While Altius Minerals (ALS) is known as a diversified royalty company today, its origins lie in Project Generation (PG), a business unit management refers to as its “golden goose”. It started out of necessity, with a need to spread the company’s 1997 IPO proceeds of $480K across multiple projects to reduce concentration risk and reliance on equity markets for financing. Directly or indirectly, Altius can tie its large and growing royalty portfolio back to its Project Generation roots.

In the nearly 30 years and 19,000% total return since going public, the PG operation has grown significantly but its core values haven’t changed. The three-person team led by veteran geoscientist Lawrence Winter remains focused on diversifying their bets and running a self-sufficient model, which together with the company’s royalty portfolio has put Altius on a perpetually funded flywheel.

The mechanics behind the Project Generation business are straightforward. The team is responsible for staking claims, vending projects out to high-quality partners, and managing the associated royalties/equity stakes in the context of the market and business needs.

Which stage of this process the team is focused on largely depends on market conditions, with Altius’ long-term counter-cyclical approach showing up as land accumulation in down markets, royalty creation and equity stakes during recoveries, and the monetization of those interests when conditions get frothy.

This was evident through the 2012-2016 commodity bear market, when Altius assembled two million hectares of land across nine jurisdictions. In subsequent years, the PG team took advantage of a market recovery by vending projects out to select partners, evidenced by declining expenses tied to mineral rights & leases and increased generative exploration activity.

Once a project changes hands the capital-intensive exploration work belongs to the partner, while PG helps advance it in other ways (network, sustainability best practices, capital markets access, etc.). Incentives are aligned, as Altius retains project upside through a royalty stake and minority equity position.

While low-or-no cost royalty creation is the primary objective, there’s strategic value to the equity position from a business development (influence, long-term relationships) and liquidity perspective. Opportunistically monetizing non-core equity stakes is how PG funds its own operations, with occasional home runs from the team funding Altius-level initiatives.

The most recent example of this is Orogen Royalties, which was acquired by Triple Flag in 2025 for its 1% royalty on the Arthur Gold project. Altius netted a gain of $64M on the equity while retaining a ~17% stake in the spun-off business.

Separately, Altius acquired a 1.5% royalty on the same Arthur Gold project through PG for US$300K. Shortly after the Orogen deal, Altius sold 1% of its royalty stake (retaining 0.5%) to Franco-Nevada for US$275M. $173M of the proceeds were subsequently redeployed into the company’s $520M acquisition of Lithium Royalty Corp.

The sale to Franco-Nevada also raises the question: why don’t the other royalty players imitate Altius’ PG business? We would expect the larger royalty peers to also have their own channels of sourcing they could leverage into a pipeline of investable projects. However, the economics of a win such as Arthur Gold can be meaningful for Altius, whereas the upside is immaterial for larger peers, yielding a payoff that wouldn’t justify the effort.

We also believe investor preference for pure-plays has played a role in discouraging peers from imitating the PG model. Because Altius is founder-led and started as a project generator (so it knows its true value), the team is able to avoid this outside pressure where others may not.

While still a ways out, the company’s 3% gross sales royalty on the Kami iron ore project looks like it could be PG’s next grand slam, with a projected $40M+ run-rate (the largest royalty in Altius’ portfolio) once online. On a $2M investment, our current NAV estimate of $324M represents a ~160x multiple, which should grow as the project gets closer to producing (early 2030s).

Between now and then, we expect PG will do what it does best: positioning for what’s next. In terms of royalty creation the team has been active through 2026, forming exploration alliances similar to Orogen, making third-party equity investments with royalty components, and conducting direct prospecting work on the East Coast.

This work keeps the exploration pipeline full, providing the means to generate future royalties as mines reach production or monetization events provide Altius with cash to deploy.

As equities reach “fuller” valuations, non-core equity monetization could be on the table and we expect the team’s approach to staking will be less aggressive, with market prices warranting a more selective approach to land assembly (old camps, private projects, etc.).

As for financial results we expect lumpiness by design, given the team’s patient approach to value creation is a necessary precursor to successful project generation.