Altus Strategies Plc: Quarterly Report and Financial Statements
Altus Strategies Plc (AIM:ALS), (TSXV:ALTS), (OTC:ALTUF) announces that it has published its unaudited financial results and its Management's Discussion and Analysis for the three months ending 31 March 2022. 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 31 March 2022 are as follows:
Corporate highlights
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Second and final close of the royalties acquisition covering nine development and exploration stage assets located in Australia from Newcrest Mining Ltd. (ASX, TSX PNGX; NCM) for consideration of US$4.0 million
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1.0% Gross Revenue Royalty (GRR") generated on Toura Nickel-Cobalt project in Côte d'Ivoire through sale of interest in local subsidiary to Firering Strategic Minerals Plc (AIM: FRG) ("Firering") for €15,000
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Joint venture agreement with Marvel Gold Limited (ASX: MVL) (Marvel Gold") in Mali amended with the Company regaining a 100% interest in the Lakanfla licence in western Mali, located 5km east of the Company's Diba gold project, and its interest in the Tabakorole gold project in southern Mali moving to 30%; Altus retains a 2.5% Net Smelter Return ("NSR") royalty on the Tabakorole project
Operational highlights
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Western Mali: Completion of 11,832m drilling programme at the Diba Lakanfla gold project with latest results of up to 1.27 grams per tonne (g/t") gold ("Au") over 127m from 21m on the Lakanfla Central prospect and 1.81 g/t Au over 10m from 256m at the Diba NW prospect (results are down-the-hole and not true widths)
Financial highlights
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Cash balance of £3.2m / C$5.3m as at 31 March 2022
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Cash outflow for operating activities of £0.4m / C$0.7m for three months ending 31 March 2022
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Listed equity holdings of £1.6m / C$2.7m as at 31 March 2022
Post-period end
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Award of a ten year (renewable) mining licence at the Agdz project in central Morocco covering an area of 34.36km, representing the area of copper and silver mineralisation discovered to date
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Award of a four year (renewable) 'small scale' mining licence at the Diba gold project in western Mali covering an area of 83.1km, incorporating the Diba Deposit and other key prospects
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Southern Mali: highly encouraging results from the Lone Wolf prospect at the Tabakorole gold project including 14m at 4.9 g/t Au from 33m and 10m at 1.9 g/t Au from 55m (results are down-the-hole and not true widths)
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Further extension of the La Mancha loan facility to 31 December 2022 with the annualised interest rate remaining at 10% plus USD LIBOR
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Completion of an agreement with AlphaStream Capital (AlphaStream") for the sale of a 30.1% interest in Alpha 3 SPV Ltd ("Alpha 3") for US$5.3 million. Altus and AlphaStream will each own 50% of Alpha 3 which owns a portfolio of 23 mining royalties in Australia acquired from Newcrest
Steven Poulton, Chief Executive of Altus, commented:
"I am delighted to report on an outstanding start to 2022. Not only have we diligently advanced our royalty acquisition strategy, but our royalty generation programme continues to deliver excellent results from our diverse portfolio of projects, including those in Egypt, Mali and Morocco.
"In January 2022, the Company completed the second and final close of the transaction with Newcrest for the purchase of a portfolio of royalties in Australia. The second close covered nine of the 21 royalties on development and exploration stage projects in Australia that were included in the transaction, but which had been the subject of rights of first refusal by third parties, none of which was exercised. Consideration from Altus for the second close was US$4.0 million out of the total cash consideration of US$24.0 million. The transaction was undertaken through a strategic JV with AlphaStream, a specialist mining royalty and streaming company based in the United Arab Emirates.
"During the quarter, initial royalty revenue of £343,000 was received from two cash-paying royalties that formed part of the first close of the Newcrest transaction. Revenue comprised £333,000 from the Ballarat gold mine in Victoria and £10,000 from the South Kalgoorlie Operations ("SKO") gold mine in Western Australia relating to production in Q4 2021.
"At the Company's 100% owned Diba & Lakanfla gold project, a phase-2 drilling programme covering both licences was completed. The programme comprised 9,040m of reverse circulation ("RC") drilling and 1,433m of air core ("AC") drilling. Results from the Diba NW prospect included intersections of 4.76 g/t Au over 12m from 102m and 8.74 g/t Au over 7m from 119m (results are down-the-hole and not true widths). These high-grade intersections indicate the presence of potentially enriched zones, or sub vertical mineralised structures which will be the subject of follow-up exploration. Results from the Lakanfla Central prospect returned 1.23 g/t Au over 127m from 21m, including 2.53 g/t Au over 14m from 46m. The results extended the mineralised strike of Lakanfla Central by approximately 200m to approximately 750m, with mineralisation remaining open to the northeast and at depth, and confirmed the presence of a broad gold mineralised package at Lakanfla Central. Altus' JV partner, Marvel Gold, continued with its RC and AC drilling programmes at Tabakorole. The programme included 5,000m RC drilling to infill the north-west extension of the deposit and to test priority proximal targets.
"The Company's royalty generation team focused on Egypt during the quarter, with reconnaissance work undertaken on the Gabal Om Ourada (346km2) and Wadi Dubur (175km2) licences. The team mapped numerous hard rock gold workings, collected samples that were sent for laboratory analysis and identified a number of targets for further exploration work. The Company continued to scale up its operations in Egypt with the recruitment of additional local and well trained geologists.
"The Company's discovery team in Morocco continued to explore the 10 new battery metals focused projects in the Anti-Atlas Mountains that were awarded to the Company during 2021. Rock chip samples were collected and sent for laboratory analysis. The Company's Moroccan projects are proposed to be vended to London AQSE Growth Market-listed Eastinco Mining and Exploration plc (AQSE: EM.P), subject to the satisfaction of certain conditions precedent, including the admission to trading of Eastinco's entire issued share capital to the Official List of the FCA (Standard Segment) and to trading on the LSE's Main Market for listed securities.
"During the quarter, the Company executed a Sale and Purchase Agreement with Firering for the sale of the Toura nickel-cobalt exploration licence application in western Côte d'Ivoire. Consideration for the sale was €15,000 in cash and a GRR of up to 1.0% on nickel and cobalt sales from the project.
"Following the end of the quarter, the Company undertook a rebalancing of the Australian royalty portfolio it acquired from Newcrest, with the sale to AlphaStream of a 30.1% interest in Alpha 3 SPV Ltd for US$5,267,500. The transaction resulted in AlphaStream and the Company each owning a 50% interest in Alpha 3. The Company and AlphaStream each already owned a 50% interest in Alpha 2 SPV Ltd, which owns a 4.5% capped NSR royalty on the Bonikro gold mine in Côte d'Ivoire, which was also acquired from Newcrest. Following the transaction, both Altus and AlphaStream have each invested a total of approximately US$18,750,000 to own a 50% interest in both Alpha 3 and Alpha 2. No material gain or loss was made on the rebalancing and the proceeds will be applied to further royalty generation and acquisition activities.
"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 Egypt and Mali, as well as continuing to create value from our portfolio of projects in Morocco and Cameroon. I look forward to keeping shareholders updated on our progress."
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED 31 MARCH 2022
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE LOSS
| For the three months ended | ||||||||
| 2022 | 2021 | |||||||
| Notes | £'000 | £'000 | ||||||
| Continuing operations | ||||||||
| Revenue and costs recovered from joint venture partners | 2 | 343 | - | |||||
| Exploration costs expensed | 3 | (957) | (787) | |||||
| Administrative expenses | 4 | (356) | (218) | |||||
| Listing and acquisition related costs | 6 | (14) | (5) | |||||
| Foreign exchange gains/(losses) | 51 | (29) | ||||||
| Share based payments | (483) | (299) | ||||||
| Profit/(loss) from operations | (1,416) | (1,338) | ||||||
| Interest receivable | - | 0 | ||||||
| Interest payable | (458) | (1) | ||||||
| Other income/(costs) | (565) | 0 | ||||||
| Gain/(loss) on disposal | 234 | - | ||||||
| Fair value gain/(loss) on investments | (88) | 22 | ||||||
| Share of profit of investments accounted for using the equity method | 7 | - | - | |||||
| Profit/(loss) before taxation | (2,293) | (1,317) | ||||||
| Taxation | - | - | ||||||
| Profit/(loss) for the year | (2,293) | (1,317) | ||||||
| Other comprehensive income | ||||||||
| Items that may be reclassified to the income statement in subsequent periods | ||||||||
| Foreign currency translation differences | (206) | - | ||||||
| Total comprehensive (expense)/income for the year | (2,499) | (1,317) | ||||||
| Profit/(loss) for the quarter attributable to: | ||||||||
| - Owners of the parent company | (2,293) | (1,317) | ||||||
| - Non-controlling interest | (0) | (0) | ||||||
| (2,293) | (1,317) | |||||||
| Total comprehensive profit/(loss) for the quarter attributable to: | ||||||||
| - Owners of the parent company | (2,499) | (1,317) | ||||||
| - Non-controlling interest | (0) | (0) | ||||||
| (2,499) | (1,317) | |||||||
| Basic earnings per share (pence) attributable to the owners of the parent | 15 | (1.95) | (1.86) | |||||
| Diluted earnings per share (pence) attributable to the owners of the parent | 15 | (1.95) | (1.86) | |||||
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED 31 MARCH 2022
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
| As at 31 March | As at 31 December | ||||
| 2022 | 2021 | ||||
| Notes | £'000 | £'000 | |||
| Non-current assets | |||||
| Intangible assets | 5 | 20,592 | 16,994 | ||
| Property, plant and equipment | 194 | 30 | |||
| Leased assets | 87 | 104 | |||
| Investment in associate | 7 | 24,149 | 25,367 | ||
| Investments | 8 | 1,633 | 1,721 | ||
| 46,655 | 44,216 | ||||
| Current assets | |||||
| Trade and other receivables | 9 | 339 | 622 | ||
| Held-for-sale assets | 120 | 118 | |||
| Cash and cash equivalents | 3,202 | 6,355 | |||
| 3,661 | 7,095 | ||||
| Total assets | 50,316 | 51,311 | |||
| Current liabilities | |||||
| Trade and other payables | 10 | (1,002) | (986) | ||
| Borrowings | 11 | (19,354) | (18,349) | ||
| Held-for-sale liabilities | (34) | (34) | |||
| Provisions | (15) | (15) | |||
| (20,405) | (19,384) | ||||
| Non-current liabilities | |||||
| Trade and other payables | (65) | (65) | |||
| Total liabilities | (20,470) | (19,449) | |||
| Net assets | 29,846 | 31,862 | |||
| Equity | |||||
| Share capital | 12 | 5,866 | 5,866 | ||
| Share premium | 12 | 37,556 | 37,556 | ||
| Share based payment reserve | 2,096 | 1,613 | |||
| Other reserves | 5,723 | 5,723 | |||
| Other comprehensive income | (129) | - | |||
| Retained earnings | (21,161) | (18,791) | |||
| Total equity attributable to owners of the parent | 29,951 | 31,967 | |||
| Non-controlling interest | (105) | (105) | |||
| Total equity | 29,846 | 31,862 |
INTERIM UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2022
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
| Share capital | Share premium account | Share based payment reserve | Other reserves | Other comprehensive income | Retained earnings | Total equity | Non-controlling interest | Total | |
| Three months ended 31 March 2021 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Balance at 1 January 2021 | 3,505 | 13,222 | 531 | 5,745 | - | (12,601) | 10,402 | (101) | 10,301 |
| Profit/(loss) for the period | - | - | - | - | - | (1,317) | (1,317) | (0) | (1,317) |
| Other comprehensive income | |||||||||
| Foreign currency translation differences | - | - | - | - | - | - | - | - | - |
| Total comprehensive income/(expense) | - | - | - | - | - | (1,317) | (1,317) | (0) | (1,317) |
| Issue of shares | 514 | 7,013 | - | - | - | - | 7,527 | - | 7,527 |
| Exercise of warrants | 1 | 16 | - | - | - | - | 17 | - | 17 |
| Share based payment charge | - | - | 299 | - | - | - | 299 | - | 299 |
| Total transactions with owners, recognised directly in equity | 515 | 7,029 | 299 | - | - | - | 7,843 | - | 7,843 |
| Balance at 31 March 2021 | 4,019 | 20,251 | 830 | 5,745 | - | (13,918) | 16,927 | (101) | 16,826 |
| Three months ended 31 March 2022 | |||||||||
| Balance at 1 January 2022 | 5,866 | 37,556 | 1,613 | 5,723 | 77 | (18,868) | 31,967 | (105) | 31,862 |
| Profit/(loss) for the period | - | - | - | - | - | (2,293) | (2,293) | (0) | (2,293) |
| Other comprehensive income | |||||||||
| Foreign currency translation differences | - | - | - | - | (206) | - | (206) | - | (206) |
| Total comprehensive income/(expense) | - | - | - | - | (206) | (2,293) | (2,499) | (0) | (2,499) |
| Share based payment charge | - | - | 483 | - | - | - | 483 | - | 483 |
| Total transactions with owners, recognised directly in equity | - | - | 483 | - | - | - | 483 | - | 483 |
| Balance at 31 March 2022 | 5,866 | 37,556 | 2,096 | 5,723 | (129) | (21,161) | 29,951 | (105) | 29,846 |
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED 31 MARCH 2022
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
| Period ended 31 March | Three months ended | ||||
| 2022 | 2021 | ||||
| £'000 | £'000 | ||||
| Cash flows from operating activities | |||||
| Total comprehensive loss for the period | (2,499) | (1,317) | |||
| Adjustments for: | |||||
| Net interest (received)/paid | 458 | 1 | |||
| Share based payments | 483 | 299 | |||
| Bad debt provision | - | 11 | |||
| Depreciation of property, plant and equipment | 24 | 9 | |||
| Gain/loss on disposal | (251) | - | |||
| Fair value (gain)/loss on investments | 88 | (22) | |||
| Movements in working capital: | |||||
| (Increase)/decrease in trade and other receivables | 402 | 102 | |||
| Increase/(decrease) in trade and other payables | 449 | (78) | |||
| Other working capital movements | (33) | - | |||
| Cash flows used in operating activities | (879) | (995) | |||
| Investing activities | |||||
| Purchase of intangible assets | (3,010) | (155) | |||
| Purchase of property plant and equipment | (171) | (1) | |||
| Sale of subsidiary | 12 | - | |||
| Distribution from associate | 901 | - | |||
| Net interest received/(paid) | - | 0 | |||
| Net cash used in investing activities | (2,268) | (156) | |||
| Financing activities | |||||
| Proceeds from issue of shares | - | 2,631 | |||
| Principal element of lease payments | (5) | (5) | |||
| Interest element of lease payments | (1) | (1) | |||
| Net cash generated from financing activities | (6) | 2,625 | |||
| Net increase/decrease in cash and cash equivalents | (3,153) | 1,474 | |||
| Cash and cash equivalents at beginning of the period | 6,355 | 5,937 | |||
| Cash and cash equivalents at the end of the period | 3,202 | 7,411 | |||
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:
| Steven Poulton, Chief Executive | Tel: +44 (0) 1235 511 767 E-mail: info@altus-strategies.com |
| SP Angel Corporate Finance LLP (Nominated Adviser) Richard Morrison / Adam Cowl | Tel: +44 (0) 20 3470 0470 |
| SP Angel Corporate Finance LLP (Broker) Grant Barker Rob Rees | Tel: +44 (0) 20 3470 0471 Tel: +44 (0) 20 3470 0535 |
| Shard Capital Partners LLP (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 an income generating mining royalty company, with a diversified portfolio of production, pre-production and discovery stage 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. Altus has established a global portfolio comprising 33 royalty interests and 27 project interests across nine countries and nine metals. 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.