Miner Brian Dalton

Altius CEO Brian Dalton

Brian Dalton's Altius Minerals (TSX:ALS) is building THE diversified Canadian minerals royalty company. Today the firm announced acquiring 51% of Sherritt International's Canadian coal and potash royalties for $254 million, representing approximately 86% of Altius's market cap at the time of the announcement. Dalton is betting the farm on long life coal and potash assets, already in production, at a time when resource market pessimism is at its highest.

According to the news release:

Provides immediate cash flow from 11 low risk operating mine royalties (5 coal and 6 potash) that collectively generated approximately $25 million revenue in the last twelve months (“LTM”), on a 51% pro forma attributable to Altius basis. These are long life assets with an average reserve life of more than 20 years for the electrical coal assets, and more than 70 years for the potash assets.

These royalties compliment Altius's existing portfolio which includes a royalty on Vale's Voisey's Bay nickle mine, as well as Alderon Ire Ore's Kami iron ore deposit in Quebec.

Altius's share of the acquisition will be fully financed using cash on hand of $124 million, a senior loan from Scotiabank for $80 million, and a $50 million subordinated convertible loan from Sprott Inc and related entities.

During the first hour of trading on Wednesday shares in $ALS.TO traded up $1.02 or 9.6% to $11.62.

Read: Altius to Acquire Sherritt's Canadian Coal and Potash Royalty Portfolio 

Also: Sherritt to Divest of Coal Assets for $946 Million and Focus on Core Businesses

ALS Chart

ALS data by YCharts

This is not advice. Do your own due diligence.