Altius raises C$182M after royalty buys

Altius Minerals (TSX: ALS; US-OTC: ATUSF) is raising $182 million (US$130 million) through a bought-deal share offering to strengthen its balance sheet following a series of royalty acquisitions.

The St. John’s-based company plans to issue 3 million common shares at $60.50 apiece, it said Tuesday. The shares fell 13% to $57.20 in Toronto on Wednesday morning after Altius priced the bought deal at $60.50 per share, an 8.4% discount to the previous day’s record closing price of $66.04. The decline cut the company’s market value to about $3.2 billion.

The underwriters have an option to buy another 450,000 shares, which would increase the gross proceeds to about $209 million if exercised in full. The offering is expected to close around July 21.

“The net proceeds of the offering will be used to strengthen the company’s balance sheet following the completion and announcement of several acquisitions to date in 2026 as well as for general corporate purposes,” the company said. “Altius’s strategy is to create per share growth through a diversified portfolio of royalty assets that relate to long life, high margin operations.”

Acquisition spree

Altius, whose royalty portfolio includes interests in potash, iron ore, base metals, gold, lithium and electricity generation, announced the capital increase four days after a US$168-million (C$236-million) renewables deal. In March, Altius bought Lithium Royalty and its 38 royalties on lithium and other critical-mineral properties for about $140 million in cash and shares.

Royalty financing has become an increasingly important source of mine funding over the past two decades, allowing developers to raise capital without issuing equity or taking on conventional debt.

The model has fuelled the growth of companies such as Franco-Nevada (TSX: FNV; NYSE: FNV), Wheaton Precious Metals (TSX, NYSE: WPM) and Royal Gold (Nasdaq: RGLD), while creating a deep market for royalty acquisitions.

Great Bay

Altius agreed July 10 to acquire Northampton Capital Partners’ minority interest in Altius Renewable Royalties. That deal gives Altius an effective 50% interest in Great Bay Renewables, up from 29%.

Funds managed by Apollo Global Management (NYSE: APO) will sell their 50% interest in Great Bay to Northampton for about US$390 million. Northampton will then sell its 43% interest in Altius Renewable Royalties to Altius, leaving Altius and Northampton as equal owners of Great Bay. The deal is expected to close in late July.

Great Bay provides royalty financing to renewable-power developers and has royalties covering almost 9 gigawatts of generation capacity.

“The long-term outlook for Altius remains robust,” National Bank mining analyst Shane Nagle said in a note July 10. “Our outperform rating is supported by the company’s stable, long-life asset base, transitioning of the portfolio towards lower carbon-intensive commodities and leveraging in-house expertise to provide long-term exposure to future exploration success.”

Apex deal

In June, Altius made a US$73-million royalty investment in Apex Clean Energy’s 311-megawatt Coles Wind project in Illinois, its largest single-asset royalty acquisition to date. Altius contributed US$12.4 million to support its share of that investment.

The project is expected to begin commercial operations in 2028 and has a long-term power purchase agreement with a U.S. utility.

Altius launched its renewable royalty business in 2020 by applying the same royalty model it pioneered in mining to wind and solar developments. Even so, about 80-90% of Altius’s value is still mining-related.

The company, which joined the S&P/TSX Composite Index in June, said the new share offering, together with its expanded credit facilities, would increase its liquidity. That allows it to consider additional acquisitions while maintaining what it described as a conservative leverage profile.