Our latest Investing Matters Podcast episode with QuotedData's Edward Marten has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Final results from a 6,300m reverse circulation drilling programme at the Tabakorole gold project located in southern Mali.
Some extremely impressive grades and intersections.
Future looks VERY good
If they keep replicating what they're doing it could easily become a £1bn company but the SP is currently going nowhere. I will be increasing my holding when funds allow.
I received this very full, timely and impressive response from Steve Poulton, CEO.
Thank you for your email which is very welcome.
In respect of the Tabakorole project, Marvel are required to invest US$3M in direct exploration of the project to increase their holding from 51% to 70%.
In order to increase their shareholding from 70% to 80%, Marvel are required to then undertake and finance a definitive feasibility study. The level of investment required to take the project through to a DFS is not specified, however it would likely be significant.
Altus can then elect to finance the project pro rata (at 20%) into production, or elect to dilute and receive US$1M in cash. As you indicate Altus will also receive milestone stage payments (of $150k and $100k for each of the above).
While the stage payments provide welcome cashflow, the value of the deal is in the investments made by Marvel into the project (that Altus shareholders do not have to finance). While the stage payments are received once, there are in effect two Joint Ventures, one for Tabakorole and one for Lakanfla.
Altus retains a 2.5% NSR on each of these projects. Marvel can elect to repurchase up to 1.5% (in three 0.5% segments) of the NSR on each project, leaving Altus with 1.0% on that project.
The repurchases will require Marvel to pay Altus US$3.33M per 0.5% on that project, equating to approximately US$10M to repurchase the full 1.5%. If the project on which the royalty is being repurchased has a resource greater than two million ounces, the cost to repurchase increases to US$5M per 0.5%, equating to approximately US$15M to repurchase the full 1.5%.
On the basis that the repurchase is on commercial grounds (i.e. the project is or will go in to production), the implied value of the 1.0% NSR retained by Altus would likely be significantly more than US$6.66M. By way of illustration if the mine produced 1Moz of gold in its life, 1% would equate to the proceeds of 10,000 ounces of gold being paid to Altus. At current gold prices the 1% / 10,000oz would be equivalent to approximately US$17M in gross cashflow (undiscounted to take account of the time value of money).
On the conservative assumption of a <2Moz resource and on a hypothetical speculation of 1Moz life of mine production, then if a mine is successfully built, shareholders of Altus could benefit as follows:
Up to 20% ownership and economic benefit from a producing gold mine (and any new discoveries)
Up to US$10M in cash from the 1.5% royalty repurchase
A remaining 1.0% NSR with gross cashflows of US$17M (undiscounted and at current prices)
US$0.5M in cash milestone payments
The same again on the Lakanfla gold project / also under JV with Marvel
Market circumstances (including the price of gold) can change. The above is purely for illustrative purposes and does not constitute any form of advice or recommendation.
I am a new shareholder of Altus and am trying to understand the economics of the Tabakorole project in Mali. Am I right in thinking that Marvel Gold can increase their holding in the JV from its current 51% to 70% for $150k, then from 70% to 80% for $100k, then to $100% for a further $1m. Hence the maximum upside for Altus is only $1.25m. Plus Marvel can buyback the NSR for $3.3m for the first 1.5% then $10m for the next 1%. Hence the absolute maximum that Altus will get from Tabakorole will be around $15m. That doesn't seem much for one of their best projects when they have a market cap of £60m = $85m. Is my calculation correct? Thanks
All figures from here: https://www.altus-strategies.com/site/assets/files/4831/altus-_active_jvs_royalties_-_november_2020.pdf
Hi Ryl, I am looking at this share myself and if I was a holder i could answer your question. But as an experienced investor but no expert by any means I can tell you that I would not worry about any event 14 years ago in any company. Any issues would have washed through by now unless it is just curiousity on your behalf. Do you mean expensive from its IPO or at that time? If the latter then check the price of gold or the relevant metal at that time. If the IPO they price what they can get away with.
I’ve recently got myself a shares ISA so all this is very new, knowing what to buy is a steep learning curve. I often look on the max graph to see how the company has performed over time. Could anyone explain to me why the shares went down in price so much on the 14th of November 2007 and why the stock was so expensive to begin with?
Congratulations, a very good investment!
Sorry to say this only came on my radar yesterday
Need to do a bit more research but does look good.
It is kind of quiet!!
Are you in here? What's your thoughts?
Highlander. Dont expect a quick response this forum is unmanned during office hours.... Evenings and weekends :)
Got a small holding here, interested to hear people's thoughts and expectations?
Don't know much about this share but those grades look excellent!
Seems they have many projects on the go as well!
Having a dabble here as off the radar.
GL.
I think it has been a favourite of Dominic Frisby for some time
Recommended in Money Week
No shortage of RNS flow with Altus with its 20 project interests.
The big results to drop will be the drill currently underway, which is a 10,000m programme by Altus its 100% owned Diba gold project located close to Lakanfla and the world famous Sadiola gold mine.
Steven Poulton, Chief Executive of Altus, commented:
"Few companies provide as much exposure to the 'drill bit' and discovery upside for their shareholders as we currently do at Altus. We have recently announced almost 20,000m of drilling across three separate gold projects, being undertaken almost simultaneously. The commencement of this 6,300m programme at Tabakorole in southern Mali, by our JV partner Marvel Gold, follows the recent completion of an initial 3,880m JV-funded programme at Lakanfla in western Mali and the commencement of a 10,000m programme by Altus at our 100% owned Diba gold project located close to Lakanfla and the world famous Sadiola gold mine.
This programme at Tabakorole is designed to test the potential strike extension of the deposit as well as infill the current MRE. We look forward to updating shareholders on progress from Tabakorole as results are received."
https://www.londonstockexchange.com/news-article/ALS/drilling-programme-tabakorole-gold-project-mali/14776880
6,300m Drilling Programme Underway at Tabakorole Gold Project, Southern Mali
https://www.londonstockexchange.com/news-article/ALS/drilling-programme-tabakorole-gold-project-mali/14776880
Altus Strategies* (ALS LN) – BUY Says House Broker; SP Angel , 132p – MD&A highlights progress at Diba among other accomplishments in Q3/20
Credit: @MY21_Oracle
Altus Strategies
Ticker (LON: ALS)
Shares: 70m
Market Cap: £42
Altus Strategies have built a portfolio of 20 projects and royalties in key mining jurisdictions and currently has a high impact 10,000m RC drilling programme underway at the Diba gold project in western Mali.
Diba is strategically located in a world famous gold belt that hosts numerous open pit mines.
Altus Strategies has interest in 20 projects, the figures for just the oxide portion of the Diba gold project is more than twice the market cap with a NPV of $107m at 10% discount rate and US$1,500/oz gold price, with payback of 6.1 months; after-tax IRR is 715%.
The CEO of Altus Strategies recently topped on the open market up to 8%, BOD hold over 20%, major institutional holders including, La Mancha, Sprott, Delphi, over 76% shares tightly held.
Altus Strategies currently has a high impact 10,000m RC drilling programme underway at the Diba gold project in western Mali.
Diba is strategically located in a world famous gold belt that hosts numerous open pit mines.
?With 20 project interests no shortage of news flow, 2 today.
Altus Completes Gold Royalty & Equity Deal in Ivory Coast
https://www.londonstockexchange.com/news-article/ALS/ivory-coast-gold-royalty-and-equity-deal-completed/14772467?
Steven Poulton, Chief Executive of Altus, commented:
"The quarter ending 30 September 2020 has proven to be another successful and incredibly active one for Altus. We were delighted to publish a mineral resource estimate on our 100% owned Diba gold project in Western Mali which, post-period, has seen a 32% increase in after-tax NPV to US$107 million based on a 10% discount rate and conservative US$1,500/oz gold price. Following this news, we recently announced the commencement of a 10,000m RC drilling programme at the project. This progress is testament to the brilliant work of our team and we look forward to realising the considerable potential that we believe exists at this asset.
"In addition, our Malian field team have supported the drilling programmes on the Tabakorole and Lakanfla gold projects, each being advanced by our ASX-listed JV partner Marvel Gold. Meanwhile our field team in Cameroon is undertaking a significant 5,000m trenching and sampling programme at the Laboum gold project.
"In line with our strategy, we continue to review a number of potential royalty, project and company acquisitions which, if completed, will continue to expand the Company's royalty pipeline and potential to generate near term cashflow. Having noted a significant increase in the number of approaches from groups seeking potential transactions with Altus, we expect this work to lead to additional deal flow and income for Altus throughout the course of 2020 and 2021.
"We look forward to updating the market with the results from our current field programmes and numerous other project and royalty initiatives."
https://www.londonstockexchange.com/news-article/ALS/quarterly-results-financial-statements/14771286
Post period:
· 10,000m reverse circulation ("RC") drill programme underway at the Diba gold project in western Mali to test resource expansion potential as well as five further priority prospects
· Updated Preliminary Economic Assessment published for Diba project, with 32% increase in after-tax NPV to US$107 million based on 10% discount rate and US$1,500/oz gold price (note that mineral resources that are not mineral reserves do not have demonstrated economic viability) - see news release "Updated PEA Delivers US$107 Million (After-Tax) NPV for Diba Gold Project, Western Mali" dated 18 November 2020
· Excellent results received from metallurgical test work on oxide and sulphide samples at Diba gold project in western Mali, which test the amenability of ores to carbon-in-leach ("CIL") and heap leach processing
· Commencement of 3,800m phase-1 drilling programme at Lakanfla gold project in western Mali under JV with Marvel Gold
· Commencement of 5,000m trenching programme across several key prospects at the Company's 100% owned Laboum gold project in northern Cameroon
https://www.londonstockexchange.com/news-article/ALS/quarterly-results-financial-statements/14771286
Quarterly Report and Financial Statements
https://www.londonstockexchange.com/news-article/ALS/quarterly-results-financial-statements/14771286
Opened a position here, huge potential and way off the radar. Drill results soon. Excellent NPV RNS.
Worth a read, New CEO interview.
Altus Strategies, capturing the sweet spot of the mining sector for investors
https://www.sharebuyers.co.uk/shares/altus-strategies-shares-capturing-mining-sweet-spot-for-investors/