ANNUAL GENERAL MEETING OF SHAREHOLDERS

Transcription

1 ANNUAL GENERAL MEETING OF SHAREHOLDERS MAY 2018

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

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

4 IPO Number of Exploration / Royalty Creation Transactions 20 YEAR HISTORY WORKING WITH THE CYCLE As commodity cycles evolve through bear and bull markets, Altius has continually adapted by either growing its royalty portfolio or bringing assets from its project generation portfolio to market Present 40 IPO COMMODITIES SUPERCYCLE BEGINS COMMODITIES SUPERCYCLE ENDS ROYALTY REVENUE GROWING FAST AS COMMODITY PRICES RECOVER Many exploration projects acquired PG business model launched Voisey s Bay royalty acquired as recovery begins from the Bre-X crash Three successful spin-outs and many JV s from project generation returning over $200M to Altius 14 producing royalties acquired Exploration land bank replenished 22 2 new producing royalties added: Chapada and IOC Increased size of others: McChip and PRLP 40 project vend-outs and 2 spinouts completed Royalty Acquisition Interpreted Cyclical Position based on Dow Jones Mining Index, TSX-V and Gold Bugs Index 4

5 ONE YEAR PERFORMANCE VS. MINING INDEX & COMMODITIES Altius +32% Copper +24% S&P500 Metals & Mining +22% Zinc +19% Iron +6%

6 PERFORMANCE Royalty Revenue (FY2014 CY2017) 2018 Revenue Guidance $3M $26M $35M $46M $66M $64M $69M FY 2014 FY 2015 FY 2016 FY 2017 Calendar CY 2018 Year End 2017 Q Performance Q Revenue $15.8M Q EBITDA $12.7M Q EBITDA Margin 80% Altius converted its financial reporting period to calendar year-end in 2017 from its previous fiscal year-end of April 30. The 2017 revenues are pro-rated for Calendar year end. 6

7 CAPITAL STRUCTURE AND AVAILABLE LIQUIDITY ALS:TSX Research Coverage Issued Common Shares Fairfax Preferred Securities Basic Market Capitalization Annual Dividend Outstanding Debt Cash and Public Equity Holdings Available Liquidity (cash, and unused revolver) 43.2 million 10.0 million $619 million $0.16 per share $128 million $174 million $63 million Craig Hutchison Brian MacArthur Orest Wowkodaw $180M $150M $120M $90M $60M $30M Debt Investments Cash $M All dollar figures are in Canadian dollars as of March 31, 2017 and market capitalization as of May 11, 2018; cash and public equity holdings includes $57 million cash + $50 million junior equities + $67 million LIF position. Fiscal Year End 2014 Fiscal Year End 2015 Fiscal Year End 2016 Fiscal Year End 2017 Calendar Year End 2017 Q

8 DIVERSIFIED MINING ROYALTY FOCUS PRECIOUS METAL MINING MAJORS US$86B Market Capitalization DIVERSIFIED MINING MAJORS US$578B Market Capitalization PRECIOUS METAL ROYALTY COMPANIES US$32B Market Capitalization DIVERSIFIED ROYALTY COMPANIES US$3B Market Capitalization PLENTY OF ROOM FOR GROWTH Market capitalization as of May 11,

9 COMMODITY DIVERSIFICATION Other 2% Zinc 8% Met. Coal 5% Commodity Revenue (By Mine) Q Mine $3.3M Iron Ore 11% 2018E Revenue Commodity Mix Copper 37% Metals Chapada Iron ore - IOC $3.9M $1.1M Metallurgical Coal Cheviot $0.8M Brazil 27% Thermal Coal 18% Potash 19% Thermal Coal Copper 37% Genesee Paintearth Sheerness Highvale $1.7M $0.1M $2.1M $0.2M Other 4% Cory $0.1M Zinc 9% Copper Q Revenue 36% Commodity Mix Potash 14% Iron Ore 7% Met. Coal 5% Thermal Coal 25% Potash Other Rocanville Allan Patience Lake Esterhazy Vanscoy Coal bed methane Interest and investment Attributable Royalty Revenue $1.5M $0.1M $0.1M $0.5M $0.03M $0.2M $0.1M $15.8M POTASH EXPOSURE INCREASED POST-LIBERTY TRANSACTION 9 9

10 Potash Coal Base Metals LONG LIFE ASSETS IOC Total: 62 Years Chapada Total: 37 Years Voisey 15 Reserve Mine Life (Years) M&I Resource Life (Years) Total: 5 Years Inferred Resource Life (Years) Metallurgical (Cheviot) Total: 24 Years Thermal (Various Mines) 9 Vanscoy 101 M&I: 394 Years Inferred: 455 Yrs + Total: 950 Years Cory 73 M&I: 945 Years Inferred: 772 Yrs + Total: 1,790 Years Esterhazy 69 M&I: 52 Years Inferred: N/A + Total: 121 Years Allan 65 M&I: 639 Years Inferred: 1,048 Years + Total: 1,752 Years Rocanville 36 M&I: 204 Years Inferred: 294 Years + Total: 534 Years Mine lives calculated based on current mineral inventory and 2017 throughput. Thermal coal asset lives denote the 2017 weighted average revenue and expected plant closure and not based on reserves. 10

11 ROYALTY GROWTH POTENTIAL POTASH VOLUMES Potash royalty portfolio mines have recently undergone $9B in expansions to allow volume growth potential of up to 71% from 2017 levels Potash is increasingly critical to global food security as it increases the amount of crops that each farm unit can produce The global potash market has grown at more than a 4% CAGR over the past 5 years, including by 5.2% in 2017 Global Potash Consumption 70MT KCI 60MT KCI 50MT KCI 40MT KCI 30MT KCI Global Arable Land Per Person Reduced by ~50% Since MT KCI 10MT KCI 0MT KCI

12 GCFPPGSK Index ROYALTY GROWTH POTENTIAL POTASH PRICE Early 2000 s: Prices below Mid to late 2000 s: Capacity utilizations : Utilization 2018: Expansions now capacity incentivization levels reach critical levels and prices rise declines on expansion completed while demand while demand growth drives dramatically to incentivize expansions completions and prices fall to growth continues utilization higher below incentivization levels $800/t $700/t $600/t Potash Price, Sask. Granular Expansion Announcement Expansion Completion $500/t $400/t $300/t Cory and Allan Allan Esterhazy Cory, Rocanville and Vanscoy Vanscoy Rocanville and Esterhazy $200/t $100/t $/t 12

13 ROYALTY REVENUE GROWTH POTENTIAL CHAPADA Yamana has announced a 3-phase expansion program, starting with recovery optimization. Two feasibility studies are underway to support expanding the Chapada processing plant capacity from 23 to 32 Mtpa and eventual pit wall pushbacks to ultimately increase annual production from 120M lbs Cu to M lbs of copper. IOC The new Wabush 3 pit developed within IOC's existing mine operations is expected to come online in the second half of 2018 and support efforts to increase annual finished product output levels at a time when its high-grade products are experiencing increased demand and price premiums. VOISEY S BAY Altius and its partner Royal Gold are advancing a lawsuit against Vale which includes claims that all previous royalty payments have been inadequate as a result of internal transfer pricing below fair market rate and that the capital costs associated with processing facilities are not acceptable deductions against royalty payments. The trial is expected to begin in September 2018 and may result in the resumption of ongoing royalty payments and retroactive royalty payments. 13

14 ROYALTY REVENUE GROWTH POTENTIAL GUNNISON PROJECT Operator Commodity Location Excelsior Mining Corp. Copper Arizona, USA 1.0% GRR The EPA is currently reviewing the public comments received on the Gunnison project. The Underground Injection Control ( UIC ) permit is expected to be issued after the review is completed. The UIC permit is the final permit required prior to starting construction and commencement of production, subject to financing. KAMI PROJECT Operator Commodity Location Alderon Iron Ore Corp. Iron Newfoundland/Labrador, Canada 3.0% GSR New PEA outlined improved economics with reduced capital and operating costs. After-tax NPV at 8% discount rate came in at US$1.8 billion, IRR of 26%. Alderon also released an update to the independent Economic Impact Assessment ( EIA ) of the Kami Project outlining significant economic benefits and positive implications for the economies of Newfoundland and Labrador, Quebec and Canada. TELKWA PROJECT Operator Commodity Location Allegiance Coal Ltd. Metallurgical Coal British Columbia, Canada Sliding Scale: 1.5 3% price sliding scale GSR Permitting currently underway for planned startup in Allegiance is also completing a feasibility study on the project targeted to be released in Q4/18. The Stage 1 pre-feasibility study released in September 2017 indicated a stand-alone operation with NPV10% pre-tax of US$83M and an IRR pre-tax of 52%. ANOTHER 60+ EXPLORATION STAGE ROYALTIES IN PORTFOLIO 14

15 BLUE SKY RENEWABLE ROYALTIES Blue Sky Renewable Energy Royalties is under development as a co-venture of Great Bay Renewables and Altius Great Bay Renewables is a proven renewable energy sector investor and developer Altius expects to be the largest shareholder of Blue Sky while other strategic investors are also likely to be added Renewable energy is the fastest growing power generation sector globally on recent cost competitiveness (non-subsidized) and environmental advantages Renewable energy has fully emerged as a mainstream natural resource sector but has not yet seen development of a significant royalty level subsector - such as has already occurred in mining and oil and gas Mean Levelized Cost of Energy (US$/MWh) $400 $350 $300 $250 $200 Utility Scale Solar Wind Nuclear Coal Gas - Combined Cycle Renewable energy resources are infinite and therefore offer exceptional royalty upside optionality Consideration underway for contribution of our remaining coal generation royalty revenue (phasing out by 2030) for reinvestment into long life renewable energy generation projects $150 $100 $50 $ Coal $102 Gas $60 Solar $50

16 PROJECT GENERATOR BUSINESS PERFORMANCE Value Creation Through Project Generator Junior Portfolio $50M $22M $33M April 2016 April 2017 March Projects converted to junior equity and new royalties since 2016 market bottom Does not include $10M equity convertible debenture in Champion Iron or several additional equity positions (Aethon, etc.) that were subject to closing after quarter end 16

17 PARTNER FUNDED EXPLORATION IN PROJECTS ACTIVE 40 KM DRILLING IN 2018 $39M Estimated Partner Funded Drilling for 2018 $10M $3M $3M $2M $1M $3M $3M $3M $2M $1M $3M $3M $2M Lynx Adventus Zinc (Assorted) Avrupa (Alvito) Canex (Gibson) Canstar (Buchans/Mary March EMU (Vidalita) Evrim (Cuale) New Found Gold (Sail Pond) Renaissance (Jupiter) Renaissance (Silicon) Revelo (Loro) Sokoman (Moosehead) Wolfden (Picket Mtn) 17

18 EVRIM THE LATEST PG MODEL CASE STUDY High sulphidation epithermal surface gold discovery in Jalisco, Mexico 100% owned and explored by partner Evrim Resources with Altius retaining 1% base metal NSR and 1.5% precious metal NSR Altius owns 17% I/O shares or 19.9% fully diluted including warrants Evrim Resources (EVM TSXV) Share Performance May-17 August-17 November-17 February-18 May % (SHARE PRICE PERFORMANCE Y-O-Y) 18

19 LYNX DIAMONDS ANOTHER GEM IN THE PG PORTFOLIO A New Discovery (Northern Manitoba) 1,693 microdiamonds in the mm to mm size fraction recovered from 240 kg in 15 samples. Large Scale Opportunity >15 km unit up to 200 m wide locally. Social License Recently executed agreement with local community to permit access and exploration. Strong Endorsement Private company Adia Resources Inc. created and multiple recognized industry leaders prepared to co-invest with Altius; considering the launch of a new public vehicle

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