Episode 393: The Critics Are Wrong... Copper Demand Is Here to Stay
On this week's Stansberry Investor Hour, Dan and Corey welcome Brian Dalton back to the show. Brian is president and CEO of Altius Minerals, a diversified mining royalty and streaming company operating in Canada, the U.S., and Brazil.
Brian kicks things off by sharing the basics of Altius Minerals – what the company does, what sets it apart from other natural resource royalty companies, and the option value of its assets. He also talks a bit about his background and how he got his start in prospecting.
Next, Brian explores the renewable-energy part of the business. Altius took its coal revenues and reinvested those to write royalties on renewable-energy projects, particularly wind and solar. As Brian explains, nearly all of these projects have some aspect involving energy storage. And best of all, renewable energy's resource life is basically "infinite." Brian specifies...
Say it's a set of wind turbines today and they're going to be good for 20 years. We assume 20 years' revenue, but if that gets reinvested in 16 or 17 years, suddenly there's an extra 20 years [of revenue to come]... At that point in time, what will have happened to the equipment? The equipment that will be replacing what's coming off probably is capable of capturing more energy from the same footprint than the initial round. So you're going to get a volume increase and a life extension all at once, all at no cost.
Then, Brian delves into copper. He urges listeners to ignore all of the noise around the metal – from both the "woke" and "antiwoke" sides of the aisle – and to realize that demand is steadily rising. In the short term, he says that investors can really take advantage of volatility and the irrationality of price cycles. But there's also a lot of money to be made long term, as demand isn't going anywhere. "Copper is electricity," Brian notes. Further, he discusses incentivization prices, operating costs, and the future of the industry...
There aren't going to be a bunch of surprise new high-grade copper discoveries found at [the] surface now. We're talking about choosing to pick lower-grade deposits because that's what's available to us. These wouldn't have made the cut 15 or 20 years ago. But they're the best we've got right now, and we still need copper.
Finally, Brian talks about nuclear energy's prospects, Altius' history with uranium royalties, and how he makes decisions about Altius' capital allocation. Unlike many other companies, Altius treats share buybacks as if they're competing against external investment opportunities. If the best value in the market is in the assets Altius already owns, and if there's a wide spread between that value and the share price, only then do buybacks happen...
I think there's always a natural bias in management teams to buy something external, to make an acquisition, to add something new... If you like the things you've already bought – and you must've because you bought them – and you think they're trading at a deep discount on a per-share basis, and you've got cash sitting around, well heck, buy more of it.
Click here or on the image below to watch the video interview with Brian right now. For the full audio episode, click here.
(Additional past episodes are located here.)
The transcript is coming soon.