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Altius Minerals announces 2018 royalty revenue

Mining News - Published on Fri, 15 Mar 2019

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Altius Minerals Corporation reported attributable royalty revenue of USD 67.0 million for the year ended December 31, 2018. The prior financial year was an abbreviated eight month period related to a change of the Corporation's fiscal year end designed to better align its reporting with its royalty counterparties. Attributable royalty revenue for the quarter ended December 31,2018 was USD 17.6 million, compared to USD 17.1 million in 03 2018. Adjusted of USD 53.0 million for the year represents a margin of approximately 80%. Q4 2018 EBITDA of USD 13.4 million compares to USD 13.9 million in Q3 2018. Net earnings for the year were USD 1.9 million. A Q4 2018 loss of USD 12.4 million includes non-cash impairment charges of USD 14.3 million on a pre tax basis relating primarily to the write-down of a pre-production stage royalty interest, goodwill and USD 3.5 million relating to the Genesee Royalty Limited Partnership's amended royalty calculation. Fourth quarter earnings also include a USD 4.1 million unrealized loss on fair value of derivatives and a USD 1.4 million share of loss in associates reflecting equity accounting for the Adventus Zinc Corporation and Alderon Iron Ore Corp. holdings. General and administrative costs in the quarter and year were adversely impacted by professional and advisory fees associated with acquisitions and increased corporate development activity.

Operational Overview and Outlook
Attributable royalty revenue per share increased for the 5th consecutive year, and has grown by seven times over that period. The value of the commodity and asset level diversity that has developed in the portfolio was also evident during the year. Commodity prices were mixed with lower base metal prices, particularly in the second half of the year, offset by stronger potash prices and higher iron ore quality differentials. Production volumes from most of our mine royalty exposures were higher, but with exceptions related to a labor disruption that lowered IOC production levels and continued production declines at 111 as it approaches ore exhaustion. Royalty revenue was also negatively impacted by Labrador Iron Ore Royalty Corporation withholding significant cash at the expense of dividend payouts during the second half of the year, which will now be distributed to shareholders in April 2019.

The Corporation has issued 2019 royalty revenue guidance of $67 - $72 million which is based upon operator guidance where provided, and recent trend extrapolation otherwise, and by using spot prices prevailing at the beginning of the year. The past year was notable as one in which the Altius team brought strong focus to solving our most significant future portfolio management challenges. Specifically, we set out to proactively and strategically address the loss of copper and zinc revenue related to the pending closure of the 111 mine and the planned regulatory phase- out of electrical coal in Alberta by 2030. We addressed the decline of 111 base metals revenue in part through the increase of our royalty interest on the Gunnison mine in Arizona (Excelsior Mining Corp.), which has begun construction. Subsequently, we also acquired a royalty on the advanced stage Curipamba project (Adventus and Salazar Resources Limited) and have noted the potential for expansion growth being signaled at Chapada in Brazil that could lead to further growth in our copper stream. The Alberta electrical coal phase-out has begun to be addressed by the acquisition of a portfolio of development stage renewable energy royalties in the US that has the potential to transform this part of our portfolio from short / medium term to ultra-long life. Having met these decline challenges, any future acquisition initiatives and, more particularly, the embedded capital cost free growth potential of the existing portfolio, will now become fully accretive as they occur.

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Posted By : Rabi Wangkhem on Fri, 15 Mar 2019
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