Altus Strategies announce first closing of royalty on Caserones mine
Published by Jessica Casey,
Global Mining Review,
Altus Strategies Plc has announced that it has completed the first closing (first closing) of its recently announced agreement to acquire an effective 0.418% net smelter return royalty (NSR) interest on the producing Caserones Copper Mine, located in the Atacama region of northern Chile (the acquisition). Altus is acquiring the NSR interest for US$34.1 million through a strategic 50:50 partnership with TSX-V and NYSE American listed EMX Royalty Corp. (EMX). Altus and EMX have created a special purpose vehicle (SPV) incorporated in Chile that is owned jointly by Altus and EMX. On completion of the acquisition, the SPV will have acquired an effective 0.836% NSR royalty for US$68.2 million. Altus is principally financing the acquisition with a US$29 million acquisition loan facility agreement (facility) provided by La Mancha Fund SCSp.
- First closing under acquisition of a 0.418% NSR interest on Caserones copper mine in Chile.
- Initial 76% of 0.418% NSR interest acquired for US$26.15 million.
- Final closing of the remaining 24% NSR interest to occur on 1 September 2021.
- NSR interest is expected to generate cash flow of US$3.2 million (post-tax) per year to Altus.
- Caserones has been operating since 2015 and has 17 years of mine life remaining.
- Acquisition part-financed by US$29 million loan facility from major shareholder, La Mancha.
- La Mancha holds a 35.08% interest in Altus and its Chief Executive is a Director of Altus.
- SPV owned by Altus and EMX to share revenues from a combined 0.836% NSR interest.
- Additional royalty transactions under review globally with a focus on gold and copper.
Steven Poulton, Chief Executive of Altus, commented: “We are delighted to announce the first closing of a significant cash paying royalty on a long-life copper mine in a Tier-1 mining jurisdiction. Altus is acquiring an effective 0.418% NSR royalty interest on the Caserones copper mine in the Atacama region of Chile, for a cash consideration of US$34.1 million. The NSR interest is expected to generate approximately US$3.2 million (post-tax) per year attributable to Altus. The Caserones mine is owned and operated by JX Nippon Mining & Metals Corp. of Japan and has an estimated 17 years of production remaining.
“The Acquisition of the NSR interest is being part-financed by a US$29 million acquisition bridge loan facility provided by La Mancha, our largest shareholder, which has recently established a US$1.4 billion mining investment fund. The provision of the facility underscores La Mancha's commitment to the long-term growth of Altus and the quality of this acquisition. We are also delighted to have formed a strategic relationship with NYSE American and TSX-V listed EMX Royalty Corp. to acquire the NSR through the creation of a Chilean SPV company. Our partnership with EMX is strengthened by Michael Winn, the Chairman of EMX, who is also a Non-Executive Director of Altus.
“In addition to our acquisition, it is notable that TSX-listed Nomad Royalty Company Ltd, which has a market capitalisation of approximately CAN$440 million, has recently agreed to purchase a further 0.351% NSR royalty interest on the Caserones mine, increasing their total effective NSR interest to 0.631%. The Nomad transaction underscores the strength of investor interest in this high-quality royalty.
“Following this acquisition, Altus will receive significant quarterly royalty income and will have long- term exposure to copper. We expect the demand for copper to remain strong in the years ahead, as the global economy seeks to decarbonise in parallel with continued infrastructure development, urbanisation and wealth creation in emerging markets. I look forward to updating shareholders on the final closing in due course.”
Read the article online at: https://www.globalminingreview.com/finance-business/24082021/altus-strategies-announce-first-closing-of-royalty-on-caserones-mine/
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