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Altus Strategies publishes quarterly report and financial statements

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Global Mining Review,

Altus Strategies Plc has published its unaudited financial results and its management's discussion and analysis for the three-month and nine-month periods ending 30 September 2021.


Highlights for the three months ended 30 September 2021 are as follows:

Corporate highlights

  • Acquisition of an effective 0.418% net smelter return (NSR) royalty on the Caserones copper mine in northern Chile for US$34.1 million, expected to generate annual cash flow of US$3.2 million (post-tax) to Altus (projection assumes copper price of US$4.00/lb and production in line with modelled mine plans which means actual results may vary and remain subject, among other factors, to the copper price remaining stable and the mine achieving the modelled operating performance during the period).
  • Caserones royalty acquired via a strategic 50:50 partnership with TSX Venture and NYSE American listed EMX Royalty Corp via a Chilean special purpose vehicle holding a combined effective 0.836% NSR interest on Caserones.
  • US$29 million strategic acquisition loan facility provided by the company's largest shareholder La Mancha Fund SCSp.
  • Appointment of Mark Campbell as Non-Executive Chairman of 100% owned subsidiary Akh Gold Holdings Ltd and General Manager (Egypt).

Operational highlights

  • Western Mali: Initial results from reverse circulation (RC) drilling at the company's 100% owned Diba gold deposit, including 8.5 g/t gold (Au) over 24 m from 20 m and 2.54 g/t Au over 30 m from 36 m (results are down-the-hole and not true widths).
  • Southern Mali:
    • Significant increase in joint venture (JV) landholding at Tabakorole (by 100 km2 to 292 km2) with Australian Securities Exchange listed Marvel Gold Limited.
    • Encouraging diamond drilling (DD) results from first 19 drill holes at Tabakorole and discovery of significant new parallel zone of mineralisation.
  • Egypt: Discovery of numerous hard rock artisanal gold workings from field reconnaissance at Gabal Om Ourada and Wadi Dubur projects.
  • Morocco: Discovery of high-grade copper and silver from reconnaissance exploration at the recently granted Azrar, Izougza and Tata projects.
  • Morocco: Grant of four new exploration licences totalling 148.5 km2, targeting copper and silver.

Financial highlights

  • Cash balance of £5.9 million/CAN$10.2 million as at 30 September 2021.
  • Cash outflow for operating activities of £3.1 million/CAN$5.2 million for nine months ending 30 September 2021.
  • Listed equity holdings of £1.6 million/CAN$2.7 million as at 30 September 2021.

Post period

  • Receipt of maiden royalty income of US$1.34 million in respect of the company's NSR royalty on the Caserones copper mine in northern Chile (before local Chilean and UK taxes).
  • Upgraded mineral resource estimate (MRE) prepared for Tabakorole gold project in Southern Mali, resulting in a 24% increase in indicated ounces and a 7% increase in inferred ounces, with 70% of the deposit subject to the MRE within 150 m of the surface.
  • High grade intersections including 21.9 g/t Au over 10.2 m from 28 m from DD at Diba gold deposit in western Mali (results are down-the-hole and not true widths).

Steven Poulton, Chief Executive of Altus, commented: “I am delighted to report on a significant and highly productive quarter for the company, marked in particular by the closing of the US$34.1 million landmark acquisition of the cash-paying Caserones copper royalty in Chile. The acquisition, which has transitioned Altus into a revenue generating business, is a testament to the company's strategic vision and effective growth strategy. Altus has also continued to deliver excellent results on its work programmes across its portfolio of projects, including drilling in Mali and field exploration programmes in Egypt and Morocco.

“The acquisition of the NSR royalty on the Caserones copper mine not only marked a major milestone in the development of the company's royalty strategy, but also further diversifies the company's portfolio outside of Africa and towards copper. The first cash instalment from Caserones was received shortly after the end of the quarter. Our largest shareholder, La Mancha, assisted Altus with the acquisition by providing a US$29 million strategic acquisition facility, underscoring their commitment to the long-term growth of Altus as well as the quality of the acquisition.

“Significant progress has been made at the Diba gold project in western Mali during the period, with initial results from reverse circulation drilling, including 8.5 g/t Au over 24 m from 20 m and 2.54 g/t Au over 30 m from 36 m. The AC and RC drilling programmes, which were paused due to the rainy season, recommenced after the period end and were augmented to include 1300 m of diamond drilling. A key objective in the next quarter will be to complete the drilling programmes at Diba with an updated independent MRE and preliminary economic assessment on the project to follow.

“Altus' JV partner, Marvel Gold, has continued to advance the Tabakorole gold JV project in southern Mali during the period, through a combination of RC and DD programmes, targeting both infill of and extensions to the existing deposit. Results included 2.4 g/t Au over 24 m from 35 m in the parallel zone and 3.6 g/t Au over 16.5 m from 3.2 m in the northwest zone. Shortly after the period, Marvel announced an updated MRE for Tabakorole, comprising 17.3 million t at 1.2 g/t Au for 665 000 oz in the inferred category and 9.2 t at 1.2 g/t Au for 360 000 oz in the indicated category (see news release dated 5 October 2021). The updated MRE represented a 24% increase in indicated ounces and a 7% increase in inferred ounces. Approximately 70% of the MRE is situated within 150 m of the surface. The deposit remains open in parallel zones and at depth.

“In Egypt, Altus is delighted to have welcomed Mark Campbell to the team as General Manager of the company's Egyptian branch and we have expanded our in-country geological and administrative teams. Initial reconnaissance was also completed on Gabal Om Ourada and Wadi Dubur in the Eastern Desert with numerous hard rock artisanal gold workings discovered and, after the period end, reconnaissance commenced at the Gabal Al-Shaluhl and Wadi Jundi licences.

“In Morocco, a high resolution, induced polarisation survey commenced at the Agdz copper-silver project. The results will be used to define and prioritise targets for trenching and drilling across four key prospects discovered to date at Agdz. In July, four further projects, totalling 148.5 km2, were granted to the company in the western anti-Atlas of Morocco, increasing the company's portfolio of projects in Morocco to 14 and its area of exploration to over 800 km2. The company is actively examining potential transactions with third parties on its portfolio of Moroccan assets that are held by its 100% owned subsidiary Aterian Resources Ltd.

“We look forward with confidence to another exciting quarter ahead for Altus. Alongside assessing further accretive royalty acquisition and other strategic opportunities, our focus during the quarter will be progressing our gold programmes in Mali and Egypt, as well as continuing to create value from our portfolio of projects in Morocco. I look forward to keeping shareholders updated on our progress.”

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