Ladies and gentlemen, thank you for standing by, and welcome to the Altius Minerals Corporation Third Quarter twenty twenty Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. 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.altiasminerals.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 and A session. The forward looking statement on Slide two applies to everything we say, both in the formal remarks and during the Q and A. And 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 16,200,000.0 was up 25% from last quarter's royalty revenue of $13,000,000 largely due to copper prices rebounding from a low of $2.3 per pound realized last quarter to approximately $2.95 realized this quarter. We also recognized higher zinc volumes at seven seventy seven 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 prices compared to Q2.
We also experienced continued low thermal coal revenue due to the ongoing COVID related impacts of reduced Alberta 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 ILC 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 $12,400,000 was also up 24% from Q2, with the increase following the revenue growth. G and A costs of $2,400,000 are up from the $1,900,000 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 percent consistent with last quarter's EBITDA margins. Adjusted operating cash flow of $7,300,000 this quarter reverses the trends 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 $33,900,000 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 and A and slightly higher interest charges. The quarterly net loss of $39,800,000 or $0.96 per share includes a noncash impairment charge of $45,600,000 or $1.1 per share.
Adjusted net earnings were 3,600,000 or $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 9,000,000 Prior to the purchase, we had collectively carried our share of the coal LPs at a value of 73,000,000 and the incremental acquisition cost, therefore, resulted in a significantly lower weighted average carrying value, which prompted an impairment evaluation. 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 noncash adjustments this quarter relate to the dilution gain that resulted from Adeptus Mining's successful completion of a $38,000,000 financing. During Q4, we will continue to evaluate the impact of the Apollo Renewables transaction on our financial reporting.
We also expect the all around receivership process to unfold in Q4. I'll 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 $1,000,000 The current receivership based sales process for the former assets of Alderon, including the CAMI project, is ongoing. We have previously booked impairments to the value of these holdings upon initiation of the receivership process, but 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 $05 per share quarterly dividend. And 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 FLAURA for more information on how to enroll in this program. Finally, looking at the balance sheet and capital allocation, we ended Q3 with $45,500,000 in the value of the project equity portfolio and $73,800,000 in LIARC shares. After payment of approximately $9,000,000 for the Liberty acquisition, our preferred security distributions and common share dividends and the funding of an additional 3,000,000 to TG on a milestone based payment, we ended the quarter with $16,000,000 in cash and cash equivalents. We also had modest activity on our normal course issuer bid in Q3. And on a year to date basis, we have repurchased and canceled 644,000 shares at an average price of $9.45 per share.
We have paid $15,000,000 year to date on our term debt and have approximately 39,000,000 in undrawn availability on our revolver. As Brian will discuss in greater detail, Apollo is expected to fund the next $80,000,000 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 $7,000,000 to PGE, of which $5,000,000 was funded directly by Apollo. Brian has more to say on macro conditions and the recent acquisitions, and 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 improvement 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 through the quarter and subsequent periods. We saw strong price rebounds begin to take shape across the base metals complex, but also technical issues like Chapada and July that have resulted in temporary production level declines.
Potash 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 IOT mine again elected to not distribute dividends to shareholders. However, premium quality iron ore prices remained robust and resulted in strong royalties, while the potential of our interest linked to the CAMI project were also brightened. Turning to the electricity component of our royalties, we elected to take a noncash write down with respect to our electricity coal assets, while on the other hand, our most significant development during the quarter saw Opius Renewable royalties receive an accretive investment and strong endorsement from major private equity player Apollo. A mixed bag of updates here for sure, but this yet again underscores the benefits of holding a well diversified portfolio.
Overall, the positives outweighed the negatives, and 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 seven seventy seven were isolated and solutions to return to full production levels in relatively short order are being implemented by both mine owners, and we continue to view top tier operators. Lundin, in particular, appears to be making the most of the situation by advancing stripping more soft columns while also stepping up activities related to their expansion plans for Sapatera. At Voisey's Bay, nickel, copper and cobalt production has ramped back up from COVID related curtailments, and 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. Adventist Mining also closed a major institutional equity financing round during the quarter that paved the way for it to complete feasibility study work at its high grade Pericomba polymetallic project in Equinor as well as to advance our regional copper porphyry exploration target. We hold a royalty related to Kurigamba and are significant advantaged shareholders. Base metal price strengthening continues as the challenges of a protracted period of low investments and new and replacement capacity is being met concurrently by expectations of higher global demand and 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 an intensity. All 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 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, and 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 and 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 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 within 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 steelmaking and expect this schematic 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 steelmaking. As such, they are increasing demand of direct inputs and its land stock for ore from other regions, and in particular, Australia's Silberra, 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 Pinto's overall portfolio also seems to be gaining significance. With a late September announcement by the major of the securing of facilities in North China that are being used to upgrade ores from the silver operations with IOC derived material.
It is worth reminding here that a core part of our long term attraction to IOC to its extensive and arguably underdeveloped mineral endowment and its certainly underutilized transportation infrastructure. We have recently learned that a receivership process that seeks to sell the former assets of all around iron ore, being mainly the feasibility stage Tammy 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. Albius originated the CAMI project and retained a 3% gross sales royalty related to any future potential production.
Our efforts to convert the residual revenue from our phase out stage Alberta thermal coal loyalty into a long term stream of renewable energy based royalties achieved a significant milestone during the quarter. Follow-up funds can now earn a 50% interest in the business in exchange for sole funding the next $80,000,000 in improvement of that investment. We have a specific investor call on this deal whenever we're now, so I won't rehash the details today. The main subsequent update to note, however, is that the joint venture has announced its first investment in the form of USD 25,000,000 expansion of an existing agreement with Tri Global Energy. This was motivated from our side by a recognition that PGE is now either sold or has visibility on sales of sufficient projects to meet our estimate of the number of creative 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.
As such, 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 unprocessed. The Apollo announcement has also had a positive impact in terms of our deal flow origination look as potential counterparties continue to gain awareness of the royalty model generally and develop increased confidence in our particular capability to provide innovative partner like solutions to their businesses. We've also continued to evaluate the optimal methods and structures that ARR can utilize, the funded share of investments that are identified following completion of the earnings 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 royalty 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 our 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 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, a new 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 royalties to our portfolio. Thank you. And with that, we will open the call for your questions.
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. And specifically, I'm just wondering, with The US $25,000,000 new transaction that was announced that will be funded by Apollo, does does that that effectively mean that they if upon closing of that transaction that they would effectively gain or earn in, I think, a a 15 and a half percent ownership of the renewables? Is it just dollar for dollar percentage of that 80,000,000 effectively from an earning perspective? Yes.
That's correct. And so the ultimate target here is 80,000,000 of sole funding from Apollo to reach the full 50% level. Okay. So there's no specific milestones. It's just percentage of dollars spent effectively.
Orest, to be honest, I'd wanna go through the details of the agreement to be absolutely certain on that. But, you know, generally speaking, that's correct. Okay. I can. Thank
you very much.
And any significant no update.
Your next question comes from John Tumazov 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 virus? And how much was the impact to volume from either growth or depletion?
Single biggest factor is none of those. In fact, it actually is a with decision of IOT to withhold or not to lose. Withhold is probably not the right word, but to not declared dividends throughout the year. So, you know, there's two forms of income that flow into Labrador Iron Oil 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. But then there's the equity level interest that's Lyra Cole. And, you know, typically, there's a pretty fulsome payout ratio that results to shareholders from that. But so far in 2020, I think that would be the single biggest difference, you know, quarterly and year to date in our revenue. No doubt potash prices have had a significant impact or down considerably year over year, while volume are slightly are slightly up.
And I and I would consider the other, you know, more COVID volume driven impacts to to really have been relatively minor. The major one would be at at Voigy's Day, but that's still a relatively small royalty within our within our structure. So for the pinpoint, in order, I'd say that we give it in situation at IOC, which we obviously hope gets reversed in q four, 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'm looking at the cash flow statement, the acquisition of investments is 68,000,000 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 US million dollar investment in Apex Clean Energy in I guess, it would have been late q one, early q two. We'll convert that to Canadian, and you'll find a lot of a lot of the number. There were ongoing milestone payments made to Tri Global Energy as well. Those related to the original investments, but the way they were structured is that money were actually released and deployed on them achieving the actual sales and portfolio growth milestones. The only mining related investments of note would be the additional interest that was acquired in the coal limited partnerships and then some more modest incremental purchases of potash royalty interest in Saskatchewan.
Basically, just some team up of some small third party holders, you know, sort of a regular program that we're 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 gonna 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 or in my township, there are cornfields converted to solar because the state subsidies are so big even though and New Jersey is not as good as Arizona for sunlight.
I didn't put solar on my house because I didn't wanna bank on the subsidies. I think New Jersey is more bankrupt than Puerto Rico. But 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. And to be honest, that's as much as anything a function of the knowledge base that our management team has, the the networks, the connections that 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. But there is still a longer term strategy or plan to take the model further afield as the business grows in the long term. You know, if you wanna 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 that we're investing in.
So, you know, there is some element of choosing, I suppose, in that, you know, we're we're conscious of where their efforts and projects are concentrated. But for the most part, it's pretty diversified across the different the different grid networks in The US. You know, even in New Jersey right now, with the cost of with the cost of solar panels and the efficiencies having improved so much, there is an unsubsidized economic case for for the project. But, again, it's not the the way 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. So it's more of a market driven set of forces that will determine how our ultimate geographic diversity is gonna shape up at least within within North America.
And and it has more to do with than just resorts. It also has to do with factors such as interconnection availability, grid bottlenecks, and a whole host of factors there that that that go into that. But what I can say is that the sales of these projects is and the appetite for buying these projects from final sponsors or by final sponsors from the developers that we're backing is very much economically motivated beyond historical subsidies, which, quite frankly, are already set to to roll off pretty soon. I take a lot of comfort in the fact that there's 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 McCarthy with Raymond James. Your line is open.
Good morning. I'm just a little bit back to Orest's question. The $7,000,000 you just put into TGE, Apollo did 5 and you did 2. So a couple of questions. I guess, I just want to confirm that brings your investment so far to TGE up to 24,000,000,
I guess.
So you have $6,000,000 of your share to go. And secondly, is that the way we should think about it going forward? I mean, I thought originally you would put in the first 30,000,000 and then they'd put in the next 80,000,000 but you kind of split it you know, five and two. Just just is that how it works going forward, or or what was your rationale
for getting it that way? Brian, the the 2,000,000 was actually a milestone payment that was made for, you know, solely on our account prior to the signing of the Apollo deal. The next milestone tranche was triggered after the Apollo deal. So I guess the other way of answering is that at whatever point we were when Apollo entered, you know, 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 8,000,000 or so remaining at the time of the Apollo entry.
So the funding of those eight will obviously contribute to the towards those toward towards their 80,000,000 earning.
And or maybe not. And then
Roughly speaking.
And does the next twenty five that goes in that you've announced post that deal then, I mean, the original PGE royalties were gonna be 3%. Are the new 25 kind of the same sort of thing, 3% royalties? Is that sort of structure? So, in fact, the 25 is a real true continuation. Like, the full 55 works the same way?
Yeah. It's just it's just an expansion of the whole program. We just you know, there was very little modification, minor tweaks here and there to the actual investment agreement. But 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. And we obviously didn't want that to happen.
We think that, you know, 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. So they were very happy to keep, you know, using our capital to bank and grow their portfolio forward. They're obviously very happy with the relationship and similarly so will we I mean, bigger picture here, what what I'd love to see happen is that in the case of that PV agreement, the APEX agreement, and even others that we might complete from here is that they're not one off, that they're continuing, that we can continue to keep funding their growth and development with 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 with those, groups that are, you know, meeting expectations and exceeding so well in their own businesses.
Great. Thank you very much. Very helpful.
Thanks, Bob.
Your next question comes from Craig Hutchinson, TD Bank. 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, I guess, three royalties already created with the funds you've advanced to GGE. Can you provide any outlook in terms of when you think you might be able to actually secure royalty on the funding provided to Apex? Yes. 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. But what's important to point out here is that when we entered that agreement with with Apex and also with TG 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. So it, you know, it was not you know, it wasn't gonna work for us to try to interject royalty structures into ongoing sales processes, and that would have obviously not been well received by the people that they were already dealing with. So, you know, there was a carve out of projects or of what we call excluded projects that were, you know, more or less subject to prior sale already. And, you know, 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.
So 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 with royalties attached. And from there forward, it will be essentially all all the royalties attached that that would come out of the portfolio. But their sales have been remarkable. They've they've they've been knocking out of the park all year. In fact, they've worked through that backlog, which through the projects, quite a bit ahead of schedule, but more or less.
They're not quite there yet, but very close to reach at that point. K. I appreciate the additional color. No problem. Thanks.
There are no further questions queued up. At this time, I'll turn the call back over to Florwood. Thank you, Denise. I do have one question that's coming from an investor who's on the webcast And, Ben O'Brien, he wants you to speak to your estimate of the impact on the triple seven and Chapada shutdown. So which quarter and anything you can estimate on quantity?
Ben, you can speak to the timing elements of that. I guess, you know, or at least correct me if I get this wrong. But with Chapada, there's a a lag impact. So, you know, we kind of when you see q four revenue, it really comes from q three, and that's before there was the the technical issue. So 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 seems that's less of an issue at seven seventy seven. So there are current challenges that we would expect to book in or note in q four. Before I go further with that, Ben, is that accurate?
Yeah. That's accurate. So yeah. The only difference with July is that the the zinc we get paid for as it's produced because there's a refinery there. So it's only the copper would have a similar lag at July as well.
Got you. And then as far as the overall impact, what we've heard from the operators is that in in both cases, they're still running but at reduced levels. The Chicago has managed to replace some of the down 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. So I don't know.
You can make your own estimates as to what that relates to, but probably 50% of production depending on how the ramp up goes. And with regards to triple seven, timeline is a little less clear, but they're similarly guiding to be back to full capacity by by year end. So right now, there is some production, but what's happening is that it's coming through up through the ramp. So they're, you know, constrained there. So, obviously, the pulling the ore from the through the shaft is not happening at the moment, but there's still some production coming from the from the the the.
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 of it's it's the rainy season in Brazil, and, you know, a lot of the bottlenecks and curtailments happen at the at the mine itself. And one thing that Lundin seems to be doing is advancing a lot of prestripping and and continued mining levels so that they can work from stockpiles once they get up and running. And I'm assuming anyway that that is that should have a positive impact on negating some of those mine level impacts So I think they're, again, they're making the most of the situation and trying to fight things back the best that they best that they can. They're clever people.
So I'm not gonna I'm optimistic that they'll really minimize the impact here.
And we do have a question on the phone. Your next question comes from Zack Whartman with Laurentian Bank. Your line is open.
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. And 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. Know what? Funny enough, it's 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 is considerably lower than the original purchase price on the on the core interest. So when you weight average the cost, you know, the cost across those purchases, you know, 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, you know, 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. So we continue to believe that the rationale at the time was strong and that our expectation for a fairly rapid payback still hold. We obviously had better visibility on near term than 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 of of phasing our own interest from coal and into renewables. Yeah. I can see the point, but, you know, the argument's other or or again, sir, that by picking up that additional interest, really nothing is going to change. The mines are gonna still run and operate at exactly the same pace irrespective of who the ultimate owner of that additional royalty interest was. So it's not like there was any way, shape, or form that this is an investment that somehow could encourage or would enable a longer life of the of the asset.
Beyond that, I guess, you know, the argument we've made is that at that point in time, we had already reached the point that we've invested all of what we expected on remaining coal revenues into the growth of the renewables business as per sort of when we started the whole renewables initiative. And we're still seeing lots of opportunity, and here is an accretive opportunity to, you know, acquire more of those cash flows to, you know, final weighing in the gaps in stages in the coal business and and to reinvest. So 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 investing focus. It's just a way to, leverage the dollar because nobody wants to pay anything for coal and to take that dollar and to further accelerate the renewables investment plan.
Okay. And I guess just in terms of the really rough math here, if you're still carrying the thermal coal portfolio at, call it, dollars 37,000,000 combined, A 44.9% interest that you bought in July for 9,000,000 is still worth roughly $1,617,000,000. In other words, it still looks like it was accretive even with the write down taken. Yeah.
I mean, again, the other thing about it's more than just the weighted average. But We also look really concerned you know, the factors ranging from, you know, what's your prognosis for energy consumption in Alberta, what's the future gas price gonna be. Yeah. We took what we believe are 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.
But, again, it's it's a guess at that. I think the approach we've taken is appropriate and and definitely conservative.
Okay. Thanks, Brian. Appreciate that.
Thank you.
There are no further questions set up at this time. I'll turn the call back over to Flora Wood for closing Okay. Thanks, Denise, and I wanna thank everybody for dialing in and for the questions. And we'll look forward to talking to you for your end.
Just keep me safe.
This concludes today's conference call. You may now disconnect.