GuruFocus - Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Altius Minerals Corp (ATUSF) reported royalty revenue of $16.6 million for Q3 2024, reflecting higher base metal prices and growth in the renewable royalty portfolio.
- The company has a strong liquidity position with $25.6 million in cash and $116 million in unused revolving credit.
- Altius Minerals Corp (ATUSF) has several royalty projects nearing completion, including the Eastern Deeps Copper Cobalt mine and the Re Cabras and Mariana lithium mines.
- The company is benefiting from increased global potash demand, which is expected to set new records this year.
- Altius Minerals Corp (ATUSF) continues to see growth in its renewable royalties, with new acquisitions contributing to revenue and positive power demand forecasts in key regions.
- Royalty revenue decreased from $17.8 million in Q3 2023 to $16.6 million in Q3 2024, partly due to lower potash prices.
- The mineral royalties segment's EBITDA margin decreased from 76% in Q3 2023 to 69% in Q3 2024, impacted by higher professional fees.
- Net earnings decreased to $3.2 million in Q3 2024 from $3.5 million in Q3 2023, reflecting lower revenues and higher costs.
- The company is awaiting the results of arbitration proceedings related to its royalty rights, which could impact future revenue streams.
- Forest fires affected production at the IOC operations, although no significant damage was reported.
A: The direction will be guided by the process. Options include a full sale of the asset, which has garnered interest from precious metal royalty companies. We might consider taking back non-precious royalties as part of the consideration. Alternatively, we could retain Silicon as a long-term component of our portfolio. The decision will depend on where the best value for shareholders lies. The process is on hold until the arbitration decision is made. (Brian Dalton, CEO)
Q: Is the process in a holding pattern until the arbitration decision is made?
A: Yes, we have received indicative interest, but a definitive decision requires the arbitration outcome. The arbitration hearing was in April, and we await the arbitrators' decision. (Brian Dalton, CEO)
Q: Regarding the North Northampton acquisition, are there benefits for Altius Minerals beyond access to deeper capital pools? Could you reduce your position in Altius Renewable Royalties to buy other royalties?
A: From a minerals perspective, not much changes. Altius Minerals evaluated opportunities and took up pro-rata rights when ARR was public. Going forward, it will be situational, depending on liquidity and portfolio balance. (Brian Dalton, CEO)
Q: Can you speak to the broader M&A market and your position to acquire new royalties? Are there opportunities, and what commodities or development stages are you looking at?
A: The market isn't particularly active, but we have a few opportunities in our traditional commodity areas. The focus is on organic growth from existing assets, though we remain open to opportunities. The Silicon process might influence this. (Brian Dalton, CEO)
Q: Any visibility on when the arbitration decision might be expected? Could it drag into next year?
A: Unfortunately, we have no insight or guidance on the timing. It's in the hands of the arbitrators, and we await their decision. It could be tomorrow or later. (Brian Dalton, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.