Altius Minerals Corporation

Morning, ladies and gentlemen, and welcome to the LTS Minerals Q3 conference call and webcast. At this time, all lines are in 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 zero for an operator. This call is being recorded on Wednesday, November 12, 2025. And I would now like to turn the conference over to Ms. Flora Wood. Thank you. Please go ahead.

Thank you, Ina. Good morning, everyone, and welcome to our Q3 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 or replay the call along with the presentation slides that are on our website at altiusminerals.com. Brian Dalton, CEO, and Stephanie Hussey, CFO, are our speakers for the call. You've heard Stephanie before when she substituted for Ben, but this quarter I'm proud to introduce her as CFO. Now on forward-looking statements. The forward-looking statement on slide two applies to everything we say in our formal remarks and during the Q&A. And with that, Stephanie is up first.

Thank you, Flora, and good morning, everybody. Yesterday, we reported Q3 net earnings of $265 million, or $5.72 per share, which reflects the $340 million gain on the sale of the Arthur Gold royalty, as well as reflecting higher royalty revenues. G&A costs are up slightly related to one-time retirement payments, and moving forward, we can expect a reduction in base salary costs of approximately 40%. The corporation also recognized the $64 million gain in other comprehensive earnings following the Origin triple flag plan of arrangement. Altius received cash of $29.5 million, triple flag shares which were sold for proceeds of $37 million, and shares in the new Origin spin co. Increases in royalty revenue and adjusted EBITDA for Q3 reflect higher attributable potash volumes and realized prices, higher copper stream deliveries, and $3.4 million in interest and investment income. These amounts are partially offset by lower incomes from iron ore. Growth in operating cash flow for the quarter was driven by higher royalty revenue and interest receipts, offset by taxes paid and working capital changes. Q3 2025 adjusted net earnings of $0.17 per share is higher than the third quarter of 2024, with the main adjusting items being the gain on the sale of the Arthur Gold royalty, foreign exchange, and related tax impacts. Following our two significant transactions in the quarter, the corporation considerably strengthened its balance sheet and liquidity profile. In Q3, we received $250 million U.S. of the $275 million purchase price of the Arthur Royalty, and in Q4, we can expect the remaining $25 million, net of any withholding taxes. And this will be following the expiry of any challenge and appeal periods associated with our arbitration process. Current total liquidity available is approximately $540 million, and this includes cash on hand, $125 million available under our revolver, as well as $62.5 million potentially available as an accordion feature, subject to certain criteria under the terms of our credit agreement. During the quarter, we made debt repayments of $11 million. This consisted of $9 million voluntary repayment on the revolver and a $2 million principal repayment on our term debt. We paid total cash dividends of $4.2 million and issued approximately 13,000 common shares under the dividend reinvestment plan. In August, the corporation renewed its normal course issuer bid for another year, and we purchased and canceled 52,000 common shares for a total cost of $1.5 million. Yesterday, our board of directors approved a quarterly dividend of $0.10 per share to be paid to shareholders of record on November 28th with a payment date of December the 15th. Our renewable royalty business also remains well-funded with increased market activity and new opportunities arising from development, construction, and operating level investments. We expect to see continued portfolio growth over the coming quarters. Before I hand it over to Brian, I wanted to thank both Ben Lewis and Chad Wells for their guidance and support throughout my career. Ben has been a mentor of mine since 2006 before I joined Altius in 2014. I look forward to working with them both in their advisory roles moving forward. And with that, I'll hand it over to Brian.

Thank you, Steph. Thank you, Flora. And to everyone for being with us today. I would like to start where Steph left off in thanking Ben and Chad for many years of dedicated service and camaraderie as we worked together to grow Altius from a small junior explorer to a well-diversified royalty company and highly profitable exploration business. Your efforts have left Altius in far better shape than when you joined. While we wish them well in their requirements, we are delighted to be able to still avail of their wisdom going forward and to continue to call them friends. I know I'm speaking for the entire team in congratulating Stephanie and her advancement and progression to the role of CFO, where we know she will continue to excel. As noted by Stephanie, Altius finds itself today in excellent financial health with a very strong balance sheet from which to base future potential growth. The effort of figuring out how we might best deploy our capital resources is well underway, and our corporate development team is busily analyzing and comparing a host of interesting options. You will hear more on this effort in coming quarters, I'm sure. While this work certainly includes analysis of various external opportunities, we continue to keep sight of our already established internal growth profile that stems from existing assets and investments we made primarily through a less rosy or optimistic part of the mining industry cycle than we currently seem to be experiencing. This past quarter saw an improvement in prices for many of the commodities we are exposed to, particularly for potash, copper, U.S.-based electricity, gold, and lithium. And this has naturally begun to translate into higher royalty revenues. Price is only half the story at best, however, when considering royalty investments at Altius. We are far more intrigued and focused on the volume side of the equation, and note that it is during the up parts of the cycle when sentiment and capital availability drive decisions by operators to expand existing operations and to build new ones. We are seeing positive signals in this regard across our portfolio. This is a function of the very dedicated focus we placed over the past decade or more on selecting for assets that we felt would be the most likely investment candidates for these types of investments. Essentially, this meant attaching ourselves to assets in which existing production rates seem low as a function of resource size and or in which cost structures and other development parameters are more favorable than most competing alternatives. Nowhere is this feature more prominent within our portfolio than with respect to our ultra-long-life, low-cost, low geopolitical risk potash mine exposures. Global demand, growth for potash, and ultimately food continues to track along a well-established trend, and the signals from our operators about continuing to hold, if not grow, market share are currently amplifying. So while we still believe, even after strong movement over the past two years, that current potash prices do not readily incentivize a new wave of major growth investments, we do know that these must ultimately come, and that our asset exposures represent the most advantaged opportunities to bring on the supplies that the world will need, and need sooner than most observers currently anticipate. Our continuing work to estimate incentivization pricing for both groundfields and brownfields potash development in Saskatchewan was recently informed by updated costs and time to completion estimates that BHP announced for its Janssen project. This has led to our view that the gap between current prices and the levels required to keep the global potash market supplied has further widened in recent years. Sorry, I'm going to go on pause for a moment. Sorry about that, fire alarm in the building, just a test, no worries. Another area of potential future volume growth that we are monitoring closely is with respect to Lundin's current efforts to expand production levels at its Chapada complex. It has reported that it is exploring a relatively low capital cost project to incorporate higher grade ore from its recent Tauva discovery that would result in meaningful increase in final copper output. We're expecting more details of this plan in the first quarter of next year, and note that our copper stream rates extend to the Su'uva lands. We saw good news during the quarter from Silvercorp that it continues to track well in terms of cost and timeline for its under-construction Curripamba mine, where we hold a 2% MSR. At spot prices, our annual revenue expectations and IRR estimates on the original investment have increased meaningfully. This is in large part driven by Curripampa's strong precious metals content. Turning to our U.S.-based electricity royalties, we saw excellent progress during the quarter with continuing revenue ramp-up as new projects continued to commission and our interconnection funding initiative began to deliver results. Our portfolio now consists of 13 operating stage royalties and five projects under construction by a very strong suite of counterparties. Perhaps most importantly, we note that the freeze-up in investment activity that has characterized the renewable electricity sector for most of this year, driven by heightened political and policy uncertainty, has begun to thaw. This has led to the resumption of project sales activity for our developer partners and the associated de-risking of our underlying royalties. It has also led to increased industry project financing activity that has allowed us to increase our near-term expectations for deployment into new royalty investments. We anticipate being in a position to provide further detail on this front in our year-end update. At Arthur, we heard another very encouraging update from AGA that spoke to ongoing resource growth and project scope potential based on continuing positive drilling results. This included references to growth and continuity for a particularly high-grade portion of the Merlin deposit that in previous studies was shown to give the potential for several years of plus 1 million ounce per year production rates in the early part of the mine plans. To the extent that this high-grade core continues to expand, the obvious implication is that there is increased potential for this type of production rate to continue for longer. At current prices, that production rate implies royalty revenue levels of potentially more than $30 million a year for our 0.5% NSR. We look forward to learning more when AGA publishes the PFS this coming February. Turning next to Cami, we congratulate Champion and partners Nippon Steel and Sojits on closing the first phase of their investment partnership during the quarter. We were also encouraged to learn of continuing progress with respect to engineering studies, environmental permitting, social licensing, and efforts to attract infrastructure support associated with Canada's new push to strengthen its critical mineral sector. As mentioned previously, this project has particular strategic importance to NIPON as it continues to execute a major investment program that is designed to modernize its steelmaking fleet to electric arc furnace-based technology, which is reliant on high-priority inputs of the type CAMI is being designed to produce. Our 3% CAMI royalty has the potential to become our single largest by revenue. Another encouraging feature of these stronger resource markets that's worth noting is that it results in an increased availability of capital for explorers. There's more money available for the juniors. This, in turn, naturally leads to increased drilling activity across our portfolio of early-stage royalty projects and, therefore, enhanced discovery potential and the possibility for more CAMI and silicon-type events in our future. I'll conclude by saying that while our efforts to source external opportunities have certainly not stopped following the closing of the partial sale of our after royalty, we do not believe that our growth is at all dependent or solely dependent on this work. The work we did in selecting for higher probability expansion and new build opportunities over the past number of years already solidifies our potential organic growth profile. We look forward to updating you further following Q4 on what we expect will be a particularly busy and exciting period of reporting from several of our royalty operator counterparties.

And with that, I'll turn it over to your questions. Thank you.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star four by the one on your telephone keypad. You will hear a prompt that your hand has been raised. And should you wish to cancel your request, please press star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys.

One moment, please, for your first question. And your first question comes from the line of Brian McArthur from Raymond James.

Please go ahead.

Good morning. I have two questions. My first one is just a technical one. On the $25 million payment, From Franco, they talked about making it in Q4, and your wording sort of sounds like you think you'll get it in Q4, but there may be additional challenges. Are you seeing challenges, or is that just being cautious language about when you get the $24 to $5 million in?

Well, the payment is due upon the expiry date. you know, a date of any challenge, assuming that no challenge has been made. And to date, we don't know of any challenge and we're getting very close to that, uh, deadline for, uh, uh, for Anglo to make, make any challenge, but that's really, it's, it's a technical answer as well. It's a very formal trigger for that, uh, for that payment. And essentially it means we've got to go past the appeal period. Appeal is probably not exactly the right word, but challenge period. And, um, without challenge, and at that point, the payment is automatically due.

But that time period is in Q4, technically.

That is within days.

Okay, great. Thank you very much. My other question just relates to GBR. There's a lot of discussion now about, if I'm reading this correctly, that you're putting debt into a lot of these deals at the moment. When you do that, and you get your 7% return. Is there a link that you're entitled to a royalty or how are you thinking about that? Because again, my view would be royalties get a different multiple than doing debt deals at the end of the day.

Yeah, no, I think you're exactly right in that assessment. So there is a dedicated debt financing facility in place that is being utilized to post these interconnection deposits. To date, there isn't a formal linkage to royalties, but at some point, these deposits that are currently fully refundable will turn to refundable deposits, and then at that point, our payments are due. So we do see a lot of opportunity there to continue these relationships with those groups as that shifts over, and we could potentially convert some of the facilities to royalties in the future. But obviously, that... that's a two part equation and both sides would have to see something reasonable there. So I think it's probably better to look at it as yes, a nice sort of incremental source of revenue, a means of supporting our partners and others in the industry. And certainly a, hopefully anyway, a means of, you know, a relationship building tool that hopefully leads to additional deal flow. But, you know, for the meantime, it's, it's, It's quite profitable, but I wouldn't treat it as sort of, you know, this is not long-term recurring revenue. These are relatively short-duration instruments.

Great. Thanks. That color is very, very helpful. Thank you. Thanks, Brian.

Thank you.

And your next question comes from the line of Oreswell Carell from Scotiabank. Please go ahead.

Hi. Good morning. Brian, Could you please give us some color on what Altius plans to do with this cash windfall that it's received from the recent transactions? I mean, you're sitting with near enough $400 million plus of cash. How do you plan to deploy that moving forward? And do you see opportunities out there to deploy it?

And if you do, I'd be curious sort of what commodities you're looking at right now.

Probably I'll give you some color on the last part, but, you know, think in terms of the kinds of commodity exposures we already have. We like those. You know, we're careful about managing balance across that, but, you know, we're not afraid to have something get bigger if that's where the opportunity rests. But, you know, we're not looking at any kind of, you know, big forays into, into anything exotic. We like the kinds of commodity exposures that we have, you know, as far as the deployment question goes, yes, there are potential opportunities out there and Mark and the team are pretty busy working through those. But, you know, you know us, we're going to be very patient and disciplined and take our time with sorting through things and, There's lots of opportunities with the fullness of time here. It could involve external opportunities. It could also involve what we would call internal M&A. That's using the buyback to increase our exposure to the existing growth profile that we already have in place. We're taking our time. We're going through what our alternatives are. This will be done methodically in Altius-like fashion. You know us. The last time we had a pilot cache and we talked about deploying it into new opportunities, we ended up waiting for, I think it was over five years, until the window opened. So we're not afraid of that either. It's not the base assumption here. But, yeah, it's a world-class problem, and we're working through it. It's a fun effort, and I think everyone certainly is enjoying Excited to have the shackles off a little bit in that anything we're looking at now as potential external opportunities at least doesn't necessarily involve equity or the dilution of what's already embedded as a growth profile within the company. So I'm not going to get any more specific than that, as you might imagine.

Well, I'll try anyways with a follow-up question. I totally understand that it takes time and these opportunities come up when they come up, but in terms of the potential to increase your buyback, is that something we could see sooner rather than later?

Well, put it this way, when we're looking at external opportunities, everything has to measure up against what we see as the upside in terms of owning more of our So that's just sort of the analysis that's going on. How does that opportunity compare to this one over here, this one over here, and the one that's always available for us? And some of that's going to be market circumstantial. I know it's been a strong market here, but markets have been known to be volatile in the past, and we're kind of excited about that volatility, quite frankly, at Altius, and ready to move. Yeah, I think we're getting there. We're getting there in terms of priority lists. When we do make a priority list, it doesn't mean it's immediately actionable, but it at least informs us to be ready and poised to potentially do things, whether that's on the buyback or something external. So you did get a little more out of me, but that's it, I promise.

Thanks. Thank you. Have a good one. Cheers.

Thank you. Once again, should you have a question, please press star followed by the one on your telephone keypad. And your next question comes from the line of Craig Hutchinson from TD Cowen.

Please go ahead.

Hi, good morning, guys. Maybe just a follow-up question from Brian's question earlier, just on the GBR. It seems like there's a lot of opportunity in this kind of deploying capital to support these refundable interconnection deposits. But I guess how big could this opportunity be? And you mentioned it's more short-term in nature. It gives a sense of, you know, how long you expect it to take to get repaid. You know, just looking at a 7% margin spread, that seems to imply, at least in my view, there is some risk here, giving us a pretty healthy margin. But just any kind of context in terms of the potential opportunity here, those durations, the timing of the repayments of the refundable interconnection deposits, and just maybe if you can speak to why that margin is so high. Thanks.

I wouldn't actually characterize it as a function of the investments being risky. In fact, it might be a little bit the other way. It's largely a function of how low our cost of capital is that we're utilizing. because these are fully refundable deposits. We're not actually making the payments to the counterparties. These are being, you know, pledged on their behalf, but we retain full control. So, you know, these are not, it's not cash that's gone to a counterparty. So, for example, if the counterparty got in trouble, these deposits are not, you know, essentially they're not part of their asset mix, and we retain full control. So we've got quite a high rating attached to that facility. And so, yeah, it's pretty low-cost capital. And then on the other side, it does speak to, you know, pretty... How would I put it? Like, money is fairly expensive in the renewable sector. So a lot of these groups as well will be developers by nature, right? It's not going to be the next eras of the world that are looking for this money from us who can, you know, fund it from... existing balance sheets. These are groups that, quite frankly, would rather not have their own capital tied up with these deposits. They'd rather advance their projects on the ground. So, you know, the return, what we're getting paid to provide these facilities is a function of, you know, more difficult market conditions, particularly, you know, for equity type capital. And just to prioritization of uses of capital by some of these groups, you know, this isn't going to be out there for extended periods of time. So the cost is, you know, it just makes sense for them. It's what the market is bearing right now. You know, if you go further with it and think more to what we're, you know, I guess more focused on, which is acquiring long-term royalty type interests, recurring revenue streams, optionality, all that sort of thing. The same can be true. Our expected returns have edged up in the last while, and it's largely a function. Just look at the equity markets in the renewable space right now. It's not particularly strong, although it does seem to be improving. And I'll be honest, on the other hand, and this is what's remarkable, is that there is some reticence amongst lending groups and banks because they actually fear repercussions from the U.S. administration about being seen to be supportive of the industry. So quite a wild backdrop, really. But, you know, if you've got conviction, long-term belief, what it results in is... competing forms of capital are scarcer now than they would have been, and returns have adjusted accordingly. And the other thing that's remarkable about this is that the actual fundamental backdrop is really strong. So you've got these challenging market conditions and reluctance on the part of competing forms of capital against what is probably the strongest electricity markets that anyone's you know, who's an investor has ever seen in the U S market. And the gap that's sort of how that gap is in some ways being filled is through, uh, it's the end users of the power. It's the buyers of the power who are stepping up and signing quite long term, um, above market priced, uh, contracts to buy the electricity. And so that's sort of what stepped in to fill the hole that was created when, um, um, you know, sort of tax credits and all those sorts of benefits that used to be part of the economic mix for, for these projects has gone away. What's happened is a quite capitalist response in that the people who actually need the power are filling the hole and just providing whatever price is needed to get the power made. And, uh, so, you know, on that hand, it's extremely bullish conditions out there, but remarkably weak, um, financing conditions. So quite an interesting juxtaposition there.

But I love it. Very great. I appreciate the call, everyone.

Thank you. There are no further questions at this time. Ms. Wood, please proceed.

Thank you, Ina. We do actually have a question from a shareholder who's emailed. Thank you for doing that, by the way. And it's about the Labrador trough, high grade, low impurity, Iridor. And the first part of it is really about the outlook, especially in light of Simandou coming on. The second part is, do we have any update on Julian Lake?

The second part is easy, no real update there. And in fact, there was a recent change in government in within Newfoundland, and this is obviously the process that I think is being referred to as proposals that we've made to the provincial government around advancing or developing the Julian Lake deposit that it controls. So we don't have the results of that process in front of us yet, and it may take a little time for the new government to get their heads around what's going on there, but we'll certainly be updating whenever we do. The Semendu question, there's a little bit of confusion, I think, out there in the market with respect to that. It's not actually designed to produce ultra-high purity DR-grade iron ore. There's talk of that potentially being some of the mix down the road, but really what it is, it's more the higher grade end of the blast furnace spectrum. It's a function of how rapidly overall grades are declining in Australia, I would say. There's even pushes now to reduce the benchmark from 62 down to 61. All sorts of challenges from the established producers there that are emerging and trying to meet basic spec for blast furnace grade. As I understand it, anyway, Simundu is meant to be, you know, that continuum for blast furnace grade would be sort of, say, 58 to 65, and that's meant to improve Rio's, you know, contribution of the higher end of that spectrum and to bring their overall, to sort of arrest the overall grade decline they've been dealing with.

Hope that answers it. That's good.

I think there's no further questions. So we'd like to thank everybody again for joining us, and we'll look forward to speaking with you for Q4.

Thank you, everyone.

Thank you. Congratulations.

Thank you very much. First one under your belt.

Thank you. Thanks, everybody, for joining. All right.

Bye-bye. Thank you, and this concludes today's call. Thank you for participating. You may all disconnect.