LABRADOR NICKEL ROYALTY LIMITED PARTNERSHIP

Voisey's Bay Royalty

Altius has a 10% interest in the Labrador Nickel Royalty Limited Partnership. The Limited Partnership holds a 3% net smelter return royalty over the Voisey's Bay nickel-copper-cobalt project in Labrador that is owned and operated by Vale INCO NL.

Altius' royalty entitles it to a share of revenues less certain costs incurred after concentrates leave the mine site for final processing. The costs of mining or onsite processing are not deducted from our share of revenues.

Altius acquired the royalty interest in mid-2003 using a conservative long term nickel price of US$3.25 per pound for a total purchase cost of $13.6 million. by mid 2010 Altius had recognized cumulative revenue in excess of $15 million since the royalty was acquired and expects another several decades of annual royalty revenue.

At present, Vale Inco states the Voisey's Bay operation has an estimated project life of about 30 years and ranks as one of the lowest cost nickel producers globally. Altius views the Voisey’s Bay royalty as one of the best royalty assets in the minerals industry today.
 

Inherent Upside

Altius believes the exploration potential of the area captured by the royalty to be exceptional. This exploration upside is especially significant to Altius because not only does the royalty apply to the known mines and ore reserves at Voisey's Bay it applies to the entire Voisey's Bay district! Further, the exploration potential comes at zero effective risk to Altius shareholders, as exploration expenditures are not deductible against royalty payments.

The Voisey's Bay project is at a very early stage of its exploration and development history compared to other world-renowned nickel districts like Sudbury and Noril'sk which dramatically grew in scale over the initial decades following discovery.