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Altius Minerals flags up to C$75M impairment charge on Genesee partnership

Altius Minerals Corp. on Feb. 2 said it expects to book a noncash impairment charge of C$70 million to C$75 million on the carrying value of its 53% interest in the Genesee Royalty Ltd. Partnership for the fiscal quarter that ended Jan. 31.

Genesee Royalty holds an underlying interest in the coal resources of the Genesee mine in Alberta, which provides thermal coal feed to Capital Power Corp.'s adjacent Genesee generating station on a long-term, exclusive basis in exchange for a tonnage-based royalty.

Altius reassessed the value of future Genesee Royalty payments and intends to reduce its share of the carrying value of the royalty as a result of a proposed change in Alberta's provincial electrical generation policy, which aims to phase out coal-based electrical generation capacity by 2030.

The Alberta government has acknowledged that the new policy will have a negative economic impact on certain stakeholders that invested in the province's integrated coal electricity sector under previous policy regimes and has offered to provide transition payments to impacted electrical generation stations and mine operators as compensation.

Altius has requested a meeting with the provincial energy minister to discuss the impacts of the new policy on its investments in Alberta but noted that there is no assurance the company will receive compensation.

The Genesee mine was governed by policy and regulatory conditions that would have allowed it to continue operations until about 2055 at the time that Altius and its investment partners acquired the royalty. According to Altius, Capital Power has secured a deal with the provincial government for compensatory transition payments in exchange for ceasing coal-fueled power generation at Capital Power's Genesee facilities by 2030.