Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Altius Minerals Corp (ATUSF, Financial) reported an increase in net earnings to $8.3 million or $0.18 per share, up from $3.3 million or $0.06 per share in Q2 2023.
- Revenue and adjusted EBITDA were positively impacted by higher base metal prices and growth in the renewable royalty portfolio.
- The company has a strong liquidity position with $19.2 million in cash and $93 million in unused revolver room on its credit facility.
- Altius Renewable Royalties reported significant progress, with 12 operating stage wind and solar projects totaling more than 2.5 gigawatts.
- The El Domo Curipamba Project received government approval to begin construction, promising high-grade copper and gold production.
Negative Points
- The mineral royalties segment's EBITDA margin decreased to 77% in Q2 2024 from 81% in Q2 2023, impacted by higher professional fees.
- Adjusted operating cash flow decreased to $9.2 million from $14.1 million in Q2 2023, due to timing of royalty revenue cash receipts and working capital changes.
- Potash prices were lower, affecting revenue despite stable global consumption trends.
- The closure of the Genesee coal mine negatively impacted revenue.
- There is uncertainty regarding the arbitration outcome for the Silicon Royalty in Nevada, which could affect future asset valuations.
Q & A Highlights
Q: Can you provide more details on the potential disposition or retention of the Silicon royalty?
A: Brian F Dalton, CEO: We received various proposals, some including asset swaps, but I can't provide more details out of respect for the process. There are opportunities for a blend of cash and assets if we decide to sell.
Q: What volume growth should we expect for potash royalties over the next year?
A: Brian F Dalton, CEO: Nutrien is guiding for about 8-9% growth by 2026, mainly through automation. We expect long-term global demand growth of 2.5-3% annually, with our royalties maintaining or gaining market share.
Q: Regarding the Silicon arbitration, how significant is the outcome, and when do you expect a decision?
A: Brian F Dalton, CEO: The arbitration result is material for long-term district-scale potential. The majority of the resource is not disputed. Timing is uncertain, but everything is concluded and in the arbitrators' hands.
Q: Can you clarify the financial impact of the Adventus deal and other cash flows?
A: Ben Lewis, CFO: The Adventus deal brought in CAD9.8 million in cash. We also had cash outflows for investments, notably increasing our stake in Origin. Proceeds from sales of non-core investments were CAD15.7 million.
Q: How does the arbitration outcome affect the value of the Silicon royalty?
A: Brian F Dalton, CEO: The arbitration outcome is important for reflecting the asset's value in offers. It affects the premium an asset like this might attract, especially considering the broader district-scale potential.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
