Altius Minerals Corporation · TSX:ALS
Altius Minerals — Investor Day (May 2021)
66 slides from Altius Minerals's investor day presentation, May 2021
Slide 1: Investor Day - May 2021
TSX: ALS Investor Day - May 2021 Renewable Energy | Clean Steel | Potash | Copper | Lithium | Nickel | Cobalt
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT This document includes certain statements that constitute “forward- Forward-looking statements speak only as of the date those looking statements” and “forward-looking information” within the statements are made. Except as required by applicable law, Altius does meaning of
Slide 3: Cyclical Thoughts
Cyclical Thoughts
Slide 4: Dr. Copper - Global Structural Demand Since 1950
Dr. Copper - Global Structural Demand Since 1950 World Refined Copper Usage (000’s metric tonnes) = 3x as many people, each using 3x as much copper… means >9x more copper usage Consider our increasing reliance on all things electrical and electronic and nothing about today or tomorrow’s increased co
Slide 5: Structural and Cyclical Price Trends
Structural and Cyclical Price Trends During the second half of the last century the real price of copper fell consistently despite strong global demand growth Average Annual Copper Price (US$/t) • Technology breakthrough in the mid-60’s (SX-EW) allowed many giant “Super-Cycle” copper deposits in the
Slide 6: Geologic Inflation Through the “Super-Cycle”
Geologic Inflation Through the “Super-Cycle” Capex, Opex and Incentive Pricing $7.00 * Incentive Price is estimated using Capex: +300% industry average new build capital $6.00 intensity and operating costs to derive a 15% IRR result $5.00 $4.00 Incentive: +235% $3.00 $2.00 Opex: +166% $1.00 0 $- 200
Slide 7: Dr. Copper in 2021 – 2005-2006 Déjà Vu?
Dr. Copper in 2021– “2005 - 2006 Déjà Vu?” ? Incentive Price Actual Price 2017 2018 2019 2020 2021 Spot Price $ Amount Above / Below Incentive Sources: SNL Financial, internal estimates, dashed lines an informed guess • 8 years of “super-cycle” incentive conditions ultimately resulted in short term
Slide 8: Cyclical Position
Cyclical Position How is Altius Positioned as a Long-Term, Contrarian Investor? Cycle I Cycle II (Super-Cycle) Cycle III Top Interpreted Cyclical Position We currently appear to be Altius within relatively early IPO innings (end of 3rd?) of the new cycle Bottom Bottom 2000 2005 2010 2015 2020 Altius
Slide 9: Royalty Business Lookback
Royalty Business Lookback
Slide 10: Altius’s Long-Term, Counter-Cyclical Royalty Growth Focus
Altius’s Long-Term, Counter-Cyclical Royalty Growth Focus Disciplined Royalty Acquisition History Cycle I Cycle II (Super-Cycle) Cycle III Royalty Acquisition Interpreted Cyclical Position $1.14/share $1.03/share Potash, Thermal (Electrical) Coal $0.81/share $0.61/share Potash Renewable Copper, Zinc
Slide 11: Revenue to Date, NAV Relative to Purchase Price
Revenue to Date, NAV Relative to Purchase Price Acquisition Purchase Realized Net Current Net Asset Value Realized Revenue & NAV Historic Acquisition Date Price (Note 1) Revenue (Note 2) (Analyst Average)(Note 3) Voisey's Bay 2003 $13.6 million $36.0 million $19.1 million $55.1 million Chapada Strea
Slide 12: Royalty Revenue Growth
Royalty Revenue Growth Revenue Per Revenue Share s $1.86 $1.62 $1.56 $1.08 $0.88 $0.83 $0.22 FY 2014 FY 2015 FY 2016 FY 2017 2018 2019 2020 Per-share growth accretion since 2014 mostly reflective of period of counter-cyclical M&A Focus now cyclically shifting to price appreciation and organic volume
Slide 13: Organic Royalty Growth Drivers
Organic Royalty Growth Drivers
Slide 14: Royalty Exposures Well Aligned With Macro Growth Trends
Royalty Exposures Well Aligned With Macro Growth Trends Sustainability Thematic Providing Strong Investment Tailwinds For Underlying Assets Macro-Trend Altius Royalty Exposure Transition to Renewable Altius Renewable Royalties Corp. Public subsidiary ARR funding the development of a portfolio of mor
Slide 15: Commodity / Market Exposures
Commodity / Market Exposures |15
Slide 16: Royalty Asset Lives Unrivalled in Sector
Royalty Asset Lives Unrivalled in Sector Large Resources Are A Strong Predictor of Future Production Expansions Iron IOC 24 10 11 Humphrey South in permitting (2024- 2071) Significant expansion drilling on-going Chapada 34 19 8 and capacity expansion under study Voisey’sBay Higher prices / lower cut
Slide 17: Strong Underlying Mine Economics
Strong Underlying Mine Economics Commodity Spot Estimated Operating Operator Mine Benchmark Price Margin Nutrien All Operations Potash $353 498% Mosaic All Operations Potash $353 469% Hudbay Manitoba Copper $4.70 466% Excelsior Gunnison Copper $4.70 440% Lundin Chapada Copper $4.70 327% Vale Voisey'
Slide 18: Iron Ore
Iron Ore Iron Ore Price (US$/t) $200 $150 $100 $50 $0 May Aug Nov Feb May 2020 2021 Iron Ore 62% Fe Fines CFR Qingdao
Slide 19: The Greener Steel Transition
The Greener Steel Transition Labrador Trough Structural Advantage ▪ The most common iron ores contain hematite and/or magnetite (iron oxides) and Iron Ore Iron Oxygen Iron to Impurities Ratio other mineral and elemental level impurities to varying degrees 17% Impurities Low Quality 58% 25% (Ratio) 3
Slide 20: Altius and the Labrador Trough – IOC Royalty Growth Potential
Altius and the Labrador Trough – Royalty Growth Potential IOC (Operator: Rio Tinto) IOC is amongst the highest margin iron ore operations in the world at current product prices Near-term Growth Potential Nameplate capacity at IOC was increased to 23Mt/a following a significant capital investment pro
Slide 21: Altius and the Labrador Trough – Kami
Altius and the Labrador Trough – Royalty Growth Potential Kami (Operator: Champion Iron) The Kami project is a low-impurity feasibility stage opportunity located within the core production area of the Labrador Trough mining district Altius's project generation team completed the early exploration pr
Slide 22: Champion Iron
Champion Iron (CIA-TSX/ASX; CIAFF-OTCQX) PREMIUM PRODUCT TIER 1 Altius Minerals Corporation– Investor Day JURISDICTION Green Steel Transition - Labrador Trough Structural Advantage HIGH QUALITY INFRASTRUCTURE |22
Slide 23: Disclaimer
Disclaimer Champion Iron This presentation (the “Presentation”) contains information about Champion Iron Limited (“Champion Iron”, “Champion” or the “Company”), current as at the date hereof or as at such earlier date as may be specified herein. This Presentation does not constitute or form part of
Slide 24: Corporate Overview
Corporate Overview Champion Iron LARGEST PUBLICLY LISTED PURE-PLAY HIGH-GRADE IRON ORE PRODUCER GLOBALLY > Top Tier Jurisdiction > Established production in region since the 50’s > 2nd largest hub of high-grade export globally > Access to infrastructure > Nearly US$4 Billion invested > 7.4 Mtpa name
Slide 25: Sustainable Solution
Sustainable Solution Champion Iron HIGHEST QUALITY IRON ORE FOR LONG Global iron ore concentrate production TERM VISION TO ENABLE TRANSITION Total Intensity (KgCO2e/t) TOWARDS GREENER STEEL > At 66.3% Fe, Bloom Lake produces one of the highest quality iron ore products globally > Bloom Lake’s iron o
Slide 26: Product Development
Product Development Champion Iron Current Offering Proven Product Blast Furnace Pellet Feed Direct Reduction Pellet Feed 66.3% Fe ~68% Fe 4.7% SiO2 + 2.57% SiO2 + Al2O6 Al2O6 > Product trading at a premium relative to the > Product can be converted into Direct Reduced quoted Cost and Freight (CFR) C
Slide 27: Labrador Trough Potential
Labrador Trough Potential Champion Iron 65.5% Fe 66.2% Fe 67.4% Fe 69.5% Fe 69.5 % Fe (S BF) (S BF) (S BF) (P BF) (P EAF) |27 Source: Champion Iron Limited Proprietary Analysis
Slide 28: Labrador Trough Potential
Labrador Trough Potential Champion Iron CIA COMPLETED THE ACQUISITION OF THE KAMI PROJECT IN Q1 2021 > Situated only a few kilometres south east of Bloom Lake, the Kami project has significant historical resources and * historical reserves of high-grade iron ore * near available infrastructure * > A
Slide 29: Questions?
Labrador Trough Potential Champion Iron Questions? Contact for additional information Michael Marcotte, VP Investor Relations mmarcotte@championiron.com | 514-316-4858 |29
Slide 30: Potash
Potash Potash Price (US$/t) $400 $300 $200 $100 May Aug Nov Feb May 2020 2021 Midwest Cornbelt Brazil CFR
Slide 31: Potash Price History
Potash Price History Historic Potash Pricing USD/t Midwest Cornbelt • Cyclical bottom reached in 2016 $1,200 • Capacity utilization rate beginning to edge up again as expansion $1,000 decisions that were incentivized during prior cyclical price and $800 sentiment conditions now begin to be validated
Slide 32: Global Potash Demand Growth
Global Potash Demand Growth ( 20-year 2.7% CAGR) World Population Global potash demand has grown by almost 30M mt (~ 70%) over 8 Billion past 20 years Reflects population growth and decrease in per capita arable 7 Billion land (higher agricultural yield requirements) Growth rate projections suggest
Slide 33: Portfolio Mines Volume Growth
Portfolio Mines Volume Growth (7-year 5.4% CAGR) 25.00 Since our initial acquisition in 2014 royalty portfolio mines have increased production by 4.15Mt (~37% or 5.4% per year) and have steadily gained global market share 7.84M mt 20.00 Mines produced at 66% of combined nameplate capacities in 2020
Slide 34: Royalty Attributable Volume Growth
Royalty Attributable Volume Growth (7-year 8.2% CAGR) Attributable Tonnes KCl (constant 2021 royalty unitization ownership level basis) • Our attributable royalty volumes (levelized to current royalty ownership level) have grown at a faster rate than the total 1,800,000 underlying mine production ra
Slide 35: Production and Nameplate Capacity Utilization by Mine
Production and Nameplate Capacity Utilization by Mine TSX: ALS | OTCQX: ATUSF |35
Slide 36: Remaining Capacity Utilization - Future Capacity Growth Timing?
Remaining Capacity Utilization - Future Capacity Growth Timing? Assuming no further increase of current ~22% market share, the 7.84Mt additional tonnes of existing potential production growth (to 25M mt reach namplate capacities) from our portfolio mines could be reached in 2034 at a 2.7% global shi
Slide 37: Saskatchewan Potash “Incentive Price” Rough Estimates
Saskatchewan Potash “Incentive Price” Rough Estimates $1,200/t Saskatchewan Brownfield Nutrien Implied Greenfield $1,100/t Incentive Price - High Average estimated capital intensity of expansions undertaken at Altius royalty portfolio mines since 2005 is ~$976/t and suggests $1,000/t Nutrien Implied
Slide 38: Project Expansions and Completions Relative to Pricing
Project Expansions and Completions Relative to Pricing US$1000/t Cory US$800/t Esterhazy Expansion Start US$600/t Vanscoy Expansion Completed US$400/t Rocanville Allan US$200/t US$/t 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Midwest / Cornbelt Rocanville (+3.5Mmt, $3B) Allan (+2.1Mmt, $
Slide 39: Vast Resources Allow For Multiple Future Expansions
Vast Resources Allow For Multiple Future Expansions Reserves Resources Average Average Mine Probabl Reserves Mine Resources Proven Grade Measured Indicated Inferred Grade e Total Total (Mt) K2 O (Mt) (Mt) (Mt) K2 O (Mt) (Mt) (Mt) (%) (%) Rocanville 195 348 543 23.4 Rocanville 1,761 1,342 1,376 4,479
Slide 40: Altius’ optionality on potash beyond current unitized areas
Altius’ optionality on potash extends beyond the current unitized mining areas based on substantial resource potential. • Altius currently owns more than 22,700 ha of Freehold mineral rights outside of current mining lease areas • We estimate the total resource potential on these non-unitized minera
Slide 41: Conclusion
Conclusion Demand / prices rising rapidly on strong yield incentivization conditions at farm level Upside Pre-built production volume growth potential of 50% to reach nameplate capacity Producers have higher margin and stronger investor sentiment conditions developing and will need to begin consider
Slide 42: Metals
Copper Price (US$/lb) $5.00 $4.00 $3.00 $2.00 May Aug Nov Feb May 2020 2021 Zinc Price (US$/lb) Nickel Price (US$/lb) $1.50 $9.50 $1.25 $8.00 Metals $1.00 $6.50 $0.75 $5.00 May Aug Nov Feb May May Aug Nov Feb May 2020 2021 2020 2021 Cobalt Price (US$/lb) Lithium Price (US$/t) $27.00 $13,000 $22.00 $
Slide 43: Chapada Copper Stream
Chapada Copper Stream • Stream acquired in early 2016 from then owner Yamana Gold • Mine is located ~300 km northwest of Brasilia, Brazil, in Goiás State • Operated by base metal focused Lundin Mining following acquisition in 2019 • Chapada is a long-life operation with a first quartile industry cos
Slide 44: Chapada Resource Growth
Chapada Resource Growth Expansion Studies Underway Reserve Life Remaining Post 2020 29 Years • Acquisition heavily motivated by recognition of exceptional resource growth potential • This has been confirmed over subsequent 5 years with reserve mine life having more than doubled • Lundin Mining, who
Slide 45: Voisey’s Bay Resource Growth
Voisey’s Bay Resource Growth Excellent potential for longer mine life if economic “cut-off” parameters shift Approximately 39Mt of ore have been mined from the Voisey’s Bay deposits to date and Vale is currently developing new underground mine to extract an additional ~32Mt by 2034 Note that in 2001
Slide 46: Voisey’s Bay Resource Growth
Voisey’s Bay Resource Growth Current mine plan extends to only 900 m depth; outstanding potential beyond this West-East Longitudinal Section Mine limit at 2034 TSX: ALS | OTCQX: ATUSF Source: Wheaton Precious Metals (2018) |46
Slide 47: Excelsior Mining’s Gunnison Project
.Excelsior Mining’s Gunnison Project .In-situ copper mining and Altius’ newest royalty • First Copper cathode production announced December 2020 • The project envisages development in three production “stages” with capacities of: - 25 million lbs/yr in Stage 1 - 75 million lbs/yr in Stage 2 – to com
Slide 48: Curipamba Royalty (2% NSR)
Curipamba Royalty (2% NSR) Adventus Mining TSXV:ADZN / Salazar Resources TSXV:SLR 5.6% copper eq M&I Resource (1.1 Blbs) • 15 additional exploration targets have been identified within the 215km2 project area that are also included within the royalty AOI - with several planned for drill testing in 2
Slide 49: Lithium Royalty Corporation
Lithium Royalty Corporation Strategic Investment LRC Royalties Acquired to Date US$120.7m raised privately to date with major shareholders including Riverstone Holdings and funds affiliated with Waratah Capital. Implied valuation based on January 2021 raise $US$137M Altius ownership of 12.6% implies
Slide 50: Renewable Energy - ARR
Renewable Energy - ARR S&P/TSX Renewable Energy C$300 C$200 C$100 May Aug Nov Feb May 2020 2021
Slide 51: Altius Renewable Royalties (TSX:ARR)
Altius Renewable Royalties (TSX:ARR) Momentum Continues with Four Additional Royalties Created This Year In 2017 Altius began working to replace its thermal Basic Market Capitalization $270 million (electrical-generating) coal royalties by developing an innovative new royalty business within the fas
Slide 52: Altius Renewable Royalties
Altius Renewable Royalties Established Partnerships with Top-Tier Developers Exposure to Expansive Development Portfolios 2nd 3rd Largest Independent Largest Independent Renewable Developer 1 Renewable Developer 1 6.5 GW 1.9 GW Commercialized Commercialized Since Inception Since Inception 26 GW 3.5+
Slide 53: Altius’s Project Generation Business
Altius’s Project Generation Business Altius generates mineral exploration projects for sale in exchange for royalties and equity positions This business has a proven track record of creating pipeline royalties at “negative cost” as well as earning significant equity based profits
Slide 54: Altius’s Long-Term, Counter-Cyclical PG Growth Focus
Altius’s Long-Term, Counter-Cyclical PG Growth Focus PG (Exploration) Business Cycle I Cycle II (Super-Cycle) Cycle III Major Project Spin-out Interpreted Cyclical Position Number of Exploration Project Deals Adventus IPO Alderon IPO Champion Iron Funding Aurora IPO Wolfden Funding 22 Aethon (AbraPl
Slide 55: Project Generation Performance
Project Generation Performance May 2016 – May 2021 61 Royalties Converted to new royalties and junior equities since 2016 market bottom ~$150M Raised in 2020 by Altius Portfolio Companies The above waterfall shows expenditures of the PG business as well as realized and unrealized gains including in
Slide 56: Global Exploration Funding Set to Increase Significantly
Global Exploration Funding Set to Increase Significantly Junior Mining Equity Markets Very Strong in 2020 Gold nancings Base/other metals nancings Specialty commodi es nancings Number of nancings completed 3,250 3,000 300 2,750 2,500 250 2,250 nancin s 2,000 ount raised 200 1,750 u ber o 1,500 150 1
Slide 57: Project Generation (PG) Business
PROJECT GENERATION (PG) BUSINESS >225 km of Drilling Exposure anticipated in 2021 from $150mm Raised in 2020/21 Anglo Gold TSX: ALS | OTCQX: ATUSF |57
Slide 58: Silicon
Silicon Direct 1.5%NSR to Altius and 1%NSR to Orogen AngloGold Ashanti’s Silicon Project in SW Nevada is subject to an Altius 1.5% NSR AGA continues to aggressively drill the Silicon target (more than 20,000 meters of drilling estimated to have been completed to date) with more than 90 additional dr
Slide 59: Adventus Mining Corporation
Adventus Mining Corporation TSX:ADZN Mid-2022 construction on Ownership in 3 copper-gold ~C$33M in cash & investments El Domo copper-gold mine districts in Ecuador with C$145M market cap. 5.6% copper eq M&I Resource +15,000 m of drilling over 3 Fully financed to El Domo (1.1 Blbs) projects to end of
Slide 60: Orogen Royalties
Orogen Royalties TSX:OGN ERMITAÑO-Au Gold/copper royalties (2% NSR) – Sonora, Mexico 12 covering Canada, USA, and Mexico Resources Tonnage Gold Silver Contained Gold Contained Silver (k tonnes) (g/t) (g/t) (ounces) (ounces) Advanced stage royalties with Indicated 2,452 4.25 64 335,000 5,010,000 2 pl
Slide 61: Altius’ NL Gold Exposure
Altius’ NL Gold Exposure ~115,000 hectares, 46 km of Drilling, $20M Raised Sail Pond Project 6,505,186 shares 2% NSR Royalty 10,000 m - Marathon’s substantial resource growth success at Projects with Altius Interest Valentine Lake and mine development plans has Significant Gold Projects been a key c
Slide 62: Silver Exposure
Silver Exposure Diablillos – Rapidly Growing a High-Grade, Large-Scale Project Large 80km2 property (100% AbraSilver) in mining-friendly Salta, Argentina Large & growing resource: +140 million silver-equivalent (AgEq) ounces or 1.7 million gold-equivalent ounces (AuEq) 1 Initial open pit PEA complet
Slide 63: Wolfden Resources
Wolfden Resources Sept 2020 PEA Highlights – Top Quartile Project TSX: ALS | OTCQX: ATUSF |63
Slide 64: Altius Minerals Corporation Capital Structure and Track Record
Altius Minerals Corporation Capital Structure and Track Record TSX: ALS | OTCQX: ATUSF Returns of Capital Issued Common Shares 41.5 million Fairfax Preferred Securities 10.0 million ($100 million) Share buy back Share buy back $5M $9M Basic Market Capitalization $768 million Share buy back Share buy
Slide 65: Thank You
THANKYOU Producing Project Royalties Generation Development RenewableEnergy Royalties Portfolio Flora Wood Director, Investor Relations Phone: (416) 346-9020 Email: flora@altiusminerals.com |65
Slide 66: Appendix
Appendix Notes to slide 37: Nutrien Greenfields project case estimates assumed 10 year construction period with capital divided equally over the period. Operating costs at $60/t, freight and logistic costs at $75/t and 3% crown royalty rate. A 100 year project life beginning at start of construction