FORWARD LOOKING STATEMENTS

Transcription

1 AUGUST 2018

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

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

4 IPO Number of Exploration / Royalty Creation Transactions 20 YEAR HISTORY WORKING WITH THE CYCLE Present 40 IPO COMMODITIES SUPERCYCLE BEGINS COMMODITIES SUPERCYCLE ENDS ROYALTY REVENUE GROWING FAST AS COMMODITY PRICES RECOVER Many exploration projects acquired PG business model launched Voisey s Bay royalty acquired as recovery begins from the Bre-X crash Three successful spin-outs and many JV s from project generation returning over $200M to Altius 13 producing royalties acquired Exploration project portfolio replenished 22 IOC royalty added Increased potash royalties Several earlier stage royalties created and acquired 41 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 ROYALTY REVENUE GROWTH PROFILE Royalty Revenue (FY2014 LTM 2018) Q2 18 Revenue $16.5M $70M $29M $33M $46M LTM EBITDA Margin 80% $6M FY 2014 FY 2015 FY 2016 FY 2017 LTM 2018 Altius converted its financial reporting period to calendar year-end in 2017 from its previous fiscal year-end of April 30. The LTM revenue is to June 30,

6 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 Under Credit Revolver 43.2 million 10.0 million $557 million $0.16 per share $125 million $188 million $100 million Craig Hutchison Brian MacArthur Orest Wowkodaw Jacques Wortman $200M Investments Cash Debt $100M $0M F 2014 F 2015 F 2016 F 2017 CY 2017 Q Net Debt $22M $41M $11M -$19M -$126M -$62M All dollar figures are in Canadian dollars with market capitalization as of August 7, Altius converted its financial reporting period to calendar year-end in 2017 from its previous fiscal year-end of April 30. Cash and public equity holdings includes $52 million cash position at June 30, $60 million junior equities portfolio position at June 30, $76 million LIF position as at June 30,

7 CREDIT REFINANCING UPSIZED AND IMPROVED TERMS EXTENSION AND INCREASE OF CREDIT FACILITY (JULY 2018) $250M Credit facility increased to $225M Term extended by 5 years to 2023 maturity $200M $150M Revolver (Unused) $5M Revolver (Unused) $100M More flexibility on covenants Locked in the interest rate on 80% of our current debt $100M $50M $0M Revolver $75M Term Debt $50M Previous Term Debt $125M New 7

8 DIVERSIFIED MINING ROYALTY FOCUS PRECIOUS METAL MINING MAJORS US$75B Market Capitalization DIVERSIFIED MINING MAJORS US$535B Market Capitalization PRECIOUS METAL ROYALTY COMPANIES US$31B Market Capitalization DIVERSIFIED ROYALTY COMPANIES US$3B Market Capitalization PLENTY OF ROOM FOR GROWTH 8 Market capitalization as of August 7, 2018.

9 STRONG OPERATORS IN SAFE JURISDICTIONS Rocanville Mine Allan Mine Cory Mine Patience Lake Vanscoy Mine Potash Chapada Mine Saskatchewan, Canada Copper Esterhazy Mine Potash Copper 37% Goias, Brazil 777 Mine Saskatchewan, Canada Copper, Zinc, Gold & Silver Voisey s Bay Mine Nickel, Copper & Cobalt Potash Newfoundland, Canada 14% Iron Ore Company of Canada Manitoba, Canada Thermal Coal Alberta, Canada Genesee Mine Sheerness Mine Highvale Mine Paintearth Iron Ore (Pellets and Con.) Labrador, Canada Cheviot Mine Metallurgical Coal Alberta, Canada 9

10 COMMODITY DIVERSIFICATION Zinc 9% Iron Ore 9% Potash 12% Other 5% Met. Coal 4% Three Months Ended July Mix Copper 37% Thermal Coal 24% Copper 37% POTASH REVENUES DISPLACING THERMAL COAL AS SECOND HIGHEST CONTRIBUTOR POST POTASH PORTFOLIO ACQUISITION FROM LIBERTY LATE Q Zinc 8% Met. Iron Coal Ore 4% 7% Other 4% Thermal Coal 20% Q Revenue Mix Copper 39% Potash 23% Altius converted its financial reporting period to calendar year-end in 2017 from its previous fiscal year-end of April 30. revenue mix represents three month period reported quarter from

11 Potash Coal Base Metals LONG LIFE ASSETS = EXPANSION OPTIONALITY IOC Total: 62 Years Chapada Total: 37 Years Voisey Total: 19 Years Reserve Mine Life (Years) M&I Resource Life (Years) Total: 5 Years Inferred Resource Life (Years) Metallurgical (Cheviot) Total: 24 Years Thermal (Various Mines) 9 Vanscoy M&I: 394 Years Inferred: 455 Yrs + Total: 950 Years Cory 73 M&I: 945 Years Inferred: 772 Yrs + Total: 1,790 Years Esterhazy 69 M&I: 52 Years Inferred: N/A + Total: 121 Years Allan 65 M&I: 639 Years Inferred: 1,048 Years + Total: 1,752 Years Rocanville 36 M&I: 204 Years Inferred: 294 Years + Total: 534 Years Mine lives calculated based on current mineral inventory and 2017 throughput. Thermal coal asset lives denote the 2017 weighted average revenue and expected plant closure and not based on reserves. 11

12 PRODUCING ROYALTY UPDATES CARDINAL RIVER Q2 reporting by Teck included a highlighted announcement that a detailed design study is underway to develop a new mining area within the Cardinal River project area. This was noted to offer the potential to extend the mine life by 9 years to 2029 at a production rate of approximately 1.4MT per year in addition to existing production. IOC Operations have fully resumed following the resolution of a 9 week labour disruption during Q2. The new Wabush 3 pit development is expected to come online in the second half of 2018 and support efforts to increase annual finished product output levels. The industry leading quality premiums attracted by the high iron content, ultra-low alumina content of the pellets and concentrates produced by IOC continued to widen during the period. CHAPADA Yamana has announced a 3-phase expansion program at Chapada. The first phase involves current capital investments to improve metal recoveries. A stage 2 expansion of the processing plant from 23 to 32 Mtpa and a stage 3 pit wall pushback are both under feasibility study. Exploration beyond the immediate mine area continues to identify significant mineralization that could result in the further expansion or extension of current operations or lead to additional mining and processing centers within the extensive project area. VOISEY S BAY 15 year mine life extension announced in June 2018 following completion of a cobalt based stream financing. Altius and its partner Royal Gold are advancing a lawsuit against Vale which includes claims that previous royalty payments have been inadequate as a result of internal transfer pricing below fair market rates and that the capital costs associated with processing facilities are not acceptable deductions against royalty payments. A trial is scheduled to begin in September

13 PRODUCING ROYALTY UPDATES 777 Hudbay provided guidance during the quarter that it has pushed back its planned closure date at 777 by a year to late 2021 while also noting that it continues to evaluate options that could lead to further mine life extensions. Nutrien increased its guidance for global potash demand and its overall production levels for potash. It also noted an increase in year over year potash pricing (Altius estimates 15-25% depending on region), as a result of tight global supply. A modest production curtailment at Vanscoy was announced with concurrent increases in production rates at other lower cost operations. The curtailed capacity was noted as being available for future resumption as continuing market demand growth requires. Global Potash Consumption POTASH PORTFOLIO 70MT KCI 60MT KCI 50MT KCI 40MT KCI 30MT KCI 20MT KCI 10MT KCI 0MT KCI

14 RESOURCE STAGE ROYALTY UPDATES GUNNISON PROJECT Operator Excelsior Mining Corp. Copper Arizona, USA 1.0% GRR, further option on additional 0.5% The final required permit (Underground Injection Control) was issued during the quarter but remains subject to an appeal during the subsequent 30 day appeal period. KAMI PROJECT Operator Alderon Iron Ore Corp. Iron Newfoundland/Labrador, Canada 3.0% GSR Loan agreement with Sprott Lending (including Altius syndicate participation) refinances loan with Liberty Metals and Mining. Fully permitted project, undergoing an updated Bankable Feasibility Study expected Q TELKWA PROJECT Operator Allegiance Coal Ltd. Metallurgical Coal 1.5 3% price sliding scale GSR Feasibility study expected Q4 2018, with permitting currently underway for planned start-up in Strategic steelmaking partner discussions underway. British Columbia, Canada ANOTHER 60+ EXPLORATION STAGE ROYALTIES IN PORTFOLIO 14

15 PROJECT GENERATOR BUSINESS GROWTH Value Creation Through Project Generator Junior Portfolio $60M ~$1.40/share $22M $33M PG Portfolio Value April 2016 April 2017 June Projects converted to junior equity and new royalties since 2016 market bottom Does not include $10M equity convertible debenture in Champion Iron, or indirect holdings and in-the-money share purchase warrants 15

16 PROJECT GENERATION HIGHLIGHTS Copper-gold rich VMS deposit in westcentral Ecuador within the Curipamba project that possesses significant exploration upside Adventus is earning 75% in project through spending US$25M over 5 years Recent infill drilling results include: metres of 7.0% Cu, 1.61 g/t Au, 3.0% Zn, 18.4 g/t Ag, and 0.1% Pb (June 6, 2018) Recent drilling results from Moosehead Project in Central Newfoundland has confirmed a high grade discovery Drilling from the first three holes include: meters of g/t Au, 6.85 meters of 0.50 g/t Au and 6.42 meters of 8.18 g/t Au. The second phase of drilling is expected to begin in early fall of this year Constantine released the first set of step out assay results from Palmer Project in Alaska resulting in increasing the total strike length to 350 meters for the AG Zone discovery. Drill intercepts include step out assays results of 4.8 meters grading 436 g/t Ag, 1.3 g/t Au, 3.6% Zn, 1.6% Pb; Second drill hole intercepted an interval of 28.8 meters grading 141 g/t Ag, 0.5 g/t Au, 9.0% Zn, 3.5% Pb. 16

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