Altius makes bid for rest of TNR amid board fight

Altius Minerals (TSX: ALS) has made an unsolicited, non-binding proposal to acquire the 87% of TNR Gold (TSXV: TNR; US-OTC: TRRXF) it doesn’t already own, a move that would give it control of royalties over two major Argentine copper and lithium projects.

Vancouver-based TNR hasn’t disclosed the offer price or other financial terms. At TNR’s Wednesday morning share price of 32¢, the company is valued at about $78 million and Altius’ proposed purchase of the remaining shares would be worth roughly $68 million before any takeover premium.

TNR has entered into an exclusivity arrangement with Altius after a special committee of independent directors reviewed the proposal, TNR said Wednesday. The committee is continuing to assess the approach and no definitive transaction has been agreed. Altius had signalled its interest in TNR’s royalty portfolio when it first invested for 9.9% of the company in May.

“The TNR royalty portfolio includes exposure to major copper and lithium deposits,” Altius said at the time. “We look forward to working constructively with the TNR team as its royalty portfolio and business continues to advance and mature.”

Shareholder dispute

The approach comes amid a months-long shareholder dispute at TNR involving New York-based Eucalyptus Resources Opportunities Fund, which has sought changes to the company’s board and criticized Altius’ initial investment as dilutive. On Monday, TNR and Eucalyptus agreed to discontinue a court petition and give the existing board time to complete its strategic review.

TNR shares gained 8.3% in Toronto on Wednesday morning after closing Tuesday at 30¢. They’ve traded between 9¢ and 36.5¢ over the past year. The company has a market capitalization of $80.9 million. Altius has been steadily building its position in TNR this year. Its subsidiary invested $4.2 million in May for 23.5 million shares at 17.75¢ each.

The investment also gave Altius a right of first offer over TNR’s interests in royalties covering the Mariana lithium project and Los Azules copper project in Argentina. Altius said at the time the investment fit its strategy of taking minority stakes in companies holding royalties over large mineral deposits.

Altius increased its position in July by buying another 7.4 million shares at 23¢ each for about $1.7 million. That lifted its holding to 30.9 million shares, or about 13%. Based on that stake, TNR has about 244 million shares outstanding.

Royalty portfolio

TNR’s main assets include a 0.4% net smelter return royalty on McEwen’s (TSX, NYSE: MUX) Los Azules project in San Juan province, Argentina, although 0.04% is held on behalf of another shareholder.

Los Azules is one of Argentina’s largest undeveloped copper projects. A 2025 feasibility study outlined proven and probable reserves containing 10.2 billion lb. copper and average production of about 205,000 tonnes of copper cathode annually during its first five years.

TNR also holds a 1.5% net smelter return royalty on Ganfeng Lithium’s Mariana project in Argentina, including a 0.15% interest held for another shareholder. Ganfeng can repurchase 1% of the royalty for $1 million, which would leave TNR with a 0.45% interest.

Mariana began producing lithium chloride last year and made its first export in February.

TNR also has a 7% net profits royalty over the Batidero I and II properties at the Josemaria project being advanced by Lundin Mining (TSX: LUN) and BHP (NYSE, LSE, ASX: BHP), and owns 90% of the Shotgun gold project in Alaska.

In addition to Eucalyptus’ criticism of Altius’ original investment in April, it also objected to the associated voting agreement and rights over TNR’s royalties. TNR and Eucalyptus subsequently clashed over the company’s annual meeting and the ownership and voting of shares.

TNR has scheduled its annual and special shareholder meeting for Dec. 8.