Ladies and gentlemen,, thank you for standing by, and welcome to the Altius Minerals Corporation Third Quarter 2020 Financial Results Conference Call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to turn the call over to Flora Wood, Director of Investor Relations. Please go ahead.
Thank you, Denise. Good morning, everybody, and welcome to our Q3 call. Our press release and quarterly filings were released yesterday after the market closed and are available on the 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 the website at www.altiusminerals.com.
Brian Dalton, CEO, and Ben Lewis, CFO, are the speakers for the call, and then we'll open it up for an open Q&A session. The forward-looking statement on slide two applies to everything we say, both in the formal remarks and during the Q&A. With that, I'll turn over to Ben to take us through the numbers.
Thank you, Flora, and good morning, everyone. Q3 royalty revenue of CAD 16.2 million was up 25% from last quarter's royalty revenue of CAD 13 million, largely due to copper prices rebounding from a low of CAD 2.30 per GBP realized last quarter to approximately CAD 2.95 realized this quarter. We also recognized higher zinc volumes at 777 Mine and higher copper volumes from Chapada when compared to last quarter. Base metal revenue accounted for 53% of total royalty revenue in the quarter, demonstrating our leverage to copper. Offsetting the base metals contribution in Q3 was a 16% lower realized potash price as compared to Q2. We also experienced continued low thermal coal revenue due to the ongoing COVID-related impacts of reduced Alberta electric economic activity and related power consumption, but that was offset by two months of increased royalty level ownership.
Pass through iron ore revenues from Labrador Iron Ore Royalty Corporation, or LIORC, continued to track lower as IOC again elected not to pay an equity dividend in spite of continued strong iron ore performance and cash flow generation. Brian will have more to say on these topics and our outlook for relevant commodity exposures. Q3 EBITDA of CAD 12.4 million was also up 24% from Q2, with the increase following the revenue growth. G&A costs of CAD 2.4 million are up from the CAD 1.9 million reported last quarter, with most of the growth coming from higher corporate development expenditures in the third quarter related to the Liberty acquisition and the renewable royalties business joint venture transaction with Apollo. Nevertheless, our EBITDA margins came in at a healthy 77%, consistent with last quarter's EBITDA margins.
Adjusted operating cash flow of CAD 7.3 million this quarter reverses the trend in Q1 and Q2 of adjusted cash flow exceeding EBITDA due to the timing of income tax payment due dates that were pushed out by authorities this year due to COVID-related economic support measures. On a year-to-date basis, adjusted operating cash flow of CAD 33.9 million is just under last year's comparable period, despite the lower revenue this year. This reflects lower cost of sales on Chapada stream revenue, lower G&A, and slightly higher interest charges. The quarterly net loss of CAD 39.8 million, or CAD 0.96 per share, includes a non-cash impairment charge of CAD 45.6 million or CAD 1.10 per share. Adjusted net earnings were CAD 3.6 million or CAD 0.09 per share.
The main factor contributing to the impairment charge related to our acquisition of an additional 45% interest in the Coal Royalties LPs to take our interest to 97% for a net cost after adjustments of approximately CAD 9 million. Prior to the purchase, we had collectively carried our share of the Coal LPs at a value of CAD 73 million, and the incremental acquisition cost therefore resulted in a significantly lower weighted average carrying value, which prompted an impairment evaluation. Other considerations made were more conservative views regarding future Alberta power demand and the pace of potential power plant retirements and/or natural gas refueling capabilities. Other non-cash adjustments this quarter relate to the dilution gain that resulted from Adventus Mining's successful completion of a CAD 38 million financing.
During Q4, we will continue to evaluate the impact of the Apollo renewables transaction on our financial reporting. We also expect the Alderon receivership process to unfold in Q4. I will remind you that the loan to Alderon, our 37% share ownership position in Alderon, and our 3% gross sales royalty on the Kami iron ore project all have a combined carrying value on our books of CAD 1 million. The current receivership-based sales process for the former assets of Alderon, including the Kami project, is ongoing. We had previously booked impairments to the value of these holdings upon initiation of the receivership process. That may require upward adjustments based on the final results of the asset sales process, which, as Brian will further describe, we understand to have attracted strong interest.
The board of directors declared a CAD 0.05 per share quarterly dividend. Again, this dividend is eligible for our dividend reinvestment plan, which we announced last quarter for shareholders who are interested in receiving common stock instead of cash. Please visit our website or contact Flora for more information on how to enroll in this program. Finally, looking at the balance sheet and capital allocation, we ended Q3 with CAD 45.5 million in the value of the project equity portfolio and CAD 73.8 million in LIORC shares. After payment of approximately CAD 9 million for the Liberty acquisition, our preferred security distributions and common share dividends, and the funding of an additional $3 million to TGE on a milestone-based payment, we ended the quarter with CAD 16 million in cash and cash equivalents. We also had modest activity on our normal course issuer bid in Q3.
On a year-to-date basis, we have repurchased and canceled 644,000 shares at an average price of CAD 9.45 per share. We have paid CAD 15 million year to date on our term debt and have approximately CAD 39 million in undrawn availability on our revolver. As Brian will discuss in greater detail, Apollo is expected to fund the next $80 million in renewable energy royalty transactions, which will reduce our near-term expected level of capital allocation towards this initiative. Subsequent to quarter end, we funded CAD 7 million to TGE, of which CAD 5 million was funded directly by Apollo. Brian has more to say on macro conditions and the recent position. Now I'll turn it over to him.
Thank you, Ben and Flora, and thank you, everyone, for joining. We are certainly happy to note the improvements in revenue levels over recent quarters. While this has been accompanied by some headwinds, on balance, we believe that forward signals give reason for optimism that the worst of 2020 is now behind us and that a resumption of our longer-term positive growth trajectory is underway. I will start today by summarizing some of the highlights and challenges that occurred throughout the quarter and subsequent periods. We saw strong price rebounds begin to take shape across the base metals complex, but also technical issues at Chapada and Triple Seven that have resulted in temporary production level declines. Our ash prices averaged lower than in the prior quarter, while the outlook for global demand and production volumes from our operators became firmer.
The operator of the IOC mine again elected to not distribute dividends to shareholders. Premium quality iron ore prices remained robust and resulted in strong royalties, while the potential of our interest into the Kami project will also brighten. Turning to the electricity component of our royalties, we elected to take a non-cash write-down with respect to our electrical coal assets. While on the other hand, our most significant development during the quarter saw Altius Renewable Royalties receiving accretive investment and strong endorsement from major private equity player, Apollo. A mixed bag of updates there for sure, this yet again underscores the benefits of holding a well-diversified portfolio. Overall, the positives outweigh the negatives, we remain confident in our positioning over all time frames. Allow me to break all of this down further and provide additional context to our outlook.
The technical challenges experienced at Chapada and 777 Mine were isolated, solutions to return to full production levels in relatively short order are being implemented by both mine owners, whom we continue to view as top-tier operators. Lundin, in particular, appears to be making the most of the situation by advancing stripping more stock volumes while also stepping up activities related to their expansion plans at Chapada. At Voisey's Bay, nickel, copper, and cobalt production has ramped back up from COVID-related curtailment, the new underground mine development work continues to progress well. Earlier this week, we were pleased to learn that Excelsior Mining has begun initial copper recovery processes at the Gunnison project in Arizona, in which Altius holds a royalty interest.
Adventus Mining also closed a major institutional equity financing round during the quarter that paves the way for it to complete feasibility study work at its high-grade Curipamba polymetallic project in Ecuador, as well as to advance other regional copper-gold exploration targets. We hold a royalty related to Curipamba and are significant Adventus shareholders. Base metal price strengthening continues as the challenges of a protracted period of low investment in new and replacement capacity is being met concurrently by expectations of higher global demand on increased electrification infrastructure and renewable energy investments. This is to come from both the public sector, as stimulus is set to be disproportionately allocated to these objectives, and the private sector, that is increasingly seeing outsized long-term growth emanating from these particular sustainability transition-based macro trends.
The perfect storm for copper and other metals such as nickel and lithium that we have talked about in past updates, is indeed taking form and building in intensity. Both of our major potash mining counterparties have noted a resumption of demand growth and a better industry supply-demand balance as we get set to close out 2020. Global agricultural conditions are markedly better than at this time last year, when a series of weather-driven events caused a sudden decline in fertilizer demand that led to price deterioration. Crop prices are strong. Farmers around the world are now busy working to catch up on replenishing the nutrient content of their soils. Potash inventory levels have normalized as a result. Prices have begun to trend back up. Iron ore prices have continued to hold up well in spite of better supply conditions as the year has progressed.
This is due to strong steel demand growth, particularly in China, as post-COVID infrastructure stimulus measures there were very quickly implemented. While it is hard to assess for how long this increased level of demand will continue in China or to determine when other markets begin to ramp up steel demand to meet their own infrastructure investment plans, we continue in any event to be long-term bullish on the disproportionate need for ultra-high quality iron ore types that we have been purposely aligning our shareholders with. We are noting a steady build of policy direction and capital allocation towards the goal of reducing the emissions impact of steel making and expect this thematic to only further accelerate. Ultra-high purity iron ore products of the type arguably best exemplified by Canada's Labrador trough mining district, result in natural reaction efficiencies and significantly reduced emissions when used during steel making.
As such, they are in increasing demand as direct inputs and as blend stocks for ores from other regions, and in particular, Australia's Pilbara, that are in many cases, experiencing a progressive deterioration of average ore quality. Specific to the IOC mine from which all of our current iron ore-based revenue emanates, this trend is being reflected in strong quality-based premiums that are not only linked to high iron content, but increasingly, the low content of impurities such as silica, alumina, and phosphorus. IOC's role within operator Rio Tinto's overall portfolio also seems to be gaining in significance, with a late September announcement by the major of it securing of facilities in North China that are being used to upgrade ores from its Pilbara operations with IOC-derived material.
It is worth reminding here that a core part of our long-term attraction to IOC relates to its expansive and arguably underdeveloped mineral endowments and its certainly underutilized transportation infrastructure. We have recently learned that a receivership process that seeks to sell the former assets of Alderon Iron Ore, being mainly the feasibility stage Kami Iron Ore Project, which is located immediately south of the IOC mine, has attracted significant industry interest. We also understand that a proposal from an established mine operator is being recommended by the receiver for approval by the Supreme Court of Newfoundland and Labrador in a hearing that is expected to occur in coming days. Further details of the proposal remain sealed at this time, pending court approval. Altius originated the Kami Project and retains a 3% gross sales royalty related to any future potential production.
Our efforts to convert the residual revenue from our phased-out stage Alberta Thermal Coal royalties into a long-term stream of renewable energy-based royalties achieved a significant milestone during the quarter. Apollo Funds can now earn a 50% interest in the business in exchange for sole funding the next CAD 80 million in approved investments. We held a specific investor call on this deal when it was announced, so I won't rehash the details today. The main subsequent update to know, however, is that the joint venture has announced its first investment in the form of a $25 million expansion of an existing agreement with Tri Global Energy.
This was motivated from our side by a recognition that TGE has now either sold or has visibility on sales of sufficient projects to meet our estimate of the number of created royalties required to meet thresholds under our original investment amount, while at the same time having increased its total project pipeline to levels beyond that at the time of the initial agreement. We were delighted to reach terms with them to essentially keep the process rolling, and we would hope to do the same again at successive points in the future as their business continues to grow and prosper. The Apollo announcement has also had a positive impact in terms of our deal flow origination mix, as potential counterparties continue to gain awareness of the royalty model generally and develop increased confidence in our particular capabilities to provide innovative, partner-like solutions for their businesses.
We have also continued to evaluate the optimal methods and structures that ARR can utilize to fund its share of investments that are identified following completion of the earning stage of our agreement with Apollo. We have completed an initial assessment of options, and these are currently being more fully developed as part of an ongoing board-level decision-making process. As has been discussed with you at several points over the past year, this list of options continues to include the potential for taking ARR public as a pure-play renewable energy spin-out company. Broader market conditions have remained favorable for this possibility. That said, there are many factors that go into such a decision, and we continue to explore and evaluate how best to proceed to ensure that we maximize the exciting long-term opportunity that we believe ARR represents for shareholders.
Lastly, but never least, we continue to see positive developments throughout our project generation business. Our portfolio of holdings continue to attract strong interest from investors and gain access to broader pools of capital with which to advance the various projects. This will translate into a tremendous amount of exploration and development activity and news flow throughout the remainder of the year and into 2021. This will hopefully result in continued portfolio value growth and underlying royalty project advancements. We also remain active in our own internal exploration efforts and are continuing to find strong demand for the projects that are being generated, with several new project deals completed during the quarter that add new equity positions and early-stage royalty to our portfolio. Thank you. With that, we'll open the call for your questions.
Ladies and gentlemen, to ask a question, please press star, then the number one on your telephone keypad. Our operator, just a moment, will compile the Q&A roster. Your first question comes from Orest Wowkodaw with Scotiabank. Your line is open.
Hi, good morning. I wanted to get a little bit of better understanding on how the mechanics work on renewables deal with Apollo. Specifically, I'm just wondering, with the $25 million new transaction that was announced that will be funded by Apollo, does that effectively mean that upon closing of that transaction, that they would effectively gain or earn in, I think, a 15.5% ownership of the renewables? Is it just dollar for dollar percentage of that $80 million effectively from an earning perspective?
Yes, that's correct. The ultimate target here is CAD 80 million of sold funding from Apollo to reach the full 50% level.
Okay. There's no specific milestones, it's just % of CAD spent effectively.
Orest, to be honest, I'd want to go through the details of the agreement to be absolutely certain on that, but generally speaking, that's correct.
Okay. Again, thank you very much.
If there's any significance, I'll update.
Again, to ask a question, please press star, then the number one on your telephone keypad. Your next question comes from John Tumazos with Very Independent Research. Your line is open.
Thank you for taking my question. In comparing the quarter's revenue to a year ago, how much is the impact of the various prices? You noted potash was a big decrement. How much was the impact adverse to volume from the COVID, and how much was the impact to volume from either growth or depletion?
It actually is a decision of IOC to withhold probably not the right word, but to not declare dividends throughout the year. There's two forms of income that flow into Labrador Iron Ore Royalty Corporation, which we're a holder of, and that ultimately get passed through. There's the royalty amount, which obviously the operator has no discretion on. It's simply a function of production and prices. There's the equity level interest that LIORC holds, and typically, there's a pretty wholesome payout ratio that resolves to shareholders from that. So far in 2020, that would be the single biggest difference quarterly and year to date in our revenue. No doubt, potash prices have had a significant impact, are down considerably year-over-year while volumes are slightly off.
I would consider the other, more COVID volume-driven impacts to really have been relatively minor. The major one would be at Wabush A, but that's still a relatively small royalty within our structure. If I were to pinpoint, in order, I'd say the dividend situation at IOC, which we obviously hope gets reversed in Q4, but obviously don't get to make that call. Potash pricing, and then beyond that, particularly in the middle part of the year, base metal prices, mainly copper.
If I can ask another. I am looking at the cash flow statement. The acquisition of investments is CAD 68 million. How much of that is renewable, and what were the larger investments this year of a traditional mining and geology nature?
The biggest investment there would have been a $35 million investment in Apex Clean Energy in late Q1, early Q2. We will convert that to CAD, you will find a lot of the number. There were ongoing milestone payments made to Tri Global Energy as well. Those related to the original investments, the way they were structured is that monies were actually released and deployed on them achieving actual sales and portfolio build milestones. The only mining-related investments of note would be the additional interest that was acquired in the coal limited partnerships, then some more modest incremental purchases of potash royalty interests in Saskatchewan. Basically, just some team up of some small third-party holders. Sort of a regular program that we are running.
If I can ask one last one. The broad question is, how do you select the jurisdictions for renewable energy investment? Yesterday, Fortescue Metals, which is predicting they're going to have a future energy or renewable energy company bigger than Chevron or Total, said that their chairman and deputy CEO are going to 47 countries evaluating opportunities. I guess the sunlight is stronger in some deserts than others. Here in my township, there are corn fields converted to solar because the state subsidies are so big, even though New Jersey is not as good as Arizona for sunlight. I didn't put solar on my house because I didn't want to bank on the subsidies. I think New Jersey is more bankrupt than Puerto Rico. How do you evaluate the different jurisdictions and the best way to invest for renewable?
Well, right now, all of our investment focus is in North America. To be honest, that's as much as anything, a function of the knowledge base that our management team has, the networks of connections that they have, and sort of a strategic objective that we've had to try to perfect the royalty financing model for renewables within what we feel is the most sophisticated capital market that exists in the space right now. There is still a longer-term strategy or plan to take the model further afield if the business grows in the long term. If you want to get more granular as to where in North America we're invested, we certainly do a pretty rigorous evaluation of the overall portfolios of the developers that we're investing in.
There is some element of choosing, I suppose, in that we're conscious of where their efforts and projects are concentrated. For the most part, it's pretty diversified across the different grid networks in the U.S. Even in New Jersey right now, with the cost of solar panels and the efficiencies having improved so much, there is an unsubsidized economic case for the project. Again, the way it works with us is that we'll receive royalties from within significantly diversified portfolios, and we'll receive them in the order that they're sold. It's more of a market-driven set of forces that will determine how our ultimate geographic diversity is going to shake off and be put in North America. It has more to do than just resource.
It also has to do with factors such as interconnection availability, grid bottlenecks, and a whole host of factors there that go into that. What I can say is that the sales of these projects and the appetite for buying these projects by final sponsors from the developers that we are backing is very much economically motivated beyond historical subsidies, which quite frankly, are already set to roll off pretty soon. I take a lot of comfort in the fact that there is an economic and a rational economic underpinning to the order in which these projects are being sold and royalties are being created right now.
Thank you.
Thank you.
Your next question comes from Brian MacArthur with Raymond James. Your line is open.
Good morning. Just a little bit back to Orest question. The CAD 7 million you just put into TGE, Apollo did CAD 5 million and you did CAD 2 million. A couple of questions. I guess I just want to confirm that brings your investment so far to TGE up to CAD 24 million, I guess. You have CAD 6 million of your share to go. Secondly, is that the way we should think about it going forward? I thought originally you would put in the first CAD 30 million, and then they'd put in the next CAD 80 million, but you kind of split it CAD 5 million and CAD 2 million. Is that how it works going forward? What was the rationale for doing it that way?
Brian, the CAD 2 million was actually a milestone payment that was made for solely on our account prior to the signing of the Apollo deal. The next milestone tranche was triggered after the Apollo deal. I guess the other way of answering is that at whatever point we were when Apollo entered, sort of stopped our funding requirement for remaining milestone tranches under the original investment and put that over to Apollo's ledger. I don't know the exact number, but I believe it was CAD 8 million or so remaining at the time of the Apollo entry. The funding of those eight would obviously contribute to the work towards their CAD 80 million earning.
And then-
Roughly speaking.
Does the next 25 that goes in that you've announced post that deal then, I mean, the original TGE royalties were going to be 3%. Are the new 25 kind of the same sort of thing, 3% royalties? Is that sort of structure? In fact, the 25 is a real true continuation, like the full 55 works the same way?
Yeah, it's just an expansion of the whole program. There was very little modification, minor tweaks here and there to the actual investment agreement. As I tried to explain in the remarks, what was happening is that we were getting visibility on enough sales and royalties being created that we were going to soon cap out on receiving new royalties just because of the success that they've had. We obviously didn't want that to happen. We think that they've met our expectations, gone well beyond our expectations in terms of the pace that they've been able to bring projects to sale and royalty creation. We've noted that particularly because they were able to access our capital, the portfolio has grown to beyond what it was when we originally invested. They were very happy to keep using our capital to bank and grow their portfolio forward.
They're obviously very happy with the relationship, and similarly so were we. I mean, bigger picture here, what I'd love to see happen is that in the case of that TGE agreement, the Apex agreement, and even others that we might complete from here, is that they're not one-offs, that they're continuums. That we can continue to keep funding their growth and development with a partner like Capital, and they can continue to keep creating royalties on our behalf. That would be extremely efficient for us on a business development path going forward, if we can not only rely on new transactions with new players, but we can just continue to reload on investments with those groups that are meeting expectations and succeeding so well in their own businesses.
Great. Thank you very much. Very helpful.
Thanks, Brian.
Your next question comes from Craig Hutchison, TD Securities. Your line is open.
Good morning. I just wanted to ask about the outlook for the funding you put to Apex. You've got three deals, or I guess three royalties already created with the funds you advanced to TGE. Can you provide any outlook in terms of when you think you might be able to actually secure a royalty on the funding provided to Apex?
Yeah. Apex is actually having a banner year. I think they're on target for more project sales than at any other point, which in some ways is pretty remarkable when you consider what kind of a year we've had. What's important to point out here is that when we entered that agreement with Apex, and also with TGE for that matter, we looked through their portfolios and they identified projects within that were already fairly advanced in terms of discussions with potential buyers. It wasn't going to work for us to try to interject royalty structures into ongoing sales processes. That would have obviously not been well received by the people that they were already dealing with. There was a carve-out of projects or of what we call excluded projects that were more or less subject to prior sale already.
What that does is it generated a backlog of sales that they had to get through before next sale subject to royalty would be completed. They're actually very close to reaching that point now, and we're optimistic that before year-end, the flow will start to develop those sales with royalties attached, and from there forward, it will be essentially all projects with royalties attached that would come out of their portfolio. Their sales have been remarkable. They've been knocking it out of the park all year, and in fact, they've worked through that backlog of excluded projects quite a bit ahead of schedule, more or less. They're not quite there yet, but very close to reaching that point.
Okay. I appreciate the additional color.
No problem. Thanks.
There are no further questions, Peter. At this time, I'm going to call back over to Flora Wood.
Thank you, Denise. I do have one question that's coming from an investor who's on the webcast. Ben or Brian, he wants you to speak to your estimate of the impact on the 777 and Chapada shutdown. Which quarter, and anything you can estimate on quantity?
Ben, you can speak to the timing elements of that, I guess, or at least correct me if I get this wrong. With Chapada, there's a lag impact. When you see Q4 revenue, it really comes from Q3, and that's before there was the technical issue. In other words, we'd expect to see much of the impact from the curtailment of the reduced production impact in that case in Q1. That's less of an issue at 777 Mine. There are current challenges that we would expect to book in or note in Q4. Before I go further with that, Ben, is that accurate?
Yeah, that's accurate. Yep. The only difference with 777 Mine is that the zinc we get paid for as it's produced because there's a refinery there.
Right.
It's only the copper would have a similar lag at 777 Mine as well.
Got you. As far as the overall impact, what we've heard from the operators is that, in both cases, they're still running but at reduced levels. Chapada has managed to replace some of the downed equipment, but there's only one mill running, and if I'm not mistaken, they're estimating that they are currently running at around 30%, and that by sometime in December, that should be back up to full capacity. I don't know. You can make your own estimates as to what that relates to, but probably 50% production, depending on how the ramp-up goes. With regards to Triple Seven, timeline is a little less clear, but they're similarly guiding to be back to full capacity by year-end. Right now there is some production, but what's happening is that it's coming up through the ramp. They're constrained there.
Obviously the pulling the ore through the shaft is not happening at the moment, but there's still some production coming from the ramps. The other thing I'll point out, I should say, about Chapada is that Q1 is typically a pretty weak production quarter at Chapada because it's the rainy season in Brazil. A lot of the bottlenecks and curtailments happen at the mine itself. One thing that Lundin seems to be doing is advancing a lot of pre-stripping and have continued mining levels so that they can work from stockpiles once they get up and running. I'm assuming anyway that should have a positive impact on negating some of those mine level impacts that quarter one typically has. I think there again, they're making the most of the situation and trying to fight things back as best as they can. They're clever people.
I'm optimistic that they'll really minimize the impacts here.
We do have a question on the phone. Your next question comes from Jacques Wortman with Laurentian Bank . Your line is open.
You might be on mute, Jacques.
Oh, sorry. Sorry, Brian. There was some pushback when Altius increased its interest in thermal coal. Some felt that it conflicted with the renewable energy royalty push. Now you've written down the carrying value. Can you just revisit the thesis or the rationale on the transaction from July and where that kind of sits now?
Sure. Funny enough, it actually was a bit the driver for the write-down because the cost per percentage of ownership implied by that transaction in buying out Liberty's remaining interest was considerably lower than the original purchase price on the core interest. When you weight average the cost across those purchases, you get a significantly lower number, and that's what, in many ways, triggered impairment factors here. As far as the motivation for that transaction back in July, and the rationalization for the factors that we're seeing and that have gone into our consideration of the write-down were known to us at that time and factored in. We continue to believe that the rationale at the time was strong and that our expectation for a fairly rapid payback still holds.
We obviously had better visibility on the near term than long term, and in rationalizing that investment, we certainly put almost all of our weight on the very near term. Beyond that, in terms of how it could be perceived to be in conflict with our broader goal of phasing our own interest from coal and into renewables. Yeah, I can see the point, but the arguments other or against are that by picking up that additional interest. Really nothing's going to change. The mines are going to build, run, and operate at exactly the same pace, irrespective of who the ultimate owner of that additional royalty interest was. It's not like there was any way, shape, or form that this was an investment that somehow could encourage or enable a longer life of the assets.
Beyond that, I guess, the arguments we've made is that at that point in time, we had already reached the point that we'd invested all of what we expected of remaining coal revenues into the growth of the renewables business as per sort of an early promise when we started the whole renewables initiative. We're still seeing lots of opportunity, and here was an accretive opportunity to acquire more of those cash flows through final waning gasping stages in the coal business and to reinvest. More simply put, we didn't really see it as a doubling down on coal as much as we did see it as a doubling down on our renewables investment focus. Just a way to leverage a dollar because nobody wants to pay anything for coal and to take that dollar and to further accelerate the renewables investment plan.
Okay, thanks. I guess just in terms of the really rough math here, if you're still carrying the thermal coal portfolio at call it CAD 37 million combined, a 44.9% interest that you bought in July for CAD 9 million is still worth roughly CAD 16 million, CAD 17 million? In other words, it still looks like it was accretive even with the write-down taken?
Again, the other thing about it's more than just the weighted average. We also took really conservative approaches to the factors ranging from what's your prognosis for energy consumption in Alberta? What's the future gas price going to be? We took what we believe are very conservative views across that. There's so many subjective variables that go into how things will play out with coal in Alberta going forward that, again, it's a guess at best. I think the approach we've taken is appropriate and definitely conservative.
Okay, thanks, Brian. Appreciate that.
Thank you.
There are no further questions. At this time, I'm going to call back over to Flora Wood for closing remarks.
Okay, thanks, Denise. Want to thank everybody for dialing in and for the questions. We'll look forward to talking to you for year-end.
Thanks, everyone.
This concludes today's conference call. You may now disconnect.