Altius acquires 9.9% of TNR Gold

Altius Minerals (TSX: ALS) has taken up a 9.9% stake in TNR Gold (TSXV: TNR) to further expand its investment holdings in companies with royalty-generating assets.

In a statement on Monday, TNR said Altius will purchase 23.5 million of its common shares at C$0.1775 each — representing the volume-weighted average share price 30 days prior to the agreement.

It also represents a discount to the stock’s current trading price of $0.20 per share, which gives TNR a market capitalization of approximately C$42.5 million ($30.5 million). Altius, in comparison, trades at a market capitalization of C$2.9 billion ($2.1 billion), despite falling 0.7% on the announcement.

Altius’ investment, totalling C$4.2 million, will be used to fund potential corporate development initiatives and for general corporate and working capital requirements, TNR said.

Exposure to ‘high-potential’ projects

For Altius, the move positions the company to benefit from indirect exposure to royalty assets that it deems to have upside.

Altius currently holds interests in 13 producing assets, including six potash mines in Canada as well as Voisey’s Bay nickel-copper-cobalt mine operated by Vale (NYSE: VALE). In Brazil, it has a 3.7% stream interest on Lundin Mining’s (TSX: LUN) Chapada copper mine and a royalty on Sigma Lithium’s (TSXV: SGML) Grota do Cirilo project.

Additionally, Altius has ownerships in several other royalty firms, including significant stakes in Labrador Iron Ore Royalty Company, Altius Renewable Royalties, as well as micro/nano-cap players based in Canada. Last month, it also completed a deal to buy Lithium Royalty (TSX: LIRC).

On its latest investment, Altius said the transaction is “consistent with our well-established strategy of patiently acquiring minority equity positions in companies that hold royalties relating to high-potential mineral resource projects.”

As Altius noted, the TNR royalty portfolio includes exposure to major copper and lithium deposits in Argentina, namely a 0.4% NSR (net smelter return) royalty on McEwen’s (TSX: MUX) Los Azules project, a 7% NPR (net profit interest) on the Batidero I and II properties of the Josemaria project that is being developed by the Lundin-BHP joint venture, and a 1.5% NSR on the Mariana lithium project by Ganfeng.

In addition to these royalty interests, TNR also provides exposure to gold through its 90% holding in the Shotgun project in Alaska, which has an estimated inferred resource of 705,960 oz.

“This investment enables TNR Gold to advance the execution of its strategic plan and reflects strong market recognition of the quality of our assets and their potential,” commented Kirill Klip, executive chairman of TNR Gold, in the press release.