Altius Announces First Renewable Energy Royalty Transaction

07 Feb 2019

Altius Minerals Corporation (“Altius”) (ALS:TSX, ATUSF:OTCQX) is pleased to announce that its recently formed subsidiary, Altius Renewable Royalties Corp. (“ARR”), has entered into a transaction with Tri Global Energy, LLC (“TGE”), to gain future royalties related to a portfolio of wind energy development projects.

Dallas-based Tri Global Energy is a leading developer of wind energy in the U.S. TGE’s goal is to develop clean energy through the development of wind energy projects. The company has pioneered a unique way to generate local economic benefits through the development of renewable energy projects by partnering with landowners, communities and industry-leading investors. Its wind energy projects are traditionally vended to various renewable energy operating companies, which allows TGE to focus its expertise on development initiatives. TGE is committing its current portfolio of over 1,500 megawatts (MW) of development projects, which excludes projects already vended, and any additional projects added in the future, to this new royalty investment structure with Altius, until a minimum total royalty portfolio valuation threshold is achieved. The currently committed development portfolio includes projects located in Texas, Nebraska and Illinois.

Transaction Terms

The US$30 million royalty investment into TGE will be invested in tranches over approximately the next three years as TGE achieves certain project advancement milestones, with an initial investment upon closing of US$7.5 million.

As individual pipeline projects are developed, ARR will receive a 3% gross revenue royalty on each project. This will continue until a target minimum total royalty portfolio valuation threshold is achieved. It is expected that this threshold would be met based upon a portion of the total currently committed TGE development pipeline reaching operational status. Once created, individual royalties will apply during the full life of the respective projects.

Using current assumptions concerning development timeframes, output levels and realized power prices, the created ARR royalty portfolio from this investment is estimated to generate US$3 - 4 million in new annual royalty revenues once the target threshold is met and before factoring in any potential longer-term project extensions, output expansions or power price changes.

Funding for the TGE transaction will be provided from Altius’ available cash on hand. Depending upon the scale of the overall opportunity set that develops for ARR, Altius may also consider adding additional future investment partners as either direct subsidiary level participants or through the creation of limited partnership structures.

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