Altius Minerals Corporation

Good morning, ladies and gentlemen, and welcome to the Altius Minerals Corp Q3 2023 Financial Results Conference Call. At this time, only internal lesson only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator. This call is being recorded on Thursday, November 9, 2023. And I would now like to turn the conference over to Ms. Flora Wood. Thank you. Please go ahead.

Good morning, everyone. Thank you, Ina. Welcome to our Q3 2023 conference call. Our press release and interim filings were released yesterday after the close and are available on our website. This event is being webcast live, and you'll be able to access a replay along with the presentation slides that are on our homepage and under the investor information section. Brian Dalton, CEO, and Ben Lewis, CFO, will speak on the call. The forward-looking statement on slide two applies to everything we say in our formal remarks and during the Q&A session. And with that, Ben is up first to take us through the numbers. Go ahead, Ben.

Thank you, Flora. Good morning, everyone. Thank you for joining. Royalty revenue for Q3 2023 was $17.8 million, or $0.38 per share, compared to $26.2 million, or $0.55 per share, in Q3 2022. Adjusted EBITDA followed the trend of revenue in the third quarter, with the overall EBITDA margin being 69% this year versus 84% in the third quarter of 2022. Again, following the lower revenue against relatively stable fixed costs. The minerals royalty segment had an EBITDA margin of 76% and 87% for the current and prior year respectively. Both revenue and adjusted EBITDA were impacted by lower commodity prices, primarily potash, and the scheduled closure of the 777 mine at the end of Q2 of last year. Q3 2023 adjusted operating cash flow of $11 million or 23 cents per share compares to 25.9 million or 54 cents per share in the same quarter last year. The decrease again follows the trend of lower revenue as well as slightly higher interest paid in current period. Net earnings of 3.5 million or 8 cents per share compares to net earnings of 11.5 million or 22 cents per share in Q3 2022. Net earnings for the current quarter reflects lower revenues as well as higher interest costs and marginally higher G&A expenses in the renewable royalty segment, which added a couple of people during last year. In addition, current quarter G&A includes $537,000 for the purchase of voluntary carbon credits related to the 2022 financed emissions, which is based on our calculated share of operating royalties emissions. Net earnings for the quarter was also affected by equity losses of approximately 2.9 million in GBR's investments in Blue Star and Nova. That's two development stage renewable energy businesses. Adjusted net earnings of 5 cents per share for the quarter decreased relative to 20 cents per share during Q3 2022. The main adjusting items are unrealized gains on derivatives related to the revaluation of share purchase warrants and junior mining equities, corn exchange losses, and gains on disposal of mineral properties. ARR reported its Q3 results earlier this week on Monday. Revenue from ARR continued to grow from the addition of several operating projects which were acquired in the second half of 2022. And another project is expected to reach commercial operations before year end. Electricity prices increased in the current quarter due to warm weather and increased power demand in certain markets in which GBR has operating royalty interests. On October 31, 2023, GBR announced that it entered into a $247 million project. Senior secured credit financing, which enables GBR to accelerate its growth trajectory in the renewable royalty sector while maintaining a competitive cost of capital. This agreement represents another strong endorsement of GBR's business model. Brian will speak more on the strong progress at ARR. And you can review the recently published quarterly followings and investor conference call remarks on ARR's website. Excuse me. I'll now turn to capital allocation and liquidity. We made our regular scheduled principal repayment of $2 million on our term debt during the quarter. We also paid cash dividends of $3.6 million, or $0.08 per share, to common shareholders and issued 10,860 common shares shares valued at $200,000 under the corporation's dividend reinvestment plan. The Board of Directors approved a regular $0.08 per share dividend that will be paid to shareholders of record on November 30, 2023, with a payment date of December 15, 2023. The corporation also repurchased and canceled 275,000 common shares under its normal course issuer bid for a total cost of $5.7 million during the quarter. In addition, ARR funded $4.7 million into GBR, representing its 50 percent portion of new and existing royalty investments. Our current liquidity consists of $16.2 million in cash at the end of Q3, and we have $93 million in unused revolver room on our credit facility. ARR had cash of approximately US $38 million at quarter end. With that, I'll turn it over to Brian.