevant potash mineral reserves and resources. Angelo Grandillo, P. Eng., M. Eng. and Patrice Live, Ing. of BBA Inc., Paul Deering, P. Eng., P. Geo. of Stantec Consulting Ltd., and Michael Kociumbas, P. Geo. and Richard W. Risto, M.Sc., P. Geo. of Watts, Griffis and McOuat Limited, each of whom is a qualified person as such term is defined in NI and each of whom is independent of the Company, has reviewed and approved the scientific and technical information in this short form prospectus and the Company s 2013 AIF incorporated by reference herein regarding the Kami Project. PRESENTATION OF FINANCIAL INFORMATION The financial statements of the Company, the PMRL Royalty Business and CDP included in this short form prospectus are reported in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board. The Company s fiscal year end occurs on April 30 in each calendar year. The fiscal year end of each of the PMRL Royalty Business and CDP is December 31 of each calendar year. This short form prospectus contains pro forma financial and other disclosure relating to the Company assuming completion of the Acquisition. FORWARD-LOOKING INFORMATION Certain statements made in this short form prospectus that are not current or historical factual statements may constitute forward-looking information within the meaning of applicable Canadian securities legislation. Forward-looking information may include, but is not limited to, statements with respect to future events or future performance, the timing and completion of the Offering, disclosure regarding the Offering, the issuance of the Common Shares pursuant to the Offering and the information under the heading Use of Proceeds in this short form prospectus, the effect of the Acquisition on the Company s financial position; production volumes; financial and operational strength of counterparties; industry conditions, trends and practices; realized prices for production; future mineral reserves and mine life; management s expectations regarding the Company s growth and results of operations; estimated future revenues; fluctuations in the prices of the primary commodities that drive royalty revenue (coal, potash and iron ore); requirements for additional capital; global mineral demand; global fuel demand; arable land per capita; global diet improvement; world population growth; growth in alternative fuel demand and consumption; global income growth; business prospects and opportunities; treatment under governmental regulatory regimes with respect to environmental matters; treatment under governmental taxation regimes; government regulation of mining operations; dependence on personnel; and competitive conditions. Such forward-looking information reflects management s current beliefs and is based on information currently available to management. Expressions such as anticipates, expects, believes, estimates, could, intends, may, plans, will, would, pro forma and other similar expressions, or the negative of these terms, are generally indicative of forward-looking information. By its very nature, forward-looking information requires the Company to make assumptions and is subject to inherent risks and uncertainties which give rise to the possibility that the Company s predictions, forecasts, expectations or conclusions will not prove to be accurate, that the Company s assumptions may not be correct and that the Company s objectives, strategic goals and priorities will not be achieved. Such forward-looking information is not fact but only reflects management s estimates and expectations. A number of factors could cause actual events or results to differ materially from any forward-looking information, including, without limitation: fluctuations in the prices of the primary commodities that drive royalty revenue; fluctuations in the value of the Canadian dollar; changes in national and local government legislation, including permitting and licensing regimes and taxation policies; regulations and political or economic developments in any of the jurisdictions where properties in which the Company holds a royalty or other interest are located; influence of macro-economic developments; reduced access to debt and equity capital; litigation; title, permit or licensing disputes related to the Company s interests or any of the properties in which the Company holds a royalty or other interest; excessive cost escalation as well as development, permitting, infrastructure, operating or technical difficulties on any of the properties in which the Company holds a royalty or other interest; rate and timing of production differences from resource estimates; and risks 2

6 and hazards associated with the business of development and mining on any of the properties in which the Company holds a royalty or other interest, including, but not limited to unusual or unexpected geological and metallurgical conditions, slope failures or cave-ins, flooding and other natural disasters. The forward-looking information contained in this short form prospectus and the documents incorporated by reference herein is based upon assumptions management believes to be reasonable, including, without limitation: the ongoing operation of the properties in which the Company holds a royalty or other interest by the owners or operators of such properties in a manner consistent with past practice; the accuracy of public statements and disclosures made by the owners or operators of such underlying properties; no material adverse change in the market price of the commodities that underlie the asset portfolio; no adverse development in respect of any significant property in which the Company holds a royalty or other interest; the accuracy of publicly disclosed expectations for the development of underlying properties that are not yet in production; and the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated or intended. However, there can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Investors are cautioned that the forward-looking information is not a guarantee of future performance. The Company cannot assure investors that actual results will be consistent with any forward-looking information disclosed herein. Accordingly, investors should not place undue reliance on forward-looking information due to the inherent uncertainty therein. For additional information with respect to risks, uncertainties and assumptions, please refer to the Risk Factors section of this short form prospectus, as well as any risk factors disclosed in the documents incorporated by reference. The forward-looking information disclosed herein is made as of the date of this short form prospectus only and the Company does not assume any obligation to update or revise such information to reflect any new information, estimates or opinions, future events or results or otherwise, except as required by applicable law. ELIGIBILITY FOR INVESTMENT In the opinion of Stikeman Elliott LLP, counsel to the Company, and Cassels Brock & Blackwell LLP, counsel to the Agents (collectively, Legal Counsel ), based on the current provisions of the Tax Act, the Common Shares will be a qualified investment under the Tax Act at the time of their acquisition by a trust governed by a registered retirement savings plan ( RRSP ), a registered retirement income fund ( RRIF ), a deferred profit sharing plan, a registered education savings plan, a registered disability savings plan, or a tax free savings account ( TFSA ), each as defined in the Tax Act (each a Plan ), provided that, at the time of the acquisition by the Plan, the Common Shares are listed on a designated stock exchange within the meaning of the Tax Act (which currently includes the TSX). Notwithstanding that the Common Shares may be a qualified investment for a trust governed by a TFSA, RRSP or RRIF, the holder of a TFSA or an annuitant of a RRSP or RRIF, as the case may be, will be subject to a penalty tax in respect of such Common Shares held in the TFSA, RRSP or RRIF, if such Common Shares are a prohibited investment within the meaning of the Tax Act. The Common Shares will generally not be a prohibited investment for a trust governed by a TFSA, RRSP or RRIF unless the holder of the TFSA or the annuitant under the RRSP or RRIF, as applicable, (i) does not deal at arm s length with the Company for purposes of the Tax Act, or (ii) has a significant interest (as defined in the Tax Act for purposes of the prohibited investment rules) in the Company. Prospective purchasers who intend to hold the Common Shares in their TFSAs, RRSPs or RRIFs should consult their own tax advisors regarding their particular circumstances. 3

7 DOCUMENTS INCORPORATED BY REFERENCE Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Company s Secretary at 66 Kenmount Road, Suite 202, Box 8263 Station A, St. John s, Newfoundland and Labrador A1B 3N4, telephone (709) The following documents, filed with the securities commissions or similar authorities in each of the provinces and territories of Canada, are specifically incorporated by reference into and form an integral part of this short form prospectus: (1) the annual information form of the Company dated July 4, 2013 for the fiscal year ended April 30, 2013 (the Company s 2013 AIF ); (2) the audited consolidated financial statements of the Company, as at and for the fiscal year ended April 30, 2013, together with the notes thereto and the independent auditor s report thereon; (3) management s discussion and analysis of financial condition and results of operations of the Company for the fiscal year ended April 30, 2013; (4) the management information circular of the Company dated August 19, 2013 prepared in connection with the Company s annual and special meeting of shareholders held on September 19, 2013; (5) the unaudited interim condensed consolidated financial statements of the Company, as at and for the three and nine-month periods ended January 31, 2014; (6) management s discussion and analysis of financial condition and results of operations of the Company for the three and nine-month periods ended January 31, 2014; (7) the material change report of Altius dated December 30, 2013 in respect of the Acquisition; (8) the material change report of Altius dated April 28, 2014 in respect of the Royalty Acquisition Closing; and (9) the term sheet dated April 28, 2014, filed on SEDAR in connection with the Offering, the investor presentation dated April 28, 2014, filed on SEDAR in connection with the Offering and the investor presentation dated May 6, 2014, filed on SEDAR in connection with the Offering (collectively, the Marketing Materials ). Any documents of the types referred to in the preceding paragraphs and any business acquisition reports or any other documents as may be required to be incorporated by reference herein under applicable Canadian securities laws which are filed by the Company with the securities regulatory authorities in any of the provinces or territories of Canada subsequent to the date of this short form prospectus and prior to the termination of the Offering shall be deemed to be incorporated by reference in this short form prospectus. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this short form prospectus to the extent that a statement contained herein, or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference herein, modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this short form prospectus. MARKETING MATERIALS The Marketing Materials are not part of this short form prospectus to the extent that the contents of the Marketing Materials (as such terms are defined in National Instrument General Prospectus Requirements) are modified or superseded by a statement contained in this short form prospectus. Any template version of marketing materials filed on SEDAR after the date of this short form prospectus and before the termination of the distribution under the Offering will be deemed to be incorporated by reference into this short form prospectus. 4

8 PROSPECTUS SUMMARY The following is a summary of the principal features of the Offering and should be read together with the more detailed information and financial data and statements contained elsewhere in this short form prospectus. Please refer to the Glossary of Non-Geological Terms and Glossary of Geological Terms beginning on page 70 of this short form prospectus for a list of defined terms used herein. ALTIUS MINERALS CORPORATION Description of the Business The Company s principal business activities are focused on the generation and acquisition of mineral resource projects, royalties, and investments. The Company pursues these objectives through two complementary business segments: exploration-project generation and royalty creation; and investment and royalty acquisition. Exploration-Project Generation and Royalty Creation: Altius conducts early stage, low-cost mineral exploration and prospect generation utilizing a small team of professional geoscientists, prospectors, and consultants that create mineral exploration initiatives through scientific concept development and field work. Concepts of merit are advanced through to mineral rights acquisition and then marketed to prospective partners for the purpose of securing third party financing to advance the projects. The Company s project portfolio currently consists of approximately 20 projects covering prospective targets for iron ore, nickel, copper, gold, and platinum-group metals. The Company prefers to enter into agreements with other companies related to the mineral exploration opportunities it generates, which results in the Company carrying minority and non-operating project and/or equity and royalty interests. The Company currently has eight active exploration agreements with partners on projects located throughout Newfoundland and Labrador and Quebec. The Company also expanded its project generation business into Chile in See Altius Minerals Corporation Description of the Business Exploration-Project Generation and Royalty Creation. Investment and Royalty Acquisition The Company s two primary objectives with respect to its investment and royalty acquisition are: (i) to seek out royalty-based financing opportunities of exploration/pre-development stage assets and/or the acquisition of existing royalty interests under third party ownership on development and production stage mining assets; and (ii) to selectively invest in natural resource related companies with a goal of long-term capital appreciation. Prior to closing the Royalty Acquisition, the Company had one producing royalty interest: an effective 0.3% net smelter return royalty in Voisey s Bay, a large nickel-copper-cobalt conventional sulphide mine operated by Vale and located in eastern Labrador. The Company also holds a development stage royalty interest, being the 3% gross sales royalty on Alderon s Kami iron ore project located in western Labrador and other exploration stage royalty interests including the right to earn a 3% gross sale royalty on Rio Tinto s Goethite Bay iron ore project, a 2% gross sales royalty on Paladin Energy Limited s central mineral belt uranium project and several other earlier stage royalties. The Company s investments in mining and mineral resource related companies include an approximate 25.3% founding equity interest in Alderon with current ownership of $54 million, making the Company the largest shareholder of Alderon. The Company also has a 72.8% interest in the common shares of a private company it co-founded with Cranberry Capital Inc. in 2010 to predominantly invest in early stage companies with a goal of long-term capital appreciation. Altius also has equity stakes in two public mineral royalty companies, Virginia Mines, Inc. (8.0%) and Callinan Royalties Corp. (5.9%). See Altius Minerals Corporation Description of the Business Investment and Royalty Acquisition. 5

9 Business Strategy following Completion of the Acquisition The Acquisition will transform Altius into Canada s leading diversified minerals royalty company. The Company believes that the Acquisition provides fundamental and strategic complements to Altius existing royalty portfolio and underscores Altius ability to capitalize on acquisition opportunities. Following completion of the Acquisition, Altius expects to realize immediate substantial cash flow from the royalty income it will receive from the producing royalties within the Royalty Portfolio. Altius will continue to seek out strong royaltybased investments that have inherent value and high underlying asset quality. Altius will also continue to advance its project generation and royalty creation business through earn-in and joint venture arrangements. See Altius Minerals Corporation Business Strategy following Completion of the Acquisition. OVERVIEW OF THE ACQUIRED BUSINESSES On December 24, 2013, the Company entered into the Arrangement Agreement pursuant to which it agreed to purchase a % interest in the PMRL Royalty Business and the Sherritt CDP Interest. On January 8, 2014, OTPPB exercised the OTPPB Election to Tag-Along, requiring Altius to purchase the OTPPB CDP Interest on the same terms as the Sherritt CDP Interest and, as a result, Altius will be acquiring a 100% interest in CDP. The Royalty Acquisition Closing closed on April 28, 2014 and the OTPPB CDP Acquisition is expected to close immediately following the Offering Closing. Prairie Mines & Royalty Ltd. PMRL, a former wholly-owned subsidiary of Sherritt which is now owned by Westmoreland, holds the rights to subsurface minerals in respect of a portfolio of coal and potash properties in the Canadian provinces of Alberta and Saskatchewan. PMRL has entered into leases, or similar agreements, with mining companies and electricity utilities that, in return for payment of a royalty, grant these companies the right to exploit the subsurface mineral resources. The PMRL Royalty Business, in which Altius acquired a % interest on April 28, 2014, is comprised of holding the Coal Royalties and the Potash Royalties. The Coal Royalties consist of: (i) royalty interests in respect of electrical coal produced from the Genesee Mine, the Paintearth Mine, the Sheerness Mine and the Highvale Mine, each of which is located in Alberta, Canada and (ii) a royalty interest in respect of metallurgical coal produced from the Cheviot Mine located in west central Alberta. The properties underlying the Coal Royalties are operated by producers that the Company believes are reputable including Teck and Westmoreland. The electrical coal royalties have additional counterparty relationships with mine-mouth power plant operators, including ATCO, Capital Power and TransAlta. The Potash Royalties consist of royalty interests in respect of potash produced from the Rocanville Mine, Cory Mine, Allan Mine, Patience Lake Mine, Esterhazy Mine and Vanscoy Mine. All of the Potash Royalties have underlying assets with counterparties that the Company believes are reliable, including PotashCorp, Mosaic and Agrium. See Overview of the Acquired Businesses Prairie Mines & Royalty Ltd.. Carbon Development Partnership CDP is an Ontario general partnership that is currently held 50% by Altius and 50% by OTPPB. CDP holds a portfolio of small production stage royalties on potash and electrical coal operations and exploration stage coal projects with more than 7.2 billion tonnes of measured and indicated resources of coal and approximately 4.7 billion tonnes of inferred resources of coal. CDP also owns approximately 77.3 million tonnes of proven and probable reserves of potash and approximately 1.6 billion tonnes of inferred resources of potash in Saskatchewan. See Overview of the Acquired Businesses Carbon Development Partnership. 6

10 INVESTMENT HIGHLIGHTS Stable, Long-Life, Cash Flowing Royalty Portfolio As a result of completing the Royalty Acquisition, the Company now owns a stable, long-life, cash-flowing portfolio of producing royalties offering low geographic and operating risk, and commodity diversification. All of the mineral properties underlying the royalties are located in Canada, a mining-friendly and low-risk jurisdiction which has a long-history of mining and stable government. Moreover, all royalties are located in provinces whose economies are closely tied to mining and natural resources. The Company s attributable revenue from the Royalty Portfolio for the year ended December 31, 2013, after giving effect to the completion of the Acquisition, would have been derived from eleven low-risk producing assets, including more than 50% of revenue from inflation adjusted electrical coal royalties contributing more than 57% of revenue. The Royalty Portfolio is dominated by long-life assets with 60% of the assets having mine lives greater than 20 years. Historical Royalty Revenue (1) Attributable Revenue by Commodity (2) ($ Millions) $40 $35 $30 $25 $20 $15 $30 $32 $31 $31 Nickel, Copper and Cobalt 10% Met Coal 8% Other 6% Electrical Coal 57% $10 $5 $ Voisey s Bay 14APR PMRL & CDP Royalties Potash 19% 12APR Attributable Revenue by Asset (2) Mine Life (3) Other 12% Paintearth 17% Unknown 10% Voisey s Bay 10% <10yrs 10% Rocanville 7% Genesee 22% 10-15yrs 10% 20+yrs 60% Esterhazy 7% Cheviot 8% Sheerness 17% 20APR yrs 10% 12APR (1) PMRL and CDP royalty revenue derived from PMRL Royalty Business and CDP financial statements for the calendar years ended December 31. (2) Attributable to Altius assuming completion of the Acquisition; Calendar year ended December 31, (3) Excludes Highvale Mine, as there is no publicly available information with respect to mine life. 7

11 Tonnage-Based Royalties on Coal Mines Genesee Sheerness Paintearth Highvale Cheviot Coal Type... Electrical Electrical Electrical Electrical Metallurgical Operator... Westmoreland (1) Westmoreland (1) Westmoreland (1) TransAlta Teck Power Plant Operator... Capital Power ATCO/TransAlta ATCO TransAlta n/a Decommission Dates n/a Proven and Probable Reserves Subject to Royalties (mt) (2) 36.8 (2) 22.9 (2) 7.1 (2) 23.3 (3) Mine Life (years) (4) n/a Production (mt) (5) n/a 1.8 and 3.0 (7) Calendar Year 2013 Royalty Revenue (6) (millions)... $6.9 $5.4 $5.3 Nil (8) $2.6 Blended Unitization Rate (9) % Blended Calendar Year 2013 Royalty Rate (10).. $4.16/t (1) New operator following completion of the Arrangement. (2) Based on total mine performance attributable to PMRL as disclosed in the Sherritt AIF. (3) Based on 2013 Teck Annual Information Form. (4) Mine life may be longer than the life of the associated royalty. (5) Calendar year ended December 31, (6) Attributable to Altius assuming completion of the Acquisition, calendar year ended December 31, (7) Annual clean coal capacity of mine and preparation plant, respectively. (8) During 2013 Highvale Mine was mined outside of PMRL s unitized area but management anticipates that mining will recommence in PMRL s unitized area in the future, however there can be no assurance that this will be the case. (9) Weighted average of total production and the unitization rate for electrical coal royalties. (10) Blended royalty rates for electrical coal royalties are calculated by multiplying 2013 unitized production, if applicable, by the provisional royalty rate, divided by unitized total production. Royalties on some of Canada s Largest and Longest Life Potash Assets The Potash Royalties are derived from six producing assets which represent over 60% of potash production in Canada, including four of the five largest potash assets by production in Patience Rocanville Allan Cory Lake Esterhazy Vanscoy Operator... PotashCorp PotashCorp PotashCorp PotashCorp Mosaic Agrium Operated Since (1) Production (mt) (1)(2) (3) 1.7 Mine Life (years) (1) N/A Calendar 2013 Royalty Revenue (1) (millions). $2.2 $0.3 $0.9 $0.3 $2.1 $0.2 Blended Unitization Rate (4) % Blended Calendar Year 2013 Royalty Rate (5). 4.7% (1) From most recent PotashCorp, Agrium or Mosaic public filings, as applicable. (2) Based on full production attributable to PotashCorp, Agrium and Mosaic. (3) 2013 production on a 100% basis to Mosaic. (4) Weighted average of total production and the unitization rate. (5) Weighted average of unitized production and realized royalty rates. Additional Royalties on Producing Assets with Experienced Operators The Company holds a royalty interest in Voisey s Bay, and following completion of the Royalty Acquisition, in which it also acquired the electrical coal royalties, it now holds a royalty interest in the producing Cheviot 8

12 Mine. Each of the Voisey s Bay and Cheviot royalties make up 8-10% of attributable revenue on a trailing twelve month basis as of December 31, Voisey s Bay is operated by Vale and Cheviot Mine is operated by Teck. Disciplined Strategy and Strong Management Team The Company s management team and board of directors have a proven track record for value creation, and public company management. This management team has extensive knowledge of both the mining resource industry and the assets included in the Royalty Portfolio, in addition to well-developed relationships with experienced metals and mining operators, as well as strategic relationships in the capital markets industry. Altius share price has outperformed the two indices of which it is a current constituent, as well as the TSX composite index December 24, 2013: Announced the Acquisition Altius +76% Jan-10 1-Jan-11 1-Jan-12 1-Jan-13 1-Jan-14 Source: S&P Capital IQ as of April 23, See Investment Highlights. Altius TSX Composite Index TSX SmallCap Index TSX Global Base Metals Index 23APR DETAILS OF THE ACQUISITION On December 24, 2013, the Company entered into the Arrangement Agreement with, inter alia, Sherritt, PMRL and Westmoreland pursuant to which Altius agreed to indirectly acquire from Sherritt a % interest in the PMRL Royalty Business. Altius funded $240.9 million of the approximately $460 million aggregate purchase price for the PMRL Royalty Business alongside Liberty and the Minority Royalty Partner, who acquired the remaining interest in the PMRL Royalty Business. The Arrangement Agreement also provided for the acquisition of the Sherritt CDP Interest for a purchase price of $21 million. The PMRL Royalty Business and Sherritt CDP Interest were acquired on April 28, In addition to acquiring the Sherritt CDP Interest pursuant to the Arrangement Agreement, Altius will also acquire the OTPPB CDP Interest further to the exercise of the OTPPB Election to Tag-Along and pursuant to the CDP Purchase Agreement for additional cash consideration of $21 million. Therefore, the aggregate purchase price payable by Altius for acquisition of the PMRL Royalty Business and CDP is approximately $283 million. See Details of the Acquisition. FINANCING THE ACQUISITION The Company funded $261.9 million in respect of the Sherritt Purchase Price at the time of the Royalty Acquisition Closing, and will be required to fund $21 million in respect of the OTPPB Purchase Price, payable to OTPPB following the Offering Closing. The Company financed the Sherritt Purchase Price through the Credit Facility, the Unsecured Loan and available cash and marketable securities on hand. The Company intends to use the net proceeds of the Offering (i) to pay the OTPPB Purchase Price to OTPPB, (ii) to repay the Unsecured Loan, (iii) to repay $20 million of the Credit Facility and (iv) for general corporate purposes. See Financing the Acquisition and Use of Proceeds. 9

13 Company: Securities Offered: Price: Gross Proceeds of the Offering: Use of Proceeds: Agents Fee: Offering Closing Date: Risk Factors: THE OFFERING Altius Minerals Corporation. 4,643,000 Common Shares. $14.00 per Common Share. $65,002,000 from the offering of the Common Shares. The estimated net proceeds from the Offering, after deducting the Agents Fee and expenses related to the Offering, will be approximately $61,051,900. The Company intends to use the net proceeds of the Offering (i) to pay the OTPPB Purchase Price to OTPPB, (ii) to repay the Unsecured Loan, (iii) to repay $20 million of the Credit Facility and (iv) for general corporate purposes. See Use of Proceeds and Financing the Acquisition. The Company has agreed to pay the Agents Fee equal to 5.0% of the gross proceeds of the Offering. See Plan of Distribution. On or about May 13, 2014, or such later date as the Company and the Agents may agree. An investment in the Common Shares is subject to a number of risks that investors should carefully consider. Those risks include risks related to the Acquisition, risks related to the Offering and risks related to the Company s business. See Forward Looking Information and Risk Factors. 10

14 SUMMARY FINANCIAL INFORMATION The following tables should be read in conjunction with the consolidated financial statements of the Company, the consolidated financial statements of the PMRL Royalty Business and CDP, and the pro forma financial statements of the Company and other information contained or incorporated by reference in this short form prospectus. Altius Minerals Corporation Selected Pro Forma Consolidated Information As at January 31, 2014 Pro forma Adjustments and Acquisition of Pro forma Altius CDP PMRL Royalties (1) Consolidated (Unaudited) (In thousands of Canadian Dollars) ASSETS Current assets Cash and cash equivalents... 28,861 1,591 (11,021) 19,431 Marketable securities... 94,517 (94,517) Non-current assets Exploration and evaluation assets... 2,947 15,000 17,947 Royalty interest in mineral properties... 27,000 27,000 Investment in joint ventures... 8, , ,647 Goodwill... 11,130 11,130 LIABILITIES Current portion of long-term debt... 4,000 4,000 Long-term debt , ,200 EQUITY Shareholders equity ,882 24,384 37, ,620 Note: (1) Pro forma adjustments give effect to the acquisition and are documented in detail in the pro forma financial statements of the Company included in this short form prospectus. Altius Minerals Corporation Selected Pro Forma Consolidated Information For the nine-months ended January 31, 2014 Pro forma Adjustments and Acquisition of Pro forma Altius CDP PMRL Royalties (1) Consolidated (Unaudited) (In thousands of Canadian Dollars, except for per share amounts) Revenue... 2,892 1,208 4,100 Expenses... 6,898 1,687 7,441 16,026 Earnings from joint ventures ,415 14,980 Earnings (loss) before income taxes... (2,793) (479) 6,974 3,702 Income tax (recovery) expense... (864) 3,213 2,349 Net earnings (loss)... (1,929) (479) 3,761 1,353 Net Earnings (loss) per share Basic... (0.07) 0.04 Fully diluted... (0.07) 0.04 Weighted Average common shares outstanding Basic... 27,752,707 4,643,000 32,395,707 Fully diluted... 27,752,707 4,643,000 32,395,707 Note: (1) Pro forma adjustments give effect to the acquisition and are documented in detail in the pro forma financial statements of the Company included in this short form prospectus. 11

15 Altius Minerals Corporation Selected Pro Forma Consolidated Information For the year ended April 30, 2013 Pro forma Adjustments and Acquisition of Pro forma Altius CDP PMRL Royalties (1) Consolidated (Unaudited) (In thousands of Canadian Dollars, except for per share amounts) Revenue... 2,729 1,359 4,088 Expenses... 4,967 24,690 9,922 39,579 Earnings from joint ventures... 1,341 18,239 19,580 Earnings (loss) before income taxes... (15,110) (34,705) 8,317 (41,498) Income tax (recovery) expense... (1,959) (4,949) (6,908) Net loss... (13,151) (34,705) 13,266 (34,590) Net Earnings (loss) per share Basic... (0.47) (1.05) Fully diluted... (0.47) (1.05) Weighted Average common shares outstanding Basic... 28,399,693 4,643,000 33,042,693 Fully diluted... 28,399,693 4,643,000 33,042,693 Note: (1) Pro forma adjustments give effect to the acquisition and are documented in detail in the pro forma financial statements of the Company included in this short form prospectus. 12

16 ALTIUS MINERALS CORPORATION Incorporation and Office Altius was incorporated as a private corporation under the name Alberta Inc. by certificate and articles of incorporation issued under the Business Corporations Act (Alberta) on March 5, The articles of incorporation were amended pursuant to a certificate and articles of amendment dated June 12, 1997 to, amongst other things, change the name of the Company to Altius Minerals Corporation. The head office of the Company is located at 66 Kenmount Road, Suite 202, St. John s, Newfoundland and Labrador A1B 3V7. The registered office of the Company is located at Bannister Road SE, 3 rd Floor, Calgary, Alberta, T2X 3J3. The Common Shares are posted and listed for trading on the TSX under the symbol ALS. Inter-corporate Relationships Altius has four wholly-owned material subsidiaries and a 72.8% interest in a fifth material subsidiary, as described below: Altius Resources Inc % Mineral exploration company Altius Investments Limited % Holding company Ontario Inc % Holding company Minera Altius Chile Limitada % Holding company Altius Prairie Royalties Corp % Holding company Description of the Business The Company s principal business activities are focused on the generation and acquisition of mineral resource projects, royalties, and investments. The Company pursues these objectives through two complementary business segments: exploration-project generation and royalty creation; and investment and royalty acquisition. GENERATE PROJECT EQUITY & MINORITY PROJECT SALES Royalty Purchased ROYALTY PORTFOLIO Royalty Created JV or SPINOUT 12APR

17 The following timeline provides a snapshot of the key highlights of Altius operational history since it was founded in Altius founded in 1997 as a junior mineral exploration company Altius spins out two companies: Aurora (uranium) and Rambler (copper) Acquires 9% of International Royalty which is sold following multiple bids and Altius realizes proceeds of $63M Spins out Alderon Iron Ore (ADV:TSX) creates 3% Gross Sales Royalty and currently owns 25.3% Entered into agreement to acquire PMRL Royalty Business and CDP for $502M in partnership with Liberty Mutual and a private partner Acquired Voisey s Bay royalty for ~$13m Monetizes stakes in both spin outs for pre-tax profits of more than $200M while retaining a 2% royalty on Aurora properties Expands Project Generation business into Quebec and Chile Acquires 8.2% of Virginia Mines, Inc. (VGQ:TSX) and 5.9% of Callinan Royalties Corp. (CAA:TSX) 21APR Exploration-Project Generation and Royalty Creation: Altius conducts early stage, low-cost mineral exploration and prospect generation utilizing a small team of professional geoscientists, prospectors, and consultants that create mineral exploration initiatives through scientific concept development and field work. Concepts of merit are advanced through to mineral rights acquisition and then marketed to prospective partners for the purpose of securing third party financing to advance the projects. The Company s project portfolio currently consists of approximately 20 projects covering prospective targets for iron ore, nickel, copper, gold, and platinum-group metals. The Company prefers to enter into agreements with other companies related to the mineral exploration opportunities it generates, which results in the Company carrying minority and non-operating project and/or equity and royalty interests. The Company currently has eight active exploration agreements with partners on projects located throughout Newfoundland and Labrador and Quebec. The Company also expanded its project generation business into Chile in In October 2012, the Government of Newfoundland and Labrador requested expressions of interest regarding development of a designated exempt mineral land ( EML ) in the western Labrador iron ore mining district that contains the undeveloped Julienne Lake iron ore deposit. Altius has conducted geophysical work and exploration drilling on its adjacent mineral claims and confirmed the extension of the deposit onto Altius claims. On May 31, 2013, the Company and its Chinese partners (the JL Alliance ) submitted a detailed proposal to combine the EML with Altius surrounding mineral claims and conduct a feasibility study regarding the potential development of the entirety of the deposit as a large scale and long life iron ore mining operation. On April 16, 2014, Altius announced that the JL Alliance had been selected by the Government of Newfoundland and Labrador to enter into exclusive final stage negotiations for the award of mineral rights held by the Province of Newfoundland and Labrador over the Julienne Lake iron ore deposit. If the JL Alliance proposal is accepted, Altius intends to contribute its claims to the JL Alliance in exchange for a royalty and a minority project interest on the consolidated project. 14

18 Investment and Royalty Acquisition The Company s two primary objectives with respect to its investment and royalty acquisition are: (i) to seek out royalty-based financing opportunities of exploration/pre-development stage assets and/or the acquisition of existing royalty interests under third party ownership on development and production stage mining assets; and (ii) to selectively invest in natural resource related companies with a goal of long-term capital appreciation. Prior to closing the Royalty Acquisition, the Company had one producing royalty interest; an effective 0.3% net smelter return royalty in the large Voisey s Bay nickel-copper-cobalt conventional sulphide mine operated by Vale and located in eastern Labrador. The Company also holds a development stage royalty interest, being the 3% gross sales royalty on Alderon s feasibility stage Kamistiatusset iron ore project located in western Labrador (the Kami Project ), and other exploration stage royalty interests including the right to earn a 3% gross sale royalty on Rio Tinto s Goethite Bay iron ore project, a 2% gross sales royalty on Paladin Energy Limited s central mineral belt uranium project and several other earlier stage royalties. The Company s investments in mining and mineral resource related companies include an approximate 25.3% founding equity interest in Alderon with current ownership of $54 million, making the Company the largest shareholder of Alderon. The Company also has a 72.8% interest in the common shares of a private company it co-founded with Cranberry Capital Inc. in 2010 to predominantly invest in early stage companies with a goal of long-term capital appreciation, which is managed by Paul van Eeeden who has a successful mining and investment industry track record. Altius also has equity stakes in two public mineral royalty companies, Virginia Mines, Inc. (8.0%) and Callinan Royalties Corp. (5.9%). Voisey s Bay In 2003, Altius indirectly acquired a 7.5% interest in a 3% net smelter return royalty interest in Voisey s Bay nickel-copper-cobalt project. Altius has since increased its 7.5% interest to a 10% interest and therefore currently has an effective 0.3% net smelter return royalty. The Voisey s Bay mine is operated by Vale. Altius received approximately $3.1 million in revenue from its royalty interest in Voisey s Bay over the calendar year ended December 31, $6.0 Voisey s Bay Royalty Revenue (1) $5.0 $4.9 $4.4 ($ Millions) $4.0 $3.0 $2.0 $2.9 $2.5 $2.5 $3.7 $3.5 $3.1 $1.0 $0.0 12APR (1) Calendar years ended December

19 In 2013, the Government of Newfoundland and Labrador entered into an agreement with Vale to develop the underground deposits at Voisey s Bay. This will provide Altius with exposure to potential exploration and expansion at zero cost. Newfoundland and Labrador Voisey s Bay Geothite Bay Julienne Lake Kami Labrador City Central Mineral Belt St. John s 14APR Voisey s Bay, Newfoundland and Labrador. 14APR Business Strategy following Completion of the Acquisition The Acquisition will transform Altius into Canada s leading diversified minerals royalty company. The Company believes that the Acquisition provides fundamental and strategic complements to Altius existing royalty portfolio and underscores Altius ability to capitalize on acquisition opportunities. Having completed the Royalty Acquisition, Altius expects to realize immediate substantial cash flow from the royalty income it receives from the producing royalties within the Royalty Portfolio. Altius will continue to seek out strong royalty-based investments that have inherent value and high underlying asset quality. Altius will also continue to advance its project generation and royalty creation business through earn-in and joint venture arrangements. OVERVIEW OF THE ACQUIRED BUSINESSES On December 24, 2013, the Company entered into the Arrangement Agreement pursuant to which it agreed to purchase a % interest in the PMRL Royalty Business and the Sherritt CDP Interest. On January 8, 2014, OTPPB exercised the OTPPB Election to Tag-Along, requiring Altius to purchase the OTPPB CDP Interest on the same terms as the Sherritt CDP Interest and, as a result, Altius will be acquiring a 100% interest in CDP. The Royalty Acquisition closed on April 28, 2014 and the OTPPB CDP Acquisition is expected to close immediately following the Offering Closing. For a detailed description of the Arrangement Agreement and other transaction documents relating to the Acquisition, please refer to Details of the Acquisition. Prairie Mines & Royalty Ltd. PMRL, a former wholly-owned subsidiary of Sherritt which is now owned by Westmoreland, holds the rights to subsurface minerals in respect of a portfolio of coal and potash properties in the Canadian provinces of Alberta and Saskatchewan. PMRL has entered into leases, or similar agreements, with mining companies and electricity utilities that, in return for payment of a royalty, grant these companies the right to exploit the subsurface mineral resources. The PMRL Royalty Business, in which Altius acquired a % interest on April 28, 2014, is comprised of holding the Coal Royalties and the Potash Royalties. The Coal Royalties consist of: (i) royalty interests in respect of electrical coal produced from the Genesee Mine, the Paintearth Mine, the Sheerness Mine and the Highvale Mine, each of which is located in Alberta, Canada and (ii) a royalty interest in respect of metallurgical coal produced from the Cheviot Mine located in west central Alberta. The properties underlying the Coal Royalties will be operated by producers that the Company believes are reputable including Teck and Westmoreland. The electrical coal royalties have additional counterparty relationships with mine-mouth power 16

20 plant operators, including ATCO, Capital Power and TransAlta. The Potash Royalties consist of royalty interests in respect of potash produced from the Rocanville Mine, Cory Mine, Allan Mine, Patience Lake Mine, Esterhazy Mine and Vanscoy Mine. All of the Potash Royalties have underlying assets with counterparties that the Company believes are reliable, including PotashCorp, Mosaic and Agrium. Mine Lessee / Operator Royalty Revenue (1) ($million) Genesee (electrical coal) Capital Power / Westmoreland (2) $6.9 Paintearth (electrical coal) ATCO Power / Westmoreland (2) $5.3 Sheerness (electrical coal) ATCO Power - TransAlta / Westmoreland (2) $5.4 Highvale (electrical coal) TransAlta nil Cheviot (metallurgical coal) Teck Resources $2.6 Rocanville (potash) PotashCorp $2.2 Cory (potash) PotashCorp $0.9 Allan (potash) PotashCorp $0.3 Patience Lake (potash) PotashCorp $0.3 Vanscoy (potash) Agrium $0.2 Esterhazy (potash) Mosaic $2.1 Other Various $0.2 PMRL Royalty Total $ APR (1) Attributable to Altius assuming completion of the Acquisition; Calendar year ended December 31, (2) New operator after completion of the Arrangement with Westmoreland. In addition to the PMRL Royalty Business, PMRL also operates a coal mining business consisting primarily of the production of electrical coal from its seven surface mines in Alberta and Saskatchewan, which mines are either owned (wholly or jointly) by PMRL or owned by the associated power utility customer and mined by PMRL. Concurrently with the Royalty Acquisition, and pursuant to the Arrangement Agreement, PMRL sold its coal mining business to Westmoreland. See Details of the Acquisition Arrangement Agreement. 17

21 Genesee Highvale Alberta Saskatchewan Cheviot Edmonton Paintearth Cory Saskatoon Patience Lake Calgary Sheerness Vanscoy Allan Electrical Coal Royalty Metallurgical Coal Royalty Potash Royalty Regina Rocanville Esterhazy 18APR Carbon Development Partnership CDP is an Ontario general partnership that is currently held 50% by Altius and 50% by OTPPB. CDP holds a portfolio of small production stage royalties on potash and electrical coal operations and exploration stage coal projects with more than 7.2 billion tonnes of measured and indicated resources of coal and approximately 4.7 billion tonnes of inferred resources of coal in British Columbia and Alberta. CDP also owns approximately 77.3 million tonnes of proven and probable potash reserves and approximately 1.6 billion tonnes of inferred resources of potash in Saskatchewan. The following table summarizes the coal resources of CDP as at December 31, 2013, as reported in the Sherritt AIF: Measured Indicated Inferred Resources Resources Resources (mt) (mt) (mt) Bituminous Thermal Sub-bituminous... 3, , ,552.8 Lignite Total Resources... 4, , ,

22 The following table summarizes the potash mineral reserve and resource estimates of CDP as of December 31, 2013, as reported in the Sherritt AIF: Proven and Indicated Inferred Probable Reserves Grade Est Resources Resources (mt) % K 2 O (mt) (mt) (1)(2) Rocanville Esterhazy Other Resources... 1,590.1 Total ,590.1 (1) Inferred resources refer to potash horizons within the potash producer lease but not normally mined, and those resources identified outside of the potash producer current mine lease, but within active mining horizons. (2) Potash reserve figures are not included in the potash resource totals. Upon Sherritt giving notice to OTPPB on January 7, 2014 of its proposed sale of the Sherritt CDP Interest pursuant to the Acquisition, certain first refusal rights of OTPPB were triggered under the CDP Partnership Agreement. On January 8, 2014, OTPPB exercised its right to require that Altius, as a condition of the completion of the transfer of the Sherritt CDP Interest, purchase all but not less than all of the OTPPB CDP Interest on the same terms as the Sherritt CDP Interest (the OTPPB Election to Tag-Along ). Following completion of the OTPPB CDP Acquisition, Altius will own 100% of CDP. On April 22, 2014 Altius entered into a purchase agreement with OTPPB, OTPPB Parent and Royalty Acquiror (the CDP Purchase Agreement ) whereby Royalty Acquiror agreed to purchase from OTPPB the OTPPB CDP Interest on substantially the same terms and conditions as those contained under the Arrangement Agreement for a purchase price of $21 million. Closing of the OTPPB CDP Acquisition is expected to occur immediately following the Offering Closing. INVESTMENT HIGHLIGHTS Stable, Long-Life, Cash Flowing Royalty Portfolio As a result of completing the Royalty Acquisition, the Company now owns a stable, long-life, cash-flowing portfolio of producing royalties offering low geographic and operating risk, and commodity diversification. All of the mineral properties underlying the royalties are located in Canada, a mining-friendly and low-risk jurisdiction which has a long-history of mining and stable government. Moreover, all royalties are located in provinces whose economies are closely tied to mining and natural resources. The acquisition of the Royalty Portfolio is expected to increase Altius royalty revenue by approximately $26 million per year based on the revenue from the Royalty Portfolio attributable to Altius for the calendar year ended December 31, 2013 after giving effect to the completion of the Acquisition. Prior to the Acquisition, all of the Company s royalty revenue during the calendar year ended December 31, 2013 was derived from the Company s royalty interest in Voisey s Bay. After acquiring the Royalty Portfolio, the Company s revenue will be significantly larger and be derived from a diverse range of royalties, including electrical coal, potash, metallurgical coal, nickel, copper and cobalt. The Royalty Portfolio has historically generated stable revenue. The Company s attributable revenue from the Royalty Portfolio for the year ended December 31, 2013, after giving effect to the completion of the Acquisition, would have been derived from eleven low-risk producing assets, including more than 50% of revenue from inflation adjusted electrical coal royalties contributing more than 57% of revenue. The Royalty Portfolio is dominated by long-life assets with 60% of the assets having mine lives greater than 20 years. 19

23 ($ Millions) $40 $35 $30 $25 $20 $15 $10 $5 $0 Historical Royalty Revenue (1) Attributable Revenue by Commodity (2) $30 $32 $31 $ Voisey s Bay 14APR PMRL & CDP Royalties Nickel, Copper and Cobalt 10% Met Coal 8% Potash 19% Attributable Revenue by Asset (2) Mine Life (3) Other 12% Paintearth 17% Other 6% Unknown 10% Electrical Coal 57% 12APR Voisey s Bay 10% <10yrs 10% Rocanville 7% Genesee 22% 10-15yrs 10% 20+yrs 60% Esterhazy 7% Cheviot 8% Sheerness 17% 20APR yrs 10% 12APR (1) PMRL and CDP royalty revenue derived from PMRL Royalty Business and CDP financial statements for the calendar years ended December 31. (2) Attributable to Altius assuming completion of the Acquisition; Calendar year ended December 31, (3) Excludes Highvale Mine, as there is no publicly available information with respect to mine life. Attractive Purchase Price Multiple for PMRL Royalties The total transaction multiple for the PMRL Royalties implied was nine times the twelve month trailing EBITDA as of December 31, This multiple is lower than the current trading multiples of major mineral royalty companies and is amongst the lowest acquisition multiple paid for royalty assets based on publicly disclosed precedent transactions. 20

24 Acquisition Price Comparison EV / LTM EBITDA 25x 20x 15x 10x 5x 0x Selected Royalty Peer Trading Comparables 19x Franco- Nevada 19x Royal Gold 18x 17x Labrador Silver Iron Wheaton Ore Royalty 15x Anglo Pacific Average: 16x (1) 14x Sandstorm Gold 9x Natural Resource 9x PMRL Royalties Partners 23APR Enterprise Value / LTM EBITDA Selected Recent Royalty Precedent Transactions 40x 35x 30x 25x 20x 15x 10x 5x 0x 37x IRC (Dec-2009) 30x Battle Mountain (Mar-2007) 21x Premier Royalty (Aug-2013) 14x (1) Average: 23x 11x Gold Silverstone Wheaton (Mar-2009) (Dec-2010) 9x PMRL Royalties 19APR (Dec-2013) Source: Company filings, S&P and Capital IQ. (1) Average, excluding acquisition of the PMRL Royalties. Reliable Counterparties All of the producing royalties have underlying assets with counterparties that the Company believes are reliable. The properties underlying the Coal Royalties are operated by Teck and Westmoreland. The electrical coal royalties have additional counterparty relationships with the mine-mouth power plant operators. All of the counterparties in the Royalty Portfolio are investment grade power producers, including ATCO, Capital Power and TransAlta. The properties underlying the Potash Royalties are operated by PotashCorp, Mosaic and Agrium. These three companies each have over 50 years of operational experience and are globally significant potash producers. The Company believes that the financial strength and operational expertise of these counterparties mitigates production risks to Altius. The publically traded aspect of the counterparties adds significant transparency to the business. Potash Royalty Counterparties Coal Royalty Counterparties Company Market Capitalization (C$ Millions) Credit Rating Company Market Capitalization (C$ Millions) Credit Rating PotashCorp $32,658 A- (Neg.) Teck Resources $14,179 BBB (Stable) Mosaic $21,486 BBB (Stable) ATCO $6,212 A (Stable) Agrium $14,924 BBB (Stable) TransAlta $3,463 BBB- (Stable) Other Producing Royalty Counterparties Capital Power $2,035 BBB- (Stable) Vale $75,162 A- (Neg.) Westmoreland (1) $495 B- (Stable) 23APR Source: S&P Capital IQ; S&P long term local issuers credit rating and market capitalization as of April 23, (1) New operator following completion of the Arrangement between Westmoreland and Sherritt. 21

25 Strong Royalty Portfolio Tonnage-Based Royalties on Coal Mines The electrical coal royalties within the Royalty Portfolio tend to offer lower risk than other types of royalties given that royalty rates are not tied to commodity prices, but rather based on the number of tonnes of coal provided to fuel mine-mouth electrical power generation plants. These electrical coal royalties are also insulated from inflation risk, as the royalties are in most cases tied to a base royalty rate that is indexed to GDP growth each year. Electrical Coal Revenue by Royalty (Calendar Year Ended December 31, 2013) $8 $6.9 $6 $5.4 $5.3 (C$ millions) $4 $2 $0 12APR Genesee Sheerness Paintearth Highvale nil The assets underlying the electrical coal royalties are mined using simple open-pit bulk tonnage mining methods and supply their coal to power plants which are located in close proximity to the mining operation. Due to high transportation costs, the electrical power stations have few or no other options to source coal on a cost-competitive basis, underpinning production from leased areas. Genesee Sheerness Paintearth Highvale Cheviot Coal Type... Electrical Electrical Electrical Electrical Metallurgical Operator... Westmoreland (1) Westmoreland (1) Westmoreland (1) TransAlta Teck Power Plant Operator... Capital Power ATCO/TransAlta ATCO TransAlta n/a Decommission Dates n/a Proven and Probable Reserves Subject to Royalties (mt) (2) 36.8 (2) 22.9 (2) 7.1 (2) 23.3 (3) Mine Life (years) (4) n/a Production (mt) (5) n/a 1.8 and 3.0 (7) Calendar Year 2013 Royalty Revenue (6) (millions)... $6.9 $5.4 $5.3 Nil (8) $2.6 Blended Unitization Rate (9) % Blended Calendar Year 2013 Royalty Rate (10). $4.16/t (1) New operator following completion of the Arrangement. (2) Based on total mine performance attributable to PMRL as disclosed in the Sherritt AIF. (3) Based on 2013 Teck Annual Information Form. (4) Mine life may be longer than the life of the associated royalty. (5) Calendar year ended December 31,

26 (6) Attributable to Altius assuming completion of the Acquisition, calendar year ended December 31, (7) Annual clean coal capacity of mine and preparation plant, respectively. (8) During 2013 Highvale Mine was mined outside of PMRL s unitized area but management anticipates that mining will recommence in PMRL s unitized area in the future, however there can be no assurance that this will be the case. (9) Weighted average of total production and the unitization rate for electrical coal royalties. (10) Blended royalty rates for electrical coal royalties are calculated by multiplying 2013 unitized production, if applicable, by the provisional royalty rate, divided by unitized total production. Genesee Operation Genesee Mine Power Plant 14APR Royalties on some of Canada s Largest and Longest Life Potash Assets The Potash Royalties are derived from six producing assets which represent over 60% of potash production in Canada, including four of the five largest potash assets by production in The operations also have a long operating history and maintained strong production even through the period of low potash prices in the early 23

27 2000s. The potash operations produce steady cash flow and the majority of operations have long mine lives in the range of 46 to 80 years. Patience Rocanville Allan Cory Lake Esterhazy Vanscoy Operator... PotashCorp PotashCorp PotashCorp PotashCorp Mosaic Agrium Operated Since (1) Production (1)(2) (mt) (3) 1.7 Mine Life (1) (years) N/A Calendar 2013 Royalty Revenue (1) (millions).. $2.2 $0.3 $0.9 $0.3 $2.1 $0.2 Blended Unitization Rate (4) % Blended Calendar Year 2013 Royalty Rate (5).. 4.7% (1) From most recent PotashCorp, Agrium or Mosaic public filings, as applicable. (2) Based on full production attributable to PotashCorp, Agrium and Mosaic. (3) 2013 production on a 100% basis to Mosaic. (4) Weighted average of total production and the unitization rate. (5) Weighted average of unitized production and realized royalty rates. According to publicly filed information, many of the Potash Royalties will benefit from ongoing capacity expansion of the underlying mines without bearing the associated costs. Potash Royalties Capacity Asset Operator 2014 Capacity (Mtpa KCl) Patience Lake PotashCorp 0.3 Capacity Post Expansion (Mtpa KCl) Not Under Expansion Target Completion Date Not Under Expansion Allan PotashCorp Cory PotashCorp (1) Capacity (Mtpa KCl) % 21.4 Rocanville PotashCorp Vanscoy Agrium Esterhazy Mosaic APR Capacity Capacity Post 12APR Expansion Source: PotashCorp, Agrium and Mosaic public filings, broker research. (1) There is no update available in PotashCorp s public filings. Additional Royalties on Producing Assets with Experienced Operators The Company holds a royalty interest in Voisey s Bay, and following completion of the Royalty Acquisition, in which it also acquired the electrical coal royalties, it now holds a royalty interest in the producing Cheviot Mine. Each royalty makes up approximately 8-10% of attributable revenue on a trailing twelve month basis as of December 31, Voisey s Bay is operated by Vale and Cheviot Mine is operated by Teck. 24

28 Royalty Revenue from Other Royalties (Calendar Year Ended December 31, 2013) $4 (C$ millions) $3 $2 $3.1 $2.6 $1 $0 Voisey s Bay 14APR Cheviot Deep Pipeline of Development Assets Kami Project Altius strategy of royalty creation by staking land and selling the projects for the retention of a royalty has resulted in the Company creating royalties on a number of exploration and development assets. Altius most significant royalty on a development property is on Alderon s Kami Project in Newfoundland and Labrador. The Kami Project royalty entitles Altius to 3% of Kami s gross sales. Alderon has secured a strategic partner in Hebei Iron and Steel Group, one of the largest steel producers in China and a significant steel producer in the world. According to Alderon s public disclosure, it received environmental assessment clearance on February 18, 2014, engaged a lead underwriter for its debt financing, begun ordering long-lead time items, and is on time and budget in port development. Based on the Kami Feasibility Study, Alderon estimates Kami will pay on average approximately $25 million per year to Altius over 30 years. Alderon s press release dated January 9, 2013 anticipates eventual production expansion to 16 million tonnes per annum if warranted (although there is no assurance that production of Kami will be expanded). 25

29 Projected Kami Royalty Revenues (1) Year (1) Production (1) (Mt) Selling Price (1) (US$/Mt) Gross Revenue (1) ($mil) Royalty (2) ($mil) $107 $738 $ $107 $882 $ $107 $883 $ $107 $866 $ $107 $878 $ $102 $836 $ $102 $833 $ $102 $807 $ $102 $768 $ $102 $810 $ $102 $834 $ $102 $851 $ $102 $813 $ $102 $806 $ $102 $812 $ $102 $816 $ $102 $813 $ $102 $842 $ $102 $859 $ $102 $853 $ $102 $803 $ $102 $785 $ $102 $789 $ $102 $801 $ $102 $804 $ $102 $806 $ $102 $811 $ $102 $814 $ $102 $829 $ $102 $318 $9.5 Total $103 $24,159 $ APR (1) Source: Kami Feasibility Study. (2) Royalty calculation based on 3% of gross sales. Carbon Development Partnership CDP holds a portfolio of small production stage royalties on potash and electrical coal operations. The CDP portfolio includes more than 7.2 billion tonnes of measured and indicated resources of coal and approximately 4.7 billion tonnes of inferred resources of coal. It also holds potash projects with approximately 49.0 million tonnes of proven and probable mineral reserves and approximately 1.6 billion tonnes of inferred resources of potash, including at the producing Rocanville Mine. Much of the resource is located proximal to existing mining operations and could potentially be incorporated into future mine plans in exchange for new royalties. Other undeveloped lands containing extensive coal and potash resources may offer the opportunity for future royalty creation, project joint ventures, and/or the spinning out of assets into new companies. 26

30 Mineral Resources and Reserves Proven and Measured and Inferred Probable Indicated Resources (millions of tonnes) Reserves Resources Coal Bituminous Thermal Sub-bituminous 6, ,552.8 Lignite Total Coal 7, ,694.7 Potash Rocanville 48.9 Esterhazy 28.4 Other Resources 1,590.1 Total Potash ,590.1 Source: Sherritt AIF. Note: Rocanville reserve grade of 21.0% K 2 O and Esterhazy reserve grade of 24.0% K 2 O. 16APR Structural Advantages of Royalties Royalties have several structural advantages relative to other commodity investment alternatives as they provide certain benefits of mine operator ownership while reducing the exposure to increasing capital, operating and environmental costs. Investing in a royalty company can provide similar commodity price exposure to investing in the physical commodity although it also provides the additional potential benefit of gaining exposure to earnings and dividends as well as resource and production growth. The following chart illustrates the structural advantages of royalty companies compared to alternative investments: Exposure to: Commodity price appreciation Earnings and dividends Royalty Operators Explorers Physical Companies Commodity Resource Growth Production Growth Reduced Exposure to: Capital costs Operating costs Environmental costs 16APR Exposure to Commodity Price Appreciation. Investment in a royalty company whose portfolio includes revenue-based royalties provides investors with exposure to commodity price appreciation as an investment in a producing mining company, an exploration stage mining company and the physical commodity itself without many of the risks associated with these investment alternatives. Exposure to Earnings and Dividends. Royalty companies with producing royalties generate a passive income stream and do not require a royalty holder to reinvest earnings into their operations. Investors in royalty companies benefit from exposure to potential earnings and dividends, whereas investors in the physical commodity have neither exposure to earnings nor to dividends. 27

31 Exposure to Resource and Production Growth Potential. An investment in a royalty company allows investors to participate in the exploration upside of an underlying property as the royalty often relates to all of the production for the life of mine and underlying property. As a result, a royalty company will participate in its proportionate share of any incremental resources found on the property making it similar in this way to an operator or exploration company. In addition, a royalty company allows investors to participate in production expansion potential of the properties. An investment in the physical commodity does not offer any exposure to exploration and expansion upside. Revenue-Based and Production Based Royalties Have Limited Exposure to Capital and Operating Costs. The Royalty Portfolio consists of royalties based on revenue and/or production. These types of royalty interests limit the Company s exposure to capital and operating costs relative to mine operators and other types of royalties. In particular, these types of revenue-based and production-based royalties provide exposure to commodity prices and production growth with limited exposure to operating, environmental, closure or capital costs. Low Overhead Costs Support Strong Margins. The Company is expected to have relatively low overhead costs and no capital or development costs which support strong margin potential. Disciplined Strategy and Strong Management Team The Company has historically limited equity dilution and been debt free throughout its 17 year history prior to the Royalty Acquisition. It has built up a significant cash profit through its mineral exploration project generation business, while also creating several project royalties. It has deployed its accumulated profits by (i) acquiring royalties and royalty-related investments and (ii) returning capital to its shareholders through share repurchases. The Company s management team and board of directors have a proven track record for value creation, and public company management. This management team has extensive knowledge of both the mining resource industry and the assets included in the Royalty Portfolio, in addition to well-developed relationships with experienced metals and mining operators, as well as strategic relationships in the capital markets industry. Altius share price has outperformed the two indices of which it is a current constituent, as well as the TSX composite index. Share Price Performance (Since January 1, 2010) December 24, 2013: Announced the Acquisition Altius +76% Jan-10 1-Jan-11 1-Jan-12 1-Jan-13 1-Jan-14 Altius TSX Composite Index TSX SmallCap Index TSX Global Base Metals Index Source: S&P Capital IQ as of April 23, APR

32 INDUSTRY OVERVIEW Electrical Coal Electrical Coal Overview Coal is the most abundant and evenly distributed fossil fuel in the world with approximately 132 years of coal remaining worldwide at 2012 based on current coal reserves and 2012 global coal output, according to the German Federal Institute for Geosciences and Natural Resources, the main source of information about coal reserves used by the International Energy Agency ( IEA ). Coal is generally classified according to its heat content as either lignite, sub-bituminous, bituminous or anthracite. Lignite has the lowest heat content and anthracite the highest. Most coals are used primarily for their heating characteristics. Certain types of bituminous coals are also classified as metallurgical coals, which is combined with iron ore to produce steel. Metallurgical coal is a fundamental component of steel, which is essential to global infrastructure development. Electrical coal (also referred to as thermal coal) is found in many parts of the world, and is used for power generation and to produce steam and heat. It is generally lower in carbon content and calorific value and higher in moisture content than metallurgical coal. Many coal markets are regional markets, as only higher heating value coal and metallurgical coal support the costs of transport to distant markets. Countries that do not have sufficient domestic coal supplies for power generation import coal by means of ocean-going vessels. According to WorldCoal, the largest importers of coal for 2012 were estimated to be China, Japan, India, South Korea, Chinese Taipei, Germany and the United Kingdom. In 2009, China became a net importer of electrical coal, a trend that continued through 2012 and was expected to continue through Indonesia, Australia, Russia, the United States, Colombia, Saudi Arabia and Canada are the top exporters of coal. The IEA estimated, in their 2013 World Energy Outlook, that global coal demand will increase from 5.4 billion tonnes of coal equivalent in 2011 to 6.4 billion tonnes by 2020 under current energy policy scenarios. The IEA estimates that China and India will account for approximately 62% of this total demand. Asia is expected to remain a dominant player in international coal markets, with demand increasing from 3.3 billion tonnes coal equivalent in 2011 to 3.9 billion tonnes in Additionally, India is poised to become the second largest coal user within the next decade. The IEA estimates that 63% of the world demand for coal will be attributable to the power generation sector. Electrical Coal in Alberta Historically, the Canadian electrical coal market has been heavily concentrated, with one producer, Sherritt through its PMRL operations, producing more than 90% of the country s electrical coal, according to information disclosed in Sherritt s public filings in Approximately 90% of Sherritt s electrical coal production is dedicated to supplying power plants in Alberta and Saskatchewan. The remaining electrical coal produced is sold to other domestic customers as well as used in value-added coal products. To date, electrical coal production in Canada has been dominated by mine mouth operations, wherein power generation plants are built in close proximity to the coal mines in order to minimize coal transportation costs and take advantage of improvements in long distance power transmission. Alberta Electrical Coal Power Plant Thermal Coal Mine Genesee Paintearth Sheerness Mine Highvale Mine Power Plants Mine Mouth Customer Genesee 1 Battle River 3 Sheerness 1 Keephills 1 Genesee 2 Battle River 4 Sheerness 2 Keephills 2 Genesee 3 Battle River 5 Keephills 3 Sundance 3 Sundance 4 Sundance 5 Sundance 6 Capital Power ATCO ATCO/TranAlta TransAlta 16APR Source: Sherritt AIF; Capital Power 2013 AIF; ATCO 2013 AIF; and TransAlta 2013 AIF. 29

33 Electrical coal is Alberta s principal electricity source. The province has had a long history of coal mining, spanning back to the late 1800s. In 2012, coal was used to generate 53% of the province s electricity Electricity Generation in Alberta Wind 4% Hydro 3% Other* 3% Coal 53% Gas 37% 12APR Source: Alberta Department of Energy, Alberta Utilities Commission. * Other includes Biomass, Waste Heat, and Fuel Oil. The demand for power in the region is increasing rapidly due to a growing population and increased levels of economic activity. As a result, according to the Alberta Department of Energy, over 7,400MW of new electricity generating capacity has been added since 1998, of which 15% was coal fired. The Canadian federal government is not committed to legally binding targets for the reduction of greenhouse gas emissions ( GHG ), however, it has voluntarily proposed to reduce Canada s GHG by 17% below 2005 levels by 2020 as part of the Copenhagen Accord. Part of this reduction will be achieved through the implementation of regulations that would require significant reductions of GHG emissions by certain of Canada s largest industrial sectors. The regulations that the federal government has issued for the electricity sector will require, among other things, that new and certain refurbished coal-fired plants, commissioned after July 2015, achieve an annual emissions intensity performance standard of 420 tonnes of CO2 per GWh. The result of the regulations is expected to cause existing power plants to close down as, in the current environment, meeting the new regulations will be challenging. Management believes that electrical coal will continue to be a significant source of fuel for a large proportion of the electrical power generated in Alberta for the foreseeable future, due to: The continuing demand for competitively priced electricity combined with the significant operating cost advantages of coal relative to other available fuel sources according to the Alberta Department of Energy; The significant existing infrastructure investment in electrical coal fired power plants; Expectations that approximately 6,000MW of new generation capacity will be needed by 2020, and 13,000MW by 2029 (Source: Alberta Electrical System Operator, June 2012 Long Term Plan); Electrical coal s integral role in base load power supply; The existence of abundant long life coal mineral reserves (70% of Canada s coal mineral reserves are located in Alberta); and Advances in technologies that have reduced and will continue to reduce certain coal fired emissions such as nitrogen oxides and sulphur oxides. 30

34 Additionally, management believes existing coal resources would allow for power plants to operate past their planned decommission dates. With coal availability, planned power plant lives can potentially be extended due to combinations of the following scenarios: Continuing advances in clean coal technology which could allow for more economical means to reduce emissions and comply with federal regulations; Provincial equivalency agreements allowing Alberta regulations to apply instead of federal regulations; and Changes in government policies. Potash Potash Overview Potash is a generic term that refers to a group of potassium-bearing minerals, naturally occurring potassium salts and the products produced from those salts. The term potash arose through the traditional practice of producing potassium carbonate, needed for making soap, by leaching wood ashes in large iron pots. The ash-like crystalline residue left in the large iron pots was called pot ash. Potash is a plant s main source of potassium; one of the three primary nutrients essential for plant growth. Plants depend on potassium for water retention as well as the production, transport and accumulation of sugar. Potassium also supports plant hardiness and resistance to water-stress and disease. Plants deficient in potassium are less resistant to pests and disease, and have poor size, shape, color, taste, and reduced shelf life. The amount of potassium contained in potash varies, thus, the industry has established a common standard of measurement in defining a product s potassium content in terms of equivalent percentages of K 2 O. Sylvite potassium chloride (MOP) is the most commonly used global potash source given its high solubility characteristics and high potassium content of approximately 61% K 2 O. The majority of all potash produced is used for agricultural fertilizer, mostly in the form of MOP. Potash has no commercially viable substitute as a potassium fertilizer source. Other bases of potash consumption are potassium bearing chemicals, detergents, ceramics, pharmaceuticals, water conditioner and de-icing salt. Potash Demand Potash is a fertilizer that is a fundamental component of the global food production chain. A number of factors have led to a steady increase in fertilizer consumption over the past 50 years. Some industry observers expect this trend to continue, and possibly accelerate. The root cause of these factors is the need to produce increasing amounts of food from shrinking amounts of arable land per capita, due to development. These factors include: (i) world population growth, (ii) shrinking arable land per capita, (iii) changes in diet worldwide (such as increased protein consumption resulting in increased demand for grain and other animal feed) and (iv) the growth in alternative fuels that use crops as feedstock. The decline in arable land per capita is expected to continue in the near future and as a result there will be less land per person in the future from which food can potentially be produced. As agricultural yields increase to address the declining arable land per capita, expanded use of potash may be one of the drivers of growth in agriculture production, according to CRU. Apart from dips in demand during the 2008 global financial crisis where potash users deferred purchases and in 2012 due to fertilizer subsidy cuts in India, potash demand has continued along its long-term upward trend and management believes this upward trend will likely continue for the foreseeable future. 31

35 World Potash Shipments Million Tonnes KCl E North America Latin America China Other Asia Other India 16APR Source: Fertecon, IFA, PotashCorp, Industry Publications, Scotiabank Research. Potash Supply According to the U.S. Geological Survey, global potash production in 2012 was concentrated in three regions: the former Soviet Union (31%), North America (30%) and Europe (12%), which collectively accounted for approximately 74% of global potash production. Global potash production is predominantly generated by nine companies, with major production plants in five regions. Saskatchewan accounts for almost half of the world s potash reserves and approximately 35% of the global potash production capacity resulting in Canada contributing 30% of the global trade volume in potash. The scarcity of economically mineable potash deposits and large capital expenditure requirements has resulted in barriers to entry and a high degree of concentration among the leading producers. In 2011, according to CRU, the world potash industry had capacity of 66.9 mt, and 55.8 mt of potash was sold from more than 45 operations in 13 countries. However, a significant portion of global capacity is held by select companies and only a limited number of these potash producers are expected to increase annual production. Also, the current potash supply is being produced by aging mining infrastructure; worldwide, 85% of facilities are more than 25 years old. Consequently, additional capacity will be required to meet the forecast increases in demand. 32

36 World Potash Producer Profile by Capacity PotashCorp Uralkali (Russia) Mosaic (Canada,US) Belaruskali (Belarus) ICL (Israel,Spain,UK) Chinese Producers K+S (Germany) Agrium (Canada) APC (Jordan) SQM (Chile) Intrepid (US) Vale (Brazil) Source: Fertecon, CRU, IFA, PotashCorp Millions Tonnes KCl APR Current Production Announced Expansions Through 2017 Historically, potash production capacity has exceeded demand, resulting in low levels of capacity utilisation. Canadian producers have historically managed to maintain prices at levels sufficient to generate reasonable margins through production discipline, aided by the concentration of marketing efforts through a syndicate, Canpotex, which manages the majority of export sales from Canada. World Potash Supply and Demand % 70 90% 60 Shipments (mt) % 70% 60% Operating Rate (%) % 0 40% F 2015F 2017F Shipments Shipment Range Operating Rate 12APR Source: Fertecon, CRU, IFA, PotashCorp. Note: Shipment range based on announced project expansion and assumes typical ramp-up period for new capacity. 33

37 Potash Pricing Potash prices refer to the delivered cost of potash and are usually negotiated as delivery contracts between suppliers and their customers. By their nature, such contracts contain terms which vary depending on the suppliers and consumers geographic locations. The contracts are typically structured as either large, fixed-price sales contracts, monthly contracts with annual minimums or spot purchases. Premium potash grades include coarse and granular material with larger particle sizes (1-4 mm) and soluble industrial products generally purer than 98% KCl. Granular and coarse potash is generally priced at a premium. Potash prices were relatively stable prior to In 2007, escalating food prices helped spur fertilizer demand from Brazil, China, India and the United States and pushed producer operating rates over 90%. The resulting supply/demand imbalance caused MOP prices to spike in 2008, reaching a peak of approximately US$900 per tonne free on board ( FOB ) Vancouver (more than three times the highest price realized between 2001 and 2007). High commodity prices declined sharply due to the economic crisis in 2008 and falling grain prices, in conjunction with high fertilizer costs and squeezed growers margins. This margin squeeze, and a tightening of global credit, negatively affected growers ability-to-pay for fertilizer, which led to a decline in potash demand. Potash prices remained relatively high throughout much of 2009 as producers were reluctant to lower their prices. By early 2010, MOP spot prices were back to the January 2008 level of US$340 per tonne, down from an average of US$630 per tonne in MOP prices started to increase along with overall commodity prices in 2010, reaching approximately US$350 per tonne. Potash prices traded roughly sideways until mid-2013, when Belarusian miner, OAO Uralkali, announced its intensions to end production restrictions it currently had in place, which had the effect of underpinning global prices. This decision had an immediate negative impact on potash prices, causing prices to fall approximately US$80 to US$ per tonne in February 2014 from US$393 in June According to Bloomberg, current FOB Vancouver prices of MOP were US$ per tonne as of March 31, FOB Saskatchewan prices have historically traded at a premium to FOB Vancouver prices, due to effects of shipping costs. $1,000 Historical Potash (FOB Vancouver) Pricing $800 (US$ / MT) $600 $400 $200 $0 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 FOB Vancouver Source: Bloomberg Potassium Chloride (Muriate of Potash) Standard Grade: FOB Vancouver Spot Price. 19APR Potash prices are supported by the high barriers to entry exhibited by the industry. These barriers are more significant in the potash industry than in other fertilizer markets due to the high cost and time involved in bringing on new supply. This is a significant reason why no new material greenfield capacity for potash has been installed for over 20 years. 34

38 Fertilizer Component Comparison Nitrogen Phosphate Potassium (Potash) Producing Countries ~60 ~40 12 Greenfield Expansion Minimum 3 years 3-4 years Minimum 7 years Cost for Greenfield US$ billion for 1 million tonnes US$ billion for 1 million tonnes C$ billion for 1 million tonnes 16APR Source: Fertecon; CRU; PotashCorp. Iron Ore Iron Ore Overview Iron ore deposits are found throughout the world on all major continents. According to data compiled by the U.S. Geological Institute in February 2014, Canada, with approximately 6.3 billion tonnes of crude ore and 2.3 billion tonnes of contained iron, hosts the world s eighth largest mineral reserves by iron content, representing approximately 3% of the world s mineral reserves. Also, according to the U.S. Geological Institute, world resources of iron ore are estimated to exceed 170 billion tonnes of crude ore containing more than 81 billion tonnes of iron Global Distribution of Iron Ore Reserves Other Countries 20% Australia 20% Canada 3% Venezuela 3% Ukraine 3% India 6% Brazil 19% China 9% Russia 17% 12APR Source: U.S. Geological Survey. According to the U.S. Geological Survey, the principal iron ore producing countries are China, Australia and Brazil, followed by India, Russia, Ukraine, South Africa, the United States and Canada. Canadian iron ore production in 2013 is expected to total 40 mt, or approximately 1.4% of the world s production. This would place Canada as the world s ninth largest iron ore producer, which is in line with Canada s reserve base. Canadian iron ore production has grown at a modest rate over the past fifteen years from its 1996 production of 36 mt. 35

39 Country 2013E Iron Ore Production (millions of tonnes) China 1,320 Australia 530 Brazil 398 India 150 Russia 102 Ukraine 80 South Africa 67 United States 52 Canada 40 Other Countries 211 World Total 2,950 16APR Essentially all of the iron ore produced globally is used in the manufacturing of steel. Based on statistics compiled by U.S. Geological Institute, 2013 global iron ore production was expected to total 2,950 mt with China leading the industry as both the world s largest producer and consumer of the ore. Production from China in 2013 was expected to total 1,320 mt, or approximately 44.71% of world production. The Chinese iron ore industry has grown at an annual rate of 13.1% over the last 5 years versus the global average (excluding China) of 4.6%, driven by the country s burgeoning steel industry and rapid industrialization. As the world s largest producer of crude steel, China, with a limited domestic supply of iron ore, is also the world s largest importer. According to the U.S. Geological Survey, China produced 1,310 mt of iron ore in 2012 and, according to Anglo-American, imported another 717 mt to meet its domestic steel manufacturing demand. The European Union and Japan are the next largest importers of iron ore. Australia, Brazil and India are some of the world s largest exporters of the commodity. Demand and pricing has been subdued recently, following concerns about sovereign debt in Europe and natural disasters in Japan. Iron Ore Production Millions of Metric Tonnes 3,500 3,000 2,500 2,000 1,500 1, E China Australia Brazil Canada Rest of World 14APR Source: U.S. Geological Survey. There is significant concentration in the global iron ore industry. Vale, Rio Tinto, and BHP Billiton are the world s largest iron ore producing companies with total production representing approximately one third of total global production. Iron Ore in Canada Overview All significant Canadian iron ore operations are located in Labrador and Quebec in a region called the Labrador Trough. Many operations and projects in the Labrador Trough have very low phosphorus and natural alumina content, as well as low levels of sulfur, alkalis and other undesirable elements. Iron ore produced from 36

40 Rio Tinto s Iron Ore Company of Canada operations located in Labrador has strong complementary value in Asian blends due to low impurities. Alderon and Rio Tinto both specifically highlight the high quality nature of their ore when compared to iron ore produced in other regions of the world. Iron Ore Prices The price of iron ore products is based principally on their iron content and shipping cost. Global iron ore prices have historically fluctuated with global demand for steel and availability of vessels for charter. Quarterly iron ore benchmark prices are set in the seaborne export market (iron ore that is exported by ocean trade routes to coastal or near coast steel making plants) and are typically based on prices negotiated by the three largest iron ore producers (Vale, BHP Billiton, and Rio Tinto) with global steel mills. According to Bloomberg, the current price of iron ore is US$112.2 per dry metric tonne. 250 Historical Iron Ore Fines 62% China Import Prices US$ per Dry Metric Tonne Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Source: Bloomberg Iron Ore Fines 62% CFR China Import. 23APR Other iron ore producers generally set their own customer price contracts on the basis of these global benchmark prices. Because transportation costs from the producers port to the purchaser are generally paid for by the purchaser (referred to as free on board), iron ore producers who ship their products over longer distances generally receive lower prices for their products than producers who ship to comparatively more proximate markets. The principal target markets for potential future products are Western European, Asian, Russian, Turkish and Middle Eastern purchasers of iron ore concentrate and other related products. 37

41 DESCRIPTION OF THE ROYALTY PORTFOLIO Overview of the Royalty Portfolio The Royalty Portfolio includes royalty interests in 11 producing coal and potash mines located in Alberta, and Saskatchewan, Canada, as well as several other non-producing royalty interests in salt, petroleum and coal bed methane leases. The following map illustrates the locations of the various mines to which the royalty interests relate: Genesee Highvale Alberta Saskatchewan Cheviot Edmonton Paintearth Cory Saskatoon Patience Lake Calgary Sheerness Vanscoy Allan Electrical Coal Royalty Metallurgical Coal Royalty Potash Royalty Regina Rocanville Esterhazy 18APR Coal The Coal Royalties comprise royalty interests in respect of electrical coal produced from the Genesee Mine, the Sheerness Mine, the Paintearth Mine and the Highvale Mine and a royalty interest in respect of metallurgical coal produced from the Cheviot Mine. Each of these mines is located in Alberta, Canada. Coal Royalty Agreements The Coal Royalties are comprised of electrical coal rights at the Genesee Mine, Sheerness Mine, Paintearth Mine and Highvale Mine, which are payable under coal leases, coal supply/exchange agreements and the Genesee Royalty Agreement. All of the electrical coal royalty arrangements provide for a royalty payable at a base rate with an annual escalator provision that is tied to indices published by Statistics Canada. Electrical coal royalties are paid by the power utilities and the royalty rates are escalated in accordance with Canadian GDP inflation, in most cases. Certain of the coal rights to which the Coal Royalties are tied have been pooled/unitized with the coal rights of other owners within a larger geographic area to form Dedicated Reserves. These Dedicated Reserves may or may not be subject to unitization agreements. Under a unitization agreement, any coal produced from a unitized area is allocated to and deemed to be produced from the lands of each party in accordance with each party s proportionate share of the coal reserves for the purpose of calculating royalties. Under the terms of its unitized leases, Altius will earn its share of royalties based on its proportionate share of total coal production within the unitized area. Under a non-unitized arrangement, actual royalties earned may vary depending on the total coal production in the areas where PMRL s coal and royalty mineral rights are located. At the Sheerness Mine, Paintearth Mine and Highvale Mine, not all coal rights have been unitized and, as such, variations will result from mining operations moving in and out of the areas where PMRL s coal and mineral rights are located. 38

42 Following the Royalty Acquisition Closing, PMRL transferred certain of its mineral property interests, leases and other royalty interests to Genesee LP and Coal LP, and Westmoreland acquired PMRL s coal operations. The Company s royalty revenue from the Coal Royalties that are unitized will be based on PMRL s proportionate share of total coal production within the unitized area. See Description of the Arrangement Royalty Interest Transfer Agreement. Summary of Coal Royalties Genesee Sheerness Paintearth Highvale Cheviot Coal Type... Electrical Electrical Electrical Electrical Metallurgical Operator... Westmoreland (1) Westmoreland (1) Westmoreland (1) TransAlta Teck Power Plant Operator... Capital Power ATCO/TransAlta ATCO TransAlta n/a Decommission Dates n/a Proven and Probable Reserves Subject to Royalties (mt) (2) 36.8 (2) 22.9 (2) 7.1 (2) 23.3 (3) Mine Life (years) (4) n/a Production (mt) (5) n/a 1.8 and 3.0 (7) Calendar Year 2013 Royalty Revenue (6) (millions)... $6.9 $5.4 $5.3 Nil (8) $2.6 Blended Unitization Rate (9) % Blended Calendar Year 2013 Royalty Rate (10).. $4.16/t (1) New operator following completion of the Arrangement. (2) Based on total mine performance attributable to PMRL as disclosed in the Sherritt AIF. (3) Based on 2013 Teck Annual Information Form. (4) Mine life may be longer than the life of the associated royalty. (5) Calendar year ended December 31, (6) Attributable to Altius, calendar year ended December 31, (7) Annual clean coal capacity of mine and preparation plant, respectively. (8) During 2013 Highvale Mine was mined outside of PMRL s unitized area but management anticipates that mining will recommence in PMRL s unitized area in the future, however there can be no assurance that this will be the case. (9) Weighted average of total production and the unitization rate for electrical coal royalties. (10) Blended royalty rates for electrical coal royalties are calculated by multiplying 2013 unitized production, if applicable, by the provisional royalty rate, divided by unitized total production. Material Royalty Interests Genesee Royalty The Genesee Mine is located approximately 70 km southwest of Edmonton, Alberta. The open pit mine, which has been in operation since 1989, has an annual production capacity of 5.6 mt. Its coal is delivered to the Genesee power station which is approximately 25 km southwest of the mine. The power station is operated by Capital Power. The Genesee power station is comprised of three power generating units with total capacity of 1,376 MW. Units 1 and 2 are owned and operated by Capital Power and unit 3 is jointly owned by TransAlta and Capital Power. Unit 1 began operating in 1994, unit 2 in 1989 and unit 3 in The units are expected to be decommissioned in 2039, 2044 and 2055 respectively. The Genesee Royalty is governed by the terms of the Genesee Royalty Agreement that was entered into with Coal Acquiror at the Royalty Acquisition Closing. The new Genesee Royalty Agreement provides, among other things, that Altius is entitled to payment of a royalty equal to % of the royalties currently received by PMRL pursuant to the terms of the Genesee Dedication and Unitization Agreement. The Genesee Dedication and Unitization Agreement provides for the dedication of certain coal rights held by the parties to the Genesee coal mine and the unitization of such interests with other parties holding mineral rights over the 39

43 mine area. The Genesee Dedication and Unitization Agreement also provides for a royalty that consists of (i) a crown equivalent royalty, calculated as the greater of a royalty calculated in accordance with the Alberta Coal Royalty Regulations as they stood at April 1981, or the per tonne provincial royalty payable for coal produced from Crown leases and (ii) an overriding royalty, which is an agreed upon base rate that is escalated by the GDP implicit price index published by Statistics Canada. The Genesee Dedication and Unitization Agreement provides that if either PMRL or Capital Power receives a bona fide offer from an arm s length third party to purchase all or a portion of its coal rights, the receiving party shall first make an offer to the other party to sell such coal rights at a price and on terms of payment no less favourable than those provided for in the offer. Upon announcing the Royalty Acquisition, a 120 day right of first refusal period was triggered in favour of Capital Power during which time Capital Power was entitled to acquire the Genesee Royalty from Sherritt on the same terms that Altius proposed to acquire the Genesee Royalty. On April 24, 2014, Capital Power agreed to waive its right of first refusal to acquire the Genesee Royalty. Sheerness Royalty The Sheerness Mine is located approximately 160 km northeast of Calgary, Alberta. Operations commenced in 1986 and currently have an annual production capacity of 4.0 mt. Coal is delivered by road from the open pit mine to the Sheerness power station, which is adjacent to the mine. Sheerness power station is owned by ATCO (50%) and TransAlta (50%). The power station is comprised of two power generating units with total capacity of 780MW. Unit 1 began operating in 1986 and unit 2 in The units are expected to be decommissioned in 2036 and 2040 respectively. The Sheerness Royalty is payable under four leases/agreements. The Sheerness Royalty is non-unitized and the royalty rate is based on an agreed base rate escalated by the GDP implicit price index published by Statistics Canada. Teck retains the right to receive a royalty on revenue earned from the mining of certain of the lands underlying the Sheerness Royalty. This royalty is non-unitized and the royalty rate is set at 5% of the gross revenue received for coal deliveries made from the leased area. Other Notable Coal Royalties Paintearth Royalty The Paintearth Mine is located in the Central Plains region of Alberta, Canada approximately 175 km east of Edmonton, Alberta. The mine has been in operation since 1956 and has an annual production capacity of 3.1 mt. Coal produced from the mine is used as a fuel source for ATCO s Battle River coal fired power station, which is located approximately 25 km southeast of the mine. Battle River power station is comprised of three power generating units (units 3, 4 and 5 after units 1 and 2 were decommissioned in 2000) with total capacity of 670MW. Units 1 and 2 were operating from 1956 to 2000 while unit 3 began operating in 1969, unit 4 in 1975 and unit 5 in The units are expected to be decommissioned in 2019, 2025 and 2031 respectively. The coal is suitable for direct delivery from the pits to the power plant, with no processing or preparation necessary. The Paintearth Royalty is payable under three leases/agreements. The Paintearth Royalty is non-unitized and based on an agreed base rate escalated by the GDP implicit price index published by Statistics Canada. 40

44 The following table summarizes coal reserves of PMRL in the Paintearth Mine as of December 31, Proven Reserves Probable Reserves Sulphur Content (1) Ash Content (2) Heating Value (2) (mt) (mt) (%) (%) (KJ/kg) 22.9 n/a ,130 (1) Estimated sulphur content by weight, as received basis, based on field averages. (2) Average in-situ coal quality, as received basis. Highvale Royalty The Highvale Mine is located in the central plains region of Alberta, in Township 52, ranges 4 and 5, west of the Fifth Meridian, approximately 60 km west of Edmonton. The following table summarizes coal reserves of PMRL in the Highvale Mine as of December 31, Proven Reserves Probable Reserves Sulphur Content (1) Ash Content (2) Heating Value (2) (mt) (mt) (%) (%) (kj/kg) 7.1 n/a ,910 (1) Estimated sulphur content by weight, as received basis, based on field averages. (2) Average in-situ coal quality, as received basis. Potash The Potash Royalties comprise royalty interests in respect of potash produced from the Rocanville Mine, Cory Mine, Allan Mine, Patience Lake Mine, Vanscoy Mine and Esterhazy Mine, each of which is located in Saskatchewan, Canada. Potash Royalty Agreements The potash royalty agreements under which the Potash Royalties are payable are generally structured as a lease of subsurface mineral rights owned by a party to a potash mining company for a specified term in return for a royalty payment based on a percentage of the net selling price of potash. The specific royalty percentages are generally determined in accordance with Saskatchewan s Subsurface Mineral Regulations, which provide for a variable rate depending on the average grade of potash ore mined. The net selling price is typically determined with reference to the mining company s list price for standard grade potash. PMRL s subsurface minerals are leased to PotashCorp, Mosaic and Agrium, which are mining companies that have the exclusive right to mine the leased subsurface minerals under various unitized and non-unitized leases. Under the unitized leases, as with the Coal Royalties, Altius will earn royalties based on its proportionate share of all potash mined within the larger area. Altius will earn royalty payments for each tonne of potash produced based on the market price of potash, the quality of the potash that is produced during a given period, and the tonnage produced from within the lands or the unitized area owned by PMRL. Actual royalties earned each year may vary depending on total potash production at each of the mines underlying the Potash Royalties. At mines where the leases of mineral rights are not unitized, variations will also result from mining operations moving in and out of the areas where PMRL s potash rights are located. At the Royalty Acquisition Closing, PMRL transferred all of its various surface mineral rights and other royalty interests in the Potash Royalties to Potash LP. See Description of the Arrangement Royalty Interest Transfer Agreement. 41

45 Summary of Potash Royalties PotashCorp PotashCorp Operated Since Production (1) 2.0 MT Operated Since Production (1) 1.2 MT Rocanville Mine Life 79 LTM Revenue (1) $2.2 Million Allan Mine Life 80 LTM Revenue (1) $0.3 Million PotashCorp PotashCorp Operated Since Production (1) 1.5 MT Operated Since Production (1) 0.3 MT Cory Mine Life 56 LTM Revenue (1) $0.9 Million Patience Lake Mine Life LTM Revenue (1) n/a $0.3 Million Mosaic Agrium Operated Since Production (1) 4.0 MT Operated Since Production (1) 1.7 MT Esterhazy Mine Life 73 LTM Revenue (1) $2.1 Million Vanscoy Mine Life 46 LTM Revenue (1) $0.2 Million 14APR Source: Bloomberg, SNL Financial and public filings by PotashCorp, Mosaic and Agrium. (1) Production shown on a 100% basis attributable to the operator and is subject to a unitization rate to determine production attributable to Altius. Notable Potash Royalties Rocanville Royalty The Rocanville Mine is a conventional underground mining operation located in south eastern Saskatchewan near the Saskatchewan-Manitoba Provincial Boundary, approximately 15 km north-east of the village of Rocanville, Saskatchewan. Potash ore is excavated below the surface, transported by conveyor belt to the bottom of the production shaft and hoisted to the mill where it is processed into the final concentrated muriate of potash product. The Rocanville Mine is currently undergoing a major expansion project which is expected to bring the mine s operational capability to 5.7 mt muriate of potash by The Rocanville Mine leases have been unitized pursuant to a unitization agreement with other mineral rights holders. Royalties are calculated as the greater of the royalty rate paid to the Crown over Crown owned lands within the Rocanville Mine lease area, or a percentage of the net selling price of run of mine ore determined by the average grade of potash ore mined in each month, in accordance with the schedule of royalty rates determined by Saskatchewan s Subsurface Mineral Regulations. Esterhazy Royalty The Esterhazy K1 and K2 mines are located on existing CNR sidings at Yarbo and Gerald, approximately 85 km southeast of Yorkton, Saskatchewan. Mosaic is currently undertaking a two phased expansion at Esterhazy, which is expected to increase production capacity by 1.7 mt by The Esterhazy Royalty is the greater of the royalty paid to the Crown or a percentage rate (determined by Saskatchewan s Subsurface Mineral Regulations) applied to the net selling price (which varies with reference to the market price of potash). The Company is expected to receive royalties from production within the unitized area for at least the next 33 years. 42