Several folks have asked about the state of Altius Minerals (ALS.TO, ATUSF), which I’ve written about for you many times and have owned for about seven years (time flies when you’re having fun!). They just released their quarterly filing, and the initial impression is “more of the same” — the business is chugging along, cash flow is more or less as expected from their producing royalties, and they continue to invest small amounts of capital to advance early-stage “prospect development” projects that they anticipate will become attractive to miners (or investors) the next time the commodities cycle turns upward.

You can see the management discussion and analysis here, which is a worthwhile overview, and the actual numbers here.

In the big picture, Altius’ share price will largely be driven by investor opinion about the prospects for copper, gold, coal, nickel, potash, zinc and other mined commodities, because assessments about the future value of those mined products will determine how much investors want to pay for future cash streams from those mines. What matters most is how much investors will pay for a future stream of potash royalties, or coal royalties, or copper royalties, and whether they have any lust in their hearts for the much-farther-into-the-future and huge-but-uncertain projects that might eventually be developed from their prospects.

This is the primary reason for Altius’ fall over the past year or two — lack of interest in paying for future potential in the commodities space. Investors are not excited about paying for a potentially huge iron ore royalty… because that project (the Kami mine, owned Altius’ spinoff Alderon and originally slated to open this year) has been unable to get financing and was put on mothballs a year or two ago, waiting for better iron prices (but Altius isn’t currently spending anything on that “someday” project). They don’t want to pay a premium for the steady and large royalties from Alberta coal mines, because there’s substantial political and regulatory uncertainty now about the speed of phase-out of the coal power plants in that province (but cash generation from the coal plants now is pretty much on track). They don’t want to pay much for the likely expansion of the 777 copper/gold mine because copper and gold are still (though gold has recovered some) at such low prices. And they don’t want to pay anything for the “prospects” — ...