Thank you, Adrianne. Good morning, everyone and welcome to our Q1 call.

Our press release and quarterly filings were released yesterday after the close and are posted to our website. This event is being webcast live and you will be able to access a replay of the call, along with the presentation slides that has been added to the website at www.altiusminerals.com.

I will also point out after the call we will be holding our Annual General Meeting again by conference call webcast and the coordinates for that event are on our website and in the management information circular. Start time for that is 11.30 Eastern.

One more event announcement, tomorrow from 9 to 11 a.m. Eastern, we are holding a virtual Investor Day call and webcast, where we are doing a deeper dive into the fundamentals of our producing royalties and also covering development stage royalties.

The details to that are on our website. The conference call has a live Q&A session and the webcast is a recording in the session.

So, no live Q&A interface, but we would love to get questions in advance. And we will read them out and answer them on that call.

With the Investor Day going on tomorrow, our Q1 call today will be a bit shorter than usual.

Thank you, Flora and good morning everyone. Q1 royalty revenue of $17.8 million or $0.43 per share was down 19% from Q4 2020 when we had the large end of year catch-up dividend from Labrador Iron Ore Royalty Corporation and on some price and timing of sales recognition lags this Q1 that we expect to start to catch-up during Q2.

On a year-over-year comparison basis, Q1 revenue is up 9% from last year. Q1 EBITDA was $14.6 million or $0.35 per share compared to $17.6 million last quarter consistent with the change in revenue.

The EBITDA margin was 82% this quarter compared to 80% last quarter. Both Q4 and Q1 EBITDA margins are at the upper end of our traditional range.

Relative to revenue growth, fixed costs remain stable and so we are constructive to margins, G&A expenditures of $1.9 million in Q1 are down 27% from Q4. This is explained mostly by higher legal and other professional fees in the prior period.

The Great Bay Renewables subsidiary G&A is no longer included in our consolidated numbers after the formation of the joint venture between ARR and Apollo Funds in October last year, with revenue and expenses now presented in earnings or loss from joint ventures. Adjusted operating cash flow was $8.8 million this quarter, down 35% from Q4 adjusted operating cash flow of $13.5 million and is largely caused by the timing of corporate tax installments.

The quarterly net earnings of $11.8 million or $0.28 per share include $0.14 in non-cash adjustment items that are identified in the waterfall table and slide that you can find on our website, leading to adjusted net earnings of $0.14 per share. The main adjustment item is a $0.09 per share gain on fair value of derivatives, which reflects the increase in market value of warrants held within the PG equity portfolio.

In addition, there are smaller foreign exchange gains, dilution gains and a reversal of the impairment recorded on the secured loan to Alderon, we fully recovered the loan amount shortly after the quarter when we received an additional 600,000 Champion shares as part of that receivership based asset sales settlement process. I will also remind you that we hold a 3% gross sales royalty on the Kami Iron Ore project, which Champion is currently evaluating.

The Board of Directors declared a $0.05 per share dividend to be paid to shareholders of record on May 31. Payment date will be June 15, 2021.

Thank you, Ben. Thank you, Flora.

As Flora said, we have our Investor Day tomorrow, so I will keep these remarks brief to want to – we are on the risk of having nothing fresh or fun to talk about tomorrow. By way of a teaser for Investor Day, I want you to consider the following excerpts from our 2019 letter to shareholders which can be found in its entirety in the Investors section of our website.

At the conclusion of that letter, we said, your business is strong and filled with embedded royalty volume growth that is already happening in a meaningful and measurable fashion. This is occurring across a diverse portfolio of long-lived high margin mining assets.

Mines that produce those commodities that are best aligned with long-term global structural trend shifts. The Altius Renewable Royalty platform is developing more quickly than we could have hoped.

The timing of the perfect storm for metal prices, it’s hard to call precisely, but its forces are deeply structural and intensifying. Its demand drivers have already begun to emerge, while the incentivization conditions needed to bring on required levels of new supply for replacements and growth are still absent.

The longer that this combination persists, the stronger the storm is likely to be when it comes and our royalties will directly and immediately benefit.

Adrian, you want to open up the Q&A?

Hi, guys. Thanks for taking my question.

I am sure you are going to address this tomorrow, but just I don’t want stealing your thunder. But just in terms of a question on capital allocation, obviously, given the extraordinary strength we are seeing here in the underlying commodities and then your royalty portfolios?

Any insight you can provide into thinking what you guys might do with some of that excess cash flow both in terms of capital allocation and maybe further capital returns to shareholders?

Well, first off, Craig, I can’t tell you how happy I am to get a question like that. We are – we actually had a board meeting yesterday.

Look, it’s been a really busy, busy quarter between the ARR spin-out and everything else. But as we go into the rest of the year and even this quarter, there is a lot of work that we are planning to do on updating our capital allocation strategy.

We feel like this is a bit of an inflection point now cyclically. Conditions are not great for M&A type activity and buying assets.

It’s just not the right part of the cycle. That was the last part when we were very busy.

We have obviously got some debt still on our books from all those acquisitions. So that will be part of the prioritization, but returns of capital are definitely going to be a huge part of that discussion.

But give us a quarter or so to do the work and think through with a longer term perspective, so we can give our shareholders some better guidance. So, work in progress.

Okay. Maybe just one other question for me, in terms of your project generation portfolio, we are seeing a lot of renewed exploration spending and budgets here.

Is there anything one or two assets in your portfolio that you would want to highlight maybe just in terms of what you see the best kind of growth potential and maybe the possibility to eventually being a paying royalty in your portfolio?

Definitely getting into thunder – from stealing thunder from tomorrow, but I will give it a stab. I mean, the things we are looking at with high anticipation obviously are probably foremost would be hopes that Champion goes ahead and builds the Kami project that will be incredibly material event in our future if that were to come to be.

Broadly speaking, within the PG portfolio, Adventis has got a feasibility study coming this year, half a dozen or so have resource estimates and PA type study coming. I don’t think all of those really are – it’s possible for some of those could get through these cycles, others I think are probably longer term types of bets, but they are all lots of things going in the right direction.

Far more speculatively, we own a royalty in our project that AngloGold Ashanti in Nevada has been very busy on called Silicon. And there is quite a bit of buzz around that.

Don’t know they have been very tightlipped about results today. I think there are some strategic reasons for that, but just as a little something that we are watching kind of item.

There is quite a bit like we really did a lot of work between say 2013, ‘16, ‘17 loading up on lands, converted those equity positions to juniors that ended up with those projects are doing really well. They have been I think raising an outside share of capital.

They have been attracting really strong new investors to come in alongside of us. So, couldn’t be happier with how the PG business is unfolding now that speculative capital has returned to the sector, it seems like it’s finally left with greed and everything else in its combat with natural homes, so too soon.

I agree. Okay, that was great.

I am looking forward to the Investor Day tomorrow and thanks for taking my questions.

Cheers.

Hey, good morning, Brian and everyone. Just one question for me in the quarter.

Just in terms of the coal business, you had a big Q4 and then it came down pretty sharply in Q1. Just wondering, is there any guidance you can give us for coal for 2021?

Is it going to be more similar to Q1? And I noticed you mentioned sort of Sheerness reaching end of life off of this and so just any color on the coal business would be great?

Yes, we don’t see much hope for surprises from Sheerness and that was, of course, a lot of what happened in Q4 with a bit of a surge, I don’t know if it was getting rid of what inventories were around or whatever, but we don’t see much there. For Genesee, it looks like business as usual for a bit of time yet as a get-going on their gas conversion.

So I mean, I think if I were looking at us and how I see it, I mean, I am looking at Genesee doing okay and keeping on going for a bit here, but we all know the writing is on the wall and that capital power is trying to get coal off of its record as well as quickly as possible, so a couple of more years there.

Okay, great. That’s it for me.

I will save the rest for tomorrow. Thanks.

Hi, good morning. Again, just quickly vis-à-vis our capital cycle comments, do you have much more to monetize in the private or junior equity portfolio?

Are we pretty well done? Are you expecting a lot more to come out of that as far as monetization?

So, was it the PG portfolio?

Yes, please.

Well, no, we have – I think at the end of the March, we reported somewhere in the mid-50s of equity values held. And we have been monetizing a lot over the last few years, but we have also been continuously adding positions, because we have still been – the team has been doing really well with selling on new projects for new equities, there was a bit of a natural replenishment that happens there.

So, it would have been mid-50s and you know what the market has done since the end of March, it’s more than that now. But yes, it’s just been good appreciation and I think there is still quite a bit on some of the names to come.

And we will keep adding new equity positions as additional projects are abandoned for shares and royalties, pretty early days for what’s going to come from that portfolio for this cycle as far as I am concerned.

Right, but that’s sorry – just to be clear, there is more private stuff that you can vend out, I mean, last cycle you had a hold inventory…

Alright.

I was curious where we are in that part of the phase of vending the land back out to juniors whether we are 80% done or 60% done?

Yes, sorry, I misinterpreted the question. So, if you remember back in 2016 we would have talked about what it was somewhere around 1.7 million hectares of lands and then over the next few years.

And inventory has been running on a sort of just-in-time basis ever since. So, the team is active and building up positions.

There is a handful of projects within the portfolio that are at different stages and there is new ones being added. So, there is no – there hasn’t been like a big inventory there for a couple of years.

It’s been a – but we are – we continue to work at replenishment all everyday, but the big backlog or the big boat up, if we call it, through the down cycle, things were really opportune has been cleared and now it’s just new ideas and continuous additions.

Thanks very much. Talk to you for the rest of my questions till tomorrow.

Great.

We realized that the history of all this is very patient, project generating exploration getting in sort of on the ground for helping to grow a project. And some of the other companies write big checks.

In the March quarter, Franco Nevada invested about $600 million in iron ore. They bought a $538 million debenture and Vale is a participating debenture plus some Labrador Iron units.

Could you give us a sense of the speed of the redeployment away from coal and potash and base metals and renewables and the tradeoff between patients or Franco writing a big check and getting immediate exposure?

Yes, I think that’s a great question, John. First one thing to clarify, yes, there is no doubt that Franco recently bought the Vale debentures, but I note that they were actually basically disclosing much earlier purchases of Labrador.

In fact based on their average prices, it sounds like we are running a pretty parallel track in terms of when we started probably in around 2016. There was no other way you can get to that average price other than there.

We were 2016 and right up into 2018 soon after the – we used a bunch of the Fairfax policies actually, where we got a lot of our position. As far as the longer term approach, yes, I mean, we are more – I guess we are countercyclical obviously and we will build things off a bit slower and let the option value play out.

This is kind of where you are going, I think is do we buy all through the cycle? And generally speaking, no, that’s not how we do it.

We feel really good about the best we have in, in some of the earlier stage that we made over the last number of years making it, growing our portfolio whether it’s expansions at existing mines or new developments like Kami or those sorts of things. Yes, I guess, it’s not a – I wouldn’t look forward, I mean, I would just look forward from us, you never say never, because special situations arise, but it’s not our intent to buy all through the cycle.

We buy when conditions are really opportune and we let organic growth take over when prices and incentivization conditions kick in. So, that’s why we were picking per royalties whether they were existing operations or development assets that we felt were most likely to be invested in when the time came.

So, big resource lives, great margin positions, pretty straightforward predictors, really a future investment. And so that’s what we see in our immediate future.

The last comment I will make there is Franco has a different situation than we do. In that, they have a different equity cost of capital profile.

And that gives them I think more flexibility to work throughout the cycle. We maybe – we get there some day, but that’s not what we are to now.

And the other thing – the other way that reflects is that a lot of our acquisitions through the down cycle may do so of leverage. Franco doesn’t typically do that, because their equity capital – cost of capital means they don’t have to.

I don’t know if I am answered any part of your question there, but we feel really good about where we are positioned for this part of the cycle and whenever this one in, hopefully 10 or 15 years from now, we will be ready to go again on the more on the M&A side, but it’s not the key focus right now.

Thank you. That’s a very good explanation.

If I can ask another question once again on our iron ore, Champion lists 8 projects on their website. Clearly, a couple of them are much bigger and advanced producing or potentially producing.

Are you open to investing in such early stage iron ore exploration in the Labrador Trough to add to your iron ore exposure or is owning 600,000 shares of Champion a good enough way to participate in the package of the different growth properties?

We have got a little more than that, because we still have shares. We invested in Champion back whenever they soon after they bought Bloom Lake and we have somewhere just over 1 million shares, I think at Champion, but still to your question, over lot of our exposure here going forward to what Champion does at least we hope is through our royalty in Kami.

We really hope that, that rises to the forefront as far as their next phase of expansion and growth develops there. But we also do have other pretty significant iron ore interests within the Labrador Trough.

We have been active there for, I don’t know how long now, it’s 15 years probably. So we all know about Kami in our royalty there, but there are other projects that actually one of which will probably have a first resource estimate published on later this year, it’s within a company called Avidian Gold or spin-out of theirs for a division of theirs called High Tide.

So we are definitely, we’ve got more layers of exposure to the Labrador Trough. And I do think the Labrador Trough has been running now for whatever it is 50 or 60 or 70 years, I think it’s really just coming into a tay day.

So from a long-term perspective, we are very deeply positioned there. Would we get involved with other projects?

Probably, we have a great relationship with Champion that goes way back and do something else that they were advancing and they wanted to work with us. David, Michael would only have to pickup the phone and it has very open ears for sure.

So, great.

Well, thanks everybody. Yes.

Thanks everybody for dialing in and really appreciate the questions. And we will look forward to talking to you tomorrow.

Thanks, everybody.

Thank you.