TNR Gold weighs Altius bid as Los Azules copper royalty nears final investment decision

But after announcement, our share price jumped 30% and it never looked back and today we are trading above 30, and it was very important for us that

Hello, you're watching Proactive. I'm joined by Kirill Klip. He's executive chairman of TNR Gold.

Kirill, very good to speak to you as always. You've described TNR Gold as a success story with Altius now proposing to acquire the company.

What's driven that progress and what makes the business attractive to a major royalty investor?

Uh thank you Steven. Good afternoon and it's very nice that you are having us today.

So basically, as you know, we are building the Green Energy metals royalty and gold company and we started our relationship with Altius many years ago and I believe we found the success formula. So now we are ripping this rewards for all our shareholders this year.

After a few years just getting to know each other. We found that we are share the same core values, which is very important. Brian Dalton built a wonderful business with his team. This year they almost reach 4 billion market cap uh in Canadian dollars in Canada.

And of course it was very important how uh small junior like us can grow together with such a big well established company and I believe we found the structure. This year we celebrated strategic investment by which we announced in April and it was very important even ISS, one of the leading proxy advisors has mentioned that basically it was like the main

and very bold indicator of our success story and success of gold team and me personally, when we made this deal with Altius because we made it at approximately 17.75 cents. It's what the volume

weighted average price, but after announcement, our share price jumped 30% and it never looked back and today we are trading above 30, and it was very important for us that Mr. Market has realized that our success formula is working with Altius.

I mean looking at that success formula, Kirill and you reported a 775% total return to shareholders over five years. that was to August the 18th.

What's been the key drivers of that performance and how do you see that strategy creating further value?

Yes, Steven. Thank you for this question. Looking back, you know, I have to look like almost 20 years back. This is how much time I spent with this company. One of our major achievements was of course building T&R Gold team, because we as a team who builds this business, we acquired this uh project, so we converted the interest in exploration potential, basically into the potential royalty cash flow.

This is what attracted Altius as well to our team, to our strategy and to our royalty portfolio. And like you mentioned, in 2025, one of our assets Mariana became a producing asset for potential royalty cash flow. So market realized starting with first institutional investors who started to build their position uh last year.

And then of course, retail became all excited without your deal because everybody realized that basically our focus strategy on advance of our royalty portfolio in critical materials in green energy space was validated by such sophisticated investor in royalty space as royalty giant from Canada Altius. And like you mentioned, of course, Mr. Market started to celebrate with us finally,

and we were very happy to report to all our shareholders that uh up to August 18th, unaffected date this year, we delivered 775% total shareholder return over five years, over 400% total shareholder return over three years and over 300% total shareholder return over one year.

So we have a lot of reasons to celebrate and of course non-binding proposal from Altius is the latest chapter in this book which we are writing all together.

I mean, looking at that non-binding proposal, how important is the Los Azules Copper project to that interest? And what can you tell us about the proposal status?

Uh as you know, I personally very excited about all this electrification, electric cars, green energy, which cannot be done without critical materials like lithium and copper. But actually, our relationship with started many years ago discussing the potential of Los Azules. And this is first time when we both get interested to study each other teams because of course Altius

with Brian Dalton is like Mr. Royalty in Canada himself. He builds such a wonderful company with his team and we liked very much their approach because they are very steady, very professional, very sophisticated and disciplined investor. And everybody knows it in the market, of course.

And of course, Los Azules is such a enormous asset. It's such a magnitude of a copper play in Argentina that Altius would love to add it to their uh crown as one of the jewels potentially. And this is how we started basically our conversation. We are not ready to sell yet. We would like to see the fruition of development of our project like Mariana Lithi, which is already in production.

like Los Azules which is moving now into investment decision. But we would like to grow together if we can find this success formula, this solution where Altius could give us some capital to grow and they will get a slice of this success. and of course they will be the one like now with non-binding offer with whom we will be very happy to discuss and negotiate

for the reward of all our shareholders, the potential transition. And maybe if we have still time, we can discuss a little bit more about Los Azules advancement now because Robin and team, they did a wonderful job of moving this project closer to construction decision this year.

I mean as you said Los Azules is progressing towards that final investment decision, Kirill. What's the next key milestones? What could they mean for your 0.4% royalty?

Yes, as we discuss, the drive for our share price increase like literally from 5 cents last year to as high as 35.5 cents this year when we delivered uh more than 105% return to that point in August. It was driven by the development of our assets. First Mariana lithium was put into production by Gangfeng lithium in February 2025. And then this year, Robin was striking one milestone

after another with his development of Los Azules. In 2025, they released a feasibility study with very impressive numbers, uh 21 life of mine with first five years of producing uh London MMA copper plate uh in the amount of more than 200,000 tons per year for the first five years, then on average 148,000 tons.

So very impressive numbers. Then they received environmental approval to build the mine in Argentina. Then they attracted IFC International Financial Corporation in order to bring expert finance umbrella to finance the development of mine in Argentina. Now Societé Generale will be running potentially the debt book of financing and Robin and his team are moving full cylinders ahead with potential IPO

of McEwen Copper where they can raise probably at least 300-400 million dollars. and very important was of course acceptance of Los Azules into regi, it's so-called Argentina's large investment incentive scheme with very favorable hard currency controls, expert controls, ability to repatriate your profits to pay dividends, pay interest in order to finance this project.

And now we are moving forward into the investment decision and Rob is talking about potential uh start of construction next year subject of course to successful financing and then by 2030, he's going to produce hopefully green copper in Argentina for all of us and our shareholders for our potential royalty stream.

I mean, Robin's highlighted the potential for Rio Tinto's Nuton technology to extend Los Azules mind life. If that potential is realized, how could it affect the scale and duration of the royalty cash flow for TNR?

Here's still and I have to take a big breath because Rob is talking about such numbers that I should first of all lead all our investors, all our shareholders, all our listeners to this video to our news releases. so that they can themselves check all the numbers Rob is talking about. But basically this wonderful enormous project could become maybe as twice as big timewise because now Rob is talking that with

advanced Nuton technology, and Nuton is a venture arm of advanced exploration from Rio Tinto. They can increase life of mine from 21 years to additional 33 years plus. So we are talking about another Grasberg potentially this time in Argentina with 50 years plus life of mine.

And then Rob is putting some numbers like 1.6 billion dollars potentially cash flow generating for his royalty, which is 1.25% on Los Azules. But of course, I would like to guide all our shareholders to check all the numbers by themselves in our latest news releases. And here I would like to caution them that all this forward-looking statement should be taken very carefully and not to become the basis for the investment decisions.

But another very interesting ace coming out of Rob's sleeves could be Rio more uh bold involvement into development of this project. To be very honest with you, I'm still surprised they have not bought this project yet because as you know, their number two copper mining uh company in the world, number one BHP is already involved in development of a giant Vana

project where we have actually another royalty on one two properties of her Samaria project. and now according to Bloomberg, Rio Tinto is kicking tires again of McCune Copper where they're holding 17%. And who knows, maybe Rob McCune already found the best house to develop his project because Rio Tinto, of course, they have the balance sheets, they have the expertise and they have all might in order to lift

this enormous development in Argentina for the benefit of all people in Argentina and of course shareholders of T.

Carol, I hope you'll keep us updated as Robin continues to pull those aces off his sleeves. Thank you very much for your time today.

Thank you very much Steven for having us today. Have a great day.

You too. Carol Klip, the executive chairman of TR Gold.