ALS.L Regulatory News (ALS)

Altus Strategies Plc / Index (EPIC): AIM (ALS) TSX-V (ALTS) OTCQX (ALTUF) / Sector: Mining

28 April 2021

Altus Strategies Plc

("Altus" or the "Company")

Audited Final Results

Altus Strategies Plc (AIM: ALS, TSX-V: ALTS, OTCQX: ALTUF) announces its audited final results for the year ended 31 December 2020. These are presented below and are available (along with the Company's 2020 Annual Report) to download on the Company's website at http://altus-strategies.com/investors/financials/ and on SEDAR at www.sedar.com.

Operational highlights

- Independent Mineral Resource Estimate ("MRE") published on Diba gold project, western Mali, comprising 4,834,000 tonnes at 1.39 g/t gold ("Au") for 217,000 ounces in the Indicated category and 5,479,000 tonnes at 1.06 g/t Au for 187,000 ounces in the Inferred category

- Excellent results received from metallurgical test work on oxide and sulphide samples at Diba, testing the amenability of ores to carbon-in-leach ("CIL") and heap leach processing

- Updated Preliminary Economic Assessment ("PEA") published for Diba project, with 32% increase in after-tax net present value ("NPV") to US$107 million based on 10% discount rate and US$1,500/oz gold price

- Results of an MRE announced for the Tabakorole gold project, southern Mali, comprising 1.2 g/t Au for 620,000 ounces in the Indicated category, 1.2 g/t Au for 290,000 ounces in the Inferred category, completed under the Company's joint venture ("JV") with Australian Securities Exchange ("ASX")-listed Marvel Gold Limited ("Marvel Gold", formerly called Graphex Mining Limited)

- Encouraging results from 70-hole 2,042m shallow aircore ("AC") drilling at Tabakorole, defining 200m northwest extension to mineralisation

- Environmental Impact Assessment of Agdz silver and copper project, eastern Morocco, accepted by Ministry of Interior, and new targets generated on the project using predictive mapping techniques

Corporate highlights

- Definitive Purchase & Sale and Royalty agreements signed with TSX Venture Exchange ("TSX-V")-listed Stellar AfricaGold Inc. ("Stellar") in respect of the Company's 100% interest in the Prikro and Zenoula gold projects in Côte d'Ivoire for 2.5m Stellar shares, warrants to purchase a further 2.5m Stellar shares, milestone payments and a 2.5% Net Smelter Return ("NSR") royalty on each project

- Grant of share options to certain directors and employees to acquire 5.1 million ordinary shares of £0.05 par value ("Ordinary Shares") at an exercise price of £0.7315 per Ordinary Share, representing a 10% premium to the closing market price on the date of grant

- Appointment to the Altus Board of Karim Nasr, CEO of La Mancha Holdings S.à r.l. ("La Mancha"), as its representative

- Appointment of Alister Hume as Business Development Manager, Sandra Bates as General Counsel and Richard Belcher as VP Exploration

- Commencement of quotation of the Company's Ordinary Shares on the OTCQX 'Best Market' in the United States under the ticker symbol 'ALTUF', enhancing visibility of the Company to potential US investors

Financial highlights

- Strategic Investment Agreement with La Mancha concluded, resulting in an investment by La Mancha of £6.5m / C$11.2m and La Mancha holding a 35.45% interest in the Company

- Consolidation of the Company's ordinary shares on a five-for-one basis

- Initial 15 million shares with a value of £1.1m / C$1.9m in ASX-listed Canyon Resources Ltd ("Canyon") received in accordance with agreement to terminate the JV on the Birsok bauxite project in central Cameroon

- Cash balance of £5.9m / C$10.3m as at 31 December 2020

- Cash outflow for operating activities of £2.3m / C$4.1m for the year

- Balance of listed equity holdings of £1.3m / C$2.3m as at 31 December 2020

Post-period end

- Completion of oversubscribed fundraising for £7.70m / C$13.35m at an issue price of £0.75 / C$1.30 per share with net proceeds to be primarily used to accelerate gold exploration programmes in Egypt and Mali

- Expansion of activities into Egypt through award of four gold exploration licences totalling 1,565km2 located in the Eastern Desert through a competitive international bidding process

- Grant of three new copper and silver exploration projects totalling 252km2 within the prospective western Anti-Atlas belt of Morocco

- Receipt of second tranche of 10 million shares in Canyon with a value of £0.6m / C$1.1m

- Completion of strategic review of Bikoula iron project in southern Cameroon by Mining Plus UK Ltd ("Mining Plus") to determine next steps for development

- Drilling at Tabakorole gold project extending strike length by 150m to over 3km

Steven Poulton, Chief Executive of Altus, commented:

"2020 has been a year of excellent progress across the Company, despite the challenging backdrop that the pandemic has presented.

"During the period, we were delighted to announce the closing of a £6.5 million strategic investment by La Mancha, one of the sector's most respected investment groups. La Mancha have acquired a 35% equity position and provided us with the capital to accelerate our royalty generation activities. We also now benefit from the business expertise of Karim Nasr, La Mancha's CEO, who we have welcomed to the Altus Board. Following this investment and in line with our growth trajectory, we were delighted to announce the appointments of Sandra Bates as General Counsel, Alister Hume as Business Development Manager and Richard Belcher as VP Exploration. These high calibre individuals reinforce the strength of the Altus team and its capabilities.

"In line with our diversified strategy, Altus successfully completed a number of project and royalty transactions during the period that realised value for our shareholders. On the operational front, our ASX-listed JV partner Marvel Gold undertook a series of drilling and other programmes at the Lakanfla and Tabakorole projects in western and southern Mali which have generated very positive results. Also in Mali, we accelerated exploration at our 100% owned Diba gold project in western Mali, undertaking drilling and generating a new and larger resource, followed by a very compelling Preliminary Economic Assessment. Elsewhere, we continued our project generation activities in Cameroon, Morocco and Ethiopia, primarily exploring for gold, copper and silver deposits.

"Post-period, we announced that the Company's shares had begun trading on the OTCQX market in the United States, offering the Company enhanced exposure to current as well as potential investors and counterparties for project transactions. We also marked our entrance into Egypt, thanks to the award of a number of gold exploration licences in the Eastern Desert to our subsidiary, Akh Gold. In March 2021, the Company completed a private placement, raising £7.7 million before expenses. The placement has strengthened our balance sheet, allowing us to further accelerate our current programmes, particularly in respect of Egypt and Mali, as well as provide capital for potential accretive project and royalty acquisition opportunities.

"The year ahead is set to be even stronger and more exciting for Altus than 2020 as we look forward to generating new discoveries, growing the number of projects and royalties in our portfolio, undertaking new joint ventures and identifying and executing project and royalty transactions that offer significant potential to realise considerable value for our shareholders."

For further information you are invited to visit the Company's website www.altus-strategies.com/ or contact:

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 focus on Africa and differentiated approach, of generating royalties on its own discoveries as well as 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

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR") until the release of this announcement.

Chairman's Statement

Reflection on the year

In this statement a year ago, I reflected on the recent successful completion of a fundraising by the Company and looked ahead with a degree of uncertainty to the potential challenges that would be posed by the unfolding pandemic. A year on and uncertainty remains regarding the direction of the pandemic, tempered by hope for the efficacy of the global vaccine rollout, but I am delighted to be once again reflecting on the recent successful completion of a fundraising by the Company. This is testament to how, against the backdrop of an unprecedented health crisis and global economic upheaval, the team at Altus has managed to continue driving exploration programmes, refining the Company's portfolio of projects and building value that continues to make the Company attractive to shareholders.

Altus was in the fortunate position of facing the pandemic period with a strong working capital balance sheet, having successfully concluded the process by which La Mancha, a pre-eminent Africa-focused mining investment group, made its strategic investment in the Company. Altus has deployed these resources across its projects in a disciplined and effective manner. Significant progress was made at the Diba gold project in western Mali, with the Company undertaking its first drilling programme, conducting metallurgical testwork, and reporting the results of an independent MRE and PEA. Two further projects in Mali, Lakanfla and Tabakorole, were the subject of accelerated exploration activity, with a resource update and a series of drilling programmes being conducted by our JV partner. The Company's portfolio of assets continued to be replenished, with a successful application for four gold exploration licences in Egypt - a new jurisdiction for Altus, and the sale of two gold projects in Côte d'Ivoire for upfront and milestone payments and future royalties. This brought the number of projects on which Altus holds a royalty to nine, and further demonstrated how Altus is growing and developing its project and royalty business.

Management and Board

For a company of our size, Altus has a strong senior management team, Board of Directors and corporate governance procedures. During the year, we welcomed Karim Nasr to the Board. Karim is the CEO of La Mancha and Altus immediately began benefiting from his considerable business acumen and insights. The senior management team was significantly bolstered by three appointments in 2020; Alister Hume joined as Business Development Manager, Sandra Bates joined as General Counsel and Richard Belcher took up the role of VP Exploration. Alister is an experienced investment and business development manager with over a decade of expertise working in private equity and capital markets in the natural resources industry. Sandra is an international lawyer with over 20 years' experience, having advised listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement. Richard is a talented geologist with a track record of exploration and discovery across the African continent. I am delighted to welcome all three of them to the management team.

Looking forward

I am looking forward to what could prove to be an exciting year for Altus, as we establish our presence in Egypt and start work on new licence ground in Morocco. A return to normal travel and site operations is much anticipated by our team, not least our UK-based geologists. For all of our employees, we will maintain their health and safety as our highest priority.

Whatever the challenges and opportunities of the coming 12 months, Altus is in a strong position to deal with them, backed by a robust treasury, an exceptional shareholder register and a first-class team of resource professionals. I am confident we will continue to deliver on all our objectives and once again exceed expectations.

On behalf of the Board, I thank the entire team at Altus for their contributions to a successful year in challenging circumstances, and I thank our existing and new shareholders for their continued support.

David Netherway

Non-Executive Chairman

Business Overview

Our project and royalty generator business model

Altus is a mining Royalty Generator focused on becoming the leading royalty company for African resource assets. The Company is based in the United Kingdom and is dual-listed in the UK (AIM:ALS) and in Canada (TSX-V:ALTS). Its shares also trade on the OTCQX in the United States (OTCQX:ALTUF). Since being founded in 2007, the Company has developed a portfolio of resource assets, diversified by commodity and jurisdiction. The team's track record of success in Africa and unique business model has attracted La Mancha, one of the world's largest mining investors, as a strategic shareholder. La Mancha's involvement is transformational for the Company, accelerating its royalty generation activities and expanding the pipeline of new project opportunities in Africa. The business is managed from our UK head office in Oxfordshire and is currently active in Mali, Egypt, Ethiopia, Morocco, Côte d'Ivoire and Cameroon. 

Altus' unique and risk-diversified business model generates short and long-term income whilst also providing investors with exposure to the multiple potential returns that can be generated from the discovery process. Altus is growing its portfolio of royalties through organic royalty generation and the potential acquisition of royalties from third parties. The Company's portfolio approach reduces risk exposure through commodity and geographic diversification. By entering JVs with third parties on its own discoveries, Altus preserves shareholder capital for investing in further discovery opportunities. The royalties are designed to yield sustainable long-term income for Altus.

The Discovery strategy leverages the Company's expertise and proven ability to identify and rapidly advance early-stage, potentially high-value projects. Altus aims to acquire multiple exploration licences in diverse jurisdictions and then undertakes exploration on these simultaneously. Once a discovery has been made, project funding is met from JV partnerships, reducing risk and preserving capital. Income is generated through JV milestone payments which occur at exploration and development landmarks. Altus typically retains a residual minority equity position in the project, providing longer term optionality. Finally, Altus retains a royalty which provides long-term cash flow potential once the project enters production.

The Acquisition strategy focuses on accelerating the growth of the portfolio through direct purchase of existing royalties from third parties, or by royalty creation through the provision of strategic capital to select exploration and mining companies. This acquisition strategy aims to enhance the quality of the Company's royalty portfolio, provide further diversification, and accelerate income to the group from cash-generating assets.

Risk diversification

Risk diversification is at the heart of the Company's philosophy, and is enacted by diversifying our portfolio across a variety of minerals at multiple locations across several jurisdictions. At the date of this report, Altus had a growing portfolio of 26 assets comprising six royalties, three JV projects with royalties, 17 exploration projects (including one project under application), spanning seven countries and across seven metals.

Altus generates projects by selectively acquiring mineral exploration licences and advancing projects through the work of its technical team of exploration geologists. At each level, any projects that prove to be uneconomic are dropped. Successful projects progress up the pyramid toward advanced exploration with JV partners and eventually the definition and monetisation of the resource. As each project matures and develops, Altus reduces its ownership, but retains a royalty interest on its future cash generation.

More than half of the Company's portfolio is comprised of gold projects, the most advanced of which are located in western and southern Mali. Aside from gold, Altus is focused on metals that it believes will be critical in the transmission, storage and efficient use of electricity in the coming decade, as the world seeks to decarbonise. Copper will be paramount among these. Other metals such as cobalt, lithium, vanadium and aluminium also have a critical part to play, as will specialist and less well-known rare-earth metals, including neodymium and praseodymium that are used in the high-quality magnets of electric motors.

Focus on Africa

While Altus' acquisition strategy targets assets in all parts of the world, the Company's discovery strategy is focused on the continent of Africa where, due to the relative lack of exploration using modern techniques compared to many other parts of the world, economic mineral deposits can still be discovered cropping out at surface. It is reported that 24% of all discoveries in the last decade were found on the continent, despite receiving only 14% of the global exploration budget (source: MinEx Consulting). According to the same survey, deposits in Africa (excluding South Africa) are being discovered at average depths of just 9m, which is much shallower than average global depths of 78m; in Canada and the USA the average discovery depths are even greater, at 125m and 198m respectively.

A growing portfolio of assets across Africa

Since the reporting date, the Company has been awarded four licences in Egypt, a new jurisdiction for Altus, and a further three new licences in Morocco.

This opportunity to make discoveries across Africa without recourse to expensive subsurface exploration technologies, including drilling programmes, means that our shareholder capital can potentially generate more value and at greater speed if applied to exploration in Africa than it might in many other parts of the world, thus increasing the discovery potential per Altus share. Given the collective geographical, geological and operational expertise of our management and advisor team, we believe Altus is well positioned to maximise this opportunity.

Chief Executive's Review

Introduction

I am pleased to report on a transformational year for Altus. Our team performed admirably despite the horrendous impacts of the Covid-19 pandemic and unprecedented international response. While prioritising the safety and security of our colleagues and the communities with whom we work, Altus grew its portfolio of assets during the year and completed a number of transactions which realised value for our shareholders. In this report I review our progress to date, discuss the current market conditions and set out our objectives for the year ahead.

A key milestone for the year was the completion of the strategic investment by La Mancha which closed in February 2020 with effectively unanimous shareholder support. La Mancha is the wholly-owned, mining investment vehicle of the Egyptian-born Sawiris family, which also has strategic stakes in Endeavour Mining Corporation and Golden Star Resources Ltd. These are two leading Canadian-listed gold mining groups, both with a focus on Africa. Coincident with the strategic investment into Altus, we consolidated our share capital on a 5:1 basis.

In April 2020, we were delighted to welcome Karim Nasr, the CEO of La Mancha, to our Board. We also bolstered the team with the appointment of a number of highly talented individuals, including Sandra Bates as General Counsel, Alister Hume as Business Development Manager and Richard Belcher as VP Exploration.

Royalty & Project Transactions

Altus successfully closed a number of project and royalty transactions in the year, including:

- The receipt of an initial 15 million shares in ASX-listed Canyon, with a current value of approximately £1.0m / C$1.7m, in relation to the termination of the Birsok bauxite JV in central Cameroon.

- The sale of two gold projects in Côte d'Ivoire to TSX-V-listed Stellar, in return for 2,500,000 shares of Stellar and 2,500,000 share purchase warrants, each exercisable to purchase a Stellar share for 24 months at C$0.07, the potential for future project milestone equity-based payments and a 2.5% NSR royalty on each project.

- An agreement with ASX-listed Marvel Gold under which Marvel Gold acquired the JV earn-in rights previously held by Glomin Services Limited ("Glomin") on the Company's Lakanfla and Tabakorole gold projects, in western and southern Mali respectively. Under the JV, Marvel Gold has the right to earn up to an 80% interest in each project by completing up to four key stages, culminating in a Definitive Feasibility Study ("DFS"). Altus will receive up to US$1,450,000 in future milestone cash payments, maintain the option to co-finance a 20% equity interest in the projects on completion of the DFS and will retain a 2.5% NSR royalty on each project.

- The acquisition of a 2% NSR royalty held by AGMEX SARL on the Company's Lakanfla gold project in western Mali, with the option to acquire the final 1% NSR royalty held by AGMEX SARL.

- The commencement of trading of the Company's shares on the OTCQX 'Best Market' in the United States, under the ticker symbol 'ALTUF'.

After the period, in February 2021, Altus announced the receipt of the final 10 million tranche of shares in Canyon in respect of the Joint Venture Termination Agreement ("JVTA") signed in February 2019. The Company currently holds 26.1 million Canyon shares with a market value of approximately £1.7m / C$2.9m representing 4.2% of Canyon's issued capital.

As at the end of the period, Altus had the following active joint venture and royalty interests.

Notes

1 Altus retains an option to co-fund its project interest at 30% or dilute to an NSR royalty

2 Net Profit Interest royalty is on the southern portion of the Ndablama gold project

3 Subject to the transfer of the Birsok licence to Canyon, NSR royalty is conditional upon the award of a mining licence to Canyon on their adjacent Minim Martap bauxite project

Joint Venture Activities

During and after the period, Marvel Gold undertook a series of significant drilling programmes at the Lakanfla and Tabakorole JV projects in western and southern Mali respectively. These programmes have resulted in significant progress at Tabakorole in particular, where Marvel Gold has announced an updated MRE, increasing the previous MRE by approximately 50%. Marvel Gold has also extended the strike of the known deposit as well as discovered a potential new parallel zone.

Project Generation Activities

During 2020, we accelerated our exploration programmes in Africa, with a specific focus on our 100% owned Diba gold project in western Mali. This work included an updated MRE, completion of metallurgical testwork, an independent PEA and a 10,000m Reverse Circulation ("RC") drilling programme. Each of these programmes generated positive results and Diba is now emerging as an exciting new gold opportunity in west Africa.

Elsewhere, Altus continued its project generation activities, completing a series of programmes that included trenching, mapping and sampling in Cameroon, Morocco and Ethiopia, primarily exploring for gold, copper and silver deposits. The Company also placed two of its projects, namely Daro and Zager, in northern Ethiopia under Force Majeure, due to the ongoing regional instability in the Tigray region.

After the year end, in February 2021, we were delighted to announce that the Egyptian Mineral Resource Authority ("EMRA") had awarded Altus four gold projects (comprising nine licence blocks), totalling 1,565km2 in the Eastern Desert of Egypt. The projects were carefully selected by Altus based on their high geological prospectivity and were awarded as part of a competitive international bidding process, which included a number of multinational gold mining companies. We are currently establishing our operational base in Egypt and are looking forward to commencing exploration imminently. Also after the year end, the Company relinquished its Tigray-Afar copper project, in northern Ethiopia due to insufficient exploration success.

Funding

The Company's Ordinary Shares are listed on the AIM market (AIM:ALS) of the London Stock Exchange in the UK and the TSX Venture Exchange (TSX-V:ALTS) in Canada. Our shares also trade on the OTC market (OTCXQ:ALTUF) in the United States. These listings provide the Company with enhanced exposure to current as well as potential investors and counterparties for project transactions.

La Mancha Strategic Investment

On 04 December 2019, the Company entered into a Strategic Investment Agreement with La Mancha, whereby, subject to shareholder and regulatory approval, La Mancha subscribed for 24,845,878 new Ordinary Shares (post-consolidation) at a price of £0.26 / C$0.45 per share for aggregate gross proceeds of £6.5 million / C$11.2 million before expenses. A General Meeting of the Company's shareholders was held on 18 February 2020 in respect of the proposed investment by La Mancha and all resolutions were duly passed.

La Mancha is a pre-eminent Africa-focused mining investment group, which has a notable track record in deal selection and value creation. The group is the wholly-owned mining investment vehicle of the Sawiris family and as at 31 December 2020 had strategic investments in two publicly traded mining companies: a 19% holding in Endeavour Mining Corp. (TSX:EDV) and a 34% holding in Golden Star Resources Ltd. (TSX:GSC and NYSE:GSS). These two companies have operations in Africa and Australia with aggregate production in excess of 1.7 million gold equivalent ounces per year.

La Mancha's strategic investment in Altus is its first external investment into the listed mineral exploration and royalty sector. The Directors believe the investment not only represents a strong industry endorsement of the Altus team, portfolio and business model, but that it will prove transformative for Altus, providing the capital and expertise to fast track the Company's project and royalty generation activities, as well as unlocking new external growth opportunities.

Specifically, the transaction benefits the Company by providing:

- additional capital to allow Altus to grow its portfolio of projects and royalties across Africa, as well as advance its existing projects further and faster than would otherwise have been possible;

- access to potential new project and corporate opportunities, introduced through La Mancha's significant network in Africa and the resource sector more broadly;

- a robust balance sheet, as compared to our peer group, during an optimal period in the mining cycle, which will strengthen the Company's position when negotiating accretive acquisition opportunities;

- the appointment of up to two La Mancha directors to Altus' Board, the first being Karim Nasr, which occurred on 06 April 2020 and which will bring additional operating and technical expertise within the mining sector and in Africa; and

- wider market recognition for the Company, its capabilities and ambitious growth plans which may attract further investors to the Company's equity and potential partners for its projects.

La Mancha's investment has resulted in it owning a 35.43% share of the Company (as at 12 April 2021 - see Director's Report), and was subject to a waiver by the UK Panel on Takeovers and Mergers under Rule 9 of the City Code on Takeovers and Mergers in respect of the obligation of La Mancha to make a mandatory offer for the Company. La Mancha entered into a relationship agreement with the Company and its nominated adviser, SP Angel Corporate Finance LLP ("SP Angel"), which included provisions to maintain the operating independence of the Company, for any transactions between La Mancha and the Company to be conducted on an arm's length basis, and for the Company to continue operating under its existing corporate governance regime. La Mancha retains the right to appoint one director to the Board of the Company as long as it holds a 15% interest in the Company, and two directors while its interest is at least 25%.

Private Placement (Post Period)

After the period, on 21 March 2021, the Company completed a private placement of 10,266,668 Ordinary Shares at a price of £0.75 / C$1.30 per share ("Placement") raising approximately £7.70 million / C$13.35 million before expenses. The two Executive Directors participated in the Placement, subscribing for a total of 50,394 new Ordinary Shares with an aggregate value of approximately £37,800 / C$65,500. We were delighted with the participation in the placement by existing shareholders, as well as a number of new institutional and family office investors. Altus also welcomed Shard Capital Partners LLP ("Shard") as joint broker to the Company, alongside the Company's existing broker SP Angel. Altus paid broker commissions of approximately £118,000 / C$206,000 in respect of the Placement (representing 1.54% of the amount raised before expenses) and issued a total of 63,065 broker warrants. Each broker warrant has an exercise price of 112.5 pence and is exercisable for a period of two years from the completion of the Placement. The completion of the Placement has strengthened our balance sheet, to allow the Company to accelerate its exploration activities, specifically in respect of Egypt and Mali, as well as provide capital for potential accretive project and royalty acquisition opportunities.

Director Shareholdings

Further to the post period Placement, the Board of Altus has an aggregate beneficial shareholding in the Company of 14,441,315 Ordinary Shares, representing 17.97% of the current issued share capital. The Directors' shareholdings underscore the strong alignment of interests between the Company's Board and shareholders.

Altus Concert Party

There have been no changes in the constitution of those shareholders who may be deemed to be acting in concert (the "Concert Party"), as defined by the Takeover Panel of the London Stock Exchange. The Concert Party consists of Steven Poulton, Susannah Poulton, Matthew Grainger, Anna Grainger, David Netherway and Diane Rissik. These individuals in aggregate hold interests in 10,297,335 Ordinary Shares equivalent to 12.81%. of the Company's issued and voting share capital. These individuals do not currently hold any warrants in the Company and hold an aggregate of 2,200,000 share purchase options, which have an exercise price of £0.7315 per option and which expire on 01 September 2025. Shareholders should note that the Concert Party is free to increase its aggregated interest to 29.99% of the Company's issued and voting share capital without incurring an obligation under Rule 9 of the Takeover Code.

Market Commentary

Markets suffered an indiscriminate and sustained sell-off following the realisation of the likely profoundly negative economic implications of the Covid-19 pandemic. The FTSE100 was trading at around 7,500 in mid-February, but fell dramatically by approximately 33% to below 5,000 by the end of March to levels first hit in 1997. The index then rallied approximately 30% higher to almost 6,500 by June 2020 and, after further volatility, closed the year just above the 6,500 level. The price of oil briefly went negative with WTI Crude hitting -$37 a barrel, as supply overwhelmed demand and as a dispute erupted between Saudi Arabia and Russia within the OPEC price fixing cartel. WTI ended the year at US$48 a barrel and currently trades at around US$61.

The price of 'Dr' copper followed a similar pattern to the equity markets, falling 25% from US$2.8/lb to US$2.1/lb between January and March, before rallying 67% in a strong upward trend, boosted by constrained mine supply due to Covid-19 restrictions, hitting US$3.5/lb in December 2020. Gold was already in a cyclical uptrend rising from US$1,517 at the start of the year to US$1,673 by early March. However, it too fell sharply by 12% to US$1,469 by the third week of March. Thereafter gold benefitted from the economic distress, climbing 41% to an all-time high of US$2,068 in early August, before pulling back to US$1,896 by the end of the year.

The shares of mining equities, including Altus, were not spared from the broad equity sell-off in the first quarter of 2020. However, after the initial sell-off had occurred, mining equities trended higher, mirroring the price of gold, copper and other metals. The GDX, an exchange-traded fund for gold miners, started the year at 29.17 and fell 35% to 19.00 by the middle of March. Thereafter it rallied to a high of 42.74 in August before slipping to 36.02 by the end of the year. At the time of writing, the FTSE100 is above 6,950, copper is above US$4.4/lb, gold is above US$1,777/oz and the GDX is trading above 35.80.

The shares of Altus outperformed the market during the year, rising from 31.0p in January to 77.5p as at 31 December 2020. This exceptional performance reflects the Company's significant corporate transactions and project developments during the year. These include the excellent exploration results from the Company's Diba gold project, the Tabakorole gold JV project and the strategic investment by La Mancha.

Commodity Market Outlook

The market's short term reaction to the pandemic underscored the attraction of gold's safe-haven properties, when generating no yield is of zero consequence. Gold has since pulled back from its highs, but remains 6% above the pre-pandemic levels. Other markets and risk assets remain buoyant, with a leading indicator being speculation in Bitcoin which is trading above $53,000 per 'coin'. Real estate markets are also resilient and seemingly indicating sustained or higher prices, with interest rates expected to remain lower for longer. In general, investors are (perhaps correctly) anticipating a strong post-pandemic economic rebound which may be supercharged by the combined effects of the inflation in the money supply by various governments, under the guise of 'stimulus' (borrowing) and the rising wages, standards of living and ultimately domestic demand for goods and services in emerging markets. In almost all scenarios, rising inflation tends to favour the price of gold and other hard assets.

Meanwhile and perhaps concerningly, bond yields are also recovering, with the 10-year US treasury having initially traded at around 1.8% in January 2020, before collapsing to 0.5% in July 2020. Yields are now approaching 1.8% again, effectively erasing all the Covid-19 related rush into the perceived safety of US government 'reserve currency' bonds. A sell off in treasuries combined with a falling gold price, suggests the market is anticipating price inflation and rising real interest rates. Equity markets tend to be negatively impacted by rising rates, as higher discount rates are applied to the future earnings. In turn, falling equity prices can self-reinforce, triggering over-leveraged investors to face margin calls, stop-loss prices to be broken through and increasing speculative short-positions. A second and perhaps more fundamental negative impact of rising real interest rates is the affordability of government and corporate debt piles and the diversion of capital (raised in taxation) from productive uses, such as infrastructure and wages, into purely servicing debt interest. These forces tend to self-limit runaway inflation.

Altus Portfolio Balance

Equity and commodity markets are facing a number of unprecedented factors. The coordinated drive to aggressively decarbonise the global economy has potentially transformational implications for the demand for copper, nickel and the so called 'rare earth metals' which are fundamental to generating, transmitting and using renewable energy. Meanwhile and in addition, the seemingly relentless growth of China, the significant amounts of yet to be printed money being earmarked for infrastructure spending (perhaps exceptionally so in the USA) and the rapid technology-driven progress (and related wealth creation) in emerging markets represent a potential perfect demand-side upward pressure for all major metals, including gold.

However, as government debt burdens across the world rise to unprecedented levels as nations seek to underwrite their economies, a 'too big to fail' mentality regarding the global economy may form, if it hasn't already. Should confidence in the economic growth outlook fall, for whatever reason, in a period of excessive debt and rising inflation, the potential for a substantial economic reset will be significant. As government, commercial and domestic debts are defaulted on and insolvencies rise, bank and other financial equities will come under sustained and systemic pressure. In such a scenario, and in a similar fashion to the post 2008 crisis period, gold could prove once again to be the ultimate store of value.

In light of the above, the Altus portfolio of projects and royalties will continue to be weighted towards gold, with an allocation above 50%. However, Altus will continue to seek to increase its exposure to the metals which are critical to the decarbonisation, infrastructure and global growth themes.

Outlook

This has been a transformational year for the Company, catalysed by the strategic investment by La Mancha. We have laid strong foundations to further grow and realise value for our shareholders. In addition to expanding our portfolio of royalties and projects, most notably in Egypt, we have also welcomed a number of high calibre professionals to the team.

In my report last year, I noted that while Altus is not immune to market turmoil, our business model protects our shareholders from some of the downside risk without limiting exposure to the upside. The events of the last 12 months have amplified the intrinsic benefits for our shareholders from:

- employing a portfolio approach with geological, commodity and jurisdictional diversification;

- being counter-cyclical, investing in exploration for new mines when the costs to do so is at its lowest and the likely future value of discoveries is at its highest;

- employing third party capital to advance multiple projects simultaneously;

- generating short term income through JV payments and project sales;

- creating potential long-term income streams from project royalties; and

- identifying and making accretive project, royalty and corporate acquisitions.

Commodity markets are turning higher. After almost a decade of under investment in the exploration and development of new mineral projects, the world is now faced with shortfalls which will likely lead to higher commodity prices. Talk of a 'Super Cycle' may prove premature. However, the coordinated drive to decarbonise the global economy and the unprecedented monetary stimulus in response to the Covid-19 pandemic have the potential to inflate and supercharge what may otherwise have been a normal and long anticipated cyclical upturn for copper, gold and other key metals.

Our key objectives for 2021 will be to continue:

- to grow the number of projects in our portfolio;

- to advance the exploration work programmes across our existing portfolio of licences;

- to seek and complete a number of royalty-based JV and other transactions on our existing projects; and

- to identify potential project, royalty and corporate acquisition opportunities and, where possible, conclude accretive transactions on these.

- to conduct business with due regard for the Company's stakeholders and its environmental and social responsibilities

Our long-term objective is to realise substantial returns for shareholders, by generating significant positive cashflow from a diversified portfolio of high-quality royalty, project and JV interests. Altus has never had a stronger outlook and with our Board, I very much look forward with you to the year ahead.

In the meantime, I take this opportunity to thank all of the Altus team for their hard work and dedication throughout what has been an unequivocally challenging year. I also take this opportunity to thank our new and existing shareholders for their continued support.

Steven Poulton

Chief Executive Officer

Strategic Report

Key Performance Indicators ("KPIs")

The Board use a mixture of financial and non-financial KPIs to help monitor the performance of Altus' group of companies (the "Group").

Cash balance

On 24 February 2020, the Group's cash balance increased by £3.7 million as it raised £6.5 million (C$11.2 million) through a strategic investment by La Mancha with 24,845,878 new Ordinary Shares (post-consolidation basis) issued and admitted to trading on AIM. The Group focuses its expenditure on its most prospective projects, and seeks to reduce costs by pursuing potential JV and project sale transactions across its portfolio. The Group's cash on hand is sufficient to fund all projected expenditure for a minimum of 12 months from the date of this report.

Portfolio size - projects in which Altus holds an interest

The size of the Group's portfolio reflects the scale and diversification of the Group's project interests. Altus selectively acquires mineral exploration licences and generates and advances projects through the work of its technical team of exploration geologists. Any projects that prove to be uneconomic are dropped, and successful projects progress to advanced exploration with JV partners and eventually the definition and monetisation of the underlying asset. Altus typically reduces its ownership throughout this process and retains a royalty interest on each of the project's future cash generation.

Altus capitalises the cost of its exploration licence renewals. As a number of these licences are renewed on a typical two-yearly cycle, particularly in Mali, not all of these costs were incurred during 2020. The Company sold its Prikro licence and Zenoula application, both in Côte d'Ivoire, during the year and decided to relinquish two licences, Zolowo in Liberia and Tigray-Afar in Ethiopia. After the year end, in Q1 2021, the Company announced that it had been a successful bidder for four gold exploration licences in Egypt and three licences, primarily for copper and silver, in Morocco. This took the number of projects to 17 (including one application), making a total of 26 assets in the Company's portfolio.

Single largest exposure by geography and mineral

Risk diversification is at the heart of the Company's philosophy, and this is enacted by exploring for a variety of minerals at multiple locations across several jurisdictions. The single largest exposure figures are an indication of the level of diversification of risk within the Group's portfolio. The Group has royalty and exploration project interests in Mali, Ethiopia, Cameroon, Morocco, Côte d'Ivoire, Liberia and (post period) Egypt. The Group continually assesses potential licence applications, projects and third party royalty acquisitions in new jurisdictions. Aside from gold, Altus is focusing on metals that it believes will be critical in the increasingly decarbonised electricity industry, particularly copper. The Group also has interests in nickel, zinc, iron, silver and bauxite projects.

Exploration costs and Administrative expenses

The Group focuses on deploying its cash on activities that are likely to maximise the value to shareholders while maintaining a strict control on administrative overheads.

Exploration costs includes African-employed geologists, on site costs, assays/analysis and exploration support costs in Africa, as well as UK geologists' salaries, and an allocation of UK management time and UK exploration support costs. There was a significant acceleration of exploration activity on the Group's projects in Mali during the year. The UK support team was expanded and this increased the proportion of exploration expenditure in overall costs.

Financial Review

Income

Revenue and costs recovered from JV partners increased to £361,000 (2019: £60,000) resulting from a significant increase in activities on the JV with Marvel Gold covering the Lakanfla and Tabakorole projects in western and southern Mali. Income included milestone stage payments and JV management fees as well as recharges of project costs.

Expenses

Exploration costs expensed in the Income Statement increased significantly to £2,350,000 (2019: £1,101,000). This was driven to a large extent by work to advance the Company's projects in Mali, and included the Diba project, which is managed by the Company itself, as well as those projects managed under the JV with Marvel Gold. All three projects incurred drilling costs during the year, and there were higher associated costs for assays, surveying work, camp operations and travel. The split between exploration costs recovered from JV partners and those borne by the Company is shown in note 6 to the financial statements.

Expenditure relating to projects relating in Mali was £1,497,000 which accounted for 64% of total exploration costs (2019: £269,000 and 24%). All other countries of operation reduced their share of exploration costs as a result, although expenditure increased in relation to projects in Cameroon to £319,000 (2019: £221,000) to support a trenching and sampling programme on the Laboum project, and in Morocco to £268,000 (2019: £214,000) to support an Environmental Impact Assessment and predictive mapping programme. Expenditure reduced in Ethiopia to £202,000 (2019: £243,000) due to the suspension of on-site operations in response to the security situation, and in Côte d'Ivoire to £58,000 (2019: £74,000) due to the sale of the Company's Prikro project in November 2020. There was virtually no expenditure in Liberia (2019: £80,000) as the Company relinquished its Zolowo licence in Q1 2020.

Staff costs for UK-based geologists and the corporate team increased to £997,000 (2019: £855,000). The Company responded to the transformative strategic investment by La Mancha earlier in the year by building its capability to grow a diversified portfolio of royalty and project assets. This included the appointments of a business development manager, an in-house legal counsel, a VP Exploration as well as the appointment of a Non-executive Director representing La Mancha. Staff costs for the Group increased to £1,210,000 (2019: £1,098,000). Notwithstanding the curtailment of onsite activities during the year, the Group retained its full team of geologists. Staff costs including share-based payments increased to £1,814,000 (2019: £1,098,000) mainly resulting from the fair value charge for share options granted during the year.

Administrative expenses in the Income Statement increased to £849,000 (2019: £731,000). This included the increase in staff costs as well as higher legal and investor relations costs. The Company's internal staff development was supported by the retention of legal advisors in Canada and the UK, and of advisors to improve the marketing of the Company's portfolio and to strengthen communication with current and potential shareholders. There were reductions in accounting costs, as more functions were brought in-house, and in travel costs as refunds were obtained for cancelled flights.

Listing and acquisition related costs includes legal, regulatory and other such costs relating to JV and other corporate transactions, including prospective agreements relating to project partnerships, project sales and royalty acquisitions. Costs for the year were £88,000 (2019: £89,000).

Other income and costs

Other operating costs increased to £993,000 (2019: £54,000) and included a share based payment charge of £664,000 (2019: £22,000) resulting from the valuation of share options granted to Directors and employees in August 2020, and a foreign exchange loss of £329,000 (2019: £32,000) which was mainly an accounting translation of balances into the functional currency rather than a realised loss.

Other income increased to £1,939,000 (2019: £152,000) with its main component of £1,727,000 being in respect of the receipt of 25 million shares of Canyon, in accordance with the JVTA. The first tranche of 15 million shares was received in February 2020, the second tranche of 10 million shares was received in February 2021 and accrued at the reporting date. Other income also included R&D tax credits in the UK for the 2018 and 2019 tax years totalling £206,000 (2019: £129,000 for the 2017 tax year). By January 2021, both tax claims had been settled in full by HMRC. The loss on revaluation of the Group's external investments during the year was £162,000 (2019: £85,000).

Assets and cash

The net assets of the Group increased to £10,301,000 (2019: £4,531,000) which was reflected in a higher closing cash balance of £5,937,000 (2019: £2,213,000), a higher value of external investments of £1,321,000 (2019: £302,000), higher trade and other receivables of £854,000 (2019: £196,000) and lower trade and other payables of £1,145,000 (2019: £1,439,000).

An increase in the Group's cash balance resulted from the strategic investment by La Mancha which was approved at a General Meeting of the Company's shareholders on 18 February 2020. The investment concluded on 21 February 2020 and raised £6.5 million (C$11.2 million) before expenses through the issuance of 24,845,879 new Ordinary Shares at an issue price of £0.26 (C$0.45) per share (number of shares and issue price on a post-consolidation basis). Subsequent to the investment La Mancha held 35.45% of the issued share capital of the Company.

The increase in the balance of external investments arose from the receipt of 15 million shares of ASX-listed Canyon as outlined above. The tranche of 10 million shares was recorded as accrued income at the reporting date and was the main constituent in the increase in the balance of trade and other receivables. The Group was also the recipient of 2.5 million shares of TSX-V-listed Stellar as initial consideration for the sale of the Group's Prikro gold project and Zenoula gold application in Côte d'Ivoire.

The reduction in the balance of trade and other payables was primarily due to the issue of 14 million pre-consolidation ordinary shares of the Company to Delphi Unternehmensberatung AG ("Delphi") in January 2020, which settled the carry-over liability arising from Delphi's subscription for Ordinary Shares in December 2019 which was delayed due to regulatory approval.

The Group's operating cash outflow for the year increased to £2,348,000 (2019: £1,581,000) as a result of the increase in exploration and administrative expenses outlined above. The Group recorded an investing cash outflow of £104,000 (2019: £680,000 cash inflow) as it did not sell any externally held investments during the year (2019: proceeds of £674,000).

Fundraising

On 22 March 2021, the Company raised £7.7 million (C$13.4 million) through an oversubscribed placement of 10,266,668 Ordinary Shares of the Company at a price of £0.75 (C$1.30) per share with existing and new institutional and private investors. La Mancha and certain directors and employees of the Group participated in the placement. The fundraising was led by joint brokers SP Angel and Shard. The issue price of the new Ordinary Shares represented a discount of approximately 8.0% to the closing mid-market price of £0.815 / C$1.41 on 19 March 2021. The new Ordinary Shares represented approximately 12.77% of the Company's enlarged issued share capital. The Ordinary Shares issued to La Mancha and the Altus Directors and officers participating in the fundraising are subject to a TSX-V four month hold period and the Ordinary Shares issued to Canadian investors are subject to a Canadian regulatory four month hold period. The hold period will expire on 26 July 2021.

The net proceeds from the placement will be used to aggressively accelerate the Group's exploration programmes in Egypt and Mali, as well as enabling the Company to consider potential project and royalty acquisition opportunities. Further details of the placement are included in the Company's news release dated 22 March 2021 (www.altus-strategies.com/news, titled 'Altus Closes Over-Subscribed £7.70m / C$13.35m Equity Fundraising and Appoints Shard Capital Partners LLP as Joint Broker').

Going concern

The Directors have assessed the cash resources available to the Company, including balances of cash at the reporting date and funds raised post year end, and investments held in publicly traded companies. They have reviewed a detailed 24-month budget prepared by the Company, assessing the likelihood of receiving projected income and the breakdown between committed and discretionary projected expenditure.

The assessment included an analysis of the impact on the Company's business of Covid-19. Since the onset of the Covid-19 pandemic, the Company has managed to undertake operations, which included on site work as well as desk-based research, and believes that it will be able to sustain these operations in the coming months. The basis of this judgement is discussed further in note 1 to the financial statements.

In making their assessment, the Directors acknowledged the existence of a number of material uncertainties including volatility in financial and commodity markets, political and security risks, and uncertainty regarding the future impact of Covid-19. These and other risks faced by the Company are outlined in detail in the Strategic Report.

Based on their assessment, the Directors have, at the time of approving the financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. It has sufficient cash to maintain its current business operations for at least 12 months and does not expect to have to raise funds to provide additional working capital in that time. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Independent Auditor's Report to the Members of Altus Strategies plc

Opinion

We have audited the financial statements of Altus Strategies plc (the parent company) and its subsidiaries (the group) for the year ended 31 December 2020 which comprise the Group Statement of Comprehensive Income, the Group and Parent Company Statement of Financial Position, the Group and Parent Company Statement of Changes in Equity, the Group and Parent Company Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and international accounting standards in conformity with the requirements of the Companies Act 2006 and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

In our opinion:

· the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2020 and of the group's and parent company's loss for the year then ended;

· the group financial statements have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006;

· the parent company financial statements have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and as applied in accordance with the provisions of the Companies Act 2006; and

· the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Separate opinion in relation to IFRSs as issued by the IASB

As explained in note 1 to the group financial statements, the group, in addition to complying with its legal obligation to apply international accounting standards in conformity with the requirements of the Companies Act 2006, has also applied IFRSs as issued by the International Accounting Standards Board (IASB).

In our opinion the group financial statements give a true and fair view of the consolidated financial position of the group as at 31 December 2020 and of its consolidated performance and its cash flows for the year then ended in accordance with IFRSs as issued by the IASB.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the group's and parent company's ability to continue to adopt the going concern basis of accounting included reviewing the group's forecasts and assumptions used in preparation. Our work included comparing these forecasts to actual results and significant events subsequent to the year end.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Our application of materiality

The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures. The materiality applied to the group financial statements was £200,000 (2019: £140,000), based on thresholds for net assets and the loss before tax. The benchmarks used and the percentages applied are unchanged from the prior period and were selected as the exploration assets and exploration costs are the primary drivers of the business. The performance materiality was £140,000 (2019: £98,000) and triviality of £10,000 (2019: £7,000). The materiality applied to the parent company financial statements was £30,000 (2019: £30,000) based upon the loss before tax. The performance materiality for the parent company was £21,000 (2019: £21,000).

Component materiality for all entities within the group was set lower than our overall group materiality and ranged from £1,000 to £75,000 with a performance materiality set at 70% of overall materiality.

We agreed with the audit committee that we would report all audit differences identified during the course of our audit in excess of £10,000 at group level, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

Our approach to the audit

Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement, aspects subject to significant management judgement as well as greatest complexity, risk and size.

As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas involving significant accounting estimates and judgement by the Directors and considered future events that are inherently uncertain. The recoverability of intangible assets and investments in subsidiary undertakings were assessed as areas which involved significant judgements by management. We also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

The accounting records of the parent company and all subsidiary undertakings are centrally located and audited by us based upon group materiality or risk to the group. The key audit matters and how these were addressed are outlined below.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

· the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

· the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

· adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

· the parent company financial statements are not in agreement with the accounting records and returns; or

· certain disclosures of Directors' remuneration specified by law are not made; or

· we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the Statement of Directors' Responsibilities, the Directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the group and parent company financial statements, the Directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

· We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussion with management, our expertise in the sector and through the application of cumulative audit knowledge.

· We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from the Companies Act 2006, IFRS accounting standards, and the operating terms set out in the exploration licenses, as well as local laws and regulations.

· We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the group and parent company with those laws and regulations. These procedures included, but were not limited to:

o enquiries of management; and

o review of minutes and other correspondence.

· We also identified the risks of material misstatement of the financial statements due to fraud at both the group and parent company level. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, whether key management judgements could include management bias was identified in relation to the carrying value of the exploration assets and we addressed this as outlined in the Key Audit Matters section.

· As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

· Compliance with laws and regulations at the subsidiary level was ensured through enquiry of management and review of ledgers and correspondence for any instances of non-compliance.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

David Thompson (Senior Statutory Auditor)

for and on behalf of PKF Littlejohn LLP

Statutory Auditor

15 Westferry Circus

Canary Wharf

London

E14 4HD

27 April 2021

Independent Auditor's Report to the Members of Altus Strategies plc in Respect of Canadian National Instrument 52-107

Opinion

We have audited the group financial statements of Altus Strategies plc and its subsidiaries (the "group") for the year ended 31 December 2020 which comprise the Group Statement of Comprehensive Income, the Group Statement of Financial Position, the Group Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board ("IASB").

In our opinion:

• the group financial statements present fairly, in all material respects, the financial position of the group as at 31 December 2020 and 31 December 2019 and its financial performance and its cash flows for the years then ended; and

• the group financial statements have been properly prepared in accordance with IFRSs as issued by the IASB.

Basis for Opinion:

We conducted our audit in accordance with International Standards on Auditing (ISAs) as issued by the IAASB and applicable law.

Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the group financial statements in the UK, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the following key audit matters and set out our findings:

Other information

The other information comprises the information included in the annual report and the management discussion and analysis, other than the financial statements and our auditor's report thereon. The Directors are responsible for the other information.

Our opinion on the group financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of Directors

As explained more fully in the Directors' responsibilities statement, the Directors are responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the group financial statements, the Directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISAs) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the group's financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.

· Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's and the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor's report. However, future events or conditions may cause the group to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

· Are required to report on consolidated financial statements, obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for the audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The partner in charge of the audit resulting in this independent auditors' report is David Thompson.

David Thompson (Engagement Partner)

for and on behalf of PKF Littlejohn LLP

Statutory Auditor

15 Westferry Circus

Canary Wharf

London

E14 4HD

27 April 2021

ALTUS STRATEGIES PLC

Group Statement of Comprehensive Income

For the Year Ended 31 December 2020

ALTUS STRATEGIES PLC

Group Statement of Financial Position

As at 31 December 2020

Company Registration No. 10746796

The financial statements were approved by the Board of Directors and authorised for issue on 27 April 2021 and are signed on its behalf by:

Steven Poulton

Chief Executive Officer

ALTUS STRATEGIES PLC

Company Statement of Financial Position

As at 31 December 2020

Company Registration No. 10746796

As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own statement of comprehensive income and related notes. The Company's loss for the year was £950,812 (2019: loss of £273,974).

The financial statements were approved by the Board of Directors and authorised for issue on 27 April 2021 and are signed on its behalf by: 

Steven Poulton

Chief Executive Officer

ALTUS STRATEGIES PLC

Group Statement of Changes in Equity

For the Year Ended 31 December 2020

ALTUS STRATEGIES PLC

Company Statement of Changes in Equity

For the Year Ended 31 December 2020

ALTUS STRATEGIES PLC

Group Statement of Cash Flows

Significant non-cash transactions

In January 2020 the Company issued 400,000 Ordinary Shares (post consolidation) to AGMEX SARL in relation to the acquisition of a 2% NSR royalty on the Company's Lakanfla project, and a further 2,800,000 Ordinary Shares (post consolidation) to Delphi Unternehmensberatung AG in respect of funds of £722,481 received as part of the non-brokered private placement in December 2019. In February 2020 ASX-listed Canyon issued 15 million shares valued at £1,108,999 to the Company in accordance with the JVTA. In August 2020 the Company granted 5,100,000 options to purchase new Ordinary Shares in the Company at an exercise price of £0.7315 per share to Directors and employees of the Company.

ALTUS STRATEGIES PLC

Company Statement of Cash Flows

For the Year Ended 31 December 2020

Significant non- cash transactions

In January 2020 the Company issued 400,000 Ordinary Shares to AGMEX SARL in relation to the acquisition of a 2% NSR royalty on the Company's Lakanfla project, and a further 2,800,000 Ordinary Shares to Delphi Unternehmensberatung AG in respect of funds of £722,481 received as part of the non-brokered private placement in December 2019. In August 2020 the Company granted 5,100,000 options to purchase new Ordinary Shares in the Company at an exercise price of £0.7315 per share to Directors and employees of the Company.

ALTUS STRATEGIES PLC

Notes to the Financial Statements

For the Year Ended 31 December 2020

Accounting policies

Company information

Altus Strategies plc is a public company limited by shares and incorporated in England and Wales. The registered office is 14 Station Road, Didcot, Oxfordshire, OX11 7LL, United Kingdom. The Group consists of Altus Strategies plc and all of its subsidiaries, as listed in note 19.

Basis of preparation

These financial statements have been prepared in accordance with International Accounting Standards in conformity of the Companies Act 2006 and International Financial Reporting Standards (IFRS) and IFRS interpretations committee (IFRS IC) interpretations issued by the IASB. The consolidated financial statements have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, (except as otherwise stated).

The financial statements have been prepared on the historical cost basis, as modified by the valuation of financial assets at fair value through profit or loss. The principal accounting policies adopted are set out below.

The financial statements are presented in British Pounds Sterling (£), which is also the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest whole pound.

As permitted by section 408 of the Companies Act 2006, the Company has not presented its own statement of comprehensive income and related notes. The Company's loss for the year was £950,812 (2019: loss of £273,974).

Basis of consolidation

The consolidated financial statements comprise the financial statements of Altus Strategies plc and its subsidiaries as at 31 December 2020. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

Exposure, or rights, to variable returns from its involvement with the investee

The ability to use its power over the investee to affect its future

Generally, there is a presumption that a majority of the voting rights results in control. To support this presumption and when the Group has less than a majority of the voting rights or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has the power over an investee, including:

The contractual arrangements with the other vote holders of the investee

Rights arising from other contractual arrangements

The Group's voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

"Joint ventures" as referred to in the financial statements refer to agreements with exploration partners and not joint ventures as defined within IFRS 11.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent company of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

All inter-group assets and liabilities, equity income, expense and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Going concern

Between December 2019 and February 2020, the Group concluded a non-brokered private placement of shares and a strategic investment from La Mancha (see Chief Executive's Review), which together brought cash funds of £8.9 million (C$15.4 million) into the Group. During the year these funds have been deployed to accelerate its existing project and royalty generation activities, and at the end of the year the Group reported a cash balance of £5.9 million. In addition, the Group holds shares in three publicly traded companies with a total value at the reporting date of £1.3 million.

On 22 March 2021, the Company announced that it had raised £7.7 million (C$13.4 million) through an oversubscribed placement of 10,266,668 Ordinary Shares of the Company at a price of £0.75 (C$1.30) per share with existing and new institutional and private investors. La Mancha and certain directors and employees of the Group participated in the placement. The placement was led by joint UK brokers SP Angel Corporate Finance LLP and Shard Capital Partners LLP. The issue price of the new Ordinary Shares represented a discount of approximately 8.0% to the closing mid-market price of £0.815 / C$1.41 on 19 March 2021. The new Ordinary Shares represented approximately 12.77% of the Company's enlarged issued share capital. The Ordinary Shares issued to La Mancha and the Altus Directors and employees participating in the fundraising will be subject to a TSX-V four month hold period and the Ordinary Shares issued to Canadian investors will be subject to a Canadian regulatory four month hold period. The hold period will expire on 26 July 2021.

The Group maintains a 24-month budget projection that is founded on its strategic objectives. Apart from the costs of maintaining its staff and its normal business operations, much of the expenditure envisaged under the Group's budget is discretionary. There is significant scope to adjust levels of expenditure in line with long term expectations of financial constraint.

In response to the dramatic impact that the coronavirus pandemic continues to have on the global economy, on the mining sector and on all aspects of business operations, the Directors regularly review the Group's activities. During 2020, the Company was able to advance its exploration activities in Mali and conduct a drilling programme at its Diba gold project. It was able to safely deploy its Malian staff and move employees from other countries with low infection rates in line with international travel restrictions. The Company's two other projects in Mali were also drilled, by the Company's JV partner, Marvel Gold. The Company entered a new jurisdiction, successfully bidding for exploration licences in Egypt, and commenced setting an operational base there.

Due to restrictions imposed in response to the pandemic, no UK employees were able to travel to the Company's projects for the remainder of 2020. Instead, employees focussed on desk-based research of both current Company projects and potential new projects. This research enabled the selection of licence priorities for the Company's participation in the Egyptian International Bid Round and for the process of 'Black Permit' applications in Morocco. The research identified several new drilling targets at the Diba project in Mali, and supported the update of both the Mineral Resource Estimate and Preliminary Economic Assessment at Diba. Although it is the wish of the Company that UK employees return to site as soon as it is legal and safe to do so, until that time they will continue to make a valuable contribution to the ongoing business operation, and to expanding, refining and marketing the Company's portfolio of projects.

The Directors remain confident, given the experience of operating under Covid-19 restrictions for the past year, that the Group can continue in operation for the foreseeable future under similar or improved conditions. The UK government vaccine roll-out programme is on target. It is reasonable to expect that a high proportion of the overall population will be fully vaccinated by late summer of 2021, and that restrictions on movement will be consequently relaxed. However, the Directors acknowledge that there is an inherent uncertainty for all businesses regarding the future direction of the pandemic. Other material risks and uncertainties faced by the business are outlined in the Strategic Report.

Given the Group's cash balances as a result of the inflow of funds, and notwithstanding the severity of the economic impact of coronavirus, the Directors have, at the time of approving the financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. It has sufficient cash to maintain its current business operations for at least twelve months and does not expect to have to raise funds to provide additional working capital in that time. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Exceptional items

Exceptional items are disclosed separately in the financial statements where it is necessary to do so, to provide further understanding of the financial performance of the Group. They are material items of income or expense that have been shown separately due to the significance of their nature or amount. IPO and acquisition related costs are included as exceptional items in profit or loss.

Fair value measurement

IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The resulting calculations under IFRS 13 affected the principles that the Group uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the Company. It requires specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards.

Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the date of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the Statement of Comprehensive Income for the period.

Other reserves

Other reserves consist of a non-distributable merger reserve from historic acquisitions and the share based payment reserve as a result of the share based payments outlined in note 28.

Adoption of new and revised standards and changes in accounting policies

New and amended standards adopted by the Group and Company

The Group and Company have applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2020:

The Group and Company has assessed the adoption of these standards and amendments and there has been no material impact on the financial statements as a result of the adoption.

New and revised IFRSs in issue but not yet effective

The Group and Company have not applied the following new and revised Standards and Interpretations that have been issued but are not yet effective:

* subject to endorsement

The Group and Company are evaluating the impact of the new and amended standards above. The Directors believe that these new and amended standards are not expected to have a material impact on the Group and Company's results or shareholders' funds.

Critical accounting estimates and judgements

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows.

Revenue and costs recovered from JV partners

Costs recovered from JV partners and management fees relating to JV projects are recognised in the month in which they arise. Milestone payments, which relate to various stages of JV projects including on signature of an agreement, election by the JV partner to proceed to the next project stage, definition of a resource or completion of a feasibility study, are recognised once the Company's performance obligation is satisfied, in accordance with IFRS 15 Revenue from Contracts with Customers. No revenue is currently recognised on the Company's portfolio of royalties.

Segmental analysis

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, which is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.

Operating loss

Exploration and development costs

The Group's costs derived from its operations in countries in which it holds licences are detailed below. The number of projects at the end of the year is indicated.

The table of figures includes an estimate of costs relating to the allocation of UK costs, including geologists' salaries, management time and UK support costs, based on the number of projects running in each country during the year. During the year the Group relinquished one project in Ethiopia (Tigray-Afar) and one project in Liberia (Zolowo) and sold one project in Côte d'Ivoire (Prikro). It held two projects in Morocco that do not have any intangible assets (Ammas and Zaer). The Group was awarded four projects in Egypt and three projects in Morocco after the reporting date.

Administrative expenses

Administrative expenses include the balances in the table below.

The figure reported for Administrative expenses in 2019 in the prior year's financial statements was £785,031 which included a foreign exchange loss of £31,825 and share based payment charge of £22,103. These figures are shown in Other operating costs in the following note.

Auditor's remuneration

Fees payable to the company's auditor for the financial year were as follows.

Employees

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets. The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received. Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

The average number of employees of the Group during the year was as follows. Altus Strategies plc has no employees and incurs no remuneration costs.

Of the employees, eight were employed in the UK and 16 were employed in four countries in Africa. Remuneration of African-contracted employees is included in Exploration Costs, while remuneration of Directors and UK-contracted employees is allocated between Exploration and Administrative Costs on a time basis. Costs for the year were as follows.

Directors' remuneration

Details of Directors' remuneration are included in the Directors' Remuneration Report.

During 2020 retirement benefits accrued under defined contribution schemes for two Executive Directors (2019: two Directors).

Finance (costs)/ income

Other income

Other income for the financial year was as follows.

Other gains and losses

See note 25 for accounting policy and detail of financial assets held at fair value through profit or loss.

During 2020, the Group sold its interest in Aeos Resources Limited, which, through its subsidiary AuCrest SARL, held the Prikro gold licence and Zenoula gold licence application in Côte d'Ivoire. The loss recorded was based on the carrying value of the investment in Aeos Resources Limited measured against the initial consideration received from the purchaser, Stellar AfricaGold Inc.

The completion of the agreement that was announced on 27 November 2020 included further milestone payments to the Group, subject to progress on the projects, and a 2.5% net smelter return royalty. No income has been recognised in respect of these future payments as the likelihood of them occurring is considered too uncertain at this stage.

Income tax

Income tax represents the sum of the tax currently payable and deferred tax.

Current tax

Current tax is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit or loss as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit or loss, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Current tax for the year for the Company was £nil (2019: £nil), as follows.

The tax on the Group's loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits/ (losses) of the consolidated entities as follows.

The Group has tax losses of approximately £1,927,000 (2019: £1,718,000) available to carry forward against future taxable profits. No deferred tax asset has been recognised in view of the uncertainty over the timing of future taxable profits against which the losses may be offset.

Earnings per share

The basic loss per share is calculated by dividing the loss attributable to owners of the parent company by the weighted average number of Ordinary Shares in issue during the year. Dilution is represented by a number of warrants and options outstanding, which at the end of the year numbered 5,660,695 and 5,100,000 respectively.

No diluted earnings per share is presented as the loss-making nature means the warrants and options are anti-dilutive. A 5:1 consolidation of shares was undertaken after market close on 21 February 2020. The comparative figures are presented on a post-consolidation basis. The original (pre-consolidation) figure presented for weighted average number of ordinary shares in issue was 179,031,225 and the basic loss per share was 1.34 pence.

Intangible assets

Expenditure on exploration activities is written off against profit or loss in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated. Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following basis.

- Deferred exploration costs: Not amortised

Deferred exploration costs comprise exploration licence fees capitalised in accordance with IFRS 6 'Exploration for and Evaluation of Mineral Resources'. Licences are initially measured at cost. Management tests quarterly whether deferred exploration costs require impairment. Each exploration licence is subject to a quarterly review either by a consultant or senior Company geologist to determine if the exploration results returned to date warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long-term metal prices, anticipated resource volumes and grades, permitting and infrastructure, external factors affecting the project, as well as the likelihood of on-going funding from current or potential JV partners. In the event that a licence does not represent an economic exploration target and results indicate that there is no additional upside, or that future funding from JV partners is unlikely, a decision will be made to discontinue exploration. A further review of the recommendations of the consultant or senior Company geologist is then performed by management.