Disclosure: Bullpen receives compensation from Altius Minerals for research coverage.
Altius Minerals (ALS) reported strong Q3 results, with attributable royalty revenue growing 56% Y/Y to a record $33M…
… despite some price pressure and near-term production challenges in the lithium segment, which should normalize and grow through 2027 as current projects ramp up and new projects start contributing.
The electricity segment was the largest contributor, with a fully consolidated ARR and strong demand for interconnection financing driving $13M in revenue…
… which looks set to continue in the coming quarters, with management highlighting significant queue congestion is driving demand. More importantly, the deposit financing business could translate to renewable royalty opportunities…
… over and above the existing pipeline, which provides plenty of runway for growth through the decade. With developers seeking tax equity alternatives and Altius having ~$500M of available liquidity…
… the capital deployment window is open and not just in renewables, with the company announcing a $122M acquisition of TNR Gold alongside results. New investments could bring upside to our ~20% royalty revenue per share CAGR through 2030…
… which should drop more dollars to Altius’ bottom line…
… and warrants a premium multiple in our view, as we outline in the full report below.
