Altius to acquire Lithium Royalty for $9.50/share

Executive Summary

• Altius Minerals Corp. has entered into a definitive agreement to acquire Lithium Royalty Corp. via a plan of arrangement for total consideration of approximately $520 million ($9.50 per Lithium Royalty share).
• The transaction is expected to close in the first quarter of 2026, subject to shareholder and regulatory approvals, and will significantly expand Altius's portfolio with 37 new royalties, four producing stage royalties, and 12 advanced stage projects.
• Altius will provide a $20 million secured bridge loan to Lithium Royalty for working capital and will retain Lithium Royalty’s CEO, Ernie Ortiz, to join its corporate development team post-closing.

Key Details

• Transaction Structure: Acquisition of all issued common and convertible common shares of Lithium Royalty Corp. via a court-approved plan of arrangement under the Canada Business Corporations Act.
• Consideration: Total value of approximately $520 million, priced at $9.50 per Lithium Royalty equity share.
  • Payment Options: Shareholders may elect $9.50 in cash or 0.240 of an Altius common share.
  • Proration: Aggregate cash consideration capped at one-third of total consideration; share consideration capped at 11.5 million Altius shares.
  • Default Consideration: Shareholders not electing cash or shares receive $3.16 in cash and 0.16 Altius shares per Lithium Royalty share.
  • Composition: Approximately $173 million in cash and $347 million in Altius shares.
• Existing Interest: Altius holds an approximate 8% gross ownership interest in Lithium Royalty via units of certain limited partnerships holding conversion rights.
• Portfolio Acquired:
  • 37 new royalties (no streams), majority with long to ultralong implied resource lives.
  • Four producing stage royalties (three commissioned in 2025), currently ramping up or under expansion.
  • 12 advanced stage projects with completed economic studies (7 feasibility studies, 5 preliminary economic assessments).
  • 3-5 additional projects planning to start operations between 2026 and 2030.
  • Assets located in Canada, Australia, and South America (low geopolitical risk).
  • Diversified by production method (brine and hard rock).
• Financial Impact: Expected acquisition-based royalty revenue contribution ramping to $40-$60 million by end of decade (at current spot prices).
• Strategic Rationale:
  • Countercyclical investment at lithium price lows (<$9,000/t LCE vs. prior high >$80,000/t).
  • Complements Altius’s existing electricity sector exposure.
  • G&A synergies and revenue scaling expected to enhance pro forma EBITDA margins.
• Voting Agreements:
  • Royalty Capital limited partnerships and Riverstone VI Lithium Royalty B.V. (collectively ~84.7% of outstanding shares) agreed to vote in favor.
  • Directors and executive officers (<3% of shares) agreed to vote in favor.
• Financing: Altius agreed to provide a secured bridge loan facility of up to $20 million (U.S.) to Lithium Royalty for general working capital and continuing royalty acquisitions.
• Break Fee: $23.4 million payable by Lithium Royalty to Altius if the agreement is terminated due to a superior proposal or if the board changes its recommendation.
• Timeline: Special meeting of Lithium Royalty shareholders to be held no later than March 10, 2026. Expected closing in Q1 2026.
• Post-Closing: Lithium Royalty shares to be delisted from the Toronto Stock Exchange; Lithium Royalty to cease being a reporting issuer in Canada.
• Advisers: Altius advised by McCarthy Tetrault LLP; Scotiabank acting as financial adviser.

Notable Quotes

• Brian Dalton, CEO of Altius: "We believe that this transaction creates strong value for shareholders by adding a significant pipeline of operating, development and evaluation stage assets to the base and battery metals component of our business... We believe the portfolio the Lithium Royalty team has constructed features all of the key attributes that we seek in our royalty investments, including: very long resource lives... strong cost curve positioning, and a low jurisdictional risk profile..."
• Brian Dalton, CEO of Altius: "We are pleased that current Lithium Royalty CEO Ernie Ortiz has expressed his willingness to join Altius following completion of the transaction to continue to oversee the assets and relationships that are being acquired, as well as to support the Altius corporate development team in future potential initiatives across all of its commodity focus areas."