Elemental Altus to Consolidate Cash-Flowing Gold Royalty Portfolio from AlphaStream for Equity Consideration
Elemental Altus to Consolidate Cash-Flowing
Gold Royalty Portfolio from AlphaStream for
Equity Consideration
Vancouver, British Columbia--(Newsfile Corp. - October 16, 2024) - Elemental Altus Royalties Corp.
(TSXV: ELE) (OTCQX: ELEMF) ("
Elemental Altus
" or the "
Company
") is pleased to announce that it
has entered into a binding agreement (the "
Agreement
") to acquire an additional 50% ownership of 24
existing royalties (the "
Portfolio
") from AlphaStream Limited ("
AlphaStream
") for a consideration of
US$28 million in equity (the "
Acquisition
"). The Portfolio includes Elemental Altus' existing producing
gold royalties on the Bonikro Gold Project ("
Bonikro
"), the Ballarat Mine ("
Ballarat
"), South Kalgoorlie
Operations ("
SKO
") and 21 additional royalties located in Australia. Upon completion of the Acquisition,
Elemental Altus, through a 100% interest in the Portfolio, will hold an effective 4.5% NSR royalty on
Bonikro, a 2.5% NSR royalty on Ballarat, and a A$10/oz royalty and A$1 million Discovery Bonus on
SKO.
Acquisition Highlights:
Producing Gold Royalties:
immediate cash flow with approximately US$6 million additional
revenue forecast in 2025 by consolidating the Portfolio
Margin Expansion:
expected pro forma 2025 revenue increase of ~25% to US$31 million¹,
driving a material step up in free cash flow with no increase in management costs
Substantial Leverage to Gold:
the Portfolio provides immediate exposure to gold prices that are
significantly above consensus forecasts
Exploration Optionality:
upside already demonstrated across the Portfolio with operators in
Australia including Northern Star Resources Limited, Evolution Mining Limited, Hancock
Prospecting Pty Ltd, Mineral Resources Limited and Zijin Mining Group Company Limited
Increased Financial Strength:
further improves financial flexibility with regards to acquisitions,
deleveraging profile and dividends
Strategic Shareholder:
AlphaStream join the Register as another cornerstone shareholder
moving forward with the right to nominate a director to the Board
Frederick Bell, CEO of Elemental Altus, commented:
"Building on top of our organic growth in 2025 and 2026, this acquisition provides a step change in
revenue with accompanying margin expansion and introduces a new strategic shareholder in
AlphaStream. The assets are well known to Elemental Altus through our existing joint ownership over
the last 3 years and the producing assets have been substantially de-risked over that time. We also
continue to see material exploration upside across the portfolio, most notably at the Hampton-
Boulder-Jubilee and Hercules deposits at Northern Star's SKO in Western Australia.
By securing further interests on the Bonikro, SKO and Ballarat operations, we expect to add to our
near and long-term revenue profiles and significantly expand margins; providing increased free cash
flow generation and scale, adding high quality exploration optionality and further enhancing the
Company's precious metals focus.
We believe the Portfolio offers material upside in the current gold price environment alongside asset
outperformance. In particular, SKO has averaged ~US$1 million per annum on a 100% basis over the
last two years when including Discovery Bonus payments, and Ballarat has a committed new owner
focused on reinvesting into operations to build a long-term successful mine. At Bonikro, royalty
production is at record levels while the gold price is at all-time highs, and further upside from
embedded optionality in 21 Australian royalties offers potential outsized returns, de-risked by the
quality of operators on many assets all located in a top tier mining jurisdiction. Of note, at the Zuleika
South & Rose Hill royalty, which covers the Hercules discovery, Northern Star are undertaking
definition drilling which is expected to feed into internal mine planning studies to determine how the
project may be developed. At Mt Monger, operations are being ramped up following the merger of
Red 5 and Silver Lake; and a pre-start study completed at the Ashburton Project includes potential for
a small deposit at Merlin to be incorporated into near-term mine scheduling. Evolution Mining's
Kintore Project and associated exploration potential has been flagged as an advanced project sitting
in the Kunanalling Shear Zone which already hosts several operating mines, while the Mulgarrie
royalty operated by Zijin has been mined intermittently over the course of the last 2 years as a
satellite deposit."
Prashant Francis, the co-CEO of AlphaStream (who is expected to be nominated to the Board
subject to TSXV approval), commented:
"
AlphaStream looks forward to working with Elemental Altus in its shared vision of building a pre-
eminent royalty and streaming company. Having successfully partnered with the company on the
Portfolio, we are excited about the prospects for the future."
Key Royalties - with Elemental Altus' increased royalty rate, post-transaction
Bonikro - 4.5% NSR
The Bonikro open-pit gold mine is located in Côte d'Ivoire, 230km north-west of Abidjan and has
produced over 1.4Moz of gold at an average grade of 1.63g/t of gold since production commenced in
2008. The Bonikro Project is comprised of the Bonikro open pit and a 2.5Mtpa processing plant, as well
as the satellite Hire and Dougbafla deposits
2
. The project is operated by Allied Gold Corp (TSX: AAUC)
and has Reserves of 571,000 ounces of gold as of December 31, 2023
3
.
Figure 1: Bonikro Royalty Outline
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/8358/226794_577a83ad046c2837_001full.jpg
Elemental Altus' royalty covers the entirety of the PB5 pushback, the next in a series of successive
pushbacks of the open pit originally designed by previous operator Newcrest. Elemental Altus' royalty
operates on a sliding scale, with a maximum royalty rate of 4.5% NSR when the average gold price
during the period is above US$1,450 per ounce. The PB5 project has successfully ramped up since
commencement in 2023, with Allied guiding production of 95,000-105,000 ounces for 2024 across the
entire project³. The royalty is capped at 560,000 ounces of gold production (~444,000 ounces of the cap
currently remain), and it is understood that the production cap will be reached during the current mine
plan.
Ballarat - 2.5% NSR
Ballarat is an underground gold mine located 100km northwest of Melbourne in the major gold-producing
city of Ballarat, Victoria, Australia, in the south-western part of the Lachlan Fold Belt within the
Palaeozoic sedimentary rocks of the Bendigo-Ballarat subdivision. The mine hosts significant historical
workings and has been in modern operation since 2006, producing 35,000-40,000 ounces per annum.
Gold mineralisation occurs within discontinuous, irregular quartz veins associated with Lower Ordovician
sandstones, siltstones and mudstones that are weakly metamorphosed and folded about north-south
trending axes.
Approximately 70% of the recovered gold is 'free' and separated by gravity methods before being
directly smelted into bars, with the other 30% present as sulphide-bound gold which is extracted by
cyanide leach⁴; and a mill upgrade, to improve recoveries, is being contemplated. Ballarat is operated
by private company Victory Minerals and is mined by a combination of conventional drive development
and mechanised open stoping. The royalty area covers 32km
2
and is capped at A$50 million (~A$29
million of the cap currently remains).
Figure 2: Ballarat Royalty Outline
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/8358/226794_577a83ad046c2837_002full.jpg
SKO - A$10/oz and A$1 million Discovery Bonus
The South Kalgoorlie Operations are located in Kalgoorlie, Western Australia within the prolific Eastern
Goldfields Superterrane. Gold mineralisation is associated with greenstones with volcano-sedimentary
rocks in multiple orogenic lode gold style deposits, controlled by generally NNW-trending shear zones;
and minor paleoplacer deposits. The main mineralised orebody Hampton-Boulder-Jubilee ("
HBJ
")
remains open down plunge with limited effective deep drilling undertaken to date on the narrow,
subvertical higher grade lodes.
Elemental Altus' royalty covers 176km
2
, including the long-term producing underground HBJ gold mine
complex, owned and operated by Northern Star Resources (ASX: NST) since 2018. The mine is a
primary source of ore feed of Northern Star's regional Kalgoorlie Operations, providing ore to both the
Kanowna Belle and KCGM mills⁵. The royalty agreement includes a Discovery Bonus of A$1 million
payable for each new ore body on the royalty tenement package with production and / or Reserves
greater than 250,000 ounces of gold. To date, Northern Star has paid two Discovery Bonuses from the
SKO operations, and recent exploration drilling has indicated the potential for subsequent bonuses to be
paid.
Figure 3: SKO Royalty Outline
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/8358/226794_577a83ad046c2837_003full.jpg
Additional Royalties - with Elemental Altus' increased royalty rate, post-transaction
Figure 4: Australian Royalty Portfolio
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/8358/226794_577a83ad046c2837_004full.jpg
Asset
Operator
Commodity
Location
Stage
Interest (total)
Ashburton
(Paulsens)
Black Cat
Syndicate
Gold
WA,
Australia
Development
2.5% GSR
Bills Find (Yandal)
Northern Star Resources
Gold
WA,
Australia
Exploration
Sliding scale
Bullfinch
China Hanking Holdings
Gold
WA,
Australia
Exploration
10% NPI
Gidginbung
XavierLinQ Pty
Gold,
Copper
NSW,
Australia
Development
2% NSR
Hampton Nickel
Goldfields /
Mineral Resources /
Dynamic Metals
Polymetallic
WA,
Australia
Exploration
A$10/oz and A$1m
discovery bonus
Kintore
Evolution
Gold
WA,
Australia
Exploration
A$0.39/g Au - A$0.65/g
Au
Kunanalling
(Catherwood)
Evolution
Gold
WA,
Australia
Exploration
3.64% NSR
Mayfield
C29 Metals
Copper
QLD,
Australia
Exploration
2% NSR
Mertondale
(Crawford)
Cavalier Resources
Gold
WA,
Australia
Development
2% NSR (>30koz)
Mount Cannindah
Cannindah Resources
Copper, Gold
QLD,
Australia
Development
0.9% NSR
Mount Coolon (Rosetta)
GBM / Newmont
Gold
QLD,
Australia
Exploration
3% NSR
Mount Isa (Brightlands /
Milo)
IsoEnergy
Polymetallic
QLD,
Australia
Development
2% NSR
Mount Isa (Mt Margaret)
GBM Resources / JX
Nippon
Gold
QLD,
Australia
Exploration
2% NSR
Mount Success
Ravenswood Gold
Gold
QLD,
Australia
Exploration
0.381% NSR (capped
at A$762k)
Mount Wall
(Anthiby Well)
Hancock Prospecting
Iron Ore
WA,
Australia
Development
1% GR
Mulgarrie
Zijin Mining Group
Gold
WA,
Australia
Development
1.2% GR
Mungana & Red Dome
Administration
Gold
QLD,
Australia
Development
3% NSR (Au Only
>300koz)
Nupower
Uranium Australia
Uranium
NT,
Australia
Exploration
0.90% GR
Randalls (Mt Monger)
Vault Minerals
Gold
WA,
Australia
Producing
$1/oz Au
Wudinna
(Boland)
Cobra Resources
Gold, REEs
SA,
Australia
Exploration
1.5% NSR
Zuleika South &
Rose Hill
(Hercules)
Northern Star Resources
Gold
WA,
Australia
Exploration
A$10/oz and A$1m
discovery bonus
Terms of the Acquisition
The Acquisition is structured as the purchase of the 50% interest in each of the special purpose vehicles
that own the Portfolio that is not already owned by the Company, from a subsidiary of AlphaStream, as
vendor. As consideration, Elemental Altus will issue to AlphaStream or its affiliate 34,444,580 common
shares of the Company at an issue price of C$1.10 per share, representing aggregate consideration for
the Acquisition of US$28,000,000 equivalent to C$37,889,039 based on the Bank of Canada exchange
rate for converting US dollars into Canadian dollars of US$1=CDN$1.35318 on October 3, 2024.The
shares issued to AlphaStream will represent approximately 15% of the Company's common shares
upon closing of the transaction and are subject to restrictions on transfer for a period of four months plus
a day pursuant to Canadian securities laws and TSX Venture Exchange requirements.
Closing is expected to occur on or before November 8, 2024, and is subject to certain conditions
including the approval of the TSX Venture Exchange.
Pursuant to the Agreement, Elemental Altus intends to grant AlphaStream certain rights including:
The right for AlphaStream to nominate a director to Elemental Altus' Board provided that
AlphaStream's shareholding remains over 15% of Elemental Altus' outstanding common shares;
Pre-emptive and top-up rights in favour of AlphaStream to maintain its shareholding percentage in
Elemental Altus, provided that AlphaStream's shareholding is over 15% of Elemental Altus'
outstanding common shares; and
Following the expiration of the statutory hold period, certain processes to ensure the orderly
disposition of its shareholdings in the event AlphaStream chooses to sell its shares in the
Company.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined
in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of
this release.
AlphaStream
AlphaStream Limited, headquartered in the Abu Dhabi Global Market, is a leading mining investments
company offering innovative financial solutions to mining companies and governments worldwide. With a
diverse portfolio in Australia, Africa, and South America, AlphaStream empowers high-quality mining
operators through non-dilutive growth capital. AlphaStream's approach encompasses the entire mining
value chain, from extraction and processing to trading, ensuring comprehensive exposure and
maximizing potential returns. Notably, AlphaStream partnered with Altus Strategies to acquire the
combined Newcrest royalty portfolio in December 2021, demonstrating their commitment to strategic
acquisitions and industry leadership.
Frederick Bell
CEO and Director
Corporate & Media Inquiries:
Tel: +1 604 646 4527
www.elementalaltus.com
Elemental Altus is a proud member of Discovery Group. For more information please visit:
www.discoverygroup.ca
.
TSX.V: ELE | OTCQX: ELEMF | ISIN: CA28619K1093 | CUSIP: 28619K109
About Elemental Altus Royalties Corp.
Elemental Altus is an income generating precious metals royalty company with 11 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. 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
Richard Evans, FAusIMM, is Senior Vice President Technical 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
1)
Based on broker consensus revenue estimates for the Company in 2025
2)
Allied Gold Technical Report titled "NI 43-101 Technical Report for the Bonikro Gold Project, Republic of Côte d'Ivoire", dated September 7, 2023
and effective July 5, 2023
3)
Allied Gold Release titled "Allied Gold Announces Preliminary 2023 Operating Results, 2024 Guidance and Medium-Term Outlook, Highlighting
Upside to its Sustainable Production Base with Improved Costs and Growing Mineral Inventory", dated February 21, 2024 and effective December
31, 2023
4)
Shen Yao Holdings Technical Report titled "Independent Qualified Persons Report for the Ballarat Goldmine, Australia", effective February 28,
2021
5)
Northern Star Resources "2024 Annual Report", dated August 22, 2024
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 completion of the Acquisition and projected closing date; expected additions to revenue and free
cash flow; exploration optionality and upside; anticipated improvements to financial flexibility with
regards to acquisitions, deleveraging profile, and dividends; long term success and future development
of the mines associated with the Portfolio; the price of gold; potential for Merlin to be incorporated into
near-term mine scheduling; forecasts related to the Bonikro gold mine; the potential for subsequent
bonuses in connection with SKO operations; royalty rate increases assuming the closing of the
Acquisition; the approval of the Acquisition by the TSX Venture Exchange; and AlphaStream's rights on
a go-forward basis. 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