12 Nov 2021 07:00
Altus Strategies Plc / Index (EPIC): AIM (ALS) TSX-V (ALTS) OTCQX (ALTUF) / Sector: Mining
12 November 2021
Altus Strategies Plc
("Altus" or the "Company")
Quarterly Report and Financial Statements
Altus Strategies Plc (AIM: ALS, TSX-V: ALTS, OTCQX: ALTUF) announces that it has published its unaudited financial results and its Management's Discussion and Analysis for the three-month and nine-month periods ending 30 September 2021. These documents have been posted on the Company's website at www.altus-strategies.com/investors/financials/ and are also available on SEDAR at www.sedar.com.
HIGHLIGHTS
Highlights for the three months ended 30 September 2021 are as follows:
Corporate highlights:
· Acquisition of an effective 0.418% net smelter return ("NSR") royalty on the Caserones copper mine ("Caserones") in northern Chile for US$34.1 million, expected to generate annual cash flow of US$3.2 million (post-tax) to Altus (projection assumes copper price of US$4.00 per pound and production in line with modelled mine plans which means actual results may vary and remain subject, among other factors, to the copper price remaining stable and the mine achieving the modelled operating performance during the period - see "Forward Looking Information" in Management's Discussion and Analysis)
· Caserones royalty acquired via a strategic 50:50 partnership with TSX Venture and NYSE American listed EMX Royalty Corp via a Chilean special purpose vehicle holding a combined effective 0.836% NSR interest on Caserones
· US$29 million strategic acquisition loan facility provided by the Company's largest shareholder La Mancha Fund SCSp ("La Mancha")
· Appointment of Mark Campbell as Non-Executive Chairman of 100% owned subsidiary Akh Gold Holdings Ltd and General Manager (Egypt)
Operational highlights:
· Western Mali: Initial results from reverse circulation ("RC") drilling at the Company's 100% owned Diba gold deposit, including 8.50 grams per tonne ("g/t") gold ("Au") over 24m from 20m and 2.54 g/t Au over 30m from 36m (results are down-the-hole and not true widths)
· Southern Mali: Significant increase in joint venture ("JV") landholding at Tabakorole (by 100km2 to 292km2) with Australian Securities Exchange listed Marvel Gold Limited ("Marvel Gold")
· Southern Mali: Encouraging diamond drilling ("DD") results from first 19 drill holes at Tabakorole and discovery of significant new parallel zone of mineralisation
· Egypt: Discovery of numerous hard rock artisanal gold workings from field reconnaissance at Gabal Om Ourada and Wadi Dubur projects
· Morocco: Discovery of high-grade copper and silver from reconnaissance exploration at the recently granted Azrar, Izougza and Tata projects
· Morocco: Grant of four new exploration licences totalling 148.5km2, targeting copper and silver
Financial highlights:
· Cash balance of £5.9 million / C$10.2 million as at 30 September 2021
· Cash outflow for operating activities of £3.1 million / C$5.2 million for nine months ending 30 September 2021
· Listed equity holdings of £1.6 million / C$2.7 million as at 30 September 2021
Post period:
· Receipt of maiden royalty income of US$1.34 million in respect of the Company's NSR royalty on the Caserones copper mine in northern Chile (before local Chilean and UK taxes)
· Upgraded Mineral Resource Estimate ("MRE") prepared for Tabakorole gold project in Southern Mali, resulting in a 24% increase in indicated ounces and a 7% increase in inferred ounces, with 70% of the deposit subject to the MRE within 150m of the surface
· High grade intersections including 21.9 g/t Au over 10.2m from 28m from DD at Diba gold deposit in western Mali (results are down-the-hole and not true widths)
Steven Poulton, Chief Executive of Altus, commented:
"I am delighted to report on a significant and highly productive quarter for the Company, marked in particular by the closing of the US$34.1 million landmark acquisition of the cash-paying Caserones copper royalty in Chile. The acquisition, which has transitioned Altus into a revenue generating business, is a testament to the Company's strategic vision and effective growth strategy. Altus has also continued to deliver excellent results on its work programmes across its portfolio of projects, including drilling in Mali and field exploration programmes in Egypt and Morocco.
"The acquisition of the NSR royalty on the Caserones copper mine not only marked a major milestone in the development of the Company's royalty strategy, but also further diversifies the Company's portfolio outside of Africa and towards copper. The first cash instalment from Caserones was received shortly after the end of the quarter. Our largest shareholder, La Mancha, assisted Altus with the acquisition by providing a US$29 million strategic acquisition facility, underscoring their commitment to the long-term growth of Altus as well as the quality of the acquisition.
"Significant progress has been made at the Diba gold project in western Mali during the period, with initial results from reverse circulation drilling, including 8.50 g/t Au over 24m from 20m and 2.54 g/t Au over 30m from 36m. The Air Core and RC drilling programmes, which were paused due to the rainy season, recommenced after the period end and were augmented to include 1,300m of diamond drilling. A key objective in the next quarter will be to complete the drilling programmes at Diba with an updated independent MRE and Preliminary Economic Assessment on the project to follow.
"Altus' JV partner, Marvel Gold, has continued to advance the Tabakorole gold JV project in southern Mali during the period, through a combination of RC and DD programmes, targeting both infill of and extensions to the existing deposit. Results included 2.4 g/t Au over 24m from 35m in the parallel zone and 3.6 g/t Au over 16.5m from 3.2m in the northwest zone. Shortly after the period, Marvel announced an updated MRE for Tabakorole, comprising 17,300,000 tonnes at 1.2 g/t Au for 665,000 ounces in the Inferred category and 9,200,000 tonnes at 1.2 g/t Au for 360,000 ounces in the Indicated category - See Altus' news release "Gold Resource Exceeds One Million Ounces at Tabakorole in Southern Mali" dated 05 October 2021. The updated MRE represented a 24% increase in indicated ounces and a 7% increase in inferred ounces. Approximately 70% of the MRE is situated within 150m of the surface. The deposit remains open in parallel zones and at depth.
"In Egypt, Altus is delighted to have welcomed Mark Campbell to the team as General Manager of the Company's Egyptian branch and we have expanded our in-country geological and administrative teams. Initial reconnaissance was also completed on Gabal Om Ourada and Wadi Dubur in the Eastern Desert with numerous hard rock artisanal gold workings discovered and, after the period end, reconnaissance commenced at the Gabal Al-Shaluhl and Wadi Jundi licences.
"In Morocco, a high resolution, induced polarisation survey commenced at the Agdz copper-silver project. The results will be used to define and prioritise targets for trenching and drilling across four key prospects discovered to date at Agdz. In July, four further projects, totalling 148.5km2, were granted to the Company in the western anti-Atlas of Morocco, increasing the Company's portfolio of projects in Morocco to 14 and its area of exploration to over 800km2. The Company is actively examining potential transactions with third parties on its portfolio of Moroccan assets that are held by its 100% owned subsidiary Aterian Resources Ltd.
"We look forward with confidence to another exciting quarter ahead for Altus. Alongside assessing further accretive royalty acquisition and other strategic opportunities, our focus during the quarter will be progressing our gold programmes in Mali and Egypt, as well as continuing to create value from our portfolio of projects in Morocco. I look forward to keeping shareholders updated on our progress."
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2021
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE LOSS
For the three months ended 30 September | For the nine months ended30 September | ||||||
2021 | 2020 | 2021 | 2020 | ||||
Notes | £ | £ | £ | £ | |||
Continuing operations | |||||||
Revenue and costs recovered from joint venture partners | 2 | 29,905 | 79,310 | 52,509 | 255,984 | ||
Exploration costs expensed | 3 | (717,308) | (293,145) | (2,063,096) | (882,128) | ||
Administrative expenses | 4 | (331,079) | (225,776) | (803,893) | (530,289) | ||
Listing and acquisition related costs | 6 | (167,842) | (14,507) | (175,335) | (61,372) | ||
impairment of intangible asset | 5 | (519,777) | - | (519,777) | (3,798) | ||
Foreign exchange gains/(losses) | (349,970) | (153,534) | (360,302) | (98,210) | |||
Share based payments | (243,349) | (53,225) | (857,865) | (73,227) | |||
Profit/(loss) from operations | (2,299,420) | (660,877) | (4,727,759) | (1,393,040) | |||
Interest receivable | - | - | 60 | 1,614 | |||
Interest payable | (253,996) | (1,537) | (256,447) | (5,202) | |||
Other income/(costs) | 57 | 249 | 57 | 1,109,250 | |||
Fair value gain/(loss) on investments | (468,077) | (299,094) | (373,232) | 132,047 | |||
Share of profit of investments accounted for using the equity method | 7 | 653,610 | - | 653,610 | - | ||
Profit/(loss) before taxation | (2,367,826) | (961,259) | (4,703,711) | (155,331) | |||
Taxation | - | 71,209 | - | - | |||
Profit/(loss) for the year | (2,367,826) | (890,050) | (4,703,711) | (155,331) | |||
Other comprehensive income | |||||||
Items that may be reclassified to the income statement in subsequent periods | |||||||
Foreign currency translation differences | 29,818 | - | 29,818 | - | |||
Total comprehensive (expense)/income for the year | (2,338,008) | (890,050) | (4,673,893) | (155,331) | |||
Profit/(loss) for the quarter attributable to: | |||||||
- Owners of the parent company | (2,336,827) | (891,023) | (4,700,765) | (155,852) | |||
- Non-controlling interest | (999) | 973 | (2,946) | 521 | |||
(2,367,826) | (890,050) | (4,703,711) | (155,331) | ||||
Total comprehensive profit/(loss) for the quarter attributable to: | |||||||
- Owners of the parent company | (2,337,010) | (891,023) | (4,670,947) | (155,852) | |||
- Non-controlling interest | (999) | 973 | (2,946) | 521 | |||
(2,338,008) | (890,050) | (4,673,893) | (155,331) | ||||
Basic earnings per share (pence) attributable to the owners of the parent | 14 | (2.91) | (1.27) | (6.05) | (0.24) | ||
Diluted earnings per share (pence) attributable to the owners of the parent | 14 | (2.91) | (1.27) | (6.05) | (0.24) | ||
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2021
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
As at 30 September | As at 31 December | ||||
| 2021 | 2020 | |||
Notes | £ | £ | |||
Non-current assets | |||||
Intangible assets | 5 | 3,169,722 | 3,277,381 | ||
Property, plant and equipment | 25,179 | 4,720 | |||
Leased assets | 45,150 | 60,198 | |||
Investment in associate | 7 | 24,959,232 | - | ||
Investments | 8 | 1,561,431 | 1,320,542 | ||
29,760,714 | 4,662,841 | ||||
Current assets | |||||
Trade and other receivables | 9 | 315,283 | 853,629 | ||
Held-for-sale assets | 86,462 | 86,765 | |||
Cash and cash equivalents | 6,486,641 | 5,937,486 | |||
6,888,386 | 6,877,880 | ||||
Total assets | 36,649,100 | 11,540,721 | |||
Current liabilities | |||||
Trade and other payables | 10 | (22,537,212) | (1,144,754) | ||
Held-for-sale liabilities | (34,020) | (34,020) | |||
Provisions | (15,000) | (15,000) | |||
(22,586,232) | (1,193,774) | ||||
Non-current liabilities | |||||
Trade and other payables | (29,458) | (45,848) | |||
Total liabilities | (22,615,690) | (1,239,622) | |||
Net assets | 14,033,410 | 10,301,099 | |||
Equity | |||||
Share capital | 11 | 4,019,576 | 3,504,580 | ||
Share premium | 11 | 20,255,458 | 13,222,115 | ||
Translation reserve | (52,761) | (82,579) | |||
Other reserves | 7,216,878 | 6,359,013 | |||
Retained earnings | (17,301,514) | (12,600,749) | |||
Total equity attributable to owners of the parent | 14,137,637 | 10,402,380 | |||
Non-controlling interest | (104,227) | (101,281) | |||
Total equity | 14,033,410 | 10,301,099 |
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED 30 SEPTEMBER 2021
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
Share capital | Share premium account | Translation reserve | Other reserves | Retained earnings | Total equity | Non-controlling interest | Total | |
Nine months ended 30 September 2020 | £ | £ | £ | £ | £ | £ | £ | £ |
Balance at 1 January 2020 | 2,102,284 | 7,378,369 | (82,579) | 5,755,070 | (10,524,314) | 4,628,830 | (98,327) | 4,530,503 |
Profit/(loss) for the period | - | - | - | - | (155,852) | (155,852) | 521 | (155,331) |
Other comprehensive income | ||||||||
Foreign currency translation differences | - | - | - | - | - | - | - | - |
Total comprehensive income/(expense) | - | - | - | - | (155,852) | (155,852) | 521 | (155,331) |
Issue of shares | 1,402,296 | 5,803,746 | - | - | - | 7,206,042 | - | 7,206,042 |
Share based payment charge | - | - | - | 53,225 | - | 53,225 | - | 53,225 |
Total transactions with owners, recognised directly in equity | 1,402,296 | 5,803,746 | - | 53,225 | (155,852) | 7,103,415 | 521 | 7,103,936 |
Balance at 30 September 2020 | 3,504,580 | 13,182,115 | (82,579) | 5,808,295 | (10,680,166) | 11,732,245 | (97,806) | 11,634,439 |
Nine months ended 30 September 2021 | ||||||||
Balance at 1 January 2021 | 3,504,580 | 13,222,115 | (82,579) | 6,359,013 | (12,600,749) | 10,402,380 | (101,281) | 10,301,099 |
Profit/(loss) for the period | - | - | - | - | (4,700,765) | (4,700,765) | (2,946) | (4,703,711) |
Other comprehensive income | ||||||||
Foreign currency translation differences | - | - | 29,818 | - | - | 29,818 | - | 29,818 |
Total comprehensive income/(expense) | - | - | 29,818 | - | (4,700,765) | (4,670,947) | (2,946) | (4,673,893) |
Issue of shares | 513,333 | 7,013,435 | - | - | - | 7,526,768 | - | 7,526,768 |
Exercise of warrants | 1,663 | 19,908 | - | - | - | 21,571 | - | 21,571 |
Share based payment charge | - | - | - | 857,865 | - | 857,865 | - | 857,865 |
Total transactions with owners, recognised directly in equity | 514,996 | 7,033,343 | - | 857,865 | - | 8,406,204 | (2,946) | 4,297,213 |
Balance at 30 September 2021 | 4,019,576 | 20,255,458 | (52,761) | 7,216,878 | (17,301,514) | 14,137,637 | (104,227) | 14,033,410 |
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2021
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Period ended 30 September | Three months | Nine months | |||
2021 | 2020 | 2021 | 2020 | ||
£ | £ | £ | £ | ||
Cash flows from operating activities | |||||
Profit/(loss) for the period after taxation | (2,338,008) | (890,050) | (4,673,893) | (155,331) | |
Adjustments for: | |||||
Net interest (received)/paid | 253,996 | (77) | 256,387 | 3,588 | |
Share based payments | 243,349 | 53,225 | 857,865 | 73,227 | |
Impairment of non-current assets | 519,777 | - | 519,777 | 3,798 | |
Bad debt provision | - | - | (10,875) | - | |
Depreciation of property, plant and equipment | 6,822 | 5,679 | 19,303 | 18,148 | |
Receipt of shares in investee | - | 1,614 | - | (1,108,999) | |
Fair value (gain)/loss on investments | 472,363 | 322,493 | 376,689 | (134,899) | |
Share of profit of associate | (653,610) | - | (653,610) | - | |
Revaluation of associate | 508,093 | - | 508,093 | - | |
Other gains/(losses) | - | (71,581) | - | (21,754) | |
Movements in working capital: | |||||
(Increase)/decrease in trade and other receivables | (4,967) | (117,100) | (68,054) | (32,911) | |
Increase/(decrease) in trade and other payables | 695,655 | 984 | 325,447 | (476,619) | |
Cash flows used in operating activities | (296,530) | (694,813) | (2,542,871) | (1,831,752) | |
Investing activities | |||||
Purchase of intangible assets | - | (15,801) | (412,118) | (76,102) | |
Purchase of property plant and equipment | (18,524) | - | (24,714) | (4,027) | |
Investment in associate | (6,203,429) | - | (6,203,429) | - | |
Loan granted to associate | (18,610,286) | - | (18,610,286) | - | |
Net interest received/(paid) | (256,447) | 77 | (256,387) | (1,838) | |
Net cash used in investing activities | (25,088,686) | (15,724) | (25,506,934) | (81,967) | |
Financing activities | |||||
Proceeds from issue of shares | - | - | 7,548,338 | 6,483,561 | |
Loan granted by related party | 21,068,997 | - | 21,068,997 | - | |
Principal element of lease payments | (5,425) | (4,607) | (15,224) | (13,473) | |
Interest element of lease payments | (700) | (1,518) | (3,151) | (4,902) | |
Net cash generated from financing activities | 21,062,872 | (6,125) | 28,598,960 | 6,465,186 | |
Net increase/decrease in cash and cash equivalents | (4,322,344) | (716,662) | 549,155 | 4,551,467 | |
Cash and cash equivalents at beginning of the period | 10,808,985 | 7,480,771 | 5,937,486 | 2,212,642 | |
Cash and cash equivalents at the end of the period | 6,486,641 | 6,764,109 | 6,486,641 | 6,764,109 | |
Qualified Person
The technical disclosure in this regulatory announcement has been approved by Steven Poulton, Chief Executive of Altus. A graduate of the University of Southampton in Geology (Hons), he also holds a Master's degree from the Camborne School of Mines (Exeter University) in Mining Geology. He is a Fellow of the Institute of Materials, Minerals and Mining and has over 20 years of experience in mineral exploration and is a Qualified Person under the AIM rules and NI 43-101.
For further information you are invited to visit the Company's website www.altus-strategies.com or contact:
Altus Strategies Plc Steven Poulton, Chief Executive | Tel: +44 (0) 1235 511 767 E-mail: info@altus-strategies.com |
SP Angel (Nominated Adviser) Richard Morrison / Adam Cowl |
Tel: +44 (0) 20 3470 0470 |
SP Angel (Broker) Grant Barker / Richard Parlons |
Tel: +44 (0) 20 3470 0471 |
Shard Capital (Broker) Isabella Pierre / Damon Heath |
Tel: +44 (0) 20 7186 9927 |
Yellow Jersey PR (Financial PR & IR) Charles Goodwin / Henry Wilkinson | Tel: +44 (0) 20 3004 9512 E-mail: altus@yellowjerseypr.com |
About Altus Strategies Plc
Altus Strategies (AIM: ALS, TSX-V: ALTS & OTCQX: ALTUF) is a mining royalty company generating a diversified and precious metal focused portfolio of assets. The Company's differentiated approach of generating royalties on its own discoveries in Africa and acquiring royalties globally through financings and acquisitions with third parties, has attracted key institutional investor backing. The Company engages constructively with all stakeholders, working diligently to minimise its environmental impact and to promote positive economic and social outcomes in the communities where it operates. For further information, please visit www.altus-strategies.com.
Cautionary Note Regarding Forward-Looking Statements
Certain information included in this announcement, including information relating to future financial or operating performance and other statements that express the expectations of the Directors or estimates of future performance constitute "forward-looking statements". These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, without limitation, the completion of planned expenditures, the ability to complete exploration programmes on schedule and the success of exploration programmes. Readers are cautioned not to place undue reliance on the forward-looking information, which speak only as of the date of this announcement and the forward-looking statements contained in this announcement are expressly qualified in their entirety by this cautionary statement.
Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is based on assumptions made in good faith and believed to have a reasonable basis. The forward-looking statements contained in this announcement are made as at the date hereof and the Company assumes no obligation to publicly update or revise any forward-looking information or any forward-looking statements contained in any other announcements whether as a result of new information, future events or otherwise, except as required under applicable law or regulations.
TSX Venture Exchange Disclaimer
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organisation of Canada accepts responsibility for the adequacy or accuracy of this release.
Market Abuse Regulation Disclosure
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
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