Altus Strategies Plc / Index (EPIC): AIM (ALS) TSX-V (ALTS) OTCQX (ALTUF) / Sector: Mining
20 August 2021
Altus Strategies Plc
("Altus" or the "Company")
Quarterly Report and Financial Statements
Altus Strategies Plc (AIM: ALS, TSX-V: ALTS, OTCQX: ALTUF) announces that it has published its unaudited financial results and its Management's Discussion & Analysis for the three-month and six-month periods ending 30 June 2021. These documents have been posted on the Company's website at www.altus-strategies.com/investors/financials/ and are also available on SEDAR at www.sedar.com.
HIGHLIGHTS
Highlights for the three months ended 30 June 2021 are as follows:
Operational highlights:
· Commencement of 17,500m Reverse Circulation ("RC") and Air Core ("AC") drilling programme at Diba gold project in western Mali
· Grant of three new projects, as well as exploration licences adjacent to existing projects, totalling 221km2 in Morocco
· Ground magnetic and soil sampling surveys at Tabakorole gold project in southern Mali have defined numerous additional targets
Corporate highlights:
· Appointments to the senior management team, strengthening the Company's corporate and technical capabilities across its key areas of operation:
o Amilha Young as Company Secretary and Legal Counsel (UK);
o Boubacar Thera as Corporate Manager (Mali); and
o David Hall as Strategic Advisor (Egypt)
Financial highlights:
· Cash balance of £10.8m / C$18.5m as at 30 June 2021
· Cash outflow for operating activities of £1.2m / C$2.1m for six months ending 30 June 2021
· Balance of listed equity holdings of £2.0m / C$3.5m as at 30 June 2021
Post period:
· Agreement signed to acquire an effective 0.418% net smelter return ("NSR") royalty on Caserones Copper Mine ("Caserones") in northern Chile for US$34.1 million, expected to generate annual cash flow of US$3.2 million (post-tax) to Altus
· Strategic 50:50 partnership with NYSE American and TSX-V listed EMX Royalty Corp. ("EMX") via a Chilean special purpose vehicle ("SPV") holding a combined effective 0.836% NSR interest in Caserones
· US$29 million acquisition loan facility provided by a wholly-owned subsidiary of La Mancha Fund SCSp ("La Mancha")
· Initial results from RC drilling at the Diba gold deposit in western Mali, including 8.50 g/t gold ("Au") over 24m from 20m (including 26.45 g/t Au over 7m) and 2.54 g/t Au over 30m from 36m (results are down-the-hole and not true widths)
· Discovery of high-grade copper and silver from reconnaissance exploration at recently granted Azrar, Izougza and Tata projects in Morocco
· Significant increase in landholding at Tabakorole (by 100km2 to 292km2) under joint venture ("JV") with Australian Securities Exchange ("ASX") listed Marvel Gold Limited ("Marvel Gold")
· Encouraging diamond drilling ("DD") results from the first 11 holes at Tabakorole, which are expected to be incorporated into an updated Mineral Resource estimate ("MRE") in September 2021
· Grant of new exploration licences totalling 148.5km2 in Morocco, targeting copper and silver
· Appointment of Mark Campbell as Non-Executive Chairman of 100% owned subsidiary Akh Gold Holdings Ltd and General Manager (Egypt)
Steven Poulton, Chief Executive of Altus, commented:
"I am delighted to report on another very active quarter for Altus, during which Altus continued to deliver on its work programmes across its portfolio of projects, including drilling at our projects in Mali. With the receipt of £4.9m / C$8.5m at the start of the quarter, being the balance of proceeds from the March 2021 private placement, the Company ended the quarter with a strong cash balance of £10.8m / C$18.5m.
"Having completed a 10,000m RC drilling programme earlier in the year at Diba, we commenced a follow up programme at the end of May, incorporating RC and AC drilling. Of this programme, 7,500m will be AC drilling and will target a high priority 4km long and northerly striking zone, which may represent a potential extension of the Diba NW prospect. Diba NW was discovered by the phase-1 RC programme completed by Altus earlier in the year. Intersections from Diba NW included 1.45 g/t Au over 22m and 1.87 g/t Au over 10m (not true widths). The AC programme will also test the Diba Far East prospect, which is defined by numerous artisanal gold workings, with shafts reportedly dug up to 20m deep, coincident with significant structural targets as identified by the Company's ongoing ground magnetic survey.
"Marvel Gold continued to advance the Tabakorole JV project in southern Mali during the period, with a drilling programme targeting near-surface, high-grade intercepts that fall outside of the previously modelled MRE. A 177-hole AC drilling programme totalling 5,148m was completed during the quarter. This programme has confirmed mineralisation approximately 3km southeast of the main deposit. In addition to the drilling programmes, Marvel Gold has collected 4,267 soil samples and completed 5,300 line kilometres of high resolution ground magnetics, as part of its ongoing regional exploration programme, which includes Tabakorole.
"During the quarter, the Company conducted reconnaissance exploration on three recently granted copper focused projects totalling 221km2, located in the western anti-Atlas of Morocco; namely Azrar, Izougza and Tata. Analysis has confirmed the presence of prospective geological formations for stratiform sediment-hosted deposits and multiple historic artisanal workings. After the period, four further projects totalling 148.5km2 were granted 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 800km2.
"After the quarter end, on 16 August 2021, the Company concluded an agreement to acquire 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 Corporation of Japan and has an estimated 17 years of production remaining. The acquisition of the NSR interest will be part-financed by a US$29 million acquisition bridge loan facility ("Facility") provided by La Mancha, Altus' largest shareholder. The provision of the Facility underscores La Mancha's commitment to the long-term growth of Altus and the quality of the acquisition. The Company formed a strategic relationship with NYSE American and TSX-V listed EMX Royalty Corp., to acquire the NSR through the creation of a 50:50 owned Chilean SPV company. Altus' partnership with EMX is strengthened by Michael Winn, the Chairman of EMX, who is also a Non-Executive Director of Altus.
"Also following the period, we were delighted to report on excellent initial results from the current RC drilling programme at the Company's 100% owned Diba gold project in Western Mali. These included an exceptional intersection of 8.50 g/t Au over 24m from 20m downhole (not true width). The RC programme is designed to expand and infill the existing Diba resource, as well as define a maiden resource at the Diba NW prospect. Infill drilling within the current deposit has improved our understanding of the high-grade mineralisation that strikes northeast for approximately 550m through the Diba Deposit.
"We look forward to another exciting quarter ahead, including the commencement of fieldwork in Egypt, further drilling programmes in Mali and an expansion of our due diligence capabilities as we accelerate the assessment of further cash paying royalty acquisition opportunities."
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED 30 JUNE 2021
CONDENSED CONSOLDIATED INTERIM STATEMENT OF COMPREHENSIVE LOSS
| | | For the three months ended 30 June | | For the six months ended |
| ||||||||||||
| | | 2021 | | 2020 | | 2021 | | 2020 |
| ||||||||
| | | £ | | £ | | £ | | £ |
| ||||||||
| Continuing operations | | | | | | | | |
| ||||||||
| Revenue and costs recovered from joint venture partners | | 22,604 | | 16,860 | | 22,604 | | 176,674 | |||||||||
| Exploration costs expensed | | (559,089) | | (288,227) | | (1,345,788) | | (588,984) | |||||||||
| Administrative expenses | | (254,437) | | (125,737) | | (472,814) | | (308,311) | |||||||||
| Listing and acquisition related costs | | (2,575) | | (39,758) | | (7,493) | | (46,864) | |||||||||
| Foreign exchange gains/(losses) | | 19,261 | | 72,054 | | (10,331) | | 55,324 | |||||||||
| Share based payments | | (315,758) | | - | | (614,516) | | (20,002) | |||||||||
| | | | | | | | | |
| ||||||||
| Profit/(loss) from operations | | (1,089,994) | | (364,808) | | (2,428,338) | | (732,163) | |||||||||
| | | | | | | | | | |||||||||
| Interest receivable | | 44 | | 1,219 | | 60 | | 1,614 | |||||||||
| Interest payable | | (1,187) | | (1,769) | | (2,451) | | (3,665) | |||||||||
| Other income/(costs) | | (106) | | - | | - | | 1,109,001 | |||||||||
| Fair value gain/(loss) on investments | | 72,521 | | 1,208,745 | | 94,845 | | 431,141 | |||||||||
| | | | | | | | | | |||||||||
| Profit/(loss) before taxation | | (1,018,722) | | 843,387 | | (2,335,884) | | 805,928 | |||||||||
| | | | | | | | | | |||||||||
| Taxation | | - | | (71,209) | | - | | (71,209) | |||||||||
| | | | | | | | | | |||||||||
| Total comprehensive profit/(loss) for the quarter | | (1,018,722) | | 772,178 | | (2,335,884) | | 734,719 | |||||||||
| | | | | | | | | | |||||||||
| Profit/(loss) for the quarter attributable to: | | | | | | | | | |||||||||
| - Owners of the parent company | | (1,016,988) | | 772,205 | | (2,333,937) | | 735,171 | |||||||||
| - Non-controlling interest | | (1,734) | | (27) | | (1,947) | | (452) | |||||||||
| | | (1,018,722) | | 772,178 | | (2,335,884) | | 734,719 | |||||||||
| Total comprehensive profit/(loss) for the quarter attributable to: | | | | | | | | | |||||||||
| - Owners of the parent company | | (1,016,988) | | 772,205 | | (2,333,937) | | 735,171 | |||||||||
| - Non-controlling interest | | (1,734) | | (27) | | (1,947) | | (452) | |||||||||
| | | (1,018,722) | | 772,178 | | (2,335,884) | | 734,719 | |||||||||
| | | | | | | | | |
| ||||||||
| Basic earnings per share (pence) attributable to the owners of the parent | | (1.26) | | 1.10 | | (3.08) | | 1.17 |
| ||||||||
| Diluted earnings per share (pence) attributable to the owners of the parent | | (1.26) | | 1.02 | | (3.08) | | 1.07 |
| ||||||||
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED 30 JUNE 2021
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
| | | | As at 30 June | | As at 31 December |
|
| | | 2021 | | 2020 |
| | | | £ | | £ |
| Non-current assets | | | | | |
| Intangible assets | | | 3,689,499 | | 3,277,381 |
| Property, plant and equipment | | | 8,462 | | 4,720 |
| Leased assets | | | 50,166 | | 60,198 |
| Investments | | | 2,033,794 | | 1,320,542 |
| | | | 5,781,921 | | 4,662,841 |
| Current assets | | | | | |
| Trade and other receivables | | | 288,474 | | 853,629 |
| Held-for-sale assets | | | 86,554 | | 86,765 |
| Cash and cash equivalents | | | 10,808,985 | | 5,937,486 |
| | | | 11,184,013 | | 6,877,880 |
| Total assets | | | 16,965,934 | | 11,540,721 |
| | | | | | |
| Current liabilities | | | | | |
| Trade and other payables | | | (748,213) | | (1,144,754) |
| Held-for-sale liabilities | | | (34,020) | | (34,020) |
| Provisions | | | (15,000) | | (15,000) |
| | | | (797,233) | | (1,193,774) |
| Non-current liabilities | | | | | |
| Trade and other payables | | | (40,631) | | (45,848) |
| Total liabilities | | | (837,864) | | (1,239,622) |
| | | | | | |
| Net assets | | | 16,128,070 | | 10,301,099 |
| | | | | | |
| Equity | | | | | |
| Share capital | | | 4,019,576 | | 3,504,580 |
| Share premium | | | 20,255,458 | | 13,222,115 |
| Translation reserve | | | (82,579) | | (82,579) |
| Other reserves | | | 6,973,529 | | 6,359,013 |
| Retained earnings | | | (14,934,686) | | (12,600,749) |
| | | | | | |
| Total equity attributable to owners of the parent | | | 16,231,298 | | 10,402,380 |
| Non-controlling interest | | | (103,228) | | (101,281) |
| Total equity | | | 16,128,070 | | 10,301,099 |
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED 30 JUNE 2021
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
| | Share capital | Share premium account | Translation reserve | Other reserves | Retained earnings | Total equity | Non-controlling interest | Total |
| Six months ended 30 June 2020: | £ | £ | £ | £ | £ | £ | £ | £ |
| Balance at 1 January 2020 | 2,102,284 | 7,378,369 | (82,579) | 5,755,070 | (10,524,314) | 4,628,830 | (98,327) | 4,530,503 |
| Profit/(loss) and total comprehensive profit/(loss) for the period | - | - | - | - | 646,137 | 646,137 | (452) | 645,685 |
| Issue of shares | 1,402,296 | 5,803,746 | - | - | - | 7,206,042 | - | 7,206,042 |
| Expiry of share warrants | - | - | - | - | - | - | - | - |
| Total transactions with owners, recognised directly in equity | 1,402,296 | 5,803,746 | - | - | 646,137 | 7,852,179 | (452) | 7,851,725 |
| | | | | | | | | |
| Balance at 30 June 2020 | 3,504,580 | 13,182,115 | (82,579) | 5,755,070 | (9,878,177) | 12,481,009 | (98,779) | 12,382,230 |
| | | | | | | | | |
| Six months ended 30 June 2021: | | | | | | | | |
| Balance as at 1 January 2021 | 3,504,580 | 13,222,115 | (82,579) | 6,359,013 | (12,600,749) | 10,402,380 | (101,281) | 10,301,099 |
| Profit/(loss) and total comprehensive profit/(loss) for the period | - | - | - | - | (2,333,937) | (2,333,937) | (1,947) | 2,335,884 |
| Issue of shares | 513,333 | 7,013,435 | - | - | - | 7,526,768 | - | 7,526,768 |
| Exercise of warrants | 1,663 | 19,908 | - | - | - | 21,571 | - | 16,812 |
| Share based payment charge | - | - | - | 614,516 | - | 614,516 | - | 298,758 |
| Total transactions with owners, recognised directly in equity | 514,996 | 7,033,343 | - | 614,516 | (2,333,937) | 5,828,918 | (1,947) | 5,826,971 |
| | | | | | | | | |
| Balance at 30 June 2021 | 4,019,576 | 20,255,458 | (82,579) | 6,973,529 | (14,934,686) | 16,231,298 | (103,228) | 16,128,070 |
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED 30 JUNE 2021
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
| Period ended 31 March | Three months | | Six months | ||||
| | 2021 | | 2020 | | 2021 | | 2020 |
| | £ | | £ | | £ | | £ |
| Cash flows from operating activities | | | | | | | |
| | | | | | | | |
| Profit/(loss) for the period after taxation | (1,018,722) | | 772,178 | | (2,335,884) | | 734,719 |
| Adjustments for: | | | | | | | |
| Net interest (received)/paid | 1,143 | | 2,166 | | 2,391 | | 3,665 |
| Share based payments | 315,758 | | - | | 614,516 | | 20,002 |
| Impairment of non-current assets | - | | - | | - | | 3,798 |
| Bad debt provision | - | | - | | 10,875 | | 10,875 |
| Depreciation of property, plant and equipment | 5,278 | | 6,076 | | 12,481 | | 12,469 |
| Receipt of shares in investee | - | | (1,614) | | - | | (1,110,613) |
| Fair value (gain)/loss on investments | (73,350) | | (1,234,996) | | (95,674) | | (457,392) |
| Other gains/(losses) | - | | (5,548) | | - | | 38,952 |
| Movements in working capital: | | | | | | | |
| (Increase)/decrease in trade and other receivables | (167,396) | | 100,263 | | (63,088) | | 84,189 |
| Increase/(decrease) in trade and other payables | (313,810) | | (54,799) | | (391,959) | | (477,603) |
| Cash flows used in operating activities | (1,251,099) | | (416,274) | | (2,246,342) | | (1,136,939) |
| | | | | | | | |
| Investing activities | | | | | | | |
| Purchase of intangible assets | (257,782) | | (31,729) | | (412,118) | | (60,301) |
| Purchase of property plant and equipment | (4,792) | | (1,131) | | (6,190) | | (4,027) |
| Net interest received/(paid) | 24 | | (2,167) | | 60 | | (1,915) |
| Net cash used in investing activities | (262,550) | | (35,027) | | (418,248) | | (66,243) |
| | | | | | | | |
| Financing activities | | | | | | | |
| Proceeds from issue of shares | 4,917,650 | | - | | 7,548,339 | | 6,483,561 |
| Principal element of lease payments | (4,958) | | (4,492) | | (9,799) | | (8,866) |
| Interest element of lease payments | (1,167) | | (1,633) | | (2,451) | | (3,384) |
| Net cash generated from financing activities | 4,911,525 | | (6,125) | | 7,536,089 | | 6,471,311 |
| | | | | | | | |
| Net increase/decrease in cash and cash equivalents | 3,397,876 | | (457,426) | | 4,871,499 | | 5,268,129 |
| Cash and cash equivalents at beginning of the period | 7,411,109 | | 7,938,197 | | 5,937,486 | | 2,212,642 |
| Cash and cash equivalents at the end of the period | 10,808,985 | | 7,480,771 | | 10,808,985 | | 7,480,771 |
Qualified Person
The technical disclosure in this regulatory announcement has been approved by Steven Poulton, Chief Executive of Altus. A graduate of the University of Southampton in Geology (Hons), he also holds a Master's degree from the Camborne School of Mines (Exeter University) in Mining Geology. He is a Fellow of the Institute of Materials, Minerals and Mining and has over 20 years of experience in mineral exploration and is a Qualified Person under the AIM rules and NI 43-101.
For further information you are invited to visit the Company's website www.altus-strategies.com or contact:
| Altus Strategies Plc Steven Poulton, Chief Executive | Tel: +44 (0) 1235 511 767 E-mail: info@altus-strategies.com |
| SP Angel (Nominated Adviser) Richard Morrison / Adam Cowl |
Tel: +44 (0) 20 3470 0470 |
| SP Angel (Broker) Grant Barker / Richard Parlons |
Tel: +44 (0) 20 3470 0471 |
| Shard Capital (Broker) Isabella Pierre / Damon Heath |
Tel: +44 (0) 20 7186 9927 |
| Yellow Jersey PR (Financial PR & IR) Charles Goodwin / Henry Wilkinson | Tel: +44 (0) 20 3004 9512 E-mail: altus@yellowjerseypr.com |
About Altus Strategies Plc
Altus Strategies (AIM: ALS, TSX-V: ALTS & OTCQX: ALTUF) is a mining royalty company generating a diversified and precious metal focused portfolio of assets.The Company's differentiated approach of generating royalties on its own discoveries in Africa and acquiring royalties globally through financings and acquisitions with third parties, has attracted key institutional investor backing. The Company engages constructively with all stakeholders, working diligently to minimise its environmental impact and to promote positive economic and social outcomes in the communities where it operates. For further information, please visit www.altus-strategies.com.
Cautionary Note Regarding Forward-Looking Statements
Certain information included in this announcement, including information relating to future financial or operating performance and other statements that express the expectations of the Directors or estimates of future performance constitute "forward-looking statements". These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, without limitation, the completion of planned expenditures, the ability to complete exploration programmes on schedule and the success of exploration programmes. Readers are cautioned not to place undue reliance on the forward-looking information, which speak only as of the date of this announcement and the forward-looking statements contained in this announcement are expressly qualified in their entirety by this cautionary statement.
Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is based on assumptions made in good faith and believed to have a reasonable basis. The forward-looking statements contained in this announcement are made as at the date hereof and the Company assumes no obligation to publicly update or revise any forward-looking information or any forward-looking statements contained in any other announcements whether as a result of new information, future events or otherwise, except as required under applicable law or regulations.
TSX Venture Exchange Disclaimer
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organisation of Canada accepts responsibility for the adequacy or accuracy of this release.
Market Abuse Regulation Disclosure
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
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