Altius Minerals Corporation (ALS) Earnings Call Transcript & Summary

Good morning, and welcome to the Altius Minerals AGM. The AGM is being held live in Newfoundland and the purpose of this webcast and conference call is to allow remote participation for attendees, including Q&A. All voting is done in advance as explained in the circular. I will now turn the call over to Ms. Flora Wood. Thank you. Please go ahead.

Thank you, Lina, and thank you to everyone who's joined us on the conference call. You can download the slide presentation from the website on the AGM page and the Investors page. Our order today will start with our Chairman, John Baker, who will go through the formal part of the AGM. And following the conclusion of the meeting, we'll then turn to the webcast and that's when you'll see the slides advance. John, I'll turn it over to you.

Is the camera coming on automatically?

Yes. Yes, it's on.

Oh, is on. Good day, everybody. I'd like to call the meeting to order, and welcome, everyone, to our -- this is hard to believe, 28th Annual Meeting of Shareholders. We've seen a lot of changes in this company from the small company that started 28 years ago and growth in this company. Brian will touch on some of that in his presentation. I guess the one thing that hasn't changed much is the script that I'm about to read, which I've done for now 28 years. So bear with me while I take you through this. It's not nearly exciting as the other part of the meeting. So as it was mentioned, this is being broadcast as well, webcast. And I think everyone in the room knows, but perhaps not everyone on the webcast that I'm John Baker, Executive Chairman of the corporation. And in accordance with the bylaws, I will act as Chairman of the meeting. Shareholders were given the option to attend this meeting either in person or by conference call or by webcast. And let me first address those persons not here in person, but joining us by webcast or conference call. The webcast allows participants to hear the meeting, but it is listen-only. So if anyone viewing the webcast would like to ask questions either during the formal part of the meeting or after Brian's presentation, they will need to dial into the conference call as all questions are received there. And the phone number for that dial-in is shown on our website. For those on the webcast or that have dialed in and would like to view the presentation that Brian is going to present later, they will find that on the website if they go to the website and go to investor information at the top and click on AGM in the drop-down, you'll see the information circular documents and the link to the webcast. Now before we begin, I'd like to introduce Altius' senior management team in attendance today and I would ask that they stand as their name is mentioned and be recognized. Firstly, Brian Dalton, President, CEO and Director; Ben Lewis, Senior Vice President and Chief Financial Officer; Chad Wells, standing already over this way, Vice President, Corporate Development, Project Generation; Lawrence Winter, Vice President, Generative and Technical; Flora Wood. There's Flora, Vice President, Sustainability and Investor Relations; Stephanie Hussey, Vice President, Finance; and Mark Raguz, Vice President, Corporate Development. We also have in attendance today members of our Board of Directors because we had an in-person Board of Directors meeting yesterday, our quarterly meeting. And I would like to ask that -- I would ask that they stand and be recognized as well. Nicole Adshead-Bell, Teresa Conway, Anna El-Eiran, Fred Mifflin and Jamie Strauss. And the 2 remaining directors, Roger Lace and Andre Gaumond, unfortunately, had to return -- they were at the Board meeting yesterday, but had to return to the mainland yesterday due to other commitments. Now I appoint Flora Wood to act as scrutineer for the meeting and Chad Wells, our Corporate Secretary, appointed as Secretary of the meeting. The notice calling this meeting and all proxy-related materials were mailed to the shareholders on April 11, 2025. I have the scrutineers' report. A quorum for any meeting of shareholders under our bylaws is 2 persons present representing at least 25% of the shares entitled to vote at the meeting. And the written report I have from the scrutineer shows that 34,206,734 shares are represented at this meeting, either by persons present or represented by proxy and that represents 73.9% of all outstanding shares. This meets the quorum requirements for the meeting, I would say, by a long shot because we think this is probably a record attendance for our AGMs to have nearly 74% of our shareholders represented at the meeting. So notice of the meeting having been given and a quorum being present, I declare the meeting to be properly called and constituted for the transaction of business. Our bylaws permit a shareholder to participate in a meeting by means of telephone or other communication, but do not permit voting to take place other than in person or by proxy. Any registered shareholder or proxy holder present in person or by telephone may demand that a ballot be conducted on any motion put before the meeting, but unless a ballot is demanded on any motion, for expediency, I will conduct all votes by simply a show of hands of those persons present. In order for the meeting to flow efficiently, I've also asked Altius officers to move and second all resolutions. Firstly, financial statements. I submit and formally receive the corporation's financial statements for the year-ended December 31, 2024, and the auditor's report on those statements as mailed to shareholders requesting same on April 11 of this year. The first item of business is the appointment of an auditor for the coming year. As you will see from the information circular, management is nominating the firm of Deloitte LLP as auditors to hold office until the next annual meeting or until their successor is appointed and to authorize the directors to fix their remuneration. Deloitte has been the corporation's auditor since 2006 and are represented by the folks here at our meeting today, Tim and Jacquelyn. Do I have a motion for this item of business?

Mr. Chairman, I move that Deloitte LLP be appointed the corporation's auditor to hold office until the next Annual General Meeting and that the corporation's directors be authorized to fix the remuneration to be paid to the auditor.

Mr. Chairman, I second the motion.

Thank you. Is there any discussion? If not, I'll ask for a vote on the motion by a show of hands and I will remind you that you cannot vote against this motion. Your choice is to vote in favor or to withhold your vote. All those in favor, please raise their hands. Thank you. I declare the motion carried. The next item of business is the election of directors for the coming year. The Board has fixed the number of directors to be elected at this meeting at 9. May I have nominations for directors?

Mr. Chairman, I'm pleased to nominate for election as directors for the next year: John Baker, Nicole Adshead-Bell, Teresa Conway, Brian Dalton, Anna El-Eiran, Andre Gaumond, Roger Lace, Frederick Mifflin and Jamie Strauss.

Mr. Chairman, I second the nomination.

Thank you. As was stated in the information circular, these 9 persons are management's nominees for election to the Board. We have an advanced notice bylaw that requires that any person proposing to nominate a director for election must provide the company with advanced notice and prescribe details concerning any proposed nominee. No advance notice has been received in accordance with this bylaw, so we may now proceed directly to the election of directors. The Board also has a policy that any nominee proposed for election as a director who receives a greater number of shares withheld than shares voted in favor must tender his or her resignation to the Chairman of the Board to take effect on acceptance by the Board. 9 persons have been nominated to fill the 9 directors' positions. Do I have a motion for this item of business?

Mr. Chairman, I move that the 9 persons who are nominated for election as directors be elected the corporation's directors for the next year to hold office until the next Annual General Meeting and that the shareholders authorize the election of the 9 nominees by a single resolution.

Mr. Chairman, I second the motion.

Thank you. Any discussion? All those in favor, please raise their hands. Thank you. Anyone opposed? I declare the motion carried. The third item of business is to consider and if acceptable pass an advisory resolution on the corporation's approach to executive compensation, known commonly as a say-on-pay resolution, the details of which are set forth in the management information circular. As noted in the circular, the corporation believes that its compensation objectives and approach to executive compensation appropriately align the interest of management with the long-term interest of shareholders. Under this policy, we provide shareholders the opportunity to cast an advisory vote on our approach to executive compensation at each AGM. This policy reflects our ongoing efforts to meet the highest governance standards and to ensure a high level of shareholder engagement. The Board, with myself and Mr. Dalton abstaining, unanimously recommends that shareholders vote in favor of the advisory resolution as set forth in the management information circular. Do I have a motion to this effect?

Mr. Chairman, I move on an advisory basis and not to diminish the role of responsibilities of the Board that the shareholders accept the approach to executive compensation [indiscernible].

Mr. Chairman, I second the motion.

Thank you. Is there any discussion? All those in favor, please raise your hands. Thank you. Anyone opposed? I declare the motion carried. And I have to say that in the proxies received too, the support for this motion was 99.198%. So I think shareholders are content that we're appropriately handling executive compensation. Thank you very much for that. So next, this concludes the formal business of the meeting. Is there any other matter a shareholder wishes to raise? For these purposes, I'd ask the conference operator to open the phone lines for a moment to see if there's any questions from persons on the conference call.

[Operator Instructions] No question at this time. Please proceed.

Thank you. So no questions from the conference call. So if not, I'll entertain a motion that the meeting be terminated.

Mr. Chairman, I move that the meeting terminate.

Mr. Chairman, I second the motion.

All those in favor? Those opposed? I declare the motion carried and the formal part of the meeting terminated. Thank you for enduring this. I will now pass the floor over to Brian for his annual presentation. And of course, a question period will follow that both from persons present here and from persons on the conference call, as noted at the beginning of the meeting. And Brian's presentation, as I said at the beginning, is on the website if anyone would like to access it while he's going through it. Brian?

Thank you, Mr. Chairman. Thank you, everybody, for joining us today virtually and in person. Okay. Let me tell you about Altius. I really like the position the business is in today. I think it's the overall portfolio mix that has been assembled and that's evolved really over time, brings a really nice balance across the areas that we're interested in. So you can see on this slide here on the left-hand side that there's a nice mix across the renewables base metals, iron ore and potash side. And probably the biggest difference on this chart year-over-year would certainly be that big wedge now represented by gold. And that is very much a function of a royalty that we hold on a new discovery in Nevada that is emerging as one of the -- probably one of the most important gold discoveries in the world. So again, I've joked about this in the past or hinted at it in the past that I thought it might happen, but this supposedly [indiscernible] non-precious metals royalty company now finds as the single biggest exposure across our platform, a gold royalty. I think another important point on this slide or a couple of more important points is that there's a nice balance in the pipeline right now. There's 10 mines and 13 renewable energy projects that are operating and cash flowing. But behind that, there's a nice -- there's a pipeline that's coming along with 3 mines currently being built, subject to royalty, 3 renewable projects, a whole host of projects at various stages of study, so preliminary to investment decision point, but coming along. And the other thing I'd point out here is the durations that we're highlighting. So we have an average remaining resource life of 35 years across the portfolio. So I would certainly say it's the most annuity-like portfolio you're going to find in the mining royalty world these days. Louder? Okay. I've got a cold, so this could be a bit of a challenge, let's see. I can hear myself fine. So I want to start today about with the project generation business. Often in our presentations in the last number of years, the project generation business is a couple of slides at the end and we always talk about how important it is and how it's been the driver of the business over the years. And so this year, I've really thought a lot more about this part of our business and there's been some really good reasons to think about this part of our business. And I wanted to bring it right upfront this year and highlight just how powerful this part of our business is and what a differentiator it represents for our shareholders amongst peer royalty companies. So what does it do? Essentially, what it does is it carries out mineral exploration. So that can come in the form of our own exploration where we select our own mineral projects and stake those lands. But it also could involve us looking through the portfolios of other companies and investing alongside of them or with them for opportunities that they've identified. And there's 2 real initial products that come from that work. So when we identify a project, an opportunity, an exploration opportunity, we would typically be looking to sell that project on relatively quickly to some other group that wants to carry out the more detailed exploration work and that allows us to free ourselves up to go back and just generate it over and over again. So at that point when we sell the project on, we would normally retain equities in the company that we're selling the project to, but always a royalty as well. So that's what covers us for the long-term opportunity and upside. And when I say long term, we are really talking long term. The average duration right now from the point that a mineral discovery is made before a mine is created is probably in the 25-year range. So this is long horizon type investing. But the results have been really something to be proud of. I'll leave it at that. So just looking at the equity side, the junior equity side of the business and this is a 10-year snapshot, we've invested around $125 million. But today, we've monetized or returned more than that and we still have total monetized and remaining equities, the value is about $225 million. So this -- just on that basis alone, this is a business that more than pays for itself while creating all of these royalties and optionality. And certainly, in the past year, that's been -- that side of the business has really shown. And I would highlight and we'll talk about this in later slides, but incredible successes in daylighting the value that has happened through the Silicon Gold discovery that I just talked about. And I would also highlight here the Kami project in Labrador, which is really starting to move forward now. And then beyond that, there's more than 50 additional earlier-stage royalties that are all kind of like lottery tickets, but they didn't cost anything. In fact, we made money while we were accumulating. That's, I think, what's important here. And what this part of the business really has the potential to do for our shareholders, we believe, is when you go and buy a royalty, an existing royalty in the market to acquire its cash flow, it's a competitive process. We hope things go better than you underwrite. And -- but typically, you're looking at a really good investment is going to be something that gives you high single digit, low double digit kind of returns. But when we add these types of royalties into our mix, Silicon spent $300,000, it's worth $500 million. And you blend that all together, what it does is it makes Altius, by far and away, the highest returning royalty company in the marketplace. And I would much rather be the highest returning than the largest any day of the week. So this is -- maybe gives you a little bit of a help in terms of understanding what we're managing for on our shareholders' behalf. I'll quickly go through an outline of what's happened at Silicon in the past year. First and foremost, it's been confirmed really as one of the most important gold discoveries in really probably in decades in the world. And on this slide, you can see red areas that will be the Silicon and Merlin deposit. And that's the component of those deposits that we believe AngloGold, the operator, has published about a combined 16 million ounce resource from. But the orange area on this slide would be areas that they've also drilled and are showing continuation of mineralization, but haven't yet reached the point of confidence or drilling density that resources have been published for. So we do see still quite a lot of room for growth from that already quite lofty number that they've published. There's quite a lot of room here. The only other thing I'd point out on this slide is that Anglo has so far talked about a production rate for this mine that could be in the sort of average of 1 million ounces a year, at least in the initial years. So this is from their very early stage study. So take it with a little bit of a grain of salt. But just for context, at current gold prices, that will generate about $65 million a year to Altius when this mine is built, which is actually not far off where our total revenue was last year, just to put this in context, not bad for $300,000. This is just for fun. So this will have more meaning for the people in the room here. But on this slide, you can see the geocenter on the sort of center right. So when you go out here now and you look straight up the harbor and then you look off to the west of the Confederation building. And basically, what you're looking at are the dimensions of the pit of the Merlin deposit. That's how big the mine will ultimately be. Its width will be the full length of St. John's Harbor and then its length, the long axis will go from the harbor right to Confederation. This is a very big gold deposit. And for anyone who's not in the room, I encourage you to come to Newfoundland and come to the geocenter and do that. So keeping with Project Generation, just as an analysis, if you will, or a case study here. So with that investment to 2 components, the equity component and the royalty part, we've been able to look at them separately. So we held an investment in a company called Orogen. We hold an investment in a company called Orogen. And that's the successor company to a merger between 2 companies called Evrim and Renaissance. So Renaissance is the group that originated the Silicon project and that's where the 1.5% royalty that we hold comes from. Renaissance option the property then to AngloGold and they retained a separate 1% royalty. But as part of that and through different investments over the years, we found ourselves as about a 20% shareholder in Orogen. So Orogen owns 1% NSR. We own a direct 1.5% NSR. And just a couple of weeks ago, there was an announcement in the market by a company called Triple Flag Precious Metals, well-known precious metals royalty company and they've made an offer to acquire Orogen. And there's a few pretty significant implications for us. So our investment in Orogen originally would have been for about $14 million, if you total up all the different purchases over time. And the value of that shareholding based on that proposed purchase price is closer to $80 million, I think around $79 million. So obviously, that part has worked out extremely well for us. But there's also a direct look through in that acquisition as to what the value of their 1% royalty is and if you then just take that and multiply it by 1.5x, what that transaction would suggest is that our royalty interest in the Silicon deposit is worth somewhere north of CAD 500 million against, I really like saying this, our original purchase price of $300,000. So obviously, an extreme version case study, but not the only one in our history like this. This is not a one-off. We've done this and we will continue to do this in the future. Second example, I won't run through all the details, would be the Kami project. There, we spent about $2 million. We found the deposit way back when it's gone through a number of different iterations and hands over time, but it finds itself today in extremely strong hands and that's being advanced by Champion Iron Ore, which is without question, I think, the best builder and operator probably not only in iron ore in Labrador, but one of the best builders and operators of any mine type in Canada. And they've just partnered with Nippon Steel, fourth largest steel company in the world. So together, they're advancing the Kami project and they're spending lots of money and doing lots of work. So it really feels like there's a lot of traction and this is an asset that's going to turn into a cash flowing royalty for us. But that $2 million investment compared now because all this activity is happening, the analysts have had to take notice and make an assessment of what that royalty might be worth. And so right now the average of those estimates and those analysts would say that, that royalty has become worth $154 million. That said, I wouldn't dream of selling it for that. And we'll go through this entire list now every single line on the [indiscernible]. But this is more lottery tickets. There's 50 more projects that are built in this business. I can't tell you which one is going to be the next Kami or the next Silicon, but it's probably there. And if not, we'll put it there. That's -- again, I can't stress enough how important this part of our business is and what a differentiator it is. It has been from the very beginning, the actual engine of the business. And even the royalties that we've acquired, so things we bought out of the market and spent lots of money acquiring and getting cash flows from, for the most part, they were all acquired with excess profits that were generated in the exploration. Tip my hat to the PG team. They don't get enough credit in the business. Things get lost behind the big potash cash flows and all that sort of stuff. But as a shareholder, I think it's really important to know where all the magic really happens in this business and why we're different and I think it's really special. So potash, I'll go quickly now and get through the 4 other key areas I wanted to touch on. So we own royalties on all the big potash mines in Saskatchewan. These are pretty important. If these mines weren't operating right now, roughly 1/4 of the world's population would be starving. That's how important they are. They provide about 25% of the fertilizer, potash fertilizer that the world requires. They're amongst the lowest cost, most stable and secure. They are absolutely essential to global food security right now. They're also pretty neat in the sense that they're not all that economically sensitive. So everyone is all [indiscernible] about markets or the economy or whatever. In the end, we've all got to eat. And basically, the demand growth in this sector is a function of that, of the number of mouths on earth that need to be fed. It's compounded by the fact that there's a shrinking land or land -- agricultural land isn't increasing at the same pace that food production is. So it just means you need to be more intensive with fertilizer application on the same area of land. So there's a wonderful long-term demand dynamic here that these -- the demand for potash globally grows at about 2.5% a year. That doesn't sound like all that much, but 2.5% a year, when you compound that basically in perpetuity, it makes things pretty magic. And just to give you a sense, we've owned these royalties now for -- this is our 11th year and in that time frame, the world's demand for potash has increased by about 1/3. So that's the power of compounding. Any of the investment advisers in the room will have pitched that a long way. So extremely long-life. These things have resources that can run for hundreds, in some cases, thousands of years. So have some fun someday to compound 2.5% for 500 years to see where you get to. These are really special. The other thing about these mines is that the operators that run them haven't just been able to grow their businesses in line with that overall market demand growth. So that 1/3 -- 1/3 growth in the market, they've done better than that. So these operators having actually increased their market share from 18% to 23% over that time frame. So basically, the term we'd use internally would be it's growth within growth and it's extremely, extremely powerful. On their face, these seem like really boring things, really boring assets. They're just not exciting in many ways, but they are truly wonderful, this steady compounding market share growth. As the world needs more, we have full confidence that these mines are going to be able to continue to expand to meet that opportunity and possibly to continue to do what they've been doing and that's to exploit their various advantages and to continue to earn global market share. And potash, this is a price chart. And really all I wanted to point out here is that current prices are okay and the mines are making a decent margin, right? There's their cost to produce potash versus what they sell it for, it's okay. But they're not making enough that as the world needs them to expand their production that they're not making enough to make big investments in growing out that production. And that can be normal and can persist for quite some time. But in the long run, our full belief is that the long-run price of any of these mine commodities is -- at the end, it's the average or it's a function of what that cost is to replace and to grow new production. So it can go below that for periods of time, but that ultimately leads to -- that lack of investment ultimately leads to shortages, which cause big price spikes. And that's the kind of thing we've seen in the past. So right now we -- our position is that the current potash price is below what's required to incentivize new production. And the longer that goes on, the more likely it is that we end up with the next big price spike. Base metals. So this is a chart I really like. It shows global demand for copper since the beginning of the last century. Now think about that time frame and all the things that have happened in the past 125 years, right? There's been depressions and wars and urbanization of China, now the rise of India, electric vehicles. There's been a lot of noise out there that's really relevant to the copper market. And right now there's all this concern about recessions and oh, well, people are pretty gloomy on copper because there's economic uncertainty out there and that's going to really depress demand for copper. Can you see any of those events on this chart? That's what I really find most interesting about this. People get so bent out of shape about these short-term demand stories and they don't matter. In the end, the demand for copper has grown. Just in the past 20 years, it's grown by 2/3. But over that whole history, essentially what it's done is it mirrored humanity's use of electricity. That's what copper does. It enables electricity. So despite all that noise, it's important to not get too fussed about it. And when people think it's -- the sky is falling and demand is going to fall off a cliff, it's usually a time when we get more bullish. And inversely, when there's outlandish claims of crazy new demand, we'd probably be a little bit more cautious. What matters here is that despite that relative stability, this compounding at 2.5% a year, very similar to potash in demand, there's still wild price cycles. In our time, we've seen copper go from $0.60 to $4 back to $1.60, up to $5 back to $3.5, $4-ish kind of range. So pretty wild cyclicity despite something that's apparently so stable. And all that really reflects though is, in some cases, sentiment. But to really understand those price cycles, you got to look more at supply, not at demand. So there's periods of time when the price is high and lots of investment happens and lots of copper production is brought on stream and usually too much. So there's a surplus and the price crashes. But then there's periods when prices don't support the operators of mines are not making enough money to be investing in new production. And what eventually happens is some of those mines deplete, demand continues to grow and you get a shortage and then you get the big price spike. What's really interesting about right now and this is the chart on the right-hand side is that we're now 11 years into a part of the cycle where there has been extreme underinvestment in the growing of new copper supply. So typically, that would argue that we're -- there has to be a price cycle coming to incentivize new production because we're on the verge of shortages. So that's -- we've been saying that for a while. You've heard us say it here, but the truth is, I think Niki put it best yesterday, the longer we keep saying it, the more true it becomes that this is looming. Anyway, the message here is that we do see that ahead of us still. We're extremely bullish about this part of our business and we think we're really well positioned to benefit from those increasing price cycles. So when those higher prices come, not only will we collect higher revenues because the product is being sold for higher prices, but that is the time when these mining companies will choose to make investments in the mines to grow out their production. So we'll benefit from higher prices and it will also cause higher production volumes to come from either existing royalties or new mines that are going to get built. So that's what we've been working hard for a number of years, positioning ourselves for to be in that spot where we benefit from that. Just some quick highlights from the year in the base metal side. So there's a new discovery. We would have talked about this previously here, called Sauva at our Chapada project. The operator Lundin Mining is busy drilling that resource off and has begun to do studies now about trying to figure out the optimal production rate. So they're doing the work that goes into designing a new mine at that discovery. So that's something that we believe is on the come in our business. This is an additional deposit outside of the main Chapada deposits that are already currently being mined. The Curipampa project, which is a polymetallic copper and gold mine or a deposit in Ecuador. That was acquired by a company called Silvercorp this past year. They've now started construction. So there's money going to ground and we'd expect first royalties in that next year. At Voisey's Bay, both of the underground mines have now been built and are starting to ramp up. There's quite a significant increase in production expected there over the next 12 to 18 months as those mines are fully commissioned, but they're both built now and operating. Grota do Cirillo is a lithium mine in Brazil. First phase is up and running. They're producing, it's paying royalties and there's a significant second phase expansion that has just been announced and is underway. Mariana and Tres Quebradas projects, these are lithium projects in Argentina. Mariana has just opened up. We'd expect first royalties later this year. And Tres Quebradas is expected to open up in the third quarter of this year. And I put this on the slide and it kind of goes to what we're talking about earlier, lottery tickets and whatnot, but we're watching closely is how I would describe it, an announcement or a project that [ Teck ] is involved with a company called Abra. We hold a royalty on the project, but they announced a drill hole just a couple of weeks ago. A little early to say, but the initial results from that first hole make it -- it certainly got our attention. It looks like it may be a brand new porphyry copper discovery with a fantastic address right in the main belt that most of the world's big copper porphyry mines are located in. So I said earlier, I don't know on that slide where the next Silicones and Kamis are, but here I've gone and said I think I do. So we'll see. Iron ore, similar story really in some ways to what I mentioned in potash, growth within growth. Again, read the headlines every day and it's where the world is falling, we're never going to use a piece of steel again. But yet for the last 25 years, steel use, iron ore use, it's grown at 3.5% a year. There's that growth dynamic. But what's really important, particularly for our exposures, is there are changes underway. So the amount of steel the world needs is just steadily increasing. But what's really happening is that how it's being made is changing. So most of the world's steel would have come from what are known as blast furnaces previously and that is a plant that you put iron ore and coal into and out comes steel. There's a technology called the electric arc furnace, which doesn't require any coal. But what it does require is a particular type of iron ore. It has to be very high purity. So what's happening right now is a lot of the world's big steel companies are in the process of converting their historical blast furnace fleets to electric arc furnaces. So really, as they -- as the blast furnaces run up against their maintenance lives, they're not being reinvested in. Instead, they're being replaced with electric arc furnaces. And so on the right chart, you can see there's been really outsized demand growth for the high purity end of iron ore relative to that, which goes into blast furnaces. And that's purely a function of the fact that things we would have talked about a couple of years ago that it was coming that a lot of people were going to invest and build electric arc furnaces. Now you can see that it's actually starting to happen and showing up with a higher growth rate in demand for the -- for that particular type of iron ore. You'll see we weren't bullshitting. It's really happening. Growth within growth again because we -- all of our exposures in iron ore are focused on that future, on providing iron ore on projects that will provide iron ore to these transition steel plants, which will be a lot more electric arc-based than blast furnaces in the future. We have a number of different exposures. We obviously have our royalty or our share of the royalty at IOC that we hold through LIF. Kami, we touched on a little bit, but I'll say a few more words on now. We think this has the potential -- similar potential as we see from the Silicon royalty in terms of what it can do and generate for our business. We believe that the partners that are advancing it are extremely committed to making it happen. I'll touch on that in a second. But before I leave here, I'd also point out that we have other earlier stage projects in our pipeline. Some of these have been around for a while, but that are advancing now because we're all seeing more interest. There are more mining companies that have not been traditional players in Labrador are suddenly showing up to come in and hopefully get access to some of this high-grade iron ore. There are very few places in the world that quality of iron ore can be mined, processed and brought to market. And there are far fewer than that, that are -- have any kinds of -- that can be brought to market from a logistics point of view. So Labrador is quite unique in terms of resource endowment of the particular type that it is as well as having existing and excess rail and port capacity. There's really nothing like that in the world right now. So people are coming, but we were there first. So again, the Kami project, a big -- I think it was a big event this year, really felt important when I saw it happen when Champion announced that Nippon Steel was coming in to partner on the Kami project. Nippon have been pretty vocal in the market. They're one of the leaders in terms of groups that are building these electric arc furnaces. And they were pretty vocal in the market because their own investors and shareholders identified as a key risk to their business. They're building all these electric arc furnaces, well, where are you going to get all the high-purity iron ore that you need to supply those plants on any kind of a long-term basis? So they basically, for a couple of years, have been scouring the globe and looking at all the available opportunities that they might invest in to try to secure long-term supplies. And from that, the choice they made was to invest in the Kami project alongside of Champion. And you can see on the bottom little graphic there how Nippon has been basically transitioning its fleet. And why this isn't an investment by saying an investor who thinks the price of iron ore is going up or something. It's nothing like that. This isn't about going into the stock market and the brokers and saying, let's build this mine and we'll make a bunch of money. This is about a group that makes steel, has been making it for probably over 100 years. It's the fourth biggest in the world. This is about getting access to that iron ore. And Champion, I would argue is, as I said, is it could not be in the hands of a better operator, builder and now committed partner. So again, we're pretty bullish that our Kami royalty is going to be a very important part of our business in the not too distant future. When I say not too distant, be careful because we tend to look in long horizons, but basically a blink of an eye in our world. Lastly, on renewables. Obviously, this year there was one big event when Altius Renewable Royalties, which we had taken public in 2001 was basically delisted or brought off the market. And what we did there was bringing on a Dutch pension fund through a group called Northampton Capital. So they partnered up essentially and came in and bought out all of the minority shareholders, the public shareholders of this business. And what that has done is that they bring access to a lot of capital that we can deploy in this business, which essentially Altius Renewable Royalties, mainly what it does is it provides financial backing in exchange for royalties for wind and solar projects in the U.S. for anyone who isn't familiar with it. So just to back -- give sort of a backdrop of what's happening in the renewable space and with this business right now. The first thing I'll say is that like the market sentiment towards the renewable industry right now is downright terrible. Most of the public equities, renewables businesses have been underperforming. It's very difficult. There's not much access to capital. I mean all of that speaks to really why Altius Renewables was -- had to be taken from the market. So there's just some real challenges. And it's in pretty wide contrast to the period when we took the company public when the renewable sector was sort of the darling of the market. And I guess all that's a little bit normal. There's just pendulums that swing in the markets like everywhere else. But the key here is that, that sentiment is not matched at all by what's happening in the sector fundamentally and on the ground. So in the past 25 years, electricity demand in the U.S. grew by, what is the number 5% -- 10%. In the next 5 years, it's going to grow by 15%. There's an absolute explosion in demand for electricity in that market right now. And it's broadly based. I mean, AI gets the headlines, but this is manufacturing plants, you name it. The system operators are being overwhelmed by customers asking to get allocations of power so they can build whatever industrial facilities they want to. And in a lot of cases, they're just being told, no, we don't have the power. So that's on one side of the equation. And then on the price side, for years, renewables would have had a bit of a knock against them because they were seen as being really the only work with subsidies. So it's government monies coming in that have to -- otherwise, these are not economic and they -- so that's always been the knock in the naysayers. Well, all that's been under quite a bit of pressure recently under the new U.S. administration. But what's really neat and this to me is a signal of a certain maturation of the industry overall is that's not how these projects are making their money right now and it's not how they're getting financed. It's good old-fashioned capitalism at this point. It's the customer working with the operator. They're negotiating a price for the power that gets produced. And on the basis of that contract, these projects are getting financed. So independent of subsidies or anything else. And that price that's required to make those projects happen because those projects need to happen because these customers need the power, have been doing really well. It's up 50% in the past 2 years is the price of contracted electricity. So if you want to build a power plant, you can go to any customer and say, if you'll sign a contract for 10 or 15 years to buy this power at this price, we've got an economic project and we'll go ahead and build that project. You'll get what you want, we'll get what we want. And that is the deal that's happening right now. So it's pretty neat. And it's -- so you've got huge demand for power. You've got rapidly increasing prices and yet sentiment is absolutely ugly. And I'm not whining about that. I think that's awesome because all -- within that sentiment backdrop, all the other forms of capital that we would normally compete with have really pulled back and withdrawn. So we're seeing really good opportunities on the ground right now to make investments in not -- it should be so much more competitive based on the fundamentals right now, but it's not. So I think over the next few quarters, you'll see a lot of activity within this business in terms of its growth potential. It's a pretty cool business. Based on the investments that this business has made to date, it's a little over USD 500 million at the sort of joint venture level. We're part of that joint venture with Apollo. We expect royalty revenues of around $65 million to $70 million once all of those investments fully mature and the projects that we would have backed earlier on get to the point that they've reached production. So that's sort of the embedded growth profile that's in the business right now. And it's not really based upon new investments that we might make that I've just outlined a pretty bullish case that I think we will be able to continue to deploy lots of capital in this business. There's over 8 gigawatts of royalties under royalty in this company right now. I mean, to put that in context, it's many multiples of the amount of power that's produced right now in Labrador. Okay. I'm getting to the end here. This is getting more monotonous than your script, John. I picked this up a little bit here. So just to highlight some of the features of the past year as far as our capital structure and how we allocated capital to manage the balance sheet. It was a big year last year for us on the share buyback. We felt at various times that the best investment we could see in the market was to acquire our own shares. And by doing so what we're doing is acquiring a higher percentage interest on a per share basis in all of the assets that we own. So in other words, we felt that, that was better than anything we saw external. So increasing every share's percentage ownership of the existing portfolio assets represented the best use of capital. So we acquired -- we invested about $16 million of our free cash flow last year. Our average price for purchases was around $21.27 a share. We did increase the dividend last year to $0.36 a share. I think we're year 4, 5 now as part of the Canadian Dividends Aristocrats Index, which still sounds really funny when I hear it, but here we are. You told me that when we started our little exploration company that would be in the Dividend Aristocrats Index, I wouldn't have probably believed you. But anyway, those 2 things combined in last year was a record year in terms of the amount of capital that we were able to give back to shareholders either through the buyback or dividends. And certainly, it was a good year as far as overall balance sheet net debt, so debt relative to cash and equity positions continue to strengthen right through the year. And that will -- that's continued even further now, particularly once that Triple Flag-Orogen transaction closes. So this is the last slide for me. I usually put this one up there. In some ways, it feels a bit immodest, but it's a tracker. It tells you that we're competitive. We're still full of energy here and this is something that we've got every plan to keep going. And more importantly, we believe that the assets that we hold today have the ability and the power to keep this trend going. But we're now running on 28 years with the business having compounded at over 20% a year. So something that we're extremely proud of. It's a very rare record in markets anywhere in the world. But it also -- it's a high bar to hold every year. But anyway, we've done it for 28, let's keep it going. And what that's translated to is that early exploration company that started a bit less than $1 million market cap is today about a $1.2 billion capitalized company. And with that, I'll take any questions and probably people will notice, I deliberately didn't get into pre-answering any questions about what we're going to do with our Silicon royalty. We'll see if -- Henry, maybe you want to ask us that one, do you? Anyway, thank you very much.

I'll ask the operator as well to open the lines for any questions from those on the call.

[Operator Instructions]

Well, I'll have to answer my own question. We don't know yet what we're going to do with the Silicon. We have gone out for proposals in the market for -- just to test the waters to see what interest levels might be. We had a really, really good response to that. Most of the precious metals royalty companies have put their hands up saying that they would love to own the Silicon royalty. And it's our job now to compare what those proposals look like. There's a variety of structures and things that have been proposed to us. We have to assess that and compare really against what our own views of the long-term value are and what is just the best move for our shareholders. Is it to sell or swap out the royalty for something that's more in our traditional lines of business? Or is it better to keep this as a core part of our portfolio going forward? And I would hope that at some point during this quarter, we'll make that determination and make our decision. But thanks for the question.

We have a question over the phone. We have Kelly [indiscernible].

Yes. I just want to say as a longtime Altius shareholder, thank you for all the work you're doing and the team is doing. I want to ask a question that came up in your guys' project generation news release. You're talking about new exploration alliances or new jurisdictions. So just kind of curious if you could expand on that a little bit?

So the question is around activity in the project generation business and what new areas we might be looking at and partnerships and alliance. So Chad Wells, would you like to come up and take that question for the group? The question was around what we've mentioned in our recent release on the project generation, what new areas we might be looking at, what kinds of structures and partnerships we're thinking about for building -- continuing to build the portfolio in project generation.

Well, I guess just a little bit of reflection. Back in 2012 to 2016, we did a lot of international-type project generation with different groups all over the planet. In recent times, we've been establishing, I guess, finding new groups in choice jurisdictions where we see the ability to find good rocks, if you will, but finding the right people that we can partner with to do the right arrangements. And yes, in recent times, we've identified 2 or 3 different groups where we're looking to do our typical MO deal where we sponsor these groups. We end up with equity in the junior company, but at the same time, create an option or a direct participation in a future royalty that might be created. And even though we've seen obviously dramatic performance in the precious metals space, we really haven't seen that capital flow down to the micro caps. So quite frankly, it's a big arena right now. It's wide open. There are a lot of groups that are doing excellent exploration in different jurisdictions that we like and we can enter there on favorable terms because of the lack of the capital for those groups. So we're very encouraged by our ability to go into some new jurisdictions and build up some new royalties like we've done in previous cycles. So yes, it's good going into right now.

You're going to name any places or you're going to keep that as state's secret?

Well, again, we've obviously -- we've done a lot of business in North America in the past. We've done some business in South America, in Chile and Argentina. We've looked into Europe, into Eastern Europe in places. And I won't be too specific today because, again, we're discussing, I'll call it, deals and arrangements, but good places. And I suspect this quarter, we'll consummate 2 to 3 of those arrangements and advise the public accordingly. But we're pretty excited about it.

I think the answer is he's still on planet Earth anyway. Can you show me how to see that? Oh, on the call. Go ahead, yes.

And we have another question over the phone from Brandon [indiscernible].

Interested in your thoughts on Altius exposure to copper and base metals. Is it -- is your exposure where you want it to be? Are you too -- if not, do you think you're too late in the cycle to acquire new copper royalties? And then any thoughts on the Gunnison project?

I'll start with the last piece. So on Gunnison, I guess, we remain eternal optimists, but certainly not in any of our near- to medium-term planning that we're expecting any revenues from that. But I guess, in the presentation, I was pretty clear, I believe that there is a bull market, a big bull market in copper and base metals generally ahead of us. And so in those environments, things -- that's when things can and normally do happen. As far as our overall exposure, like it's good, but it would be somewhere when I look at just the business overall. I mean, we've got good things happening there. Curipampa comes on next year. But we've still got appetite, I would say, in copper and in base metals for the right opportunity. I don't think it's too late at all. I mean their equity values are not reflecting what the price really has to be to make new supply happen in the market. So I still think we're definitely below mid-cycle. Our analysis of the incentive price for copper now has well north -- I believe it's crossed over $6 in our models. And the margins that operators are making today are really, really low and that's been a function of -- on a chart, it looks okay. It looks like copper prices have been moving up for a number of years. But the reality is that costs have gone up even faster. So it's a lower-margin business generally on average today than it has been for some time. So we're definitely open-minded in copper right now. And it certainly has been a focus area when we've asked groups to express interest in Silicon and if they had any assets that they might show us that we could include in a swap package, we definitely identified copper and base metals as an area we had lots of appetite for. Thank you for the question.

There are no further questions over the phone. Please proceed.

Okay. Thank you, operator. Thanks those in attendance here and on the phone. That concludes the meeting and we'll have a little social here. And anyone on the call who would like to join us next year, please do so in person. Thank you for attending the meeting today. That concludes the meeting, operator.

Thank you. And this concludes today's call. Thank you for participating. You may now disconnect.