Putting a value on Altius now that we can value the Silicon NSR. Vulcan Minerals and Atlas Salt show signs of life. Eagle remains halted.
Altius Minerals
In the middle of the 2016 baseball season, the Chicago White Sox did a Chicago White Sox thing. They traded for 34-year-old starting pitcher James Shields from the San Diego Padres. Shields gave the White Sox innings, but not much else, as a loss of velocity and movement on his pitches left the fading veteran vulnerable to home runs. In exchange the Sox sent the Padres two young players, including 17-year-old prospect Fernando Tatis Junior. The Padres turned a salary dump into one of the game’s biggest stars – a trade that worked out beyond all expectations even as both teams knew Tatis could become a star.
The Altius Minerals version of the Shields-for-Tatis trade is their 2015 acquisition of Callinan Royalties, which netted them a royalty on Hudbay’s 777 mine (decommissioned as of 2022). They also received a 1% royalty on the Gunnison copper project, which Altius later increased to 1.625% with a $5 million payment. The Gunnison project still isn’t in production, and to be honest I didn’t know the now renamed Excelsior Mining still existed until I looked it up.
But Callinan Royalties was also involved in the creation of a 1.5% NSR royalty on the Silicon Project in Nevada. And after Altius acquired Callinan it inherited this 1.5% NSR, which is separate from a 1% NSR royalty that until this week was held by Orogen Royalties. With the closing of Triple Flag’s purchase of Orogen Royalties, the Altius royalty on Silicon has a comparable that puts its value somewhere between $500-$600-million.
Callinan is the Tatis-esque deal that’s worked out beyond any reasonable expectation. The Orogen deal makes Altius seem cheap at its current market cap of $1.28-billion.
- Silicon 1.5% NSR: $550-million
- Orogen spinout stake: $60-million
- Alitus Renewables stake: $215-million. Altius Minerals owns 57% of ARR. This is a private company, so I came up with this number based on the approximately 30.87 million shares outstanding in December when it was taken over at $12/share. This should probably be valued higher.
- Labrador Iron Ore Royalty shares: $101.6-million
All numbers CAD
We’re up to $926-million in value without factoring in Potash royalties that will last for decades, the Kami iron ore 3% NSR royalty, the El Domo 2% NSR royalty or any other high-value assets that don’t have a public market value. Altius will rerate with CEO Brian Dalton interested in monetizing his crown jewel. It’s time to buy back in.
Vulcan Minerals
Vulcan Minerals and Atlas Salt are showing signs of life.
- Great Atlantic is fully permitted.
- New SALT CEO doing the paid interview circuit with Crux.
- And here’s an introduction to the salt market shared by Vulcan’s CEO.
- Vulcan is presumably out doing grassroots exploration if it’s putting out primers.
So we can assume there’s an equity raise coming – a supposition on my part but one that fits the available facts. Atlas may have permits and a plan, it doesn’t have money. We remain invested in Vulcan as the 3% royalty holder on Great Atlantic and majority shareholder of Atlas Salt.
Eagle Royalties
Eagle Royalties remains halted after the announced RTO with Summit Royalties. We wait to liquidate and put our profits into new opportunities in a target-rich environment.
