The model is epitomised by the Michelin uranium deposit, shunted by Altius into Toronto-listed Aurora Energy in 2005 in exchange for 37 per cent of its stock. By 2008, Altius had sold down its shares into a raging uranium bull market, netting proceeds of C$208m, versus initial prospecting costs of C$650,000.
In true counter-cyclical fashion, Dalton used part of the cash to buy-back shares when markets collapsed in 2008, but Altius was left sitting on C$150m, then equal to half its market cap. Rather than pay dividends out of capital, Dalton held out for a patience-testing 5 years and was rewarded with the right deal, paying nickel miner Sherritt C$233m for a coal and potash royalty portfolio in December 2013.
Again, Altius was unmistakably on the right side of the table, with Sherritt forced into asset sales by battered nickel prices and a proxy bid for its board. As of its last quarter, Altius is now sitting on recurring royalty revenue of C$26m per annum ($21m), extending over mine lives of up to 70 years.
The company reaped C$41m last week from an opportunistic investment in Virginia Mines, selling its shares into the company's C$1.3bn merger with Osisko Gold, and also holds 17m options over Michael O'Keeffe's Champion Iron, busy rolling-up iron ore assets in Canada's Labrador Trough.
Its Virginia windfall equates to a 75 per cent investment return over 3 years and lowers Altius' net debt, taken on to fund its Sherritt deal, to C$61m, bringing forward the prospect of dividends and putting Altius back in the market for fresh royalty deals. Dalton's track-record guarantees that he will be highly selective.