ALS.L Regulatory News (ALS)

Altus Strategies Plc / Index (EPIC): AIM (ALS) & TSXV (ALTS) / Sector: Mining

30 April 2019

Altus Strategies Plc

("Altus" or the "Company")

Audited Final Results

Altus Strategies Plc (AIM: ALS & TSX-V: ALTS), the Africa focused royalty and project generator, announces its audited final results for the year ended 31 December 2018. These are presented below and are available (along with the Company's 2018 Annual Report) to download on the Company's website at http://altus-strategies.com/investors/financials/ and on SEDAR at www.sedar.com.

Corporate Highlights

· Completion of the Plan of Arrangement with Legend Gold Corp.

· Dual listing of the Company's shares on the TSX-V alongside AIM listing

· Agreement to vend Cameroon Bauxite JV into JV partner for equity plus royalty

· Discussions with potential Joint Venture partners across project portfolio

Operational Highlights

· Potential VMS style copper and gold discovery at Daro in Ethiopia

· New copper and zinc focused exploration licences granted in Morocco

· Major artisanal gold workings discovered at the Zolowo licence in Liberia

· Grant of the Company's first exploration licence in Côte d'Ivoire

· Additional high grade iron ore discovered at Bikoula licence in Cameroon

· Drill targets defined at Lakanfla gold project in Mali

Financial Highlights

· Fundraise of £2.3m/C$4.1m (before expenses) in April 2018 with strong institutional support

· Cash outflow of £1.8m/C$3.1m from operating activities during the year

· Cash and marketable securities of £1.6m/C$2.8m (cash balance of £0.7m/C$1.3m and listed equity holdings of £0.9m/C$1.5m as at 31 December 2018

Market Abuse Regulation (MAR) 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 until the release of this announcement.

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

About Altus Strategies Plc

Altus is a London (AIM: ALS) and Toronto (TSX-V: ALTS) listed royalty and project generator in the mining sector with a focus on Africa. Our team creates value by making mineral discoveries across multiple licences. We enter joint ventures with respected groups and our partners earn interest in these discoveries by advancing them toward production. Project milestone payments we receive are reinvested to extend our portfolio, accelerating our growth. The portfolio model reduces risk as our interests are diversified by commodity and by country. The royalties generated from our portfolio of projects are designed to yield sustainable long term income. We engage constructively with all our stakeholders, working diligently to minimise our environmental impact and to promote positive economic and social outcomes in the communities where we operate.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this news release contain forward-looking information. 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 news release.

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

Chairman's Statement

Reflection on the year

2018 was a significant year for the Company. We materially expanded the firm's assets and shareholder base by way of our Plan of Arrangement with Legend Gold Corp, which was listed on the TSX Venture exchange in Toronto ("TSX-V"). From a financial standpoint the deal brought intangible assets worth £3.7 million on to our balance sheet and, critically, the deal expanded our portfolio of projects across Africa, with six new and exceptionally prospective advanced gold licences in Mali, one of which was already under a JV agreement with ASX-listed Resolute Mining Ltd. Shortly after this deal, Altus completed a £2.3m/C$4.1m financing and successfully listed on the TSX-V. I am delighted to take the opportunity here to welcome our new shareholders to our register and thank them for their continued support.

Company vision and focus

The vision we are pursuing is to develop a portfolio of royalty income streams and minority interests in mines across Africa, through the generation of exploration projects and advancing them with joint venture partners. The portfolio continues to evolve with 17 projects now undergoing exploration activity and a number of JV arrangements having been made or under discussion. The portfolio approach is important to us, as it mitigates inherent exploration risk and geopolitical risk, and by partnering at the advanced stages we reduce our own reliance on capital markets. Our focus remains on the vast and prospective continent of Africa, as this is where projects can still be discovered and developed rapidly and cost efficiently from surface.

Board

Our initial public offering on London's AIM in August 2017 was a counter-cyclical move by the Company and one which has proven to be pivotal. Within a few months the listing had acted as a springboard for us to undertake our combination with Legend Gold, complete a financing and dual list on the TSX-V. The remainder of 2018 has provided an opportunity for the Board to bed in, and get to grips with the enlarged operations of the Company and its dual-listed status with the governance requirements in two jurisdictions. As laid out in our Corporate Governance Report, the board members bring a range of talents and a wealth of relevant multi-national experience to meet the challenges ahead, and I am encouraged by the enthusiasm and dedication to the success of Altus that the Board has demonstrated.

Board focus

By the end of 2018 Altus was listed in two countries and conducting exploration activities in six more. The board is keenly aware that the growing size and complexity of is operations means that it must keep a sharp focus on good governance in all spheres of its activity, which involves keeping its assets in good standing, preserving the value of shareholders' interests, maintaining compliance with laws and regulations, and upholding the highest standards in its conduct.

Looking forward

Altus is on track to become a specialist mining royalty company. What sets us apart is that we are generating our own opportunities for future royalties, by making and monetising mineral discoveries. The forthcoming year promises to be another exciting and busy time for the Altus team. A number of the Company's assets have been developed to the stage of readiness for drilling with JV partners, and I have been greatly encouraged by the level of interest shown by third parties over recent months. I am confident that the team has the ability to secure advantageous agreements, and I look forward to seeing their hard work continue to bear fruit.

David Netherway

Chairman

Business Overview

Our business at a glance

Altus is a project and royalty generator focused on mineral exploration in Africa. The Company is based in the UK and dual-listed in the UK (AIM: ALS) and in Canada (TSX-V: ALTS). It identifies and acquires geologically prospective exploration licences through its local African subsidiaries, makes discoveries and seeks joint ventures with third parties to advance these into production. Altus seeks to retain cash-generating royalty interests on each of its projects.

Project and royalty generator model

Our business model is to make and monetise mineral discoveries. We proactively seek joint venture partners to finance the exploration and development of the projects we have generated, in return for a share in their ownership and the payment of future royalties to Altus. Our goal is to create shareholder value by participating in the potentially substantial and long term returns on capital that can be made by making economic mineral discoveries.

Risk diversification is at the heart of our philosophy, and we enact this by exploring for a variety of minerals at multiple locations across several jurisdictions. At the end of 2018 the Group had a diversified portfolio of seventeen projects, exploring for six different commodities across six countries.

This diversification means that the portfolio is constantly evolving: new licences are added, licences that are not considered to be a good prospect are relinquished, those for which onsite surveying works and office-based data and sample analysis indicate a potentially economic discovery can be made are actively marketed, licences that are under JV partnerships will be drilled, and the successful of these will result in mines being built and royalties accruing to Altus on the mineral assets produced.

Altus generates projects by selectively acquiring mineral exploration licences and advancing projects through the work of its team of geologists and analysts. 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 in each project but retains a royalty-generating interest.

Focus on Africa

Altus is focused on Africa where, due to the relative lack of exploration using modern techniques, economic mineral deposits can still be discovered cropping out at surface. According to a recent survey by MinEx Consulting, 24% of global discoveries in the prior decade were found on the continent, despite it being the recipient of only 14% of the global exploration budgets. The same survey reported that deposits in Africa (excluding South Africa) are being discovered at average depths of just 9m, which is much shallower than the average global depth of 78m; in Canada the average discovery depth is over 125m.

This opportunity to make discoveries across Africa without recourse to expensive subsurface exploration, geophysical technologies or extensive drilling programmes, means that the Company can potentially generate more value, at greater speed and with lower risk in Africa, than in almost any other part of the world. Given the collective geographical, geological and operational expertise of our management and advisory teams, we believe Altus is ideally positioned to exploit this opportunity.

Chief Executive's Review

Introduction

Altus is evolving from a project generator into a royalty company. Our portfolio of projects has been steadily developing, and now with two projects under JV, and a range of discussions taking place regarding our JV-ready projects we can see that the goal of our projects reaching the stage of income generating royalties is closer than ever.

We recognise that the highest returns in the mining sector can be generated in the first instance by making an economic discovery and that returns can be compounded by retaining long term royalty interests on these, to generate the potential for continuous and zero cost income streams. We provide our shareholders with exposure to both of these elements and, critically, without exposing them to the financial and other material risks that are inherent in mineral exploration and mine building.

By adopting a portfolio approach we accelerate the discovery process as well as mitigate many of the geological and geopolitical risks that are inherent to the mining sector. We stake or acquire prospective targets and our exploration teams drive forward the most promising ones, while discarding those that we do not believe will generate an economic discovery. Once we have made a potential discovery we actively promote the opportunity to potential partners to finance the next stages of exploration and ultimately take the asset into production. Our typical partner might be a large mining group or midcap, seeking to strengthen their project pipeline; alternatively, it may be a junior company seeking a new flagship asset.

This has been another very active year for Altus. On the corporate front we completed our Plan of Arrangement with Legend Gold Corp., undertook a capital raise with a number of notable new shareholders joining our register and secured a dual listing on the TSX-V. We also continued to apply our royalty generation model, making mineral discoveries in Africa and entering discussions with potential partners. This has all taken considerable organisation and co-ordination, and a great deal of effort and dedication on behalf of the whole team. I take the opportunity here to thank them all for the highly professional and diligent way in which they have helped to enact our strategy and achieve the objectives of the Company during the year.

Strategy implementation

Our royalty generation strategy is validated as each of our projects progresses through the various stages of development, from grant of licence through exploration to JV readiness, resource definition and eventually mining. 2018 has been an encouraging year in this respect. We have seventeen projects in our growing portfolio. The most advanced royalty asset in which Altus has an interest, is a 2.5% Net Profit Interest on the southern portion of the Ndablama gold project in western Liberia, which is being developed by AIM and TSE-listed Avesoro Resources. Ndablama forms part of a Mineral Development Agreement which hosts the multi-million-ounce New Liberty gold mine. Two further Altus projects are under JV arrangements, one for gold in Mali with ASX-listed Resolute Mining and one for bauxite in Cameroon with ASX-listed Canyon Resources. We have agreed with Canyon to terminate the JV and vend the JV projects into Canyon for Canyon equity and a US$1.50/t royalty. After the end of the year, Altus announced a Terms Sheet with ASX-listed Indiana Resources in respect of two of our gold projects in Mali and a Terms Sheet with unlisted Australian company Corben Resource in respect of our gold projects in Liberia and Cameroon.

During 2018, our team has been diligently analysing a range of technical datasets generating new targets and undertaking field exploration, using geophysics as well as collecting soil, stream and rock samples across key targets. This work has helped to advance the prospects across a number of our licences. Notable successes have been the definition of drill targets at the strategically located Lakanfla gold project in western Mali, and the identification of new copper and gold prospects at the Daro licence in Ethiopia.

As well as advancing existing projects, the Company has sought to replenish its portfolio of licences. During 2018 it was granted a new licence for gold exploration in eastern Côte d'Ivoire, three new licences in Morocco for copper and zinc and, as at the end of the year, Altus had three further applications pending grant - two in Côte d'Ivoire (one for gold and one for nickel-cobalt) and one in Ethiopia. The geographical and commodity diversification reflects the Company's intent to continue to expand the scope of its portfolio.

Securing the six licences in Mali through the completion of the Plan of Arrangement with Legend clearly demonstrated another strand of the Company's strategy, which is to expand and develop our portfolio not just though applications for new licences, but also through acquisitions and business combinations.

Market review

Our "market" is ultimately in the availability of JV and other strategic partners. Their access to funding is an important consideration as they will advance our projects through drilling to the identification and, if economic, the development of a resource. During the last year the level of enquiries coming into the Company has noticeably increased. This has been true both for companies looking to enter into a JV arrangement and for investors looking to participate in project equity. Australia and Canada are the main active sources of such enquiries, but not exclusively so.

The broader commodity backdrop has been relatively muted. Gold, which, alongside copper is often seen as a bell weather for the mining sector, was range bound between US$1,200 and US$1,350 during the year. The correlation between the gold price and the share performance of gold mining stocks is well documented and perhaps axiomatic. Unsurprisingly, the market for mining equities has been equally range bound, with the GDX, an exchange-traded fund (ETF) for gold miners, trading in a similar narrow range. There are a number of active factors, which, we believe, will support the price of gold over the coming years. Highest among these would be continued central bank purchases, especially from emerging market countries with growing economies wishing to diversify their reserves. This trend also reflects a perceived risk of a global downturn and of a relatively weaker dollar in the year to come, creating price inflation. A decade of uninterrupted growth, fuelled by excessively low interest rates combined with loose monetary policy in many countries has created distortions in asset prices across the globe. For these reasons, half of the Group's portfolio of projects are in gold.

However, Altus is actively building a portfolio which is diversified by commodity to gain exposure to the critical metals of the coming decade. The evolution of battery technology is reshaping the world to no less an extent than the advent of the combustion engine did at the end of the Nineteenth Century. It is well known that there will be a vast and sustained increase in demand for specialist battery metals such as cobalt, lithium and vanadium as the current worldwide research resolves to establish the best and most cost-effective battery solution. We believe that copper will remain the primary beneficiary of an increasingly electrified world. The International Copper Association has said that demand for copper for use in electric vehicles alone is expected to increase from 0.18m tonnes to 1.7m tonnes per annum between 2017 and 2027. In the macro-economy, this will create a set of drivers quite separate and, in some ways, disconnected from the current inter-locking drivers of the gold price. As noted above, the Company has a number of copper prospects in Ethiopia and Morocco and an application for nickel/cobalt in Côte d'Ivoire.

As well as measures to increase battery capacity, solutions are also being engineered to increase energy efficiency thereby requiring less energy consumption. Aluminium, the ore for which is called bauxite, is a lightweight metal and this energy efficient property means we expect demand for the metal to continue to increase in the years ahead. Our shareholding in ASX-listed Canyon Resources is also set to increase when the JV termination and vend-in of our Birsok and Mandoum bauxite projects in central Cameroon completes, which is anticipated to occur in the second quarter of 2019. On completion of the termination of the JV, Altus will receive an initial 25 million shares in Canyon with a current market value of approximately £2.9m/C$5.04m, and for vending in of the JV projects and grant of a mining licence to Canyon, Altus will receive a further 5 million shares with a current market value of approximately £0.6m/C$1.0m along with a $1.50/t royalty on the former JV projects. Altus currently owns shares in Canyon with an approximate market value of £0.8m/C$1.4m which were received by Altus along with a cash payment of A$150,000 as part of the original JV terms. Having undertaken less than US$150,000 in generating the bauxite project, this series of transactions when complete, will underscore the substantial returns that our business model can generate.

Funding

The Company's listing on the TSX-V exchange in Toronto in June was a major development, and is already significantly enhancing the Company's ability to attract investors, as well as publicising its projects to potential JV partners. The Canadian market is a global hub for mining stocks, and our presence there greatly strengthens the Company as we grow our royalty generating business.

The Company's proven ability to raise finance in April 2018 was set against a backdrop of broad investor antipathy to resource stocks in general, with the lure of speculative marijuana equities, as well as continued interest in block chain, crypto and other alternative tech plays absorbing substantial risk capital. The wider markets have also seen the rise of algorithmic passive trading, which tends to seek out lower risks and higher liquidity stocks. The drift down of the Company's share price since our IPO and dual listing, on relatively low trading volumes, does not, in the opinion of the directors, reflect the enormous potential of the Company to deliver shareholder value, both through its current pipeline of projects and its ability to continue to grow and monetise its portfolio.

With an aggregate shareholding of 36.17% of the Company, the financial interests of the board are strongly aligned to those of all shareholders. In order to continue to ensure cash (which at 31 December 2018 stood at approximately £725,000/C$1,260,000) is spent on operational activities, a number of the directors have elected to accrue some or all of their 2018 fees, salary and where applicable pension entitlement. This was also the case in previous years. Approximately £268,000/C$466,000 is currently being accrued in this form, to be paid at a later date in either cash or, subject to the necessary regulatory approvals, in equity of the Company. Where permissible, the directors may also participate in future capital raises, which is a consistent and positive feature of the Altus board. Given the continued 'bear market' conditions in the mining sector and the strong commitment of the directors, it is anticipated that further such amounts will be accrued in 2019.

Altus Concert Party

The Company has agreed with the Takeover Panel Executive an amendment to the list of certain shareholders of the Company who have previously been presumed to be acting in concert under the UK Takeover Code (the “Concert Party”). The Board has concluded that Robert Milroy, Guy Pas and Malcolm Burne shall no longer be considered to be members of the Concert Party. The Concert Party therefore now consists of Steven Poulton, Susannah Poulton, Matthew Grainger, Anna Grainger, David Netherway and Diane Rissik. These parties in aggregate hold interests in 45,048,100 Ordinary Shares of 1p each in the Company, equivalent to 25.32 per cent. of the Company's issued and voting share capital. These individuals do not hold any options or warrants in the Company. Shareholders should note that the Concert Party is free to increase its aggregated interest to 29.99 per cent. of the Company's issued and voting share capital without incurring an obligation under Rule 9 of the Takeover Code.

Outlook

Altus has a solid and proven business model, a strong and entrepreneurial team, and has established a formidable foundation for the year ahead. We have embraced the counter-cyclical nature of the resource sector and are continuing to make discoveries and enter royalty generating transactions across our growing portfolio. Our team has the essential vision, determination and energy to sustain the incredibly strong progress we have made to date.

Steven Poulton

Chief Executive Officer

29 April 2019

Independent Auditor's Report in respect of

Canadian National Instrument 52-107

Opinion

We have audited the financial statements of Altus Strategies plc and its subsidiaries (the "group") for the year ended 31 December 2018 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 ("IAASB").

In our opinion:

• the group financial statements present fairly, in all material respects, the financial position of the group as at 31 December 2018 and 31 December 2017 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 IAASB.

Basis for Opinion:

We conducted our audit in accordance with International Standards on Auditing (ISAs) as issued by 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 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.

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 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 management

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the 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.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

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 and the parent company 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 (i.e. gives a true and fair view).

· 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.

29 April 2019

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2018

ALTUS STRATEGIES PLC

GROUP STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018

Company Registration No. 10746796

The financial statements were approved by the board of directors and authorised for issue on 29 April 2019 and are signed on its behalf by:

Steven Poulton

Chief Executive Officer 

ALTUS STRATEGIES PLC

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018

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 £221,296 (2017: £382,662).

The financial statements were approved by the board of directors and authorised for issue on 29 April 2019 and are signed on its behalf by:

Steven Poulton

Chief Executive Officer 

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2018

Company Registration No. 10746796

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2018

Company Registration No. 10746796

GROUP STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2018

Significant non- cash transactions

On 31 January 2018, the Company acquired 100% of the trade and assets of Legend Gold Corp. by way of a Plan of Arrangement through the issue of equity in the Company. See note 8 for further details.

During the year, the Company issued warrants to consultants as consideration for the raising of funds in the year. These have been treated as a share based payment and further detail is included in note 26.

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2018

Significant non- cash transactions

On 31 January 2018, the Company acquired 100% of the trade and assets of Legend Gold Corp. by way of a Plan of Arrangement through the issue of equity in the Company. See note 8 for further details.

During the year, the Company issued warrants to consultants as consideration for the raising of funds in the year. These have been treated as a share based payment and further detail is included in note 26.

NOTES TO THE ACCOUNTS

1 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 Financial Reporting Standards (IFRS) and IFRS interpretations committee (IFRS IC) interpretations as adopted for use in the European Union and with IFRS and their 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 prepared in British Pounds Sterling (£), which is 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 £221,296 (2017: £382,662).

Basis of consolidation

The consolidated financial statements comprise the financial statements of Altus Strategies plc and its subsidiaries as at 31 December 2018. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.

Altus Strategies plc was incorporated on 28 April 2017. On 14 June 2017, Altus Strategies plc acquired the entire share capital of Altus Exploration Management Limited by way of a share for share exchange. The transaction was treated as a group reconstruction and accounted for using the reverse merger accounting method. Accordingly, the financial information for the prior year (2017) has been presented as if Altus Exploration Management Limited was owned by Altus Strategies plc throughout the entire prior year.

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 and 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.

During the year, the Company acquired 100% of the trade and assets of Legend Gold Corporation. Management concluded that the transaction did not meet the criteria of a purchase of an entity and as such was accounted for as an asset acquisition and not a business combination under IFRS 3. See note 8 for further detail.

"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

The Directors have at the time of approving the financial statements, a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. In common with many junior resource investment and exploration companies, the Group and Company raise funds in discrete tranches from existing shareholders and /or new investors. The Directors and management are using funds for the evaluation of resource investment and exploration opportunities. The Company expects that it will have to raise additional funds to provide sufficient working capital through the next financial year by equity placings or the sale of its equity position in Canyon Resources Limited. Thus, they 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 of 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 dates 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.

2 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 2018:

· IFRS 9 Financial Instruments;

· IFRS 15 Revenue from Contracts with Customers;

· Classification and Measurement of Share-based Payment Transactions - Amendments to IFRS 2; and

· Annual Improvements 2014-2016 Cycle.

IFRS 15 became effective as at 1 January 2018. The revenue in the Group is derived from management charges with group entities and joint-venture partners. There is no material impact on the financial statements as a result of the transition to IFRS 15.

IFRS 9 became effective as at 1 January 2019. The effective of the transition to IFRS 9 is detailed in note 23.

Other than as described above, there has been no material impact on the financial statements as a result of the adoption of the new and amended standards.

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 EU endorsement

The Group is 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. The Group and Company expect that the adoption of IFRS 16 will have no material impact on the financial statements as the Group and Company have no material lease agreements.

3 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 shown in the following notes.

4 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.

At the current stage of the Group's development, management considers there to be one income segment, which is the recovery of exploration expenses and associated management costs from joint venture partners. Income attributable to this segment in 2018 was £89,678 (2017: £401,228). All of this income was associated with the Group's activities in Africa.

5 Operating loss

6 Exploration and development costs

The Group's costs derived from its operations in countries in which it holds licences are detailed below.

7 Administrative expenses

Administrative expenses include the following balances.

8 Plan of Arrangement with Legend Gold Corporation

On 30 January 2018, Altus acquired all of the outstanding shares of LGN Holdings (BVI) Inc. ("Legend"), a 100% subsidiary of Legend Gold Corporation. A summary of the purchase price allocation for the Legend acquisition is as follows.

The value of the Altus ordinary shares was calculated based on the issuance of 41,060,256 shares at a price per share of £0.085 which was the closing Altus share price on 30 January 2018.

The replacement of Legend's warrants has been valued using the Black-Scholes option pricing model. The assumptions used in the Black-Scholes option pricing model are as follows.

At the time of acquisition Altus had only recently become a public company and therefore did not have much trading history on which to base volatility. A volatility of 100% has been assumed for the purposes of this calculation. The fair value of the replacement warrants is based on the outstanding 2,888,618 warrants outstanding adjusted for the Share Exchange Ratio of 3.0 of Altus common shares per Legend warrant. The fair value per common share of Altus is the closing price on the Alternative Investment Market ("AIM") on January 30, 2018 and the foreign exchange rate of 1.7396 is the closing GBP to CAD exchange rate published by the Bank of England on January 30, 2018.

During the year warrants valued at £85,000 using the fair value model at acquisition were exercised. The value of the investment has been adjusted by this value on exercise. At 31 December 2018 a further £15,000 of warrants remained to be exercised.

The transaction has been treated as an asset acquisition by Altus and therefore estimated transaction costs attributable to the acquisition totalling £138,000 have been included in the preliminary purchase price. The transaction costs are mainly legal expenses.

Under IFRS 3, a business must have three elements: inputs, processes and outputs. Legend was an early stage exploration company and had no mineral reserves and no plan to develop a mine. Legend did have title to mineral properties, but these could not be considered inputs because of their early stage of development. Legend had no processes to produce outputs. Legend had not completed a feasibility study or a preliminary economic assessment on any of its properties and had no infrastructure or assets that could produce outputs. There was also no management or personnel within the Company that had any experience or expertise in mine development, mining, construction of mill equipment or in milling processes. Therefore, Management's conclusion was that the transaction was an asset acquisition and not a business acquisition.

9 Auditor's remuneration

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

10 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, 8 are employed in the UK and 15 are employed in four countries in Africa. Remuneration of African-contracted employees is included in Exploration Costs. Remuneration of Directors and UK-contracted employees comprised the following costs.

11 Directors' remuneration

Details of directors' remuneration are included in the Directors' Remuneration Report. As noted in the report, the 2018 salaries figure includes additional accruals for fees relating to prior years. Further, each director has elected to defer some or all of their fees/salary, and remuneration has been paid to directors in cash and equity.

Directors' remuneration recorded in the year was as follows.

During 2018 retirement benefits accrued under defined contribution schemes for 2 directors (2017: 2 directors).

12 Finance income

13 Other gains and losses

See note 18 for accounting policy and detail of financial assets held at fair value through profit or loss.

14 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 is as follows.

Current tax for the year for the Company was £nil (2017: £nil).

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 £1,331,000 (2017: £1,089,000) 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.

15 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 outstanding, which at the end of the year numbered 28,603,477. No diluted earnings per share is presented as the loss-making nature means the warrants are anti-dilutive.

16 Intangible assets

Expenditure on exploration activities is written off against profits 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 project 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 joint venture partners. In the event that a project does not represent an economic exploration target and results indicate that there is no additional upside, or that future funding from joint venture 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.

17 Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings 4 years straight line

Computers 2 years straight line

Plant and Machinery 4 years straight line

Motor vehicles 2 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in profit or loss.

Impairment of non-current assets

At each reporting end date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.