Michigan's Upper Peninsula. Photo: Bitterroot Resources

Michigan's Upper Peninsula. Photo: Bitterroot Resources

Brian Dalton's
Patience Rewarded

Issue 139, September 2015

“The eagle is landing,” Rio Tinto told shareholders, after a high-grade base metals discovery it made in Upper Michigan in 2002. The copper content was more than 4 per cent, it said, “and the nickel is even richer.”

Rio's discovery triggered a staking rush, but with copper and nickel both sitting at a 6-year low, Michigan is once again out of fashion, allowing a new player to quietly enter the region.

Newfoundland-based Altius Minerals has become well known in the current bear market. Having built-up and held onto over $130m in cash during the last bull run, it has been snapping-up royalties, as the wider industry flounders.

In 18 months, its royalty portfolio has billowed from one cash-flowing claim over the Voisey's Bay nickel mine in Labrador to thirteen producing royalties in nine different commodities, from copper to coal. Revenue has jumped more than 10-fold to $40m per annum, but less attention has been paid to its ballooning land position, a source of longer-term value.

Altius bought the CDP for $42m last year, a vast land bank in western Canada that was once part of the Canadian Pacific Railway's rambling estate. In June, it also took a controlling interest in a 360 square mile land package in Michigan, owned by Toronto-listed Bitterroot Resources. For around $1m, Altius is now one of the largest owners of mineral rights in Michigan's Upper Peninsula, once vaunted by Rio Tinto.

Altius founder Brian Dalton, who is still in his thirties, describes the Bitterroot portfolio as a huge footprint of freehold acreage, which unlike staked claims, is free to maintain. He warns against getting “misty-eyed”, but says it is surrounded by mining headframes, pointing to the massive sulphides beneath.

Altius plans to beef-up targets before bringing in joint-venture partners, when the cycle turns. It is a pattern Dalton is fond of repeating: Altius has previously made large land calls across Labrador in gold, uranium and iron ore, using joint-ventures and spin-outs to roll properties into royalties and cash.

It is already converting the CDP into readier assets, optioning its Telkwa coal deposit to a private Australian company and transferring land to US-based Westmoreland in July, in exchange for a tonnage-based royalty.

A land bank in Michigan or Alberta is “tough to value”, says geologist and investor Brent Cook. “The value of that's going to come out five, ten years down the road, or more.”

“Brian is a very meticulous guy,” Cook says. “He just looks and looks and thinks about these things and now's the time to go out and pick-up projects that he's been wanting for all these years, but they've been too expensive.”

“He just looks and looks and thinks about these things.”

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