Altius agrees $122 million TNR deal for Los Azules royalty

Altius Minerals (TSX: ALS; US-OTC: ATUSF) has agreed to acquire the TNR Gold (TSXV: TNR) shares it does not already own, adding an effective 0.36% net smelter return royalty on the Los Azules copper project in Argentina before a final investment decision that Altius said is targeted for mid-2027.

The companies said on Wednesday they had entered a definitive agreement under which TNR shareholders, other than Altius, will receive 0.0072 of an Altius share and 0.25 of a share in a new company, SpinCo, for each TNR share, through a court-approved plan of arrangement. Based on the closing price of Altius shares on the Toronto Stock Exchange on Nov. 10, they put the value of TNR at an estimated $122 million, or about $0.48 a share: about $0.38 ($97 million) in Altius stock and about $0.10 ($25 million) in SpinCo stock. That implies a premium of about 60% to TNR's close that day on the TSX Venture Exchange. Altius already holds 30,937,500 TNR shares, or about 12.7% of the 244,081,780 shares outstanding as of Oct. 6.

TNR holds a 0.4% net smelter return royalty on Los Azules, of which 0.04% is held on behalf of a shareholder. Altius said the interest being acquired is an effective 0.36% NSR. The project is owned by McEwen Copper, a private company, Altius said, and is being developed by McEwen Inc. (TSX: MUX; NYSE: MUX), according to TNR. Altius said Los Azules is targeting a final investment decision by mid-2027, with first production in 2030. McEwen's October 2025 feasibility study outlines average production of 148,200 tonnes a year of copper cathode over a 21-year mine life, including 204,800 tonnes a year in the first five years, from proven and probable reserves of 1,023.1 million tonnes grading 0.453% copper, containing 10.2 billion pounds.

"This transaction adds a significant development stage royalty over the Los Azules project, which offers the potential for decades of increased copper exposure within our portfolio," chief executive Brian Dalton said in Altius's statement.

Altius will also acquire TNR's 7% net profits royalty on the Batidero I and II properties of the Josemaria copper-gold project, which TNR said is being developed by the joint venture between Lundin Mining (TSX: LUN; Nasdaq Stockholm: LUMI) and BHP (NYSE, LON, ASX: BHP). Los Azules and the Batidero properties are not yet in production. The agreement also includes TNR's royalty on the Mariana lithium brine project in Argentina, which has begun production; Altius put the interest being acquired at an effective 1.35% net smelter return.

TNR's 90% interest in the Shotgun Gold project in Alaska will be transferred to SpinCo. Altius will retain about 12% of SpinCo through its existing TNR shares and then subscribe for about C$2.2 million of new shares to raise its holding to about 19.9%, at an agreed valuation of $25 million, Altius said. It will keep a 0.5% net smelter return royalty on Shotgun.

The transaction requires approval by at least two-thirds of TNR shareholder votes at a meeting expected on or before Dec. 22, and a simple majority of minority votes under Multilateral Instrument 61-101, excluding Altius, TNR executive chairman Kirill Klip, Konstantin Klip and their related parties and joint actors. It also requires interim and final orders from the Supreme Court of British Columbia and TSX approval to list the new Altius shares. Directors, officers and certain other shareholders, together holding 68,761,240 shares, or about 28.2%, have signed voting support agreements. A C$5 million termination fee is payable by TNR in certain cases, and a C$5 million reverse termination fee payable by Altius. Closing is expected in the first quarter of next year.