Altius Minerals : 2024 Q4 MD&A

Published: 2025-03-11 17:40:06 ET ALS.TO

Altius Minerals Corporation

Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

Independent Auditor's Report

To the Shareholders and the Board of Directors of

Altius Minerals Corporation

Opinion

We have audited the consolidated financial statements of Altius Minerals Corporation (the "Corporation"), which comprise the consolidated balance sheets as at December 31, 2024 and 2023, and the consolidated statements of earnings, comprehensive earnings (loss), changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Corporation as at December 31, 2024 and 2023, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB").

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards ("Canadian GAAS"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Corporation in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2024. This matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Interest in Joint Venture - Fair value determination of renewable royalty interests and investments in renewable royalties - Refer to Note 2, 3, 5 and 15 to the financial statements

Key Audit Matter Description

The Corporation's joint venture has renewable royalty interests and holds investments in renewable royalties, which are accounted for as financial instruments held at fair value through other comprehensive income. The Corporation's methodology to determine the fair value of the investments at the reporting date is based on complex models and unobservable inputs. The valuation of these investments is subjective and include several assumptions that are required to determine the fair value. The judgments with the highest degree of subjectivity and impact on the fair values are the determination of an appropriate valuation methodology, expected timing of cashflow from royalties,

discount rates, power purchase agreement prices and merchant power pricing, and timing of commercial operations.

Given the significant judgments made by management to estimate the fair value of the renewable royalty interests and investments in renewable royalties, performing audit procedures to evaluate the reasonableness of the estimates and assumptions related to the determination of an appropriate valuation methodology, expected timing of cashflow from royalties, discount rates, power purchase agreement prices and merchant power pricing, and timing of commercial operations required a high degree of auditor judgment and an increased extent of audit effort, including the need to involve fair value specialists.

How the Key Audit Matter Was Addressed in the Audit

Our audit procedures related to the fair value determination of the renewable royalty interests and investments in renewable royalties, specifically the determination of an appropriate valuation methodology, expected timing of cashflow from royalties, discount rates, power purchase agreement prices and merchant power pricing, and timing of commercial operations included the following, among others:

Other Information

Management is responsible for the other information. The other information comprises Management's

Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards as issued by the IASB, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Corporation's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Corporation's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

auditor's report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Jacklyn Mercer.

/s/ Deloitte LLP

Chartered Professional Accountants

St. John's, Newfoundland and Labrador

March 11, 2025

CONSOLIDATED BALANCE SHEETS

As at

In Thousands of Canadian Dollars

Note December 31, 2024

December 31, 2023

ASSETS

Current assets

Cash and cash equivalents

15,908

130,422

Accounts receivable and prepaid expenses

7,391

6,935

Income tax receivable

749

2,074

Loan receivable

5,303

24,048

144,734

Non-current assets

Royalty and streaming interests

199,916

206,209

Investments

233,566

221,745

Interests in joint ventures

230,787

174,873

Exploration and evaluation assets

9,009

8,011

Deferred tax assets

8,798

7,907

Investment in associates

1,579

Loan receivable

7,193

6,628

Derivative - cash flow swap

312

1,339

Property and equipment

356

513

689,937

628,804

TOTAL ASSETS

713,985

773,538

LIABILITIES

Current liabilities

Accounts payable and accrued liabilities

3,319

4,155

Current portion of long-term debt

8,000

Income tax payable

1,455

734

12,774

12,889

Non-current liabilities

Long-term debt

99,381

104,173

Other liability

409

418

Deferred tax liabilities

30,293

43,520

130,083

148,111

TOTAL LIABILITIES

142,857

161,000

EQUITY

Shareholders' equity

561,177

488,727

Non-controlling interest

9,951

123,811

571,128

612,538

TOTAL LIABILITIES AND EQUITY

713,985

773,538

See accompanying notes to the consolidated financial statements

CONSOLIDATED STATEMENTS OF EARNINGS

In Thousands of Canadian Dollars, except per share amounts

Note

Year ended

December 31,

2024

2023

Revenue and other income

58,171

68,957

Costs and Expenses

General and administrative

12,433

11,489

Cost of sales

5,937

5,098

Share-based compensation

4,465

3,968

Generative exploration

180

1,048

Exploration and evaluation assets abandoned or impaired

226

602

Mineral rights and leases

227

Amortization and depletion

6,171

15,982

Earnings before the following:

28,532

30,543

Gain on disposal of mineral property

594

Loss from joint ventures

(1,840)

(1,826)

Realized gain on disposal of derivatives

4,186

349

Unrealized (loss) gain on fair value adjustment of derivatives

(2,056)

325

Impairment of royalty interest

(1,537)

(6,338)

Gain on deconsolidation of subsidiary

87,146

Interest on long-term debt

(9,523)

(9,276)

Foreign exchange (loss) gain

(3,046)

980

Share of loss and impairment in associate

(1,579)

(34)

Earnings before income taxes

100,308

15,317

Income taxes (current and deferred)

(1,496)

5,195

Net earnings

101,804

10,122

Net earnings attributable to:

Common shareholders

100,765

9,537

Non-controlling interest

1,039

585

101,804

10,122

Net earnings per share

Basic

2.16

0.20

Diluted

2.12

0.20

See accompanying notes to the consolidated financial statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

In Thousands of Canadian Dollars

Note

Year ended

December 31,

2024

2023

Net earnings

101,804

10,122

Other comprehensive earnings (loss)

To be reclassified subsequently to profit or loss

Foreign currency translation adjustment

Gross amount

1,008

(5,607)

Net amount

1,008

(5,607)

Net unrealized loss on fair value adjustment of cash flow swap

Gross amount

(915)

(716)

Tax effect

210

191

Net amount

(705)

(525)

Revaluation of cash flow swap held in joint venture

Gross amount

7,206

(5,275)

Tax effect

(1,168)

1,168

Net amount

6,038

(4,107)

To not be reclassified subsequently to profit or loss

Net unrealized gain on investments

Gross amount

10,336

14,958

Tax effect

(1,462)

(1,219)

Net amount

8,874

13,739

Revaluation of investments held in joint venture

Gross amount

3,052

24,278

Tax effect

(310)

(5,489)

Net amount

2,742

18,789

Realized loss on investments

(6,330)

(747)

Tax effect

950

Net amount

(5,380)

(747)

Other comprehensive earnings

12,577

21,542

Total comprehensive earnings

114,381

31,664

Total comprehensive earnings attributable to:

Common shareholders

111,173

24,924

Non-controlling interest

3,208

6,740

114,381

31,664

See accompanying notes to the consolidated financial statements

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended

In Thousands of Canadian Dollars

Note December 31, 2024

December 31, 2023

Operating activities

Net earnings

101,804

10,122

Adjustments for operating activities

(69,862)

23,523

31,942

33,645

Changes in non-cash operating working capital

(3,988)

2,861

27,954

36,506

Financing activities

Costs incurred on amendment of credit facilities

(1,456)

Repayment of long-term debt

(8,000)

Lease payments

(168)

Proceeds from issuance of shares

401

Cash settled stock options and RSUs

(3,849)

(1,900)

Payments to non-controlling interest

(966)

(2,030)

Repurchase of common shares

(16,196)

(12,528)

Shares returned to treasury

661

Dividends paid

(14,842)

(14,300)

(44,415)

(38,926)

Investing activities

Proceeds from sale of investments

26,434

1,157

Cash received from joint ventures

831

75,730

Return of capital

8,950

Proceeds from sale of mineral properties

161

Generative exploration

(180)

(1,048)

Exploration and evaluation assets, net of recoveries

(1,326)

(396)

Investment in joint venture

(65,871)

(21,222)

Loan receivable

(5,283)

Deconsolidation of subsidiary

(55,999)

Purchase of non-controlling interest units

(1,357)

Proceeds from repayment of loan

5,303

Acquisition of royalty interest

(1,210)

Acquisition of investments

(11,300)

(1,609)

Acquisition of property and equipment

(48)

(9)

(103,366)

55,074

Net (decrease) increase in cash and cash equivalents

(119,827)

52,654

Effect of foreign exchange on cash and cash equivalents

5,313

(4,617)

Cash and cash equivalents, beginning of year

130,422

82,385

Cash and cash equivalents, end of year

15,908

130,422

Supplemental cash flow information (Note 13)

See accompanying notes to the consolidated financial statements

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Common Shares

Other Equity

Accumulated

Total

Other

Retained

Non-controlling

In Thousands of Canadian Dollars

Reserves

Shareholders'

Total Equity

Note

Number

Amount

(Note 11)

Comprehensive

Earnings

Equity

interest

Earnings

Balance, December 31, 2022

47,624,958

358,697

12,453

90,390

24,653

486,193

122,616

608,809

Net earnings and comprehensive earnings,

January 1 to December 31, 2023

15,387

9,537

24,924

6,740

31,664

Payments to non-controlling interest

(3,387)

Transactions with non-controlling interests

2,232

(2,158)

Shares repurchased and cancelled

(611,800)

(4,613)

(7,915)

(12,528)

Dividends paid to common shareholders

(15,191)

Shares issued under dividend reinvestment plan

43,081

891

Share-based compensation

3,968

Cash settled RSUs and stock options

(1,900)

Shares issued under long-term incentive plan

24,498

314

(176)

138

Balance, December 31, 2023

47,080,737

355,289

14,345

105,777

13,316

488,727

123,811

612,538

Net earnings and comprehensive earnings,

January 1 to December 31, 2024

10,408

100,765

111,173

3,208

114,381

Payments to non-controlling interest

(966)

Transactions with non-controlling interests

(6,230)

6,882

652

Shares repurchased and cancelled

(761,500)

(5,769)

(10,427)

(16,196)

Shares returned to treasury

(220,810)

661

Dividends paid to common shareholders

(16,272)

Shares issued under dividend reinvestment plan

59,269

1,430

Share-based compensation

4,465

Cash settled RSUs and stock options

(3,849)

Shares issued under long-term incentive plan

132,912

2,065

(4,797)

(2,732)

Deconsolidation of subsidiary

(122,984)

Balance, December 31, 2024

46,290,608

353,015

10,164

116,185

81,813

561,177

9,951

571,128

See accompanying notes to the consolidated financial statements

Disclaimer

Altius Minerals Corporation published this content on March 11, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 11, 2025 at 21:39:50.309.