Altius Pumps Two Mega Projects into Project Pipeline

Issue 82, May 2014

Royalty group Altius Minerals has pumped two new mega-projects into its project pipeline, including 100 per cent of the CDP, a vast land bank in western Canada that was once part of the Canadian Pacific Railway’s rambling land estate.

The news follows a $1bn asset sell-off last year by embattled nickel miner Sherritt, which saw Altius emerge as Canada’s largest royalty group outside of precious metals.

In a sidecar agreement it bought 50 per cent of the CDP for $21m, covering over 13bn tonnes of coal and potash resources plus small scale producing royalties. Its co-owner, an Ontario-based pension fund manager, had the right to match the terms or exercise a put option, which Altius angled for and has now agreed, granting it the entire land package for $42m.

According to insiders, the company has already been approached by prospective partners looking to develop the resource, with talks “well advanced.” Altius founder Brian Dalton has previously taken large land positions in northern Labrador and in the Labrador Trough, leading to the spin-out of uranium group Aurora Energy and iron ore junior Alderon, with combined capital gains of around $250m.

“Brian’s ability over the next 5 or 6 years to make something of that investment needs to be considered in the context of his $100m-plus successes in both the uranium and iron businesses,” one cornerstone investor says.

Altius, which holds 25 per cent of Alderon and 8 per cent of gold royalty group Virginia Mines, has also said it is in “final stage” talks with the Government of Newfoundland and Labrador over mineral rights to the monster Julienne Lake iron ore deposit.

Julienne Lake has a 1.1bn tonne resource at grades of 34 per cent and is surrounded by land already owned by the company. Combining the tenements is expected to produce a project capable of 21m tonnes per annum, which Altius intends to spin-out, retaining a minority stake and a 3 per cent royalty on sales.

Its Sherritt deal, which closed Monday, is being funded by cash, a $140m credit facility and a $65m equity offering announced this week. Shares have risen 30 per cent since the deal was first announced to C$14.00, equal to the offer price. 

“Brian’s ability needs to be considered in the context of his $100m-plus successes.”

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