tsx: als...2020/11/10 · share buyback $2m share buyback $2m share buyback $5m share buyback $9m...

|2TSX: ALS | OTCQX: ATUSFTSX: ALS | OTCQX: ATUSF

FORWARD- LOOKING STATEMENT

This document includes certain statements that constitute “forward-looking statements” and “forward-looking information” within themeaning of applicable securities laws (collectively, “forward-lookingstatements”). Forward-looking statements include statementsregarding Altius Minerals Corporation’s (“Altius”) intent, or the beliefsor 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 mayrelate to future outlook and anticipated events or results.

By their very nature, forward-looking statements involve numerousassumptions, inherent risks and uncertainties, both general andspecific, and the risk that predictions and other forward-lookingstatements will not prove to be accurate. Do not unduly rely onforward-looking statements, as a number of important factors, manyof which are beyond Altius’ control, could cause actual results to differmaterially from the estimates and intentions expressed in suchforward-looking statements.

Forward-looking statements speak only as of the date thosestatements are made. Except as required by applicable law, Altius doesnot assume any obligation to update, or to publicly announce theresults of any change to, any forward-looking statement containedherein to reflect actual results, future events or developments,changes in assumptions or changes in other factors affecting theforward-looking statements.

Non-IFRS MeasuresAttributable revenue, adjusted EBITDA and adjusted operating cashflow is intended to provide additional information only and do nothave any standardized meaning prescribed under IFRS and should notbe considered in isolation or as a substitute for measures ofperformance prepared in accordance with IFRS. Other companies maycalculate these measures differently. For a reconciliation of thesemeasures to various IFRS measures, please refer to our ManagementDiscussion and Analysis.


ROYALTIES ONA SUSTAINABLE

NATURAL RESOURCEFUTURE

Subsidiary Altius Renewable Royalties Corp. (“ARR”) reinvesting royalties from phasing out coal mines to fund the development of a portfolio of more than 23 GW of new renewable energy projects through royalty financing

Macro-Trend

Fossil Fuel to Renewable Energy Transition

Electrification and Storage

Soil Quality/Agricultural

Yield Improvements

Lower Emission

Steel Making

AltiusRoyaltyExposure

Renewables Replacing Coal

Cu, Ni, Li, Co

Natural Potash Fertilizer

Clean Iron Ore Products

Copper, which benefits more than any other metal from EV and renewable energy transitions, represents our largest portfolio component. Royalty exposure to battery metals - Nickel, Lithium and Cobalt is beginning to ramp-up

Altius’s potash fertilizer royalties relate to a portfolio of top-tier Canadian mines that have pre-built capacity expansions as the need for sustainable food production increases

Royalties relate to high iron / low impurity concentrates and pellets that require less metallurgical coal usage in steel making – minimizing pollution and carbonimpacts

Industry leading fundamental business growth from assets that enable the world to meet its sustainability objectives.


Issued Common Shares 41.5 million

Fairfax Preferred Securities 10.0 million ($100 million)

Basic Market Capitalization $451 million

Annual Dividend $0.20 per share

Outstanding Debt $141 million

Cash and Public Equity Holdings† $136 million

Available Under Credit Revolver† $39 million

TSX: ALS | OTCQX: ATUSF

FY 2014 FY 2015 FY 2016 FY 2017 2018 2019

FY 2014 FY 2015 FY 2016 FY 2017 2018 2019

$6M

$3M

$28M

$1M

$33M

$15M

$46M

$26M

$67M

$35M

$78M

$44M

Revenues

Adjusted Operating Cash FlowReturns of Capital

Dividends$3M

2015

Dividends$5M

2016

Share buy back$2M

Share buy back$2M Share buy back

$5M

Share buy back$9M

Dividends$7M

2017

Dividends$7M

2018

Dividends$8M

2019

†Market cap as of Nov 10, 2020. Cash and public equity holdings includes $16 million cash + $74 million LIORC equity value + $46 million project generation equity values, as at Sep 30, 2020.

Capital Structure and Track Record

Altius Minerals Corporation


Royalty Revenues

15 Producing & Diversified Royalties

Strong Track Record of Growth

Base

Metals

44%

Steel Making Coal 3%

Electricity Generation (Coal) 16%

Clean Iron One 8%

Potash

25%

Royalty Revenues

Q3 – 2020

$16.2 Million

YTD 2020

$45.5 Million

Nine Months

Ended Sept 2020

Royalty Revenues

Other 3%


DIVERSIFIEDASSETS ANDOPERATORS

Investment Grade OperatorsDiversified Royalty Production

Battery Metals3.5%

Potash

28.4%Electricity Generation (Coal)

9.9%

Other Royalties 16.7%

Renewable Electricity Generation

11.2%

Consensus NAV Breakdown†

High Quality Steel Inputs10.9%

Copper

19.4%

†Consensus NAV by asset grouped by primary September 14, 2020.


9

Coal

ROYALTY LIVESUnrivalled Sustainability & Expandability

Weighted to 2019 revenue contribution levels our royalties have a potential weighted average remaining life of more than 121 years.

Mine lives calculated based on current mineral inventory and 2019 throughput. Coal asset lives denote the expected plant closure and not based on mineral inventory. The 2019 revenue weighted average mine life is based on remaining reserves inclusive of MI resources and throughput capacity.

Reserve Mine Life (Years) M&I Resource Life (Years) Inferred Resource Life (Years)

Chapada

Voisey’sBay

777

Gunnison

Sheerness

Genesee

Cory

Esterhazy

Allan

Rocanville

Vanscoy

25IOC

32

14

1

24 19

2

76

57

33

29

14

15

73

16

7

2

Total: 1,004 Years

Total: 129 Years

Total: 1,744 Years

Total: 1,433 Years

Total:309 Years

Several additional deposits identified.

Replacement: Conversion to long life renewable royalties underway with 940MW of project royalties created thus far.

Genesee at reduced capacity after four years.

Iron

Base Metals

Potash

+

+

+

+

+

M&I: 928 Years

M&I: 57 Years

M&I: 928 Years | Inferred: 759 Years



Resource increased by 46% in the past 3 years with several exploration programs ongoing and capcity expansions understufy.identified.

Higher prices/ Lower cut-off grade potentially creates significant additional resource; Further expoloration potential.

Replacement: Gunnison; Curipamba development

9

|8TSX: ALS | OTCQX: ATUSF

PG BUSINESS GROWTHRoyalty Creation at Negative Cost

60 Projects

Converted to new

royalties and junior

equities since 2016

market bottom

Raised in 2020 by

Altius Portfolio

Companies

Altius generates mineral exploration projects for sale in exchange for royalties and equity

positions. This is a proven Equity/Royalty Investment Strategy that allows creation of new

pipeline royalties at negative cost and provides cash for 3rd party royalty acquisitions

Net Investments Net Monetization

April 2016 December 2019 Q3 2020

$33M

-$3M

April 2017

-$6M

December 2018

$0.75M

$54M $54M

$17M

$11M

$22M $46M

Junior Equity Portfolio Growth

>$140M


DRILLING EXPOSURE>$140mm in Capital Raised and 130,000m of Drilling in 2020

50,000m

18,000m15,000m

14,600m 13,000m

5,000m 4,000m 3,000m 3,000m 3,000m

$38 M

$25 M

$13.3 M

$3.7 M$2.0 M $1.5 M $0.6 M

Equity Raised in 2020 by Altius’ PG Portfolio Companies

$4.5 M

Altius anticipates approximately 130 kms of no-direct-cost drilling with results from much of this weighted

towards the fourth quarter owing to Covid-19. This estimate does not include significant brownfield drilling

programs that are ongoing or planned around producing assets that Altius holds royalties/streams over,

including most notably the major expansion focused drilling efforts underway at Chapada.

Top 10 Drill Programs by Meterage within Altius’ PG Portfolio


Renewable Royalties

ALTIUS


Transaction Overview

• Altius’ subsidiary, ARR, has entered into a strategic joint venture with certain funds (the “Apollo

Funds”) managed by affiliates of Apollo Global Management, Inc. (NYSE: APO) to accelerate the

growth of its renewable energy royalty business

• Altius has funded US$66 million to date; Apollo Funds has the right to acquire a 50% stake in Great

Bay Renewables Inc. (“Great Bay” or “GBR”), which is the US based operating subsidiary of ARR, by

committing to fund the next US$80 million

• Future funding, after Apollo Funds’ first US$80 million is deployed, will be shared on a 50/50 basis

• Apollo Funds has publicly stated that it expects to invest up to US$200 million in GBR

• “Sidecar” GBR investment opportunities will be contemplated for investments in non-royalty

components of project capital structures, providing each Altius and Apollo Funds the option to

participate and GBR will have the potential economic benefit of management fee like income

Transaction Rationale

• ARR and Apollo see significant market opportunity for GBR to provide renewable energy royalty

financing to help fund the development of wind, solar and energy storage projects to be built in the

U.S. and Canada over the next decade

STRATEGIC RELATIONSHIP WITH APOLLO GLOBAL ASSET MANAGEMENTTransaction Overview and Rationale


Listen to Apollo Infrastructure’s co-head Geoff Strong talk renewables and goals for the asset manager’s infrastructure platform: tinyurl.com/apolloARR

Highly Experienced Strategic Partner

• Like-minded investor who sees the significant growth potential of the renewable energy sector as well

as the increasing need for project funding and more innovative capital solutions

• Sophisticated in structuring and capital formation for renewable energy projects

• Deep suite of industry relationships within the power and renewables sector to accelerate product

development

Strengthens Balance Sheet and Accelerates the Business

• Immediate source of committed capital to fund current and developing investment opportunities that

allows ARR to continue its momentum

• Enables more rapid scaling of the business; allows ARR to extend its lead as a first-mover, bringing an

innovative royalty investment model to the renewable energy sector

Accretive Transaction

• Accretive implied entry valuation to Altius’ cost basis

• Demonstrates enhanced financial strength and long-term commitment to potential new royalty

counterparties

STRATEGIC RELATIONSHIP WITH APOLLO GLOBAL ASSET MANAGEMENTWhy Apollo as Our Joint Venture Partner


RENEWABLESTRANSITION

MOMENTUM

Source: “Electrifying Insights: How Automakers can Drive Electrified Vehicle Sales and Profitability,” McKinsey – January 2017 ,Bloomberg NEF, Lazard’s Levelized Cost of Energy Analysis – Version 13.0 (November 2019),

$0

2010 2015 2020 2025 2030

1,400

1,200

1,000

800

600

400

200

Observed prices 18% learning rate

2024 implied price $94/kWh

2030 implied price $62/kWh

Lithium-ion battery pack price (real 2018 $/kWh)

Past theTipping Point

Megatrends Driving Increased Electricity

Demand

Within the electricity sector, renewable energy has become the cheapest form of new generation

Electrification trends will cause demand for electricity to grow relative to other sources and storage additions allow renewables to gain further grid-based market share.

Levelized Cost of Energy Comparison

Wind $41

Solar $40

$0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

US

$ p

er

Me

gaw

attH

ou

r

(US$

/M

Wh

)

$350

$150

$100

$50

$200

$250

$300

Utility Scale SolarGas-Combine CycleNuclear

WindCoal


ARR DEVELOPMENT PROGRESS

ACCELERATING

2017 2018 2019 2020

Renewable Royalty

First renewable royalty on small hydro/solar project in VT

CIP acquires Panther Grove wind project from TGE for 2nd embedded royalty – 12/2019

Renewable Royalty

GBR acquired by Altius Minerals (through Altius Renewable Royalties subsidiary) – 2/2019

Formation

GBR makes US$30MM royalty investment in Tri Global Energy (“TGE”) –2/2019

Royalty Investment

Silverpeak acquires Flatland Solar project from TGE for 3rd

embedded royalty –3/2020

Renewable Royalty

GBR makes US$35MM+ royalty investment in Apex Clean Energy –3/2020

Royalty Investment

Developed and refined renewable royalty structure and offering (legal, tax, etc.)

Formation

GBR formed andbegins working onbusiness concept withAltius – Q1 2017

Formation

Up to US$200MM strategic investment into GBR from Apollo Funds – 10/2020

Strategic Investment

Silverpeak acquires Canyon Wind (TX) from TGE for 1st embedded royalty on a TGE project –10/2019

Renewable Royalty

Altius and Apollo JV commits an additional US$25 MM Investment into TGE – 10/2020

Strategic Investment


APEX’s DEVELOPMENT PORTFOLIO

21 GWDevelopment Portfolio

1.6 GWProject Transcated in 2019

+2.0 GWunder construction

Apex is one of the largest renewable energy developers in the U.S. and has commercialized over 5 gigawatt (GW) of clean energy projects since inception in2009. Its current portfolio includes approximately 21 GW (12.5 GW wind, 8.5 GW solar) of development projects. Apex typically vends these projects toutilities, infrastructure funds and other institutional investors prior to construction.

Development

Note: Development locations are approximate.

Top 5 Developer in the USA in 2019 by Installed Capacity

Website Link

https://www.apexcleanenergy.com/


TRI GLOBAL ENERGY DEVELOPMENT PORTFOLIO

Note: Development locations are approximate.

Also a Top 5 Developer in the USA in 2019 by Installed Capacity

3+ GWDevelopment Portfolio

940 MWProjects Sold with ARR Royalty

Wind and SolarAsset Diversification

Tri Global Energy is a leading renewable energy developer drawing on the natural, renewable resources of the wind and the sun to successfully address thegrowing demand for clean and sustainable energy. Tri Global Energy is the leading utility-scale developer responsible for nearly one quarter of all windenergy projects currently under construction in Texas, the nation’s leader in wind capacity.

Development


0

100

200

300

400

Solar Wind Storage Gas Nuclear Coal Other

U.S. RENEWABLE DEVELOPMENT

MARKET OPPORTUNITY

Source: Berkeley Lab review of interconnection queues, Bloomberg NEF

US Interconnection Applications by Generation Type (Gigawatts)

20

14

20

15

20

16

20

17

20

18

20

19

Entered queues in an earlier year Entered queues in the year shown

20

14

20

15

20

16

20

17

20

18

20

19

20

14

20

15

20

16

20

17

20

18

20

19

20

14

20

15

20

16

20

17

20

18

20

19

20

14

20

15

20

16

20

17

20

18

20

19

20

14

20

15

20

16

20

17

20

18

20

19

20

14

20

15

20

16

20

17

20

18

20

19

Hatch portion indicates the amount paired with storage

5.6

>5.0 4.9

4.2 4.1 3.9 3.6

>3.0 2.8 2.8 2.8 2.6

2.2 2.1

14.9

Developer Installed Capacity (GW) 2010-2019

Top 15 renewable energy

developers in the US


RENEWABLE ENERGY SECTOR

ARR Represents First Royalty Level Business Model Within Utility Scale

Renewable Energy Sector

Increasing Investor Interest

EV/EBITDA Multiples for Operators Versus Royalty Co’s

6.2x 5.0x

6.6x

13.5x

9.3x 9.7x

19.0x

-

5x

10x

15x

20x

25x

Oil & Gas Diversified Precious Metals Renewables

Operator Royalty

?

EV / 2021E EBITDA Multiples for Operators Versus Royalty Co’s(1)

Source: Factset. Market data as of November 10, 2020; (1) Consensus Estimates

TSX Renewable Energy and Clean

Technology Index since Covid bottom

Renewables sector emerging as a leader in pandemic recovery.

100

120

140

160

180

200

220

Mar2020

Apr May Jun Jul Aug Sep Oct Nov2020


THANKYOU

Flora WoodDirector, Investor RelationsPhone: (416) 346-9020Email: [email protected]

Producing Royalties

Development Royalties

Project Generation

Renewable Energy Portfolio

mailto:[email protected]

tsx: als...2020/11/10 · share buyback $2m share buyback $2m share buyback $5m share buyback $9m...

Documents