Altius Minerals Agrees to Buy TNR Gold for C$122 Million, Adding Royalties on Argentina's Los Azules Copper and Mariana Lithium Projects

Altius Minerals, a Canadian company that earns income from royalties on mines rather than operating them, has agreed to buy TNR Gold, ending a months-long battle for control of the small exploration company and securing interests in two significant South American projects tied to the energy transition.

Altius will acquire TNR Gold through a plan of arrangement in an all-stock deal valued at about C$122 million, the companies announced on Wednesday, November 11, according to The Deep Dive. The offer represents a premium of roughly 60% to TNR's closing share price on November 10.

The deal terms

TNR shareholders will receive 0.0072 of an Altius share plus 0.25 of a share in a newly formed spinout company, known as TNR SpinCo, for each TNR share they hold, according to The Deep Dive. The consideration is worth about C$0.48 per TNR share, comprising about C$0.38 per share, or C$97 million in total, in Altius stock and about C$25 million through SpinCo.

SpinCo will hold TNR's Shotgun gold project in Alaska. Former TNR shareholders will own 88% of SpinCo and Altius the remainder, and Altius plans a C$2.2 million investment that would raise its stake in SpinCo to 19.9%. Altius will retain a 0.5% net smelter return royalty on Shotgun.

The royalty prize

The main attraction for Altius is TNR's portfolio of royalties in Argentina. Through the deal, Altius will gain an effective 0.36% net smelter return royalty on the Los Azules copper project, being developed by McEwen Copper, and an effective 1.35% royalty on the Mariana lithium brine project operated by China's Ganfeng Lithium, according to The Deep Dive.

Los Azules is one of the world's larger undeveloped copper deposits and is targeting financing and a final investment decision in mid-2027. Mariana is ramping up towards production of 20,000 tonnes a year of lithium carbonate equivalent.

A net smelter return royalty entitles its holder to a percentage of the revenue from a mine's production, after certain smelting and refining costs, without having to contribute to the costs of building or operating the mine.

A board fight resolved

The deal follows a bitter contest for control of TNR. Eucalyptus Resources, which described itself as TNR's largest shareholder, had pushed to replace the board, citing governance concerns and a lagging share price, according to The Deep Dive. Eucalyptus said it had the support of more than 46% of eligible votes.

TNR cancelled its shareholder meeting scheduled for September 22 days before it was due, citing alleged undisclosed coordination between Eucalyptus and other shareholders, and the meeting was later moved to December 8.

Now, Eucalyptus and its principals, along with TNR's directors and officers, have signed voting support agreements covering about 28% of TNR's outstanding shares in favour of the Altius deal, The Deep Dive reported.

"The Arrangement Agreement with Altius is a pivotal milestone," said Kirill Klip, TNR's executive chairman.

Altius's patient approach

Altius built its position in TNR over several months. It made a C$4.2 million strategic investment in May, bought 7.4 million shares on the open market in July to bring its stake to 12.7%, and submitted a non-binding proposal in early October, according to The Deep Dive.

Approvals and timeline

The deal requires approval by two-thirds of the votes cast by TNR shareholders and a majority of minority votes, according to The Deep Dive. The vote is expected at a meeting in December, and the transaction is targeted to close in the first quarter of 2027.

Why royalties are attractive

Royalty and streaming companies, such as Franco-Nevada, Wheaton Precious Metals and Altius, offer investors exposure to commodity prices and mine production with lower costs and risks than mining companies. They provide capital to miners in exchange for a share of future production or revenue, and they benefit when mines expand or new discoveries are made on their royalty land, without paying additional costs.

Altius, based in Newfoundland and Labrador, has built a portfolio of royalties on mines producing potash, iron ore, copper and other commodities, as well as interests in renewable energy and exploration projects.

Copper and lithium in demand

The TNR deal gives Altius greater exposure to copper and lithium, two metals central to the energy transition. Copper is essential for electrical wiring, power grids, electric vehicles and renewable energy systems, and demand is expected to grow strongly as the world electrifies and builds data centres. Many analysts expect supply shortfalls, since developing new copper mines takes many years.

Lithium is a key ingredient in batteries for electric vehicles and energy storage. Lithium prices have been volatile, falling sharply from their peak in 2022, but long-term demand is expected to grow.

Argentina's mining boom

Argentina has become an increasingly attractive destination for mining investment, particularly for lithium and copper. It is part of the so-called lithium triangle with Chile and Bolivia, and the government has introduced incentives for large investments. Several major copper projects are being developed in the Andes.

What it means for India

India is seeking to secure supplies of critical minerals such as lithium and copper for its electric vehicle, renewable energy and electronics industries. Indian state-owned company KABIL, a joint venture of NALCO, Hindustan Copper and Mineral Exploration Corporation, has signed agreements to explore lithium blocks in Argentina's Catamarca province. Deals such as Altius's acquisition highlight the growing global competition for interests in South American critical mineral projects.

Royalty companies and the energy transition

Royalty companies have increasingly sought exposure to metals linked to the energy transition, such as copper, lithium and nickel, as investors look for ways to benefit from rising demand without the operational risks of mining. Royalties on large, long-life projects can provide income for decades once production begins.

However, royalties on development-stage projects carry risks, since the projects may face delays, cost overruns or financing challenges before production starts. The value of Altius's new interest in Los Azules will depend heavily on whether the project reaches a final investment decision and is built on schedule.

What comes next

TNR shareholders will vote on the deal in December. If approved, Altius will add the Argentine royalties to its portfolio, and TNR shareholders will hold Altius shares and a stake in the new Shotgun gold company. Investors will watch progress at Los Azules, particularly its financing and investment decision, and the ramp-up of Mariana, which will determine the value of Altius's new royalties.