An impending discount to liquid NAV + big upside potential

ValueX June 21, 2013 Vail, Colorado

Altius Minerals
Pay <$1 for $1 liquid NAV
No credit for two developing royalties

Pay nothing for massive upside potential $2.5 mm in after tax royalty payments in 2013
$2.5mm - $3 mm/year at current prices G&A $2mm-$3mm/year

Stable share count, no debt

Two complimentary businesses

Mineral exploration project generation & royalty creation
Eastern Canada, Chile

Royalty acquisition & investment The best business is a royalty on the growth of others requiring little capital itself.
~Warren Buffett, 1978 Berkshire annual report

Capex lite business model

56 partner funded projects since inception Partner exploration funding $150 million vs. $15 million from ALS Current NAV = $255mm I never want to be in the mining business.
~Brian Dalton, founder/CEO Altius Minerals

When it works
Mineral & project location
Uranium - Central Labrador Copper/gold - central Newfoundland (Ming Mine)

Partner
Aurora Energy Rambler Metals

ALS cost
$650,000 $600,000 $2 million

proceeds to ALS Royalty

$210 million 2% GSR $6 million n/a

Iron ore in western Labrador (Kami project) Alderon Iron Ore

$31 million 3% GSR

Downside protection
$150 mm cash/treasurys ($5.33/share) $110 mm securities ($3.90) $8.4 mm Voiseys Bay Royalty ($0.30)
$2-3mm/year royalties at $6 lb. nickel

$12.9 mm total liabilities ($0.45) $9/share of decent NAV

Voiseys Bay Royalty

Altius owns an effective 0.3% NSR on Voiseys Bay nickel Paid $13.6 million in 2003
Assumed $3.25/lb. nickel ($4 in 2009, $6+ now)

Cumulative revenues ~$25 mm Est. mine life ~2036 Royalty covers all future expansion/development at zero extra cost Cash flow covers Altius G&A

Capital structure
28,854,364 fully diluted shares
NCIB 1,406,207
Started 4/2/2013 Expires 4/1/2014

Automatic share repurchase plan

7,036 shares/day (NCIB 200 days)

Zero debt Not your average geologist paycheck scheme

Upside potential: Kami project

Altius discovered a 1 billion tonne resource in western Labrador
Four producing mines, skilled labor, mining friendly jurisdiction, rail, deep sea ports, roads

Created Alderon Iron Ore (ADV.TO)

Altius owns 32.9 mm shares of ADV Alderon owns 75% of Kami LP Hebei Iron & Steel Group owns 20% of ADV.TO; 25% of Kami LP Hebei will offtake 60% of first 8 million tonnes

Hebei paid $182 mm of $400mm committments

Upside potential: Kami Project

Dec. 2012 feasibility study $1.3B capital cost to build the mine Kami mine = $2.46B NPV10
Altius owns 25% of 75% of that ~$461mm, or $16 Altius share, or 160% upside

Higher pricesbut no shortage

Bloomberg News, June 20

Hebei Says Iron Ore to Recover to $140 on Higher Chinese Output We can see there will be no shortages Ironore prices are not going to go crazy high.
~Tian Zejun, president of Hebeis international trading unit

Kami royalty income projection

Kami royalty
Production commences Q4 2015 $27mm/year @ 8mmtpa FE 62% $54mm/year @ 16mmtpa FE 62%

Mgmt stated intention is to dividend royalty income from Kami

After royalty tax, maybe $0.76 - $1.52/share
But, if I know Brian Dalton

Kami is farthest along

20 total projects right now 10 w/partners
Project Kami Western Labrador Labrador West iron ore Revelation Alaska Cristo Cu/Au Alaska Topsails Cu/Moly central NL Viking gold west NL CMB uranium central Labrador Humble Cu/Au Central Labrador Saglek - iron ore North Labrador Partner Alderon Iron Ore Rio Tinto Millrock Millrock/Brixton JNR Resources Northern Abitibi Paladin Energy Millrock/Kinross Cliffs Natural Resources Royalty 3% GSR 3% GSR 2% NSR gold; 1% NSR base metals 2% NSR gold; 1% NSR base metals 2% GSR uranium/ 2% NSR other 2-4% sliding scale NSR 3% GSR 2% NSR gold; 1% NSR base metals 1% NSR

Wait til it trades below NAV, then buy it then wait some more. Thank you. dferris@stansberryresearch.com