Elemental Altus Royalties Announces Record Year to Date Revenue
Elemental Altus Royalties Announces Record
Year to Date Revenue
Vancouver, British Columbia--(Newsfile Corp. - November 23, 2023) - Elemental Altus Royalties Corp.
(TSXV: ELE) (OTCQX: ELEMF) ("
Elemental Altus
" or "
the
Company
") announces its operating and
financial results for the quarter ended September 30, 2023. For complete details please refer to the
Financial Statements and associated Management Discussion and Analysis ("
MD&A
") for the three and
nine months ended September 30, 2023, which can be found on the SEDAR+ website
(
www.sedarplus.ca
) or the Company's website (
www.elementalaltus.com
).
Frederick Bell, CEO of Elemental Altus, commented:
"The third quarter of 2023 has seen the announcement of three new royalty acquisitions alongside the
creation of nine gold royalties through the sale of our in-house generated projects in Egypt, Mali and
Ethiopia. The Cactus copper royalty acquisition in the USA adds a high-quality long-life asset to the
portfolio that fits well into our development portfolio, while the increase to the Caserones copper
royalty in Chile is in line with our strategy to maintain our exposure to high-quality producing assets.
The announced transactions on the royalty generation front give us substantial upside through a
combination of cash payments and continuing equity exposure with our partners Allied Gold,
In2Metals and ANS Exploration.
In terms of continued revenue growth, we expect our Bonikro gold royalty in Côte d'Ivoire to materially
ramp up in the coming quarters and represent the majority of production for the mine in the coming
years. The Diba gold royalty is expected to be fast-tracked into production at the adjacent Sadiola
mine in H1 2024 by Allied Gold and likewise represent a material new source of royalty revenue. The
combination of increasing royalty revenue in 2024 alongside reduced G&A and generative
expenditure should put the Company in a very strong position to continue to take advantage of
accretive royalty acquisition opportunities going forward."
Year to September 30, 2023 Highlights:
Record Revenue of US$7.8 million (increase of 10% vs 2022) and Adjusted Revenue of US$12.2
million (increase of 58% vs 2022), inclusive of Caserones royalty revenue
Record Gold Equivalent Ounces ("
GEOs
") of 6,187oz (increase of 47% vs 2022)
Record Adjusted EBITDA of US$7.8 million (increase of 41% vs 2022)
Q3 2023 Highlights:
Revenue of US$2.4 million and Adjusted Revenue of US$3.7 million, inclusive of Caserones
royalty revenue
GEOs of 1,886oz
Adjusted EBITDA of US$2.2 million
US$2.0 million Cash from Operations plus distributions from associates, inclusive of Caserones
royalty revenue
Royalty Portfolio Highlights and Key Developments:
The Company announced the acquisition of a 0.68% Net Smelter Return ("
NSR
") royalty on the
Cactus Copper Project, which is 100% owned by Arizona Sonoran Copper Company Inc
("
ASCU
") and a 0.5% gross revenue royalty on the Nyanga Copper-Nickel Project in Gabon, which
is 100% owned by Armada Metals Limited from RCF Opportunities Fund L.P.
During the Quarter, the Company increased its existing NSR royalty on the operating Caserones
mine from private third-party vendors. The Company's total effective NSR interest is now 0.473%
The Company announced the sale of the Diba and Lakanfla gold projects in western Mali to Allied
Gold ML Corp ("
Allied
"). The projects are contiguous with the Sadiola Large Scale Gold Mining
licence that is owned and operated by Allied and the Company is expecting near term royalty
revenue. The consideration for the sale was an uncapped 3.0% NSR royalty on the first 226,000
ounces of gold produced from a defined deposit and 2.0% NSR on all future production in excess
of 226,000 ounces. A cash payment of US$1 million was also paid on closing and up to US$5
million in cash is payable in deferred production based milestones
The Company completed the sale of an 80.1% interest in Akh Gold to In2Metals Explorer S.à r.l. in
return for upfront and deferred cash, a US$10 million expenditure commitment and a 1.5% NSR
royalty on its Egyptian exploration licences
The Company agreed the sale of its Daro and Zager licences in Ethiopia to Canadian
incorporated ANS Exploration Corp for US$0.2 million cash over 5 quarters, up to US$1 million in
milestone payments, 2.5% NSR royalties with a 5 year buy-back option on up to 1% of the royalties
for US$1.5 million each, and a retained equity interest
Operating Asset Highlights
The following table summarizes the Company's revenue from royalty interests during the three and nine
months ended September 30, 2023 and 2022. Adjusted revenue also includes accrued royalty revenue
from equity investments for the same periods (see Non-IFRS Measures).
Three months ended
September 30,
Nine months ended
September 30,
2023
$'000
2022
$'000
2023
$'000
2022
$'000
Revenue from
royalties
Amancaya
159
224
608
722
Ballarat
-
147
214
147
Bonikro
290
32
556
32
Karlawinda
1,019
948
3,459
3,309
Kwale
-
44
-
250
Mercedes
178
137
610
137
Mulgarrie
8
-
22
-
Mount Pleasant
36
51
224
257
SKO
51
35
202
35
Wahgnion
637
494
1,889
1,500
Total revenue
2,378
2,789
7,784
7,066
Royalty revenue from
equity investments
Caserones
1,274
656
4,422
656
Adjusted revenue
1
3,652
3,445
12,206
7,722
The following table summarizes the Company's GEOs from royalty interests during the three and nine
months ended September 30, 2023 and 2022.
Three months ended
September 30,
Nine months ended
September 30,
2023
GEO
2022
GEO
2023
GEO
2022
GEO
Amancaya
82
130
307
395
Ballarat
-
85
108
85
Bonikro
150
18
284
18
Karlawinda
526
548
1,753
1,812
Kwale
-
25
-
135
Mercedes
92
79
309
79
Mulgarrie
4
-
11
-
Mount Pleasant
18
29
113
140
SKO
26
20
102
20
Wahgnion
329
286
958
822
Ming
-
327
-
327
Caserones
658
380
2,241
380
Total GEOs
1
1,886
1,927
6,187
4,213
(1)
See Non-IFRS Measures.
At current gold prices, Elemental Altus expects to receive Adjusted Revenue for 2023 of US$16.1 million
to US$17.7 million, approximately in line with previous Adjusted Revenue guidance of US$16.2 million to
US$18.4 million. This equates to approximately 8,200 to 9,000 GEOs, a decrease from the previous
guidance of 9,000 to 10,200 GEOs due to lower copper prices relative to gold, a slower than expected
ramp up from the Company's royalty at Bonikro that is expected to contribute materially in 2024, and
revised guidance from the Company's operators at Ballarat, Mercedes and Amancaya.
Additionally, Elemental received US$1 million during the Quarter through the transaction with In2Metals
in Egypt and subsequent to the Quarter received US$1 million from the sale of the Diba project.
Additional milestone payments are expected in 2024.
Quarterly changes to revenue received by Elemental Altus are driven primarily by fluctuations in
production at the underlying mines, the timing of sales, changes in the price of commodities and assets
being advanced to production.
Karlawinda Gold Mine, Australia
The Company owns a 2% NSR royalty on the Karlawinda Gold Project
Q3 2023 gold production from Karlawinda was 29,700 ounces (Q2 2023: 28,859 ounces) in line
with their FY-2024 guidance range of 115,000 - 125,000 ounces
On July 27, 2023, Capricorn Metals Ltd (ASX:CMM) ("
Capricorn
") declared an updated JORC
2012 compliant Ore Reserve and Mineral Resource update featuring an initial Resource for
Karlawinda Gold Project East ("
KGP East
"), including an Indicated Resource of 1.3Mt @ 0.8g/t Au
for 33koz of contained gold. While not yet material, the Resource area includes the Berwick and
Muirfield deposits, which are entirely covered by Elemental Altus' royalty, and is evidence of further
satellite Resources proximal to the existing Karlawinda processing plant. Capricorn notes that
drilling in late 2023 is planned with the aim of bringing KGP East into Reserves as a satellite pit
In the same update, Capricorn announced their plans to commence a follow-up aircore drill
program at the Vedas prospect, wholly covered by Elemental Altus' royalty. The results from the
planned drilling and previously outlined drilling during the June quarter are expected to form part of
an initial Resource on the prospect in due course
Caserones Copper Mine, Chile
The Company owns a 0.473% NSR royalty on Caserones
The Company accrued adjusted royalty revenue of $1.27 million (before tax) using an estimate
from Lundin Mining Corp's (TSX:LUN) ("
Lundin Mining
") published production and received a
dividend of US$1.1 million relating to Q2 2023 sales
Subsequent to the period end, Lundin Mining announced an increase in 2023 guidance for
Caserones to 65,000-69,000t of copper, reflecting strong performance during the year. Lundin
Mining also announced that an initial 10,000m drilling program had begun at Caserones, the
largest since the commercial production began in 2013. The drill program is set to target multiple
near-mine and regional targets within the 170km
2
license area, with all priority drill targets within
Elemental Altus' royalty area
Wahgnion Gold Mine, Burkina Faso
The Company owns a 1% NSR royalty on Wahgnion
Q3 2023 gold sales were 35,063 ounces (Q2 2023: 31,455 ounces)
Production is expected to be weighted towards the second half of the year as an increasing
proportion of ore is sourced from the higher-grade Samavogo and Stinger pits
The strip ratio was expected to reduce over the course of 2023 alongside this transition
Bonikro
Gold Mine, Cote d'Ivoire
The Company owns an NSR royalty on a portion of Allied Gold Corp's (TSX:AAUC) open pit
Bonikro gold mine called Pushback 5. At a gold price above $1,450, the NSR royalty is at an
effective rate of 2.25%
Mining volumes are continuing to increase from Pushback 5 as it becomes the mainstay of
production at Bonikro going forwards and the Company expects a materially increased revenue
contribution over the coming months
Cactus Copper Project, USA
During the quarter, the Company acquired a 0.68% NSR royalty which covers the majority of the
combined Cactus project area and Resource
On October 16, 2023, ASCU announced an updated Mineral Resource Estimate at Cactus,
including:
Measured and Indicated Resource of 445.7 million short tons at a grade of 0.589% total
copper ("
CuT
") for 5.17 billion pounds of copper
Inferred Resource of 223.8 million short tons at a grade of 0.472% CuT for 2.21 billion
pounds of copper
ASCU confirmed that the updated Resource will be used to support the upcoming Pre-Feasibility
Study ("
PFS
") which remains on track and on budget for release Q1 2024. The PFS is expected to
outline a 30-year operation targeting average production of 45-50 thousand short tons of copper
per year
Frederick Bell
CEO and Director
Corporate & Media Inquiries:
Tel: +1 604 243 6511 (ext. 2700)
Email:
Elemental Altus is a proud member of Discovery Group. For more information please visit:
www.discoverygroup.ca
or contact 604-653-9464.
TSX.V: ELE | OTCQX: ELEMF | ISIN: CA28619K1093 | CUSIP: 28619K109
About Elemental Altus Royalties Corp.
Elemental Altus is a cash generating precious metals royalty company with 10 producing royalties and a
diversified portfolio of pre-production and discovery stage assets. The Company is focused on acquiring
uncapped royalties and streams over producing, or near-producing, mines operated by established
counterparties, as well as generating royalties on new discoveries. The vision of Elemental Altus is to
build a global gold royalty company, offering investors superior exposure to gold with reduced risk and a
strong growth profile.
Qualified Person
Steven Poulton, Executive Chairman for Elemental Altus, and a qualified person under National
Instrument 43-101 - Standards of Disclosure for Mineral Projects, has reviewed and approved the
scientific and technical disclosure contained in this press release.
Notes
Non-IFRS Measures
The Company has included certain performance measures which are not in accordance with
International Financial Reporting Standards ("
IFRS
"). Non-IFRS measures are intended to provide
additional information and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. These non-IFRS measures do not have any standard
meaning under IFRS and other companies may calculate measures differently.
Elemental Altus has included certain performance measures in this press release that do not have any
standardized meaning prescribed by IFRS. The Company's royalty revenue is converted to an
attributable gold equivalent ounce, or GEO, basis by dividing the royalty revenue received in a period by
the average gold price for the same respective period. The presentation of this non-IFRS measure is
intended to provide additional information and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. Other companies may calculate these
non-IFRS measures differently. The production forecast was derived using information that is available in
the public domain as at the date hereof, which included guidance and estimates prepared and issued by
management of the operators of the mining operations in which Elemental Altus holds an interest. The
production forecast is sensitive to the performance and operating status of the underlying mines. None of
the information has been independently verified by Elemental Altus and maybe subject to uncertainty.
There can be no assurance that such information is complete or accurate.
Royalty revenue is received at zero cost.
Adjusted Revenue
Adjusted revenue is a non-IFRS financial measure, which is defined as including gross royalty revenue
from associated entities holding royalty interests related to Elemental Altus' effective royalty on the
Caserones copper mine. Management uses adjusted revenue to evaluate the underlying operating
performance of the Company for the reporting periods presented, to assist with the planning and
forecasting of future operating results, and to supplement information in its financial statements.
Management believes that in addition to measures prepared in accordance with IFRS such as revenue,
investors may use adjusted revenue to evaluate the results of the underlying business, particularly as the
adjusted revenue may not typically be included in operating results. Management believes that adjusted
revenue is a useful measure of the Company performance because it adjusts for items which
management believes reflect the Company's core operating results from period to period. Adjusted
revenue is intended to provide additional information to investors and should not be considered in
isolation or as a substitute for measures of performance prepared in accordance with IFRS. It does not
have any standardized meaning under IFRS and may not be comparable to similar measures presented
by other issuers.
Gold Equivalent Ounces
Elemental Altus' adjusted royalty, streaming, and other revenue is converted to an attributable gold
equivalent ounce, or GEO, basis by dividing the royalty and other revenue from associates in a period by
the average gold price for the same respective period, plus the net gold ounces received in the period
from streaming investments. The presentation of this non-IFRS measure is intended to provide
additional information and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. Other companies may calculate these non-IFRS
measures differently. The production forecast was derived using information that is available in the public
domain as at the date hereof, which included guidance and estimates prepared and issued by
management of the operators of the mining operations in which Elemental Altus holds an interest. The
production forecast is sensitive to the performance and operating status of the underlying mines. None of
the information has been independently verified by Elemental Altus and may be subject to uncertainty.
There can be no assurance that such information is complete or accurate.
On behalf of Elemental Altus Royalties Corp.
Neither the TSX-V nor its Regulation Service Provider (as that term is defined in the policies of the TSX-
V.) accepts responsibility for the adequacy or accuracy of this press release.
Cautionary note regarding forward-looking statements
This news release contains certain "forward looking statements" and certain "forward-looking
information" as defined under applicable Canadian securities laws. Forward-looking statements and
information can generally be identified by the use of forward-looking terminology such as "may", "will",
"should", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology.
Forward-looking statements and information include, but are not limited to, statements with respect to
the Company's ability to deliver a materially increased revenue profile, the future growth, development
and focus of the Company, and the acquisition of new royalties and streams. Forward-looking
statements and information are based on forecasts of future results, estimates of amounts not yet
determinable and assumptions that, while believed by management to be reasonable, are inherently
subject to significant business, economic and competitive uncertainties and contingencies.
Forward-looking statements and information are subject to various known and unknown risks and
uncertainties, many of which are beyond the ability of Elemental Altus to control or predict, that may
cause Elemental Altus' actual results, performance or achievements to be materially different from those
expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties
and other factors set out herein, including but not limited to: the impact of general business and
economic conditions, the absence of control over the mining operations from which Elemental Altus will
receive royalties, risks related to international operations, government relations and environmental
regulation, the inherent risks involved in the exploration and development of mineral properties; the
uncertainties involved in interpreting exploration data; the potential for delays in exploration or
development activities; the geology, grade and continuity of mineral deposits; the impact of the COVID-
19 pandemic; the possibility that future exploration, development or mining results will not be consistent
with Elemental Altus' expectations; accidents, equipment breakdowns, title matters, labour disputes or
other unanticipated difficulties or interruptions in operations; fluctuating metal prices; unanticipated costs
and expenses; uncertainties relating to the availability and costs of financing needed in the future; the
inherent uncertainty of production and cost estimates and the potential for unexpected costs and
expenses, commodity price fluctuations; currency fluctuations; regulatory restrictions, including
environmental regulatory restrictions; liability, competition, loss of key employees and other related risks
and uncertainties. For a discussion of important factors which could cause actual results to differ from
forward-looking statements, refer to the annual information form of the Company for the year ended 31
December 2022. Elemental Altus undertakes no obligation to update forward-looking statements and
information except as required by applicable law. Such forward-looking statements and information
represents management's best judgment based on information currently available. No forward-looking
statement or information can be guaranteed, and actual future results may vary materially. Accordingly,
readers are advised not to place undue reliance on forward-looking statements or information.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/188551