Renewable Power Copper Copper Lithium Clean Steel Nickel Cobalt Potash Corporate Presentation TSX:ALS | OTCQX:ATUSF April 2020
Diversified Assets and Operators 15 Producing Royalties Investment Grade Operators Zinc 3% Steel Making Coal 4% Copper 37% Clean Iron Ore 20% 2019 Royalty Revenue Electricity Generation 14% Battery Metals (Ni-Li-Co) 2% Potash 19% TSX:ALS | OTCQX:ATUSF 2
Growth Quarterly Performance Royalty Revenues Revenues (Q1-2020) $78M $16.3M $67M $46M $33M $28M $6M FY 2014 FY 2015 FY 2016 FY 2017 2018 2019 Other Steel Making 7% Coal Adjusted Operating Cash Flow 4% Clean Iron Ore 6% Base Q1-2020 Metals Royalty 40% Electricity $44M Revenue Generation $35M 15% $26M $15M $3M $1M FY 2014 FY 2015 FY 2016 FY 2017 2018 2019 Potash 27% TSX:ALS | OTCQX:ATUSF 3
Capital Structure TSX: ALS | OTCQX: ATUSF Research Coverage Issued Common Shares 41.8 million Richard Gray Fairfax Preferred Securities 10.0 million ($100 mm) Craig Hutchison Basic Market Capitalization $300 million Brian MacArthur Annual Dividend $0.20 per share Carey MacRury Outstanding Debt $155 million Jacques Wortman Cash and Public Equity Holdings † $116 million Orest Wowkodaw Available Under Credit Revolver † $35 million Leverage Ratio (Net Debt:EBITDA) Returns of Capital Share buy back $9M 6x 4.9x 5x Share buy back $5M 4x Share buy back $2M 3x Share buy back $2M 2x Dividends Dividends Dividends $8M Dividends 1x $7M $7M 1.4x Dividends $5M $3M x 2014 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 † Capital table values, return of capital and net debt to EBITDA numbers as of Dec 31 2019 except for market cap as of Apr TSX:ALS | OTCQX:ATUSF 3,2020. Cash and public equity holdings as at Mar 31, 2020 includes $32 million cash + $49 million LIORC equity value + $34 million project generation equity values
COVID19’s Impact on Assets
Commodity Prices Since COVID19 Outbreak Began 30% First Confirmed COVID19 Death (China) 20% 10% 0% Iron 65% Fines Iron 65% Pellets -10% Lead Zinc -20% Nickel Copper -30% 15-Jan-20 28-Jan-20 10-Feb-20 23-Feb-20 7-Mar-20 20-Mar-20 2-Apr-20 Price component of Altius’s top line (i.e. non -marginal) royalties have declined by 2019 revenue weighted average of 11% TSX:ALS | OTCQX:ATUSF 6
Production Level Changes Since COVID19 Outbreak Began IOC / LIF Shareholding Potash Demand Nutrien announced that it continues to expect solid • Iron Ore Company of Canada temporarily halted two iron • demand for crop inputs for the coming spring season and pelletization lines (of six) due to weak demand in Europe that its facilities continue to operate given its business is and North America. deemed an essential service by governments. As a result, IOC plans to shift more of its output to high • The U.S. farmer is generally in good shape, with debt to • grade iron concentrate, which continues to see strong assets less than 13%, equity at an all-time high, and demand. stable cash receipts expected again this year. In Q1-2020. Altius sold a portion of the LIORC common • Global grain consumption should exceed production for • shareholding and continues to hold approximately 2.9 the first time since 2011-2012, according to the USDA. million shares of LIORC. Gunnison Voisey’s Bay On March 17, 2020 Vale ramped down its Voisey's Bay • mining operation and placed it on care and maintenance On March 26, 2020 Excelsior announced that the retrofit • for a period of four weeks, as a direct result of the and wellfield upgrades have been successfully COVID-19 pandemic. completed. The mine accounted for less than 2% of Altius overall • However, in response to the unfolding global COVID-19 • 2019 revenue. pandemic, the Board of Directors has placed the Gunnison Copper Project on temporary suspension. All other operations appear to be running at or near capacity TSX:ALS | OTCQX:ATUSF 7
Strong Underlying Operating Margins Altius Price Guidance Post Covid-19 Outbreak Operator Commodity Based Operator Mine Margin Benchmark Royalty Δ Commodity Operating Commodity Operating Δ Price Margin Price Margin Lundin Chapada Copper $2.74 126% $2.19 81% -20% -45% Nutrien All Operations Potash $255 211% $240 193% -6% -18% Mosaic All Operations Potash $255 245% $240 224% -6% -20% Vale Voisey's Bay Nickel $5.88 103% $5.04 74% -14% -29% Rio Tinto IOC Fe Concentrate $110 144% $98 117% -11% -27% Rio Tinto IOC Fe Pellet $141 117% $128 96% -9% -20% Excelsior Gunnison Copper $2.74 215% $2.19 152% -20% -63% Hudbay Manitoba Ops Copper $2.74 800% $2.19 639% -20% -161% Operations have margin protection against economically driven closures - Underlying operator margins remain strong at an average of 197% despite Covid-19 based price compression Notes All amounts USD. Gudance commodity price as at January 22, 2020 and post covid-19 price as at April 4, 2020. • • Chapada margin calculated using Lundin’s guidance of 2020 C1 cash costs of copper per pound (NI43-101 report October 10, 2019) after precious metal by-product credits. Chapada cash costs do not include the effects of copper stream agreements which will be a component of the copper revenue and will impact realized revenue per pound. Nutrien and Mosaic per tonne margins calculated by taking FOB Midwest Spot over Cost of Product Manufactured. COPM = Potash COGS for the 2019 excluding depreciation and amortization • expense and inventory and other adjustments divided by the production tonnes for the period. For Mosaic, we used the 2019 four quarter average actuals cash costs of production (excluding brine) – MOP ($/tonne) • Voisey’s Bay margin calculation using SNL Modeled Cost Curve for Total Cash Cost per pound of nickel net of by-product credits. IOC margin based on Altius modeled $45/t cash costs for concentrate and $65/t cash costs for pellet. • Gunnison is expected to be in commercial production in 2020. Total cash cost pe pound of copper is derived from the Base Case of the Feasibility Study dated January 16, 2017 • Manitoba Operations margin calculated using Hudbay’s annual actuals year ended December 31, 2019. Cash cost per pound of copper produced, net of by-product credits. • TSX:ALS | OTCQX:ATUSF 8
Long Term Growth Profile
Royalties on a Sustainable Natural Resource Future Altius Macro-Trend Royalty Exposure Subsidiary Altius Renewable Royalties Corp. (“ARR”) reinvesting Fossil Fuel to Clean Energy Coal to Renewables declining coal royalty proceeds to fund the advancement of a Conversion portfolio of more than 23 GW of potential new renewable energy projects Copper, which benefits more than any other metal from EV and renewable energy transitions, represents a large portfolio Cu, Co, Ni, Li Electrification and Storage component. Royalty exposure to battery metals - Nickel, Cobalt and Lithium - set to increase in importance Altius’s potash fertilizer royalties relate to a portfolio of top -tier Canadian mines that are ramping up into pre-built capacity Soil Quality/Agricultural Yield Natural Potash expansions as the need for sustainable food production, Improvements Fertilizer without additional deforestation, increases Royalty from IOC relates to high iron / low impurity concentrates Clean Iron Ore and pellets that require less metallurgical coal usage in steel Lower Emission Steel Making Products making – minimizing pollution and carbon impacts Industry leading fundamental business growth from assets that enable the world to meet its sustainability objectives TSX:ALS | OTCQX:ATUSF 10
Royalty Lives - Unrivalled Sustainability & Expandability 85+ Year Revenue Weighted Life Mine lives calculated based on current mineral inventory and 2018 throughput. Coal asset lives denote the expected plant closure and not based on reserves. The 2018 revenue weighted average mine life is based on remaining reserves inclusive of MI resources and throughput capacity. TSX:ALS | OTCQX:ATUSF 11
Short to Medium Term Royalty Growth Profile Organic (Free) Mine Strong operating margins and long resource lives (85 years revenue weighted average) motivating multiple new build and expansion investments by operators = free royalty growth Royalty Growth Renewable Royalty New renewable energy royalty business growing fast as electricity generation transition Business Gaining accelerates and sector begins to recognize benefits of royalty finance offering Momentum Financing Ramping Up Discovery Building Expansion Study Resource Stage and Development Completed Potash New Mines in Renewable Development Expansion of Existing 168,000 metres of New Build Studies Expansions Construction Portfolio Assets drilling in 2020 60+ Exploration Rocanville Stage Royalties Chapada Voisey’s Underground Cory Expansion (Cu) (Ni-Co-Cu) Allan Vanscoy 2.5 GW Portfolio Gunnison (Copper) Esterhazy TSX:ALS | OTCQX:ATUSF 12
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