Thank you. Good morning, everybody, and welcome to our Q4 conference call.

I'll be filling in for Flora Wood today, who's out this week. Our press release and annual filings were released yesterday after the close and are available on our website.

This event is being webcast live and you'll be able to access a replay of this call, along with presentation slides that have been added to our website at altiusminerals.com. Brian Dalton, our CEO; and Ben Lewis, our CFO, will both be speakers on the call and then we'll open it up for questions.

The forward-looking statement on Slide 2 applies to everything we say in our formal remarks and during the Q&A session. And with that, I'll turn it over to Ben to take us through the results.

Thank you, Stephanie, and good morning, everyone. On an annual basis, royalty revenue was up 16% from $67 million to $78 million or from $1.58 to $1.83 per share.

This is largely on the strength of organic growth within the portfolio as no significant current revenue-generating royalty acquisitions were made during the year. Our quarterly revenue up $17.5 million or $0.41 per share compared to $19.2 million or $0.45 per share in Q3.

This reflects late year challenges with potash prices and volumes, both being impacted by weather-related demand issues and base metal prices being pressured by trade war concerns. Considering the full year, we are again made appreciative of the benefits of holding a diversified royalty portfolio.

As while there were challenges that some of our operators face, there were balancing tailwinds for others. In 2019, the best example of such an offset was a strong rebound in iron ore revenue after a tough prior year.

EBITDA margins were strong at 80% for the year compared to 77% in 2018. Royalty business EBITDA margins were actually closer to 85%.

As while we expense costs for our project generation business, we don't include its net equity gains through the income statement as revenue. The PG business did, however, contribute cash proceeds net of reinvestments of $17 million during the year.

Annual adjusted operating cash flow, again, not including PG related proceeds, came in at $44.1 million or $1.03 per share and $9.4 million or $0.22 per share during Q4. This was 27% higher than in the prior year on an annual basis as a result of cash flow margin expansion that occurred due to the top line growth versus a relatively more fixed components of costs.

Actual net earnings per share and adjusted net earnings per share of $0.41 and $0.55, respectively, compared favorably to 2018's net earnings and adjusted net earnings per share of $0.03 and $0.38. We ended the year with $22 million in cash and cash equivalents and $147 million in the market value of mining and other investments, comprised of the remaining junior equity portfolio holdings and Labrador Iron Ore Royalty Corporation shares.

The value of our residual junior equity portfolio was similar at year-end to the prior year, despite the strong level of monetization that occurred. You can find our current project generation portfolio listing on our website.

Our capital allocation priorities in 2019 balanced growth investment in our mining and renewable royalty portfolios, shareholder capital returns and debt repayment. We acquired the royalty covering the high-grade polymetallic Curipamba project in Ecuador and also made our first significant investments aimed toward developing a new renewable energy royalty business with the acquisition of Great Bay Renewables and the providing of royalty financing to Tri-Global Energy.

In returning capital, we increased our dividend by 25% to $0.05 per quarter and repurchased 802,000 shares under our buy back at prices that we feel are very accretive to assets per share, and particularly so, relative to the expected long-term growth. Repayments on our term and revolving debt facilities during the year totaled $31 million to leave us with a balance at year-end of approximately $109 million.

Subsequent to year-end, we have drawn US$35 million on our revolver to fund another renewable royalty investment. Including this recent investment, our net debt-to-EBITDA ratio will remain under two times.

Our current liquidity includes our remaining revolver capacity of approximately $38 million and our cash on hand of approximately $20 million. And now I'll turn it over to Brian.

Thank you, Ben, and thank you all for joining us this morning. I'm going to try to keep it short today, because I know many of you have lots more on your plate to deal with.

2019 was obviously a very good year for our royalty business in terms of the key performance metrics that we focus on, particularly revenue and cash flow per share. This was particularly gratifying in that it came almost entirely from no cost, organic growth from existing portfolio assets.

The royalty cash flow performance, combined with additional strong cash generation in our PG business, allowed us to reduce leverage and increase shareholder capital return. It also allowed us to develop exciting long-term growth opportunities such as successfully launching our renewable energy royalty platform and completing the acquisition of the Curipamba royalty.

2020 is shaping up to be interesting for want of a better word. We made guidance in mid-January that estimated that we should more or less match last year's record revenue performance.

Since then, a lot has obviously happened. We made a comment in our release yesterday that our uncertainty level around guidance is higher than at any point since we began giving it.

Due to COVID-19 pandemic, prices are uncertain, demand is uncertain, supply is uncertain and on and on. While we have witnessed so far are actually relatively modest declines for our major commodity exposures.

The reasoning for this seems to be that while immediate economic growth prospects are being heavily pressured, it also appears that the worst may already be behind top consumer China. And because there is now an increasing expectation that Chinese and indeed global stimulus spending will be injected into the economy and that this could actually increase near-term demand for base metals and steel.

We obviously don't know which of these sets of arguments will prevail at this time. Once we get better clarity, we will look again at our guidance and decide what if any revisions might be necessary.

What we do know is that as top line royalty holders, we are not nearly as exposed to potential continuing price decline as mine operators with their margin based exposures. We also know that the particular mine that we hold royalties on generally occupy resilient operating margin curve position within their sectors.

There is a slide in the deck today that illustrates this. With that said, I'll switch now to talk about some longer term developments related to our business.

A while ago on one of these calls, I spoke about our focus on proactively addressing challenges related to the two parts of our portfolio that were unusual in the sense that they were not related to long or ultra long-life assets. The first part of this dealt with the expected closure of the 777 mine in a few years and its impact on the base metals part of our revenue profile.

During 2019, we gained visibility on how our efforts to address this challenge we're working. Significant developments included, the completion of financing and construction of the Gunnison Copper project, which is expected to ramp up production over the next several years.

Lundin Mining acquired Chapada Mine to bring a copper focused miner with a strong balance sheet in as our new operator. Lundin has indicated on several occasions since that it’s focused on opportunities to expand production at the mine.

And Adventus Mining announced a positive PEA results with El Domo copper rich deposit and attracted strong strategic investor support to help it further advance the project through more detailed feasibility studies. As a result of these developments, we believe that the first challenge has been well-matched.

Secondly, we recognize that our thermal coal royalties would decline to zero over the coming decade based upon accelerated government phase-out policies. While a projection for the complete elimination of coal-based revenues is in many ways a positive feature given the duration of coal amongst most investors, it was still a challenge for us to finding a way to replace the lost revenue on a long-term basis.

Directly from this challenge came our strategy to try to use remaining coal royalty revenue to innovate the creation of royalty based investing within the renewable energy sector. Our long-term view on renewable energy projects is that, for the most part, once one is built, it will be continuously reinvested in to extend and expand its ability to harvest an unending resource.

So through the creation of royalties that covered the entire potential life of the renewable energy project, we believe that we could ultimately completely transition our short-term coal exposure into ultra-long life, if not perpetual, revenue stream, while also directly helping to enable the meeting of the global sustainability objectives. The initiative is working out better and faster than we could have hoped.

In the past 13 months, we have completed investments that are seeing us help on the advancement of more than 23 gigawatts of new potential renewable energy projects, which to put in context, compares to just over 13 gigawatts of wind power currently installed in all of Canada, and which is enough to power approximately 5.8 million homes. Our internal estimates also suggests that upon signing of a deal with Apex Clean Energy earlier this week, the discounted future value of our renewable energy royalty portfolio now handily eclipses that of our coal royalties, meaning that we've met the minimum objective of our strategy far sooner than we had hoped.

Our renewable royalty innovation is achieving proof-of-concept and gaining rapid acceptance and adoption within the renewables sector. We are not stopping here by any means and continue to advance several additional opportunities.

To finish, it is also worth addressing the bigger picture behind our strategy. We are more convinced than ever of the increasing alignment of our assets and prospects with key long-term macro growth trends, trends that converge around greater global sustainability needs.

These imperatives will persist long after COVID-19 has been solved. Electrification of transport, the renewable power generation and storage transition, lower emissions from steelmaking and increased sustainability in agriculture are not fleeting thing.

They define a future that Altius shareholder capital has been positioned to fully participate in through the long life, financially strong and highly expandable assets that underpin your royalty portfolio. Thank you.

Take care out there and happy to take questions.

Hi. Good morning, guys.

Great quarter. Regarding the new Apex deal, I'll dive right in.

Can you provide any additional color? I know you're going to be going around next week and providing some teach-in opportunities for the sell-side analysts.

But can you provide any additional color regarding the regional focus you're seeing, the wind-solar mix that you expect under the new agreement and the relative timing of these projects reaching commercial production? Thanks.

Sure. Thank you.

Thank you, Jack. In terms of how we envision the mix between wind and solar playing out, when I look at the TGE transaction, their portfolio is dominated by wind projects.

So naturally, we'd expect more wind projects to come from that investment, although the most recent one was, in fact, wind. Within Apex, it's a much more balanced portfolio, quite a lot of both wind and solar.

It's actually a huge portfolio, and it's well diversified across most of the major grid regions in the U.S. If there's a bigger – if there are trends that play within renewables, obviously, you're going to impact the timing of which project sale and convert to royalties for us, I would say that there is a real push around solar right now.

And if there's another trend that I think is going to become increasingly important, it's that an increasing number of solar, particularly, but also wind projects are now being advanced with storage options attached and that largely has to do with dramatic decline in battery costs over the last decade or so. And the importance of that is it takes away some of the challenge that renewable has always faced in terms of its intermittency, and it's – the need to always have additional baseload sources on the grid.

When you add more storage, basically, what happens is you can add or you can have more displacement within the overall generation mix and more relative percentage of renewables on the grid. So it's a very strong development in terms of just overall demand and market share advancements of renewables in the market.

And sorry, Jack, what was the third part of your question, again?

Just the relative timing of the projects. I think, from my understanding, these things will be coming on a little bit quicker than they have with TGE.

And I guess that's partly because you provided all the investment capital upfront. Just want to get an idea of when you start – expect to start seeing these royalties, I guess, kick in, for lack of a better expression?

Yes. So with TGE, we'd originally envisioned that it would be around three years or enough projects to sell to fully sort of best our royalty entitlement.

That's now looking like it's going to be within two years, two-thirds to three quarters of the way there now. From the perspective of Apex, it's a bigger outfit.

So their portfolio was about 10 times size of TGE. So while we put more money in, we put, say, 4 times more money in upfront, it's matched by a portfolio size that's 10 times larger.

If they meet their targets for project sales this year off that portfolio, it's possible that we could be fully vested on the first part of that investment within this year, and if not, certainly, within next year. Beyond that, you've got one- to two-year lag time for – from sale to project commissioning.

Great. Thanks very much, Brian.

Thank you.

Good morning, guys.

Hey, Craig.

Good morning.

Can you give me a sense of what you guys are thinking in terms of capital allocation this year, obviously, just given the share pullback, maybe an opportunity to buy back some more stock, possibilities to deploy more money into royalties or just continue along with the development of the renewables business?

Yes. So our capital allocation priorities this year wouldn't be the similar to last.

Obviously, we're going to continue to make our scheduled debt payments, pay our dividends. Buyback is very much a priority for us.

And I wish I could say we saw lots of opportunity for royalties on really high quality mining assets that wouldn't ultimately dilute the quality of our portfolio. But at the moment, we're not.

Obviously, these are dynamic times and things can change very quickly. So as far as growth investing goes, the best opportunities we are seeing today remain in the renewable sector.

That said, we're not completely unconstrained in terms of how much capital we can deploy in the short-term there. So we are also looking at potential strategic co-investment into that renewable platform as we try to scale it all.

Yes, so broadly speaking, the priorities are growth investing with an emphasis on renewables. And I'd say, number two, if we're talking about the discretionary part of our allocation would be on the share buyback, which is enormously accretive for us at this point.

Would you guys consider adding to your iron ore position, just given where prices are and relative to the share price of Lynx?

If we had unlimited capital, we probably wouldn't hesitate if it comes down to making choices. When I look at our own assessment of the net asset values of Lynx saying just in comparison to Altius, they're both trading at similar discounts to net asset value.

But when I consider the fact that Altius' net asset value is almost entirely royalty based, whereas Lynx is significantly weighted towards the equity component, I'd have to say that Altius represents a better value right here.

Thanks, Brian.

Good morning. Just a couple of questions.

Again, just so I'm clear on the renewables. So in the $35 million, you were sort of implying that may all get invested this year or by early next year, so that then it’d be a one to two months lag or one- to two-year lag before that would all start generating the $3 million to $4 million that you envisage going forward on a baseline level.

Is that correct?

The $35 million is all invested. So what I'm referring to there is the time it would take for enough project sales to come from that portfolio to have us receive the number of royalties were meant to receive from that investment.

So money goes into the developer, they sell projects, we receive royalties until a hurdle rate is reached. That we'd expect to close sometime next year at the latest, possibly as soon as this year based on their sales projections.

So it's – after each project is sold, there's a lot of variables here. But after a project is sold on to an ultimate sponsor operator, it can take a year to two years for equipment deliveries to occur and for construction to take place.

So there'll be a bit of a continuum. The royalty revenue will begin to kick in sort of with a lag behind each sale, not all in minimum.

I should also point out that our original investment, when we put our money in, it begins compounding the minute it goes in. So the longer it takes the royalties to be created from the investment, the more royalties we ultimately receive.

So they're – when you're thinking about how to model it, you’re not – you shouldn't be all that worried about how many zero years we would have to put in at the front end because there is a recurring compounding even before royalty revenue kicks in, that makes – that's clear.

Yes. No, that's very clear.

I'm just trying to get the exact timing down. That's very helpful.

The second thing in your renewables presentation, you have a nice chart showing a bunch of comps and leverage factors. And then obviously, the issue is where the multiple might be on a renewable royalty company.

But do you envision putting leverage in the ARR subsidiary with debt? Or is it…

Not right away. Like to me, the right point to consider leverage for that business is after it has achieved significant scale of assets, which is happening pretty quickly, but also when – first, cash flows are much more imminent.

So the first deals that close or went through last year, sales deals that went through would have been, I think, October and December. And we're projecting cash flow from those to kick in late next year, mid to late next year.

So before that sort of really imminent, I don't think the business is ready to consider using leverage. So scale of assets get closer to cash flow, and then that becomes a bit of an option for us.

For the time being, all of the money we want to put into the business is equity based. We'll front on the – front load the equity capital contribution and then consider leverage on top of that.

Great. Thank you.

And just one other question, if I may. Where do we stand with the coal situation with the Alberta government?

Where are we in the process of going through the legal side?

It's actually moving along pretty well. There's been lots of back and forth around what agreed facts might be.

And to be honest, there isn't a whole lot under dispute there from either side, what's happened that's happened. It just really comes down to a test in the end of what those facts actually represent and if it was an event that requires compensation.

So the next step from here is discovery. And Ben might correct me on this, but I believe that's scheduled for the May-June period.

Am I correct there, Ben?

Yes, it's sometime in May as the dates they're looking at. Yes.

Great. Thanks very much.

That’s all my questions. I appreciate it.

Thanks.

Thank you.

Okay, folks. Thank you very much for joining the call.

We really appreciate it, and take care of yourselves. And we'll talk to you again at the next quarterly results in April – May, sorry.

Feel like a long ways off right now, doesn’t it?

Yes. Thanks.

Take care.

Thanks, everyone.

All right, bye-bye.