Altius Minerals Corporation (ALS.TO), a diversified mining royalty company, has reported a decline in its royalty revenue for the fourth quarter and full-year 2023, primarily due to lower commodity prices and operational changes in its portfolio.
The company's Q4 2023 royalty revenue was $16.0 million, a decrease from $23.1 million in the same period the previous year. The full-year revenue also saw a drop to $73.9 million from $103.5 million in 2022. Despite the challenges, Altius Minerals remains optimistic about the long-term potential of its portfolio, particularly in the renewables sector.
Key Takeaways
- Q4 2023 royalty revenue decreased to $16.0 million from $23.1 million in Q4 2022.
- Full-year royalty revenue fell to $73.9 million from $103.5 million in the previous year.
- The company's EBITDA margin for the Mineral Royalties segment was 81% in the current year, down from 87%.
- Adjusted net earnings per share for Q4 stood at $0.06, a decrease from $0.10 in the same quarter of 2022.
- Full-year adjusted net earnings per share dropped to $0.24 from $0.74.
- Growth in revenue was noted in the Renewable Royalties segment from new operating and development-stage royalties.
- Altius ended the year with a cash balance of $12.8 million, excluding ARR cash, and $94 million in unused revolver room.
- The company is exploring strategic alternatives for its Silicon asset, with a decision expected later this year.
Company Outlook
- Altius Minerals remains positive about the long-term growth potential of its portfolio despite current market challenges.
- The company sees growth opportunities in the renewables sector.
- No residual revenue from the coal business is expected in 2024.
Bearish Highlights
- The closure of the 777 Mine and the conversion of Genesee to natural gas contributed to the revenue decline.
- Base and battery metals segments faced margin pressures due to inflation and stagnant prices.
- Lithium prices fell below the cost curve, and the copper market experienced a supply-demand deficit.
Bullish Highlights
- The potash market returned to normal with stabilized prices and strong global demand.
- The Silicon asset has been identified as a world-class gold discovery, with an initial resource exceeding expectations.
Misses
- The company reported lower adjusted net earnings per share both for Q4 and the full year.
- Decline in full-year royalty revenue attributed to lower commodity prices and operational changes.
Q&A Highlights
- Altius Minerals is considering selling or swapping its Silicon asset for non-precious metals royalties.
- The Merlin gold discovery's annual production rate potential is now believed to be over 500,000 ounces per year.
- The iron ore market is currently small, but the increase in electric arc furnaces being built could change the market dynamics.
- The company is researching the premium that direct reduced iron (DRI) might command in the market.
Altius Minerals Corporation's earnings call revealed a company grappling with market fluctuations but strategically positioning itself for future growth. The company's diversified portfolio, particularly in renewables, and its proactive approach to managing its assets demonstrate its resilience in the face of industry challenges.
As Altius continues to navigate the evolving mining landscape, it will be important for investors to monitor the outcomes of its strategic decisions, such as the potential sale or swap of the Silicon asset, and the arbitration regarding the district-scale applicability of their royalty. With a strong focus on governance and financial management, Altius Minerals is poised to capitalize on opportunities that arise in the dynamic global markets.
InvestingPro Insights
Altius Minerals Corporation's (ATUSF) recent financial performance has been marked by a decline in royalty revenue, as detailed in the article. To provide further context to these results, let's consider some key metrics and insights from InvestingPro.
InvestingPro Data:
- Market Cap (Adjusted): 707.9M USD
- P/E Ratio (Adjusted) last twelve months as of Q4 2023: 68.78
- Gross Profit Margin last twelve months as of Q4 2023: 92.28%
These figures highlight the company's financial standing and profitability. Despite the challenges faced, Altius Minerals boasts a strong gross profit margin, which suggests that the company is maintaining its operational efficiency. However, the adjusted P/E ratio indicates that the stock may be trading at a premium compared to earnings, which investors may wish to consider in the context of the company's long-term growth potential and recent revenue declines.
InvestingPro Tips:
1. Altius Minerals has been demonstrating a commitment to shareholder value through management's aggressive share buyback strategy.
2. The company has a track record of raising its dividend for four consecutive years, which may appeal to income-focused investors.
These InvestingPro Tips suggest that Altius Minerals is focused on creating value for shareholders and has the financial discipline to return capital through dividends. This could be particularly attractive in the current uncertain market environment.
For investors seeking a deeper dive into Altius Minerals Corporation, InvestingPro offers additional tips and insights. There are currently 11 more InvestingPro Tips available for ATUSF, which can be accessed by visiting https://www.investing.com/pro/ATUSF. To take advantage of these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - Altius Minerals Corp OTC (ATUSF) Q4 2023:
Operator: Good morning, ladies and gentlemen and welcome to the Altius Minerals Corporation Q4 and Year End 2023 Financial Results. [Operator Instructions] This call is being recorded on Tuesday, March 12, 2024. I would now like to turn the conference over to Flora Wood. Please go ahead.
Flora Wood: Thank you, Joanna. Good morning, everyone and welcome to our Q4 conference call. Our press release and annual filings, including the AIF, were released yesterday after the close and are available on our website. This event is being webcast live, and you’ll be able to access a replay of the call along with the presentation slides that have been added to our website at altiusminerals.com. Brian Dalton, CEO and Ben Lewis, CFO, are both speakers on the call. The forward-looking statement on Slide 2 applies to everything we say both in our formal remarks and during the Q&A session. [Operator Instructions] And with that, Ben, you are up first to go through the numbers.
Ben Lewis: Thank you, Flora. Good morning, everyone and thank you for joining us. Royalty revenue for Q4 2023 was $16.0 million compared to $23.1 million in Q4 2022. Full year attributable royalty revenue of $73.9 million compares to $103.5 million in 2022. Revenue and adjusted EBITDA for the year were impacted by lower commodity prices, lower revenue following Genesee’s conversion to natural gas and the scheduled closure of the 777 Mine at the end of Q2 last year. Mineral Royalties segment had an EBITDA margin of 81% and 87% for the current and prior year, respectively, reflecting these decreased revenues against relatively stable fixed costs. Q4 2023 adjusted operating cash flow of $7.7 million compares to $19.2 million in Q4 last year. Full year 2023 adjusted operating cash flow of $37.3 million compares to $75.9 million into 2022. The decrease follows the trend of lower revenue, higher interest rates and the timing of the income taxes paid. Net loss of $2.2 million or $0.05 per share for the quarter compares to net earnings of $6.8 million or $0.14 per share in Q4 2022. Net earnings for the year of $10.1 million or $0.20 per share for 2023 compares to net earnings of $39.5 million or $0.82 per share in 2022. Net earnings for both the quarter and year reflect lower revenues as well as higher interest costs and marginally higher G&A expenses in the Renewable Royalties segment. The fourth quarter loss in 2023 included a non-cash impairment charge on the Pickett Mountain royalty as well. Q4 2023 adjusted net earnings of $0.06 per share decreased relative to $0.10 per share during Q4 2022, while adjusted earnings of $0.24 for the year compares to adjusted net earnings of $0.74 per share in 2022. ARR reported its results on March 6. Renewable royalty revenue continued to grow, reflecting new operating and development-stage royalties in the portfolio, which were added near the end of 2022. GBR also completed a new debt financing in the fourth quarter for $247 million with available liquidity of approximately $107 million at the end of the year. On February 29, GBR entered into a new $30 million royalty investment agreement with Apex Clean Energy related to their 195-megawatt Angelo Solar project in Texas, which is anticipated to achieve commercial operations in May this year and is expected to begin generating revenue in Q4 of this year. I’ll turn now to capital allocation and liquidity. During the year, we made scheduled debt repayments of $8 million and paid total cash dividends of $14.3 million. The corporation also repurchased and canceled 611,800 shares under its normal course issuer bid for a total cost of $12.5 million during the year. Our cash balance at the end of 2023, excluding ARR cash, was $12.8 million, and we had $94 million in unused revolver room on our credit facility. ARR held cash of $88.7 million at the end of the year. And with that, I’ll turn it over to Brian.
Brian Dalton: Thank you, Ben, and thanks, everyone, for being with us today and allowing us to update our views on the year that was and the one that is underway in our view. I’ll do this by segment as per usual. Starting today with base and battery metals, we’ll hone in first on copper. There, capital and operating cost inflation continues at a high rate, while prices have been mainly stagnant. This, of course, means that operating margins have continued to compress and that the gap between actual prices and incentivization prices has further widened. That said, the price is not so bad that meaningful amount of existing production are being forced from the market. Instead, it has been geopolitics and technical issues that have caused 2024 supply forecast to fall relative to prior expectations. The result of this is that the widely forecast looming supply-demand deficit in copper is no longer looming. It seems to have begun. Lithium is another matter. There, prices have clearly fallen into the cost curve as evidenced by several mine closures and project stoppages. We don’t have a developed view yet on what the baseline incentivization price for lithium is, but we know that when everyone who could spell lithium a couple of years ago could get funded that we were above it and that now we are well below it. It is still a nascent sector, and price discovery remains a volatile process. We are keeping tabs on things as it is in times like this tied-out moment, so to speak, that the longer-term winners can be most easily identified. The key 2023 developments in the base and battery part of our portfolio included the announcement of a maiden resource at the new Saúva discovery within the Chapada district, which at minimum potentially add many years to the expected mine life or alternatively could result in expanded future production rates. Lundin is busy studying its expansion options at Chapada, while it continues to upgrade its Sauva resource and test for its limits. With the introduction of the potential of Sauva, there has been a delay in Lundin’s previously announced expansion study results time lines, but this is for the very best of reasons we could hope for. Finally, continued development market, Voisey’s Bay had announced recently that the building of an Eastern Deeps underground mine is near completion and that first production is expected later this year. Sigma began production at the Grota do Cirilo lithium mine in Brazil, and as a result, we marked our first-ever direct lithium-based royalty revenue. Also, Lithium Royalty Corporation managed to execute a very successful IPO before that segment of the market closed off. Ernie and the team have since been busily deploying the proceeds toward new royalties as conditions on the ground have become increasingly favorable for contrarian investment. That provides me with a nice segue into renewables. Frank and the team had a fantastic year. They executed a significant debt capital raise late in the year that leverages upon the prior business deployment of 100% equity-based capital. The importance of gaining this liquidity at this time relates to the broader difficulties being faced by sector developers and operators in raising competing or traditional forms of capital, such as equity and debts. Against that contrarian backdrop, the royalty financing that ARR-GBR has on offer has become more sought after and to a wider range of potential counterparties. GBR recently announced $30 million royalty investment into Apex’s Angelo Solar project that will become operational shortly and deliver revenue by late year. The steel pipeline continues to be very active with primary emphasis on additional late operating state royalty investments. Revenue ramp-up is also being supported by earlier development-stage portfolio investments that are continuing to steadily output new operating royalties. This revenue ramp-up from our renewables portfolio was timely and coinciding nicely with the end of coal power generation base royalties. In iron ore, IOC had a few issues, including wildfires along with the logistics network and some equipment breakdowns that impacted production levels. It continues to demonstrate strong commitment to investments in improving production reliability, however, and it is also looking towards structural shifts occurring in the iron ore market and evaluating opportunities to increase the percentage of its product output that can serve the growing electric arc furnace steelmaking segment. We’ve done a lot of work on this topic recently, and I’ll direct those of you who are interested to our website where you will find an overview of our conclusions. There should also be a link in our slide deck. I commented several times in the past that the transition underway in steelmaking is a major under-told story. This is still true, but the under-told part is perhaps fading as the big iron ore producers now begin to shift their own narratives and investment patterns. This takes us to the project study that Champion published for the Kami project. This above all demonstrated that Kami ores are technically suitable for upgrading to purity levels sufficient for utilization in an electric arc furnace and to therefore enable greater expected scrap steel utilization rates in the broader industry. There are still several milestones ahead to be achieved before project sanction decision can be made at Kami. But we are certainly encouraged by the competitive capital costs and attractive operating costs indicated by the study as well as Champion’s well-earned reputation for conservative planning and excellence in execution. One particular milestone that we will be watching for relates to efforts that David and Michael and the team have underway to bring in a steelmaking end user as a project partner who could help support initial capital investment requirements of the project. The other thing we’ll be keeping a close eye on is the price discovery process for DR-grade iron ore as its market share grows relative to blast furnace grades of iron ore, and a structural bifurcation between these increasingly distinct markets continues to evolve. Potash returned to more of a state of normalcy in 2023. The price declines from prior supply shock-based surge levels, while certainly reducing our royalty revenues year-over-year, have allowed the fertilizer buying strike by farmers to end. Both of our operators have noted strong resumptions in global buying and soil application patterns back towards the amounts predicted by long-term demand growth trends. Prices also appear to have stabilized at structurally higher levels than prior to the surge. This is likely a function of the more lasting cost impact of less globalized transportation and logistics frameworks. We also continue to believe that the fears of BHP’s Jansen project wrecking the market are wildly overblown. The bigger question for us remains of where all the rest of the production that will be required by the time Jansen ramps up will come from. We are confident that the mines and operators we are associated with have strong competitive advantages that will allow them to continue to at least hold market share in a steadily compounding global potash market on a long-term basis. We were certainly pleased in this regard by the announcement for Mosaic regarding its recent proving run at Esterhazy that has reportedly now made the world’s largest potash mine by capacity. Last but not least, Silicon continues to grow in recognition as a world-class gold discovery and in importance for our shareholders. With its year-end reporting, AngloGold Ashanti (NYSE:AU) published an initial resource for the Merlin gold discovery that considerably exceeded the top end of its prior indications and guidance. And perhaps more importantly, with respect to our sense of the royalty valuation noted that it now believes the annual production rate potential to be in excess of 500,000 ounces per year, up from previous indications towards greater than 300,000 ounces per year. Our upcoming arbitration process to determine the potential district-scale applicability of our royalty beyond the immediate Silicon and Merlin deposit areas remains on schedule for hearing early next month. Meanwhile, we are continuing to explore strategic alternatives and are weighing and testing a number of combinations that range from selling and are swapping for non-precious metals royalties to maintaining silicon as a part of our long-term portfolio. That decision is one we expect to be in a position to make some time this year. I said that was last, but there are some shout-outs that I feel like I should make before closing or that I really want to make before closing. Both Kami and Silicon are royalty holdings that stem from our project generation business. We long held that our royalties are the eggs while PG is the golden goose. And while hatching times are by no means rapid, the results serve to help us with our core objective: that is deliver outsized total portfolio returns over time to our shareholders. I therefore take this opportunity to let the whole of the PG team know that their efforts, innovations, and ultimately, their patient long-term execution strategies do not go unrecognized. I also take pride here in commending the broader team and their tremendous work that they do to keep our finances and governance in order in evaluating countless opportunities to fund those rare jewels and keeping you, our owners, well informed. It is a daily treat to work with each of you within this team. Thank you, sincerely. And with that, we can turn it over to any questions.
Operator: Thank you. [Operator Instructions] First question comes from Carey MacRury at Canaccord Genuity. Please go ahead.
Carey MacRury: Good morning, Brian. In terms of ARR, obviously, looking at – it’s got a great, obviously, revenue potential as into the future, which would be obviously a big material component of Altius Minerals. How do you think about – like does that worry you in terms of being too big? I mean, obviously, it’s a good problem to have, but how do you think about ARR within ALS in the longer-term?
Brian Dalton: When I take a longer-term view at our total portfolio, there’s five key kind of components, maybe five – or maybe five, maybe there’s five now, depending on how we go with Silicon, I actually think there’s really good-looking growth across – potential across all the elements. So I don’t think that there’s – I don’t have a sense that something is getting terribly out of balance, to be honest with you. So yes, ARR, we just look at it as a long-term part of our portfolio. It’s doing all the right things. Revenue is really starting to ramp up now. We’re kind of past that initial phase when all of our early investments were into developers. And obviously, that takes time for maturing. And that’s really started to happen now. There’s projects that are beginning to pay. There’s lots of construction announcements from within that portfolio. And yes – no, it’s good. No radical thinking going on at all. Just keep growing the business and let it drive benefits back to shareholders here.
Carey MacRury: Alright. That’s good. And then maybe, obviously, a lot of companies are somewhat capital-starved. So are you seeing more opportunities to deploy capital into new royalties or streams or anything?
Brian Dalton: Certainly, on the renewables side. I mean this in renewables – I mean I said it on the renewables conference call that it feels an awful lot like the mining world did back in that 2015-2016 period, when balance sheet repair was kind of the big driver. So those kind of conditions certainly are present today in renewables. And I’m pounding the table with the team to don’t spread out the liquidity you’ve got right now, get it deployed, so that kind of messaging. On the mining side, I got to be honest, not much has changed there. I still feel like we are in that in betwixt period where just the incentivization just isn’t there. The equity valuations, I don’t think, are supportive of big capital investment. There hasn’t been that kind of shift really away from focus on excess cash flows towards shareholder returns versus growth. And really until all of the parts are somewhat there, I don’t expect a lot of projects to come to market for the full financing package that might include royalty financing. There are some things that are in the market. We’ve been making a lot of passes lately. Some of that, I’ll be honest, is a function of just what we’re seeing in our own portfolio, like any kind of big external acquisitions right now, particularly if they would involve equity dilution, are just not attractive to us because, again, we just see too much internal embedded growth. But mostly, I would say it’s – we’re just not seeing those opportunities that we really, really like, that we get motivated around. We were ready for them. And we – my God, we look at so many projects these days, it’s crazy. But no sweet-spot pitches that we’ve seen in a while. And that’s fine because this is – our own portfolio is bringing the growth.
Carey MacRury: Okay. Maybe one last one, if I can just sneak it in. I know, obviously, the coal business is done. But should we be expecting any residual revenue into 2024?
Brian Dalton: I don’t believe so. If it is, it’s not material. Maybe Ben might have more insight into that...
Ben Lewis: Yes. It won’t be meaningful, no.
Carey MacRury: Okay, that’s it for me. Thanks guys.
Brian Dalton: Thanks, Carey.
Operator: Thank you. Next question comes from Craig Hutchison at TD Securities. Please go ahead.
Craig Hutchison: Hi, good morning, guys.
Brian Dalton: Hi.
Craig Hutchison: Just a question on the Silicon gold royalty and the arbitration. I guess there’s a hearing early next month. Are there certain milestones set for getting some kind of decision on that? And how quickly, I guess, can we get some kind of decision after the hearing?
Brian Dalton: No, there’s no set time line for the decision. The hearing is expected to take a few days, and that’s what’s kind of scheduled on the books. And there will be an opportunity for final submissions a little bit after the hearing date. So I really can’t point to a day. I will just say that this is not like a court docket, where there’s hundreds of competing files to be dealt with. This is a dedicated group of selected arbitrators that I expect anyway will probably want to clear this file in a reasonably expeditious manner. But I honestly, no, I don’t have – I can’t say on this day look out or is when the results come out.
Craig Hutchison: Okay. And maybe just a question on return on capital. You guys have bought back stock last year. Any more thoughts on that? Is that your priority potential increase in dividend this year? Or maybe some thoughts in terms of what you guys want to do with the excess free cash flow.
Brian Dalton: Yes. First off, we don’t look at the buyback as – in terms of returns of capital. I mean I know it has that function, but we look at it much more like we would a competing M&A-type transaction, quite frankly. We look at it as an opportunity to buy greater interest in – on a per share basis in all the assets that we hold. So it’s very much an opportunistic decision when we make it. And certainly for the last year or so, as far as capital allocation prioritization goals, nothing has outranked – and essentially, if you look at our free cash flow generation for the year, that – obviously, dividends were maintained as a priority. But everything discretionary, if you will, went into that internal denominator-focused M&A initiative that is the buyback. We feel like we’ve been handed a gift and we’re taking it.
Craig Hutchison: Okay. Thanks, guys.
Brian Dalton: Thank you.
Operator: Thank you. Next question comes from Brian MacArthur from Raymond James. Please go ahead. Brian, your line is open. Please proceed with your question.
Brian MacArthur: Sorry. Good morning. Can you hear me now?
Brian Dalton: Yes.
Brian MacArthur: Sorry. Thank you for taking my question. I’m just following up on Craig’s question. You made a statement that you think you’ll be able to decide on Silicon, the strategy later this year. Does that imply, though, that you think you will have a decision on the court case by then, or would you actually make a decision on what to do on silicon without having clarity on the court case?
Brian Dalton: No. The court case is important. I mean whether we are a buyer or a seller, what that arbitration really is going to determine is – it’s an element of the overall optionality and how that might impact the value of the royalty either as a holder or to external buyers. No, but we do anticipate that during the year, we will have the results of the arbitration, hopefully relatively soon after we complete the hearing. The other thing that we were kind of hung up on a little bit that we would identify it * as important, before we felt we were at a potential decision point was for a while now, we felt that Anglo’s guidance towards more than 300,000 ounces per year is really, really suboptimal against the kinds of resource growth we have seen there. I think across the district now Anglo is reporting more than 70 million ounces with upside indications all over the place. So as long as that number was out there, that 300,000 ounces per year was out there, we felt like there was – again, it looks suboptimal. And to the extent that that impacted potential valuations, we just weren’t going to do anything. But now they have come off that and come out with stronger guidance towards greater than 500,000 ounces a year. So that and the arbitration would have been the two things we were really watching for before we have even considered really getting serious about making a decision. And yes, so we are halfway there, more or less than a month out from getting to our hearing. So, it’s getting close. That’s why I think that this year is the year that we have to make a decision on where to go.
Brian MacArthur: Great. Thanks. That’s very helpful. Maybe moving just on to another topic, I noticed you managed to buy a little more of the potash royalties in December. Are there still more opportunities, I realize you only own 91.7%, but are there other opportunities out there, or maybe a bit of color on how that became available?
Brian Dalton: Yes. So, that was from – the potash royalties were held, or built or originally bought in a limited partnership. And so there was an individual family trust that was part of that and Liberty Mutual, the insurance company, was part of that alongside of Altius. So, that goes back to the original acquisition. A couple of years ago or a few years ago now, I guess we were able to reacquire Liberty’s interest in that limited partnership. And this year, there were – some of the members of that family group were doing things and needed to raise some capital, so we were very happy to get an opportunity to buy some more units there. We have also always been – we have always been kind of – there are individual owners of some of the unit areas. The potash mines in Saskatchewan, they tend to be pretty modest landholdings right now that are part of the greater unitized area. So, we are always kind of on the bid there, if you will, for more increments of that, but it tends to be very incremental.
Brian MacArthur: Great. Thanks. And my next question just relates to the coal as well. You mentioned you won’t give anything this year. But where does the court case stand right now?
Brian Dalton: It was heard late last year. And quite frankly, I don’t know when that decision is likely to come. That stands in contrast a little bit with the arbitration process in that, it’s obviously a very active court calendar that basically is competing here in terms of attention from the court. So, it’s really out of our hands, but it’s been a while now for sure. I would – again, I don’t want to speculate on when. But it’s concluded, and we are just all waiting for the court’s decision.
Brian MacArthur: Great. Thanks. And sorry, my last question, you mentioned on – was related to Kami and one of the things you were sort of waiting for was price discovery for what premium DRI might trade for in the market. Do you have any preliminary thoughts about what that might be, that premium going forward from your perspective?
Brian Dalton: Oh, I have a lot to talk on that, quite frankly. Brian, I don’t know if you got a chance to see it, but we talked about it in the prepared remarks linked to a presentation that we attempt just that. We go through dig a whole bunch of different scenarios. What I feel very strongly about is that the current linkage between blast furnace grades of iron ore, just up the sort of a sliding number of the iron content scale makes no sense whatsoever. Blast furnace grades of iron ore, quite frankly, serve an entirely different industrial process and why the input would link to that makes very little sense. DR grades of iron ore in contrast, what they really – I won’t say compete with, what they complement are scrap usage in an electric arc furnace. So, it’s logical to me that somebody is running an electric arc furnace and trying to decide on the input blend on any given day or month that they are going to weigh the relative price of scrap steel at various quality levels to the amount of DR-grade iron ore that they need to put in alongside of that. So, you have got flexibility if you are running an electric arc furnace. You might have – you might run it at 100% DR-grade iron ore or you might run it at 30%. It’s kind of a bit of a literally alchemy. But it’s -- still makes true the fact that the price that’s important as a benchmark for that decision is the scrap steel price, not the blast furnace grade iron ore that can’t be even possibly go into an electric arc furnace. It’s just too absurd for words. So, that will obviously shift. It’s just the DR-grade iron ore represents such a tiny market right now that it hasn’t had that significant prices got moment. But you only have to look at how many electric arc furnaces are being sanctioned right now and built to know that all of that’s not going to change in the future. It’s already in the process of changing. So, it will be fun. But it won’t be based on blast furnace grades of iron ore, which are in structural decline.
Brian MacArthur: Okay. Thanks very much for answering all my questions.
Brian Dalton: Thanks.
Operator: Thank you. Next question comes from Adrian Day at Adrian Day Asset Management. Please go ahead.
Adrian Day: Good morning Brian and the team. A couple of thoughts on silicon, when you said you are going to make a decision whether to swap it for royalties or keep it, you didn’t mention just selling the royalty. That was the first part. And secondly, you have obviously looked at the potential of spinning it off. And I wonder if you have any thoughts on that.
Brian Dalton: Yes. When I say swapping, I think realistically, what we are talking about is some combination of either a straight-up sale or a sale that involves royalties coming our way as part of the consideration. And I think generally speaking, we prefer that over a straight-up cash sale. If we are parting with a significant royalty asset, we want to see something come back in and hopefully something that offers similar levels of long-term option value as we see in silicon. So, it’s definitely a tall order, but I don’t think it’s impossible. But again, I have said this before, if you think about what silicon represents and what we have so commonly stated as our objective in acquiring royalties, it hits an awful lot of the hallmarks. So, it won’t be an easy decision. And maybe as much as anything, it will be a test of how much others might consider to be work in their structures versus what we consider to be work in ours, and that’s going to take a little bit of effort to explore. I wouldn’t say a spinout is off the table, but it’s not feeling like a priority right now just because do we want to be a shareholder of a gold royalty company saying the way that we are – we own our royalty in IOCs through an equity holding and renewables. But the difference here is that we control those businesses. And I guess the easier way to answer is that our structure probably looks cumbersome enough. So, I think it’s either a direct hold or we do something more strategic with it. And I honestly don’t know which way that’s going to go right now. It’s truly a very live internal debate, and there are still some data points to be gathered around the arbitration and really just about a better sense of what others see as the potential value here. I wish I could say more now, but that’s kind of where I am too.
Adrian Day: Okay. Great.
Brian Dalton: Thank you.
Operator: [Operator Instructions] We appear to have no further questions. You may proceed.
Flora Wood: Thank you, Joanna, and thank you to everybody who joined today, and especially in the Q&A period. So, we look forward to speaking again in our Q1 results.
Brian Dalton: Thanks everyone.
Ben Lewis: Thank you everyone.
Operator: Ladies and gentlemen, this concludes your conference for today. We thank you for participating and we ask that you please disconnect your lines.
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