BMO Global Metals and Mining Conferencealtiusminerals.com/...BMO-Conference-Presentation.pdf · BMO...

TSX:ALS | OTCQX:ATUSFFebruary 2020

BMO Global Metals and Mining Conference

TSX:ALS | OTCQX:ATUSF

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”). Forward-looking 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.

Forward Looking Statements


$6M$28M $33M

$47M

$67M$78M

FY 2014 FY 2015 FY 2016 FY 2017 2018 2019

Growth Track Record

80% EBITDA Margin $0.48 to $1.44

3

Royalty Revenue

5yr Growth in EBITDA/Share

$0.22$0.88 $0.83

$1.08

$1.56$1.84

FY 2014 FY 2015 FY 2016 FY 2017 2018 2019

Royalty Revenue Per Share


Royalty Growth Pipeline

4

Strong operating margins and long resource lives motivating multiple new build and expansion investments by operators = free royalty growth

Organic (Free) Mine Royalty Growth

New renewable energy royalty business growing fast as electricity generation transition accelerates and sector begins to recognize benefits of royalty finance offering

Renewable Royalty Business Gaining

Momentum

Discovery

Renewable Development Portfolio

2.5 GW Portfolio

Rocanville

Cory

Allan

Vanscoy

Esterhazy

Completed Potash Expansions

New Mines in Construction

Voisey’s Underground

(Ni-Co-Cu)

Gunnison (Copper)

BuildingRamping UpFinancing

and Development

ChapadaExpansion (Cu)

Resource Stage Expansion Study

Expansion of Existing Assets

New Build Studies168,000 metres of

drilling in 2020

60+ Exploration Stage Royalties

4


$22M$33M

$54M $54M$11M

-$3M -$6M

$17M

April 2016 April 2017 December2018

December2019

Proven Equity/Royalty Investment Strategy Allows Creation of New Pipeline Royalties at Negative Cost and Provides Cash for 3rd Party Royalty Acquisitions

5

PG Business Growth - Royalty Creation At Negative Cost

57 Projects

$17M

Converted to new royalties and junior equities since 2016 market

bottom

Positive cash generation in 2019

Junior Equity Portfolio Growth

PG Net Monetizations

1stGunnison starting up to mark first

PG created royalty to reach production stage

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


Levelized Cost of Energy Comparison

Renewables Transition Momentum Growth

EV Battery $ Cost / kWh

$ Cost Parity with Internal Combustion Engine

Electrification trends (e.g. transportation about to shift to EV) will

cause demand for electricity to grow and gain market share

relative to other sources of consumer energy such as fossil fuels

Lower costs, higher efficiencies and underlying demand growth

coupled with a surge in ESG investment mandates creating a

massive tailwind for renewable energy investments

Megatrends driving increased electricity demand:

ESG Going Mainstream:

6Source: “Electrifying Insights: How Automakers can Drive Electrified Vehicle Sales

and Profitability,” McKinsey – January 2017 , Lazard’s Levelized Cost of

Energy Analysis – Version 13.0 (November 2019), US SIF Foundation

Within the electricity sector, renewable energy has

become the cheapest form of new generation

Past the tipping point:

6


Renewable Royalty Growth -Tri Global Energy Investment

• Renewable energy royalties are being generated ahead of schedule – project sales in first year represent more than half that

required for full royalty vesting threshold - with remainder expected in 2020

• First royalty project, Canyon Wind (360 MW – TX), sold in October 2019 to private equity firm with operations expected to

begin in H2 2021

• Woodford Wind (300+ MW – IL) sold to Copenhagen Infrastructure Partners in December 2019 with commercial production

anticipated in late 2021

• TGE development pipeline has increased to over 2,500 MW (even after accounting for the 660+ MW project sales to date)

7Source Company Reports

7


Diversity

Diversified Portfolio

15 Producing Royalties

Investment Grade Operators

Low Jurisdictional Risk

Royalty vs. Stream Dominated

8

Copper 37%

Battery Metals (Ni-Li-Co) 2%

Potash 19%

Electricity Generation (Coal) 14%

Premium Iron Ore 20%

Steel Making

Coal 4%

Zinc 3%

2019CommodityRevenue

8

TSX:ALS | OTCQX:ATUSF9

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

Coal to RenewablesFossil Fuel to Clean Energy

Conversion

Cu, Co, Ni, Li

Clean Iron Ore Products

Lower Emission Steel Making

Soil Quality/Agricultural Yield Improvements

Transportation Electrification

Potash

Macro-TrendAltius

Royalty Exposure

Subsidiary Altius Renewable Royalties Corp. (“ARR”) reinvesting royalty based capital to advance more than 23 GW of potential new renewable energy projects – as our 5 GW coal generation exposure phases out to zero

Altius’s potash fertilizer royalties relate to a portfolio of top-tier Canadian mines that are ramping up into pre-built capacity expansions as sustainable food production needs increase

Copper, which benefits more than any other metal from EV and renewable transitions, is Altius’s largest royalty exposure. Royalty exposure to battery metals - Nickel, Cobalt and Lithium is growing

Royalty from IOC relates to high iron / low impurity concentrates and pellets that require less metallurgical coal usage in steel plants

Portfolio Aligned with Global Sustainability Trends

9

Sustainability


Longevity

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.

10

85+ Year Revenue Weighted Life


Durability

Notes:• All amounts USD. Spot as at February 22, 2020. Spot Potash is FOB Midwest.• 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 perpound.

• Nutrien and Mosaic per tonne margins calculated by taking FOB Midwest Spot over Cost of Product Manufactured. COPM = Potash COGS for the 2019 excludingdepreciation and amortization expense and inventory and other adjustments divided by the production tonnes for the period. For Mosaic, we used the 2019 four quarteraverage 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.

Operator MineCommodity

BenchmarkSpot Price Operating Margin

Lundin Chapada Copper $2.59 114%

Nutrien All Operations Potash $265 223%

Mosaic All Operations Potash $265 258%

Vale Voisey's Bay Nickel $6.01 107%

Rio Tinto IOC Fe Concentrate $95 111%

Rio Tinto IOC Fe Pellet $135 108%

Excelsior Gunnison Copper $2.59 198%

Hudbay Manitoba Operations Copper $2.59 717%

11


TSX: ALS | OTCQX: ATUSF

Issued Common Shares 42.1 million

Fairfax Preferred Securities 10.0 million ($100 mm)

Basic Market Capitalization $455 million

Annual Dividend $0.20 per share

Outstanding Debt $109 million

Cash and Public Equity Holdings† $169 million

Available Under Credit Revolver† $85 million

4.9x

1.3x

x

1x

2x

3x

4x

5x

6x

2014 2015 2016 2017 2018 2019

Net Debt to EBITDA

4.9x

1.3x

x

1x

2x

3x

4x

5x

6x

2014 2015 2016 2017 2018 2019

Net Debt to EBITDA

Leverage Ratio

Dividends

$3M

Dividends

$5M

Dividends

$7MDividends

$7M

Dividends

$8M

Share buy back

$2M

Share buy back

$2M

Share buy back

$5MShare buy back

$9M

2015 2016 2017 2018 2019

Returns of Capital

Research Coverage

Richard Gray

Craig Hutchison

Brian MacArthur

Carey MacRury

Jacques Wortman

Orest Wowkodaw

Capital Structure

Capital table values, return of capital and net debt to EBITDA numbers as of Dec 31 2019 except for market cap as of Feb 20 2020. Cash and public equity holdings includes $22 million cash + $93 million LIORC equity value + $54.1 million project generation equity values


0.9x 1.1x 1.5x

1.7x 2.0x

2.4x

ALS OR SSL WPM RGLD FNV

10.2x

16.8x 18.0x 18.2x 19.5x

27.2x

ALS SSL RGLD OR WPM FNV

11.2x

18.0x 19.6x 20.1x 20.6x

29.6x

ALS OR SSL WPM RGLD FNV

EV/EBITDA (2020E) P/CF (2020E)P/NAV

Source S&P Capital IQ, Company Reports. February 14, 2020

Potential Re-rate Catalysts

• Increased recognition of sector leading per share business growth metrics, longest duration assets, decreasing

leverage and increasing returns of capital

• New renewables royalty investment announcements

• Coal to renewables strategy execution eliminates current negative impact on investment suitability perception

• Broader portfolio sustainability attributes become recognized by ESG focused investors

• Announcements by mine operators of resource growth and mine expansion (e.g. Chapada)

Valuation

13


Thank You

14

PRODUCING

ROYALTIES

DEVELOPMENT

ROYALTIES

PROJECT GENERATION

PROJECT

RENEWABLE ENERGY

PORTFOLIO

CONTACT

INFORMATION

Flora Wood

Director, Investor Relations

Phone: (416)346-9020

Email: [email protected]

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