Altius Reports Q2 2023 Attributable Royalty Revenue of $18.7M and Adjusted Earnings (1,2) of $2.7M
ST. JOHN’S,
Brian Dalton, CEO commented, “Second quarter revenues primarily reflect lower realized prices on a year over year basis but also the scheduled closure of the 777 mine during the year. We continue to believe that most prices remain below those required to incentivize growth investment and to offset projected market deficits over coming periods. The highlight from within our royalty portfolio related to the release by AngloGold Ashanti of an exploration target estimate of 6-8 million ounces of gold from the Merlin deposit that is located adjacent to the south of the Silicon Deposit, for which a resource estimate of more than 4 million ounces was published earlier this year.”
Quarterly Highlights
-
AngloGold Ashanti (“AGA”) on August 4th provided an update on the rebranded ‘Expanded Silicon Project’, which now includes both the Silicon and Merlin gold deposits. AGA has stated an exploration target for Merlin of 6 to 8 million ounces, with a grade-tonnage range estimate of 230-250 million tonnes of 0.8 to 1.0 grams/tonne gold. An initial Inferred Mineral Resource estimate and Concept Study for the known mineralization is expected in H2 2023. Merlin is located adjacent to the south of the Silicon Deposit for which a more than 4 million ounce inferred resource estimate was published by AGA earlier this year. It also announced that it expects to complete a pre-feasibility study by year end that considers both Silicon and Merlin and that will include ‘synergies from the increased economy of scale and integrated infrastructure, with potential for large scale mining’. Altius holds a
1.5% NSR royalty related to the project. -
Lithium Royalty Corp. (“LRC”) distributed
to the Corporation as a return of capital to its pre-IPO shareholders.$8.9 million -
ARR Q2 royalty revenue of
was up$1.3 million 72% from the same quarter last year, as a result of continued renewable royalty portfolio growth. -
Nutrien has lowered potash production guidance for this year, following the temporary curtailment of production at Cory and
Rocanville due to the strike at the Port ofVancouver . Nutrien also announced that it will pause its potash portfolio production expansion program in light of market conditions and capital allocation prioritization decisions. -
Mosaic announced an increase in total nameplate capacity to 7.8 million tons at the
Esterhazy potash mine, which compares to 6 million tons in 2022. Further debottlenecking atEsterhazy is expected to add an additional 400kt of capacity. - Lundin Mining continued an aggressive delineation and expansion drilling program at the Sàuva copper discovery within the Chapada district and commented that it expects the work to result in increasing resource estimates in coming periods.
-
Champion Iron continued to work towards completion of an updated feasibility study for the Kami iron ore project located in
Western Labrador , which is targeting production of direct reduction grade pellet feed. Altius holds a3% gross sales royalty on the Kami project.
Adjusted EBITDA(1,2) of
Q2 2023 adjusted operating cash flow(1,2) of
Net earnings of
In Thousands of Canadian Dollars | Three months ended | |||||
Adjusted Net Earnings | June 30, 2023 | June 30, 2022 | ||||
Net earnings attributable to common | $ |
3,078 |
|
$ |
8,213 |
|
Addback (deduct): | ||||||
Unrealized loss on fair value adjustment of derivatives |
|
738 |
|
|
1,920 |
|
Foreign exchange (gain) loss |
|
(565 |
) |
|
1,071 |
|
Realized gain on disposal of derivatives |
|
(365 |
) |
|
- |
|
Gain on disposal of mineral property |
|
(161 |
) |
|
- |
|
Tax impact |
|
- |
|
|
(617 |
) |
Adjusted net earnings | $ |
2,725 |
|
$ |
10,587 |
|
Adjusted net earnings per share | $ |
0.06 |
|
$ |
0.23 |
|
Portfolio Performance
The following table summarizes the attributable royalty revenue:
Summary of attributable royalty revenue (in thousands of Canadian dollars) |
Q2 2023 | Q1 2023 | Q2 2022 |
Base and battery metals |
|
|
|
Potash | 6,081 |
9,032 |
11,450 |
Iron ore (1) | 2,431 |
1,870 |
2,871 |
Thermal (electrical) coal | 2,626 |
3,002 |
4,520 |
Renewable energy | 1,310 |
1,345 |
763 |
Other | 1,416 |
1,275 |
703 |
Attributable royalty revenue |
|
|
|
See non-GAAP financial measures section of our MD&A for definition and reconciliation of attributable royalty revenue | |||
(1) Labrador Iron Ore Royalty Corporation dividends received |
Base and battery metals contributed
At Voisey’s Bay production was impacted by longer than anticipated annual maintenance at the
On May 1, 2023 Altius received
In addition, Altius holds minority partnership-based interests in each of LRC’s Grota do Cirilo (commenced production during the quarter), Tres Quebradas and Mariana royalties (both of which are expected to complete construction and begin operations later this year or early next year). These will collectively add three new operating stage mines to the Corporation’s portfolio and introduce its first ever royalty revenue related to lithium production.
Potash royalty revenue of
Iron ore royalty revenue, in the form of dividends received from Labrador Iron Ore Royalty Corporation (“LIORC”), of
Champion Iron is expected to announce the results of an updated feasibility study for the Kami project later in 2023, which is located near its Bloom Lake Mine and is subject to a
Thermal coal royalty revenue of
Altius Renewable Royalties Inc. (“ARR”) (ARR: TSX) released its Q2 2023 results on August 1, 2023 ARR Q2 2023 Results. The Corporation holds
Liquidity and Capital Allocation Summary
Cash and cash equivalents at June 30, 2023 were
At quarter end the approximate market value of various public equity holdings included:
-
for shares of ARR (including the in-the-money value of share purchase warrants)$173.3 million -
for shares of LIORC$116.2 million -
for the value of the investment in LRC$55.6 million -
for publicly traded shares held within the Project Generation equity portfolio.$41.8 million
During the quarter, the Corporation made scheduled debt repayments of
Dividend Declaration
The Corporation’s board of directors has declared a quarterly dividend of
This dividend is eligible for payment in common shares under the Dividend Reinvestment Plan (DRIP) announced by press release May 20, 2020, and available to shareholders who are Canadian residents or residents of countries outside
In order to be eligible to participate in respect of the September 15, 2023 dividend, non-registered shareholders must provide instruction to their brokerage and registered shareholders must provide completed enrollment forms to the transfer agent by September 8, 2023, five business days prior to record date. Stock market purchases made under the DRIP for the September 15, 2023 payment will be satisfied by issuance from treasury at the 5 day volume weighted average price ending at the close of trading the day before payment date. Shareholders who have already provided instruction to be enrolled earlier this year will continue to be enrolled unless they direct otherwise. For more information, please see http://www.altiusminerals.com/dividend-reinvestment-plan. Participation in the DRIP is optional and will not impact any cash dividends payable to shareholders who do not elect to participate in the DRIP. The declaration, timing and payment of future dividends will largely depend on the Corporation’s financial results as well as other factors. Dividends paid by Altius on its common shares are eligible dividends for Canadian income tax purposes unless otherwise stated.
Non GAAP Financial Measures
- Management uses the following non-GAAP financial measures: attributable revenue, attributable royalty revenue, adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), adjusted operating cash flow and adjusted net earnings (loss).
- Management uses these measures to monitor the financial performance of the Corporation and its operating segments and believes these measures enable investors and analysts to compare the Corporation’s financial performance with its competitors and/or evaluate the results of its underlying business. These measures are intended to provide additional information, not to replace International Financial Reporting Standards (IFRS) measures, and do not have a standard definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. As these measures do not have a standardized meaning, they may not be comparable to similar measures provided by other companies. Further information on the composition and usefulness of each non-GAAP financial measure, including reconciliation to their most directly comparable IFRS measures, is included in the non-GAAP financial measures section of our MD&A.
Second Quarter 2023 Financial Results Conference Call and Webcast Details
Date: August 9, 2023
Time: 9:00 AM ET
Toll Free Dial-In Number: (+1) 888 396 8049
International Dial-In Number: (+1) 416 764 8646
Conference Call Title and ID: Altius Minerals Q2 2023 Financial Results, ID 46475901
Webcast Link: Q2 2023 Financial Results
About Altius
Altius’s strategy is to create per share growth through a diversified portfolio of royalty assets that relate to long life, high margin operations. This strategy further provides shareholders with exposures that are well aligned with sustainability-related global growth trends including the electricity generation transition from fossil fuel to renewables, transportation electrification, reduced emissions from steelmaking and increasing agricultural yield requirements. These macro-trends each hold the potential to cause increased demand for many of Altius’s commodity exposures including copper, renewable based electricity, several key battery metals (lithium, nickel and cobalt), clean iron ore, and potash. In addition, Altius runs a successful Project Generation business that originates mineral projects for sale to developers in exchange for equity positions and royalties. Altius has 47,497,343 common shares issued and outstanding that are listed on Canada’s Toronto Stock Exchange. It is included in each of the S&P/TSX Small Cap, the S&P/TSX Global Mining, and the S&P/TSX Canadian Dividend Aristocrats indices.
Forward-looking information
This news release contains forward‐looking information. The statements are based on reasonable assumptions and expectations of management and Altius provides no assurance that actual events will meet management's expectations. In certain cases, forward‐looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Although Altius believes the expectations expressed in such forward‐looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those projected. Readers should not place undue reliance on forward-looking information. Altius does not undertake to update any forward-looking information contained herein except in accordance with securities regulations.
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Flora Wood
Email: Fwood@altiusminerals.com
Tel: 1.877.576.2209
Direct: +1(416)346.9020
Ben Lewis
Email: Blewis@altiusminerals.com
Tel: 1.877.576.2209
Source: Altius Minerals Corporation