Altius Minerals Corporation
TSX : ALS

Altius Minerals Corporation

February 24, 2017 08:53 ET

Fairfax to Make Strategic Investment in Altius

ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(Marketwired - Feb. 24, 2017) - Altius Minerals Corporation ("Altius") (TSX:ALS) is pleased to announce that it has entered into a letter agreement pursuant to which Fairfax Financial Holdings Limited, through certain of its subsidiaries (collectively, "Fairfax"), will make an up to $100 million investment in Altius in exchange for the issuance by Altius of preferred securities and warrants.

Fairfax has agreed to subscribe, on a private placement basis, for 5% preferred securities in an aggregate amount of $100 million, issuable in tranches of not less than $25 million. Altius intends to close an initial subscription of $25 million, and has sole discretion with respect to additional subscriptions by Fairfax for the remaining $75 million in minimum tranche sizes of $25 million by no later than December 31, 2017. The preferred securities will be subordinate secured and have no fixed maturity date but may be redeemed by Altius at any time after 5 years from closing, or after 3 years if its common shares are trading at a price of at least $24 per share.

Altius has also agreed to issue 6,670,000 common share purchase warrants, exercisable at $15 per share. Warrants will vest proportionately based on the aggregate amount of preferred securities drawn by Altius under the private placement. Each vested warrant will be exercisable within 5 years, but may be extended to 7 years if the closing price of the Altius common shares is less than $24 on the fifth anniversary of the initial closing. Altius can also elect to require early exercise of the warrants if the closing price of its common shares reaches $24 at any time after the third anniversary of the initial closing.

The proceeds raised from the Fairfax financing will be used by Altius for investing in opportunities it identifies within the mining and minerals sector and for general corporate purposes.

Fairfax will have the right to nominate one director to the board of directors of Altius.

Altius CEO Brian Dalton commented, "Fairfax's 30-year record of growth is nothing short of iconic and we are both honoured and motivated by this endorsement. This deal provides Altius with an attractive new source of long-term capital and, perhaps more importantly, access to Fairfax's remarkable strength and team experience as we continue to pursue our long-term objectives."

Prem Watsa, Chairman and CEO of Fairfax, added, "Altius is establishing an impressive entrepreneurial growth record within the Canadian mining sector and has created an excellent base of long-term assets to now build upon. We are delighted to be working with and supporting the Altius team at such an exciting time in its development."

Closing of the transaction is subject to the settlement of mutually agreeable definitive documentation, and other customary closing conditions, including the approval of the TSX and receipt of all other requisite third party approvals.

About Altius

Altius directly and indirectly holds diversified royalties and streams that generate revenue from 15 operating mines. These are located in Canada and Brazil and produce copper, zinc, nickel, cobalt, iron ore, potash and thermal (electrical) and metallurgical coal. The portfolio also includes numerous pre-development stage royalties covering a wide spectrum of mineral commodities and jurisdictions. In addition, Altius holds a large portfolio of exploration stage projects which it has generated for deal making with industry partners that results in newly created royalties and equity and minority interests.

Altius has 43,335,654 shares issued and outstanding that are listed on Canada's Toronto Stock Exchange. It is a member of both the S&P/TSX Small Cap and S&P/TSX Global Mining Indices.

ForwardLooking Information

This news release contains forward-looking information. Forward looking information contained in this new release includes, but is not limited to, the expected completion of the Fairfax financing and the expected use of proceeds thereof. These statements are based on information currently available to Altius and Altius provides no assurance that actual results will meet management's expectations. In certain cases, forward-looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the receipt of necessary regulatory approvals, including the approval of the Toronto Stock Exchange and other applicable securities regulatory authorities with respect to the Fairfax Financing, and other similar matters. While Altius considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Although Altius believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include, among other things, changes in market conditions, changes in the prices of commodities, unanticipated changes in key management personnel, general economic and political conditions, the risk that the Fairfax financing may not be completed, and the failure of Altius to receive applicable regulatory approvals upon terms acceptable to Altius or at all. Mining exploration and development is an inherently risky business. Accordingly, actual events may differ materially from those projected in the forward-looking statements. This list is not exhaustive of the factors that may affect any of Altius' forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on Altius' forward-looking statements. Altius does not undertake to update any forward-looking statement that may be made from time to time by Altius or on its behalf, except in accordance with applicable securities laws.

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