Altius Renewable Royalties Corp. (ARR) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Special Meeting of Shareholders of Altius Renewable Royalties Corp. Please note that the meeting is being recorded. I would like to introduce Earl Ludlow, Chair of the Board of Directors of Altius Renewable Royalties Corp. Mr. Ludlow, please go ahead.

Thank you. Good afternoon, everyone. I'm Earl Ludlow, Chair of the Board of Directors of Altius Renewable Royalties Corp., which I will refer to today as the Company. Welcome to our special meeting, which is being conducted virtually and in person. On behalf of the Board, I want to thank those shareholders who have chosen to attend our meeting today as well as those who submitted their proxies in advance of today's meeting. I also want to take this opportunity to thank the directors and officers of the company for their efforts and work. With me today, either virtually or in person, are Flora Wood, our Corporate Secretary of the company; Brian Dalton, CEO of the company; Ben Lewis, CFO of the company; and we have Directors David Bronicheski, Chair of the Special Committee; Karen Clarke-Whistler, also a member of the Special Committee; and Anna El-Erian, a Director. Now I will address the formal items of the meeting, including the procedures we will be following. The meeting will now come to order. I've asked our Corporate Secretary, Flora Wood, to act as secretary of the meeting. I've also asked Christopher de Lima of TSX Trust Company, the company's registrar and transfer agent, to act as scrutineer of this meeting. Sole purpose of this meeting is to consider and, if deemed advisable, to pass a special resolution, which I will refer to as the Arrangement Resolution, approving the proposed plan of arrangement under Section 193 of the Business Corporations Act of Alberta, pursuant to which, Royal Aggregator LP will acquire all of the company's outstanding common shares, other than those common shares held by Altius Minerals Corporation. The full text of the Arrangement Resolution can be found in Appendix A of the management information circular dated October 18, 2024, which accompanied the notice of this meeting. In order to ensure that the business of the meeting is covered within a reasonable period of time, we have prearranged with the company's CEO, Brian Dalton, and Corporate Secretary, Flora Wood, both of whom are shareholders or duly appointed proxy holders of the company, to move and second certain resolutions. This procedure is not an attempt to discourage participation, but merely a way to expedite proceedings in a hybrid meeting environment. This meeting offers registered shareholders, as at the record date, and duly appointed proxy holders attending online the same opportunities to vote at the meeting as those attending in person. For purposes of today's meeting, all voting will be conducted by ballot. Every shareholder that had -- that was a shareholder as of the record date for the meeting, and their validly appointed proxy holders, is entitled to one vote in respect of each common share held by that shareholder or proxy holder. For those attending virtually, voting during today's meeting can only be done through our virtual voting platform. For those attending in person, voting will take place by completing a physical ballot. Registered shareholders and duly appointed proxy holders will have an opportunity to discuss the motion once the motion is tabled. As always, we will limit discussion to proper matters that relate directly to the resolution or motion being put forward for consideration at today's meeting. Each shareholder or duly appointed proxy holder is permitted to speak once on the motion. Following completion of the formal part of the meeting, there will be an opportunity for participants to ask questions. For those of you attending online, you will see an icon labeled Ask a Question. You can use that feature to submit questions, which will be read out and addressed when we open the meeting up for questions. Please identify if you are a registered shareholder or duly appointed proxy holder or guest. For those attending in person, if you have a question, please raise your hand at the appropriate time, wait to be recognized by me as Chair. And once recognized, state your name and indicate whether you are a registered shareholder or a proxy holder. And if a proxy holder, the shareholder for which you are acting as proxy, or guest, in which case, state your name. Please address your question to me as Chair. Questions that are similar in nature or repetitive may be grouped together and addressed in a single response at the appropriate time during the meeting. Questions or comments will be limited to 2 minutes per speaker in my discretion. In my reasonable discretion as Chair, we do not intend to entertain questions that are repetitive or relevant to the business of the meeting, in furtherance of personal interests, relate to personal grievances or derogatory or otherwise inappropriate. The meeting is also not intended to be used as a forum to present general economic, political or other views that are not directly or properly related to the business of today's meeting. Registered shareholders as at the record date and duly appointed proxy holders may vote on the Arrangement Resolution at today's meeting. For those attending in person, voting on this matter will proceed by ballot. On registering with the scrutineer before the start of the meeting, registered shareholders as of record date and duly appointed proxy holders present in person and eligible to vote at today's meeting should have received a ballot upon entry. Registered shareholders as of the record date and duly appointed proxy holders who already voted before today's meeting, who indicated to the scrutineer that they did not wish to change their vote today, do not need a ballot at this time. If any registered shareholder as of the record date or proxy holder who did not already vote or who already voted but would like to change their vote did not receive a ballot upon entry to the meeting, please raise your hand now and identify yourself, and the scrutineer will bring you a ballot. So once voting is announced, registered shareholders as of the record date and duly appointed proxy holders joining online will see an icon labeled Voting. Please select your voting direction from the options shown on the screen and click Submit. For those registered shareholders as of the record date and proxy holders attending in person who are voting at today's meeting and have not already submitted a ballot or proxy, once voting is announced, you will be given a moment to complete your ballot, and then the scrutineer will come around to collect all the ballots. We previously mailed the notice calling the special meeting of shareholders, along with the company's management information circular dated October 18, 2024, and the related meeting materials. We have received confirmation of that mailing from Broadridge Investor Communication Solutions and TSX Trust Company. I direct that a copy of each of the documents mailed to the shareholders be kept by the secretary and annexed to the minutes of this meeting as a schedule. If there is no objection, the reading of the notice of special meeting will be dispensed with. Pursuant to the company's bylaws, business may be transacted at this meeting if not less than 2 holders are personally present, virtually or in person, holding or representing by proxy not less than 25% of the common shares entitled to be voted at this meeting. I received a preliminary scrutineers report and it shows that there are more than 2 shareholders personally present or represented by proxy at the meeting, representing approximately 28,783,450 common shares or 93.2% of the outstanding common shares entitled to be voted at the meeting. I confirm that there is a quorum of shareholders present at the meeting. I direct that the preliminary and final scrutineer's report on attendance be annexed to the minutes of this meeting as a schedule. I now declare that this meeting is duly called and properly established for the transaction of business. I'm advised by the secretary that the preliminary voting results provided by the scrutineer indicate that the arrangement resolution to be voted on at the meeting has received support from at least 94.3% of votes cast and at least 84.1% of the majority of the minority. To my knowledge, the decision of the meeting will be in favor of the Arrangement Resolution to be considered, taking into account both voting thresholds, which I will describe. We will conduct a vote on the Arrangement Resolution before the meeting today, virtually and in person. After the meeting concludes, A press release will be disseminated announcing the final voting results and will be filed on SEDAR+. At this time, I will ask TSX Trust to please open the polls for voting on the Arrangement Resolution. [Voting]

While I review the Arrangement Resolution, registered shareholders as of record date and duly appointed proxy holders who have accessed the voting platform using their control numbers and have not already voted their shares are free to vote on the Arrangement Resolution, and the results will be tabulated accordingly. So as previously mentioned, the sole item of business of this special meeting is to consider and, if deemed advisable, to pass the Arrangement Resolution under the terms of the arrangement. Royal Aggregator LP, an affiliate of Northampton Capital Partners, LLC, will, among other things, acquire all the outstanding common shares of the company, other than those common shares held by Altius Minerals Corporation, for a price of CAD 12 per common share. Full details concerning the proposed arrangement, including the text of the Arrangement Resolution to be voted upon at this meeting, are contained in the company's management information circular dated October 18, 2024. So in order to be approved, the Arrangement Resolution must be passed by -- there're 2 tests. First, an affirmative vote of at least 2/3 of the votes cast by shareholders present or represented by proxy and entitled to vote at this meeting. Secondly, an affirmative vote of at least a simple majority of the votes cast by shareholders present or represented by proxy and entitled to vote at this meeting, excluding the votes attached to those common shares required to be excluded pursuant to Multilateral Instrument 61-101, the Protection of Minority Shareholders in Special Transactions. So for this purpose, the votes attached to common shares held by Altius Minerals Corporation, certain directors and senior officers of Altius Minerals Corporation; and Mr. Frank Getman, are excluded. The full text of the Arrangement Resolution and plan of arrangement are set out in Appendix A and Appendix B, respectively, of the company's management information circular dated October 18, 2024. Unless there are any objections from the registered shareholders or duly appointed proxy holders, I will dispense with the reading of the full text of the Arrangement Resolution. The arrangement is also subject to final order approval of the Court of King's Bench of Alberta. Will someone move to pass the resolution to approve the Arrangement Resolution?

Mr. Chairman, I move that a resolution in the form of the Arrangement Resolution set out in Appendix A of the company's management information circular dated October 18, 2024, be approved.

I second the motion.

So you have heard the motion. And we will now pause briefly to address any discussion from registered shareholders or proxy holders that are directly related to the arrangement. And are there any questions on this motion?

Yes? Would you please state your name and whether you are a registered shareholder r a proxy holder?

Mr. Chair, my name is [ Evelyn Lee ]. I am a guest at this meeting. But with your prior permission, I would like to read a statement on behalf of my client, PenderFund Capital Management Limited, who is participating online today.

Thank you.

Mr. Chair, my name is Amar Pandya, and I'm a portfolio manager at PenderFund Capital Management Limited, the manager of 4 funds that are shareholders of the company. As the largest non-insider shareholder of the company, we are shocked and dismayed by the flawed process conducted by the company and its Special Committee in approving the arrangement and their disregard for the legitimate and reasonable expectations of minority shareholders. The flawed process, including the absence of independent legal advice or a market check of available alternatives with independent financial advice, the close involvement of the controlling shareholder that is not participating in the arrangement, and the lockup of a majority of the minority shareholders before the arrangement was announced have deprived minority shareholders of any meaningful protection or voice. While today's votes on the Arrangement Resolution is performative, as approval is a foregone conclusion, we felt compelled to attend the meeting and voice our concerns against the arrangement. Thank you.