ALTUS STRATEGIES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Company Registration No. 10746796
(England and Wales)
Altus Strategies Plc
Contents
31 December 2019 | Annual Report
Contents .......................................................................................................................................................... 2
Company Information ...................................................................................................................................... 3
Key Highlights .................................................................................................................................................. 5
Chairman’s Statement ..................................................................................................................................... 6
Business Overview ........................................................................................................................................... 7
Chief Executive’s Review ............................................................................................................................... 10
Strategic Report ............................................................................................................................................. 17
Key Performance Indicators .............................................................................................................................. 17
Principal Risks and Uncertainties ...................................................................................................................... 18
Corporate and Social Responsibility .................................................................................................................. 21
Financial Review ............................................................................................................................................ 23
Review of Operations by Country .................................................................................................................. 25
Projects held by the Group or operating under joint ventures .......................................................................... 25
Projects in which the Group holds purely a royalty interest ............................................................................. 32
Corporate Governance Report ....................................................................................................................... 34
Directors’ Report ........................................................................................................................................... 43
Directors’ Remuneration Report .................................................................................................................... 47
Statement of Directors’ Responsibilities ........................................................................................................ 52
Independent Auditor’s Report to the Members of Altus Strategies plc in Respect of Canadian National
Instrument 52-107 ......................................................................................................................................... 57
Group Statement of Comprehensive Income ................................................................................................. 61
Group Statement of Financial Position .......................................................................................................... 62
Company Statement of Financial Position ..................................................................................................... 63
Group Statement of Changes in Equity .......................................................................................................... 64
Company Statement of Changes in Equity ..................................................................................................... 65
Group Statement of Cash Flows ..................................................................................................................... 66
Company Statement of Cash Flows ................................................................................................................ 67
Notes to the Financial Statements ................................................................................................................. 68
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Altus Strategies Plc
31 December 2019 | Annual Report
Company Information
Board
Non-executive Chairman
Chief Executive Officer
Executive Director
Non-executive Director
Non-executive Director
Non-executive Director
David Netherway
Steven Poulton
Matthew Grainger
Robert Milroy
Michael Winn
Karim Nasr (appointed 06 April 2020)
Chief Financial Officer
Martin Keylock
Company Secretary
Martin Keylock
Company number
10746796
Registered office
Independent Auditor
Bankers
The Orchard Centre
14 Station Road
Didcot
Oxfordshire
OX11 7LL
United Kingdom
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
United Kingdom
HSBC Bank Plc
186 Broadway
Didcot
Oxfordshire
OX1 1BE
United Kingdom
Nominated Adviser & Broker
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
United Kingdom
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Altus Strategies Plc
Solicitors
31 December 2019 | Annual Report
Phanar Legal Limited
14 Old Queen Street
London
SW1H 9HP
United Kingdom
Northwest Law Group
Suite 704, 595 Howe Street
Vancouver, British Columbia V6C 2T5
Canada
Registrar (UK)
Computershare Investor Services Plc
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
United Kingdom
Registrar (Canada)
Computershare Investor Services Inc.
510 Burrard St, 3rd Floor
Vancouver, British Columbia V6C 3B9
PR Adviser
Canada
Blytheweigh
4-5 Castle Court
London
EC3V 9DL
United Kingdom
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Altus Strategies Plc
Key Highlights
Corporate highlights:
31 December 2019 | Annual Report
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Joint venture and net smelter return (“NSR”) royalty agreement signed with Glomin Services Ltd
on two gold projects in western and southern Mali
Sale of two gold projects in western Mali to TSX-V listed Desert Gold Ventures Inc for equity,
milestone payments and 2.5% NSR royalty
Joint venture with Resolute Mining Ltd on gold project in southern Mali extended by two years
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- Option agreement signed on Toura nickel-cobalt project in western Côte d’Ivoire
- Discussions with potential joint venture partners across project portfolio
- Acquisition of a 2.5% NSR royalty held on a gold project held by the Company’s subsidiary in
western Mali (concluded post year-end)
- Agreements to terminate joint venture with ASX-listed Canyon Resources Ltd in return for
shares in Canyon (initial 15 million shares received post year-end) and to transfer licence under
joint venture to Canyon for further shares in Canyon and a royalty
Operational highlights:
- Grant of Zager copper and gold licence in northern Ethiopia
- Gold prospects discovered at Zager project
- Gold prospects further defined at Daro project in northern Ethiopia
- Drill targets defined at Diba gold project in western Mali
Financial highlights:
-
Strategic Investment Agreement with La Mancha to raise £6.5m / C$11.2m (concluded post
year-end)
- Non-brokered private placement of £2.4m / C$4.1m (before expenses) in December 2019
- Cash outflow of £1.6m / C$2.7m from operating activities during the year
- Cash and marketable securities of £2.5m / C$4.2m (cash £2.2m / C$3.7m and listed equity £0.3m
/ C$0.5m as at 31 December 2019)
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Altus Strategies Plc
31 December 2019 | Annual Report
Chairman’s Statement
Reflection on the year
I am delighted to reflect on another exceptionally productive year for Altus. We continued to deliver on
the Company’s strategy of building a diversified portfolio of project and royalty interests across Africa.
Toward the end of this pivotal year, we announced that a strategic investment agreement had been
signed with La Mancha which is a pre-eminent Africa-focused mining investment group. Post the
reporting period, this transaction was successfully completed. The Company now has a strong working
capital balance sheet including cash of £7.7 million / C$13.5 million as at the date of this report and the
support of a significant strategic industry investor.
During the period, Altus made a number of discoveries at our existing projects, entered into a joint
venture (“JV”) on two of our gold projects in Mali, sold two further gold projects in Mali, agreed to vend
our bauxite project in Cameroon to our JV partner and signed an option agreement on our nickel-cobalt
application in Côte d’Ivoire. These deals culminated in us generating cash, potential future milestone
payments linked to the performance of these projects and five new royalties. We also continued to show
a disciplined approach, by dropping ground that we did not have confidence in, to focus on areas with
higher geological potential including staking new ground over prospective targets.
Management and Board
For a company of our size, Altus has a strong senior management, board and corporate governance
procedures. During the year we were pleased to further strengthen these with the promotion of Martin
Keylock to the position of Chief Financial Officer and Company Secretary. Martin joined Altus as Financial
Controller in 2018. Further to the completion of the La Mancha strategic investment, we are also
delighted to have welcomed Karim Nasr to the board. Karim is the CEO of La Mancha and I am certain
Altus will benefit tremendously from his considerable business acumen and insights.
Looking forward
At the time of writing the world is facing a human crisis caused by the COVID-19 pandemic. While Altus
is well positioned to weather the economic storm, we cannot predict with certainty the outcomes or
duration of this very challenging period. I give my best wishes to all our team, our shareholders, our
stakeholders and their families during this difficult and uncertain time. As we look towards a brighter
future, Altus is in a strong position with a robust treasury, an exceptional shareholder register and a
first-class team of resource professionals. I am confident we will continue to deliver on all our objectives
as well as exceed expectations.
On behalf of the Board, I thank the entire team at Altus for their contributions to such a successful year
and I thank our existing and new shareholders for their continued support.
“David Netherway”
David Netherway
Non-Executive Chairman
28 April 2020
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31 December 2019 | Annual Report
Business Overview
Our project and royalty generator business model
Altus is a resource project and royalty generator that seeks to make and monetise mineral discoveries
in Africa. The Company is based in the UK and is dual-listed in the UK (AIM: ALS) and in Canada (TSX-V:
ALTS). The Company identifies and acquires geologically prospective exploration licences through its
local African subsidiaries, makes new or advances existing discoveries and seeks joint ventures with third
parties to take the projects toward production. Altus seeks to receive short term income from project
transactions as well as performance milestones from the projects and retains long term royalty interests
on each. The business is managed from our UK head office in Oxfordshire and is currently active in Mali,
Ethiopia, Morocco, Liberia, Côte d’Ivoire and Cameroon.
The business model is designed to create significant, but low-risk exposure for Altus shareholders to
the high values which can be created from a potential economic discovery, as well as its future cash
flows. In the short term this reduces the Company’s general and administrative costs, while also
generating cash and equity income from project level transactions. The royalties generated on the
Company’s assets, or which it otherwise acquires, are designed to yield sustainable long-term income
for Altus shareholders without them having to assume the technical or financial risks associated with
owning equity in a producing mine. As such the model is designed to create a virtuous circle, where our
portfolio and income streams continually grow.
Our business model
Risk diversification is at the heart of the Company’s philosophy, and this is enacted by exploring for a
variety of minerals at multiple locations across several jurisdictions. Altus currently has a diversified and
growing portfolio of sixteen projects, spanning six countries and across six different commodities.
This diversification means that the portfolio is constantly evolving: new licences are added, licences that
are not considered to be good prospects are relinquished and those for which exploration and sample
analysis indicate that a potentially economic discovery can be made are proactively marketed for a joint
venture partnership or outright sale. The Company also seconds its team to manage joint ventures in
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31 December 2019 | Annual Report
the early stages, which reduces our costs and ensures exploration continuity on the ground.
Our royalty generation pyramid
Altus generates projects by selectively acquiring mineral exploration licences and advancing projects
through the work of its technical team of exploration geologists. At each level, any projects that prove
to be uneconomic are dropped. Successful projects progress up the pyramid toward advanced
exploration with JV partners and eventually the definition and monetisation of the resource. As each
project matures and develops Altus reduces its ownership, but retains a royalty interest on its future
cash generation.
Over half of the Company’s portfolio comprises gold projects, the most advanced of which are located
in western and southern Mali. Aside from gold, Altus is focused on metals that the Company believes
will be critical in the transmission, storage and efficient use of electricity in the coming decade, as the
world seeks to decarbonise. Copper will be paramount among these and as such Altus is exploring for
economic copper deposits in northern Ethiopia and central Morocco. Other metals such as cobalt,
lithium, vanadium and aluminium also have a critical part to play, as will specialist and less well-known
rare-earth metals, including neodymium and praseodymium that are used in the high-quality magnets
of electric motors.
Focus on Africa
Altus is focused on Africa where, due to the relative lack of exploration using modern techniques,
economic mineral deposits can still be discovered outcropping at surface. According to a recent survey
by MinEx Consulting, 24% of global discoveries in the prior decade were found on the continent, despite
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31 December 2019 | Annual Report
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.
A growing portfolio of assets across Africa
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 the Altus
management and advisory teams, the board considers that Altus is ideally positioned to exploit this
opportunity.
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31 December 2019 | Annual Report
Chief Executive’s Review
In the last year we have built on our track record of making and monetising discoveries in
Africa. Following these transactions, the private placement and the strategic investment
from La Mancha, Altus has established an incredibly robust foundation from which to
accelerate the growth and value of the business.
Introduction
I am delighted to report on a highly productive year for Altus, in which we have made discoveries,
divested assets through joint ventures, sold assets and grown our portfolio of royalty interests. The year
culminated in a £2.4 million (C$4.2 million) private placement and a £6.5 million (C$11.2 million) strategic
investment agreement with La Mancha Holding S.à r.l. (“La Mancha”) which closed after the year end. I
am confident that the investment by La Mancha will prove transformational for the Company.
In this report I review the current extraordinary market conditions, discuss our business model, review
the key developments up until the date of this report and set out our objectives for the year ahead.
Market conditions
At the time of writing, nations across the world are taking unprecedented action in response to the
COVID-19 pandemic. First and foremost, Altus puts the welfare of its team and their families as its top
priority. We have responded to the situation by repatriating our staff to their home countries and
implementing remote working policies in the UK. We are fortunate that there is a considerable amount
of desk based ‘remote sensing’ work that has to be completed. This includes the assimilation and
analysis of open-source historic reports and data including satellite imagery, in order to define new
targets for Altus to explore. This work will be conducted on our existing licences, on new areas within
countries where we are already active and also in countries where Altus does not have a presence.
While scientists work to generate vaccines, as well as treatments, unprecedented peacetime measures
are being imposed to restrict travel and public gatherings in order to protect the most vulnerable. These
stringent measures are also designed to alleviate the potentially overwhelming demands on their
respective healthcare systems, as well as the professionals working on the front line. The restrictions
and the uncertainty as to their likely duration, will have substantial economic ramifications. While raising
the capital reserve ratios of investment banks was a key response to the 2008 crisis, few would have
envisaged or modelled such a dramatic global economic shock.
Central Banks are acting in concert to implement overtly inflationary monetary policies in order to
prevent widespread and simultaneous business and personal insolvencies. Such a scenario would prove
highly deflationary and lead almost inextricably to global depression and a systemic banking crisis.
Interest rates have been slashed to record lows in many countries and ‘liquidity’ is being created (or
more directly, new money printed) to purchase government and even corporate bonds and ETFs. In
coordination with the Central Banks, many governments are unveiling unprecedented fiscal stimulus
packages. These include deferring or underwriting tax and employment costs and are designed to allow
companies to remain in business, if not necessarily trading.
Energy costs typically represent around 25% of the operating cost of a mine. It is therefore important
to note the dispute that erupted in March 2020 between Russia and Saudi Arabia within OPEC, the cartel
which seeks to fix global oil prices. The conflict revolved around Saudi Arabia’s desire to cut production
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31 December 2019 | Annual Report
in order to sustain prices, as opposed to Russia’s preference to maintain foreign exchange revenues. In
response to Russia’s position, Saudi Arabia has seemingly flooded the market with production, causing
a barrel of WTI crude to plunge below US$20 by 30 March 2020 (a price last seen in 2002 and down
from US$60 at the end of 2019). Reduced demand from industry, aviation and other transportation
resulting from COVID-19, is only amplifying the negative impact on the revenues from the shale fields
of Ohio, to the oil wells of the Niger delta. If the current relatively low prices are sustained through 2020,
the potential destabilising effects for the oil producers in the developing world could be dramatic.
All of these events and responses may have profound implications for the production and price of
commodities as well as for the prices and access to capital of the companies which explore for and mine
them.
Market outlook
Since the start of 2020 international equity markets have experienced record-breaking falls and dramatic
volatility reminiscent of the collapse of 2008. Foreseeing a deep global recession, stock markets have
fallen severely and in unison as investors reconfigure their valuations in the face of such an uncertain
outlook. It is not simply earnings that are in doubt, but in many cases the fundamental commercial
viability of the businesses they own.
In the four weeks after closing at 29,551 on 12 February 2020, the Dow Jones Industrial Average lost
35% falling below 20,000. The FTSE performed no better, closing at times below 5,000, a level first hit in
1997. Market circuit-breakers have been triggered numerous times to prevent precipitous falls which
are only fuelled further by automated stop loss selling. Regulators have also intervened to introduce
restrictions on short selling of certain shares deemed most vulnerable to speculation. If the turmoil
continues, or the economic outlook deteriorates significantly, they may be forced to intervene more
substantially.
Money has been pulled out of almost all liquid investment classes, including gold and funnelled into
cash. Government bond prices are performing strongly as their yields fall to record lows. The US dollar,
the world’s remaining reserve currency is in high demand from cash investors seeking sanctuary, or to
repay the margin calls on leveraged investments. Despite the strategic investment from La Mancha,
Altus’ share price has not been immune to the dramatic short term sell off in equities.
The gold price started 2019 below US$1,300/oz and performed strongly through the year, supported
by continued central bank buying, finishing the year more than 20% higher at US$1,569. After the year
end gold hit a high of US$1,755 in April 2020. The GDX, an exchange-traded fund for gold miners,
performed even more strongly than gold during 2019, up 38% at 29.28, having started at 21.09, only to
lose almost 50% of that by March 2020.
Gold and other commodities are generally priced in US dollars and as such are inversely correlated to
the dollar’s strength. The recent dollar surge, compounded with market expectations for falling
economic activity, have intensified commodity price falls. ‘Doctor copper’ the bellwether for global
growth has fallen to around US$4,500/t, down 25% from the end of 2019. These are prices last seen in
the immediate aftermath of the 2008 financial crisis. As such it is not surprising that mining equities
have mirrored and, in many cases, exaggerated the falls in the wider blue-chip markets. As with the
monetary response witnessed after 2008, we are already seeing central banks seeking to shore-up and
ultimately reflate equity and other markets. Mining shares and perhaps especially gold equities, can
therefore be expected to rebound eventually. The timing and nature of the rebound is currently
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Altus Strategies Plc
unpredictable.
31 December 2019 | Annual Report
Notwithstanding the apparent resumption of industrial activity in China, the short-term effects of the
pandemic will likely result in the demand for commodities and manufactured products (cars, phones
and such) being reduced. However, it is also likely that the supply of commodities will also fall, as mines
either temporarily close, or output is reduced, to protect the health and safety of personnel and in the
event of bottle necks restricting the supply of inbound machinery components, or the export of these
commodities. Metals may therefore reach their supply / demand price equilibrium at or even above
their pre-crash levels. Companies with high quality projects and royalties should therefore continue to
be in demand.
The plethora of inflationary monetary and fiscal policies that have been announced, will if implemented
likely feed into nominally and real-term higher gold prices in the years ahead. As such the valuations
for high-quality gold mining and development companies, which have not escaped the immediate sell-
off, may rise considerably over time. Meanwhile, if the current lower energy prices are sustained by
OPEC, then copper and other metal producers which do not have significant short-term financing risks,
may well be able to sustain positive production margins.
We are now entering a period of limited but unknown duration, when the access to traditional capital
markets is likely to be at best impaired and at worst closed for many companies. This may be a prelude
to material merger and acquisition activity of projects and businesses. Those companies such as Altus,
with relatively strong balance sheets and which are least reliant on raising short term debt or equity
capital, will likely be in the ascendency, as their boards and shareholders seek to consolidate accretive
opportunities.
In my report last year, I noted that we had experienced a decade of uninterrupted economic growth.
This had been fuelled by low interest rates which, when combined with loose monetary policies, had
created significant distortions and bubbles in asset prices. The dramatic falls in stocks in the first quarter
of 2020 underscores the merits of our business model. While not immune to the recent turmoil in
markets, it has amplified the intrinsic benefits in Altus from:
-
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employing a portfolio-approach with geological, commodity and jurisdictional diversification;
being counter-cyclical, investing in exploration for new mines when the costs to do so is at its
lowest and the likely future value of discoveries is at its highest;
employing third party capital to advance multiple projects simultaneously;
generating short term income through joint venture payments and project sales;
creating potential long term income streams from project royalties; and
identifying and making accretive project, royalty and corporate acquisitions.
Strategy Implementation
Altus completed a series of exploration campaigns during the year, including soil, stream sediment,
geophysical and remote sensing programmes. This work resulted in the discovery of a number of new
gold, copper and silver prospects. Most notable was the definition of numerous drill targets at four of
our gold projects in Mali. Our exploration teams also successfully expanded the size of our copper and
silver prospects at the Agdz project in central Morocco and the copper and gold prospects at our Daro
project in northern Ethiopia.
During the year the Company relinquished the Mandoum bauxite licence in central Cameroon and was
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31 December 2019 | Annual Report
granted the Zager copper-gold licence in northern Ethiopia. Exploration conducted by our field teams,
targeting potential volcanogenic massive sulphide belts has already generated very promising results.
At the end of the period Altus had two exploration licence applications pending, both located in Côte
d’Ivoire with one for gold and one for nickel-cobalt.
Transactions
The Company successfully closed a number of project and royalty transactions in the year, including:
-
The sale of two gold projects in western Mali to TSX-V listed Desert Gold Ventures, in return for
$50,000 in cash, 3,000,000 shares of Desert Gold, the potential for future project milestone
payments and a 2.5% NSR royalty on each project.
- A joint venture with Glomin Services on two gold projects, in western and southern Mali
respectively. Under the JV Glomin has the right to earn up to an 80% initial interest in the
projects in return for US$100,000 in cash on commencement, up to US$1,450,000 in milestone
cash payments and a 2.5% NSR royalty on each project.
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The extension of our joint venture with ASX and LSE-listed Resolute Mining to May 2021, on
the Pitiangoma Est gold project in southern Mali, whereby Resolute has the option to earn a
70% interest in the project by spending US$3 million and completing a feasibility study.
The termination of our joint venture with ASX-listed Canyon Resources in return for 25,000,000
shares in Canyon (15,000,000 shares received to date) and the transfer of the joint venture
licence to Canyon for 5,000,000 further shares in Canyon and a US$1.50/ton life of mine royalty
on future bauxite production from the former joint venture licence.
- An option agreement with Firering Holdings in respect of the Company’s Ni-Co licence
application in eastern Côte d’Ivoire, whereby Firering may earn a 95% interest in the licence in
return for the payment of €15,000 and an NSR royalty linked to the price of nickel.
- An agreement with AGMEX in respect of the acquisition of a 2% NSR royalty held on the
Company’s Lakanfla project in western Mali. The transaction completed after the period.
As at the end of the period Altus had the following active joint venture and royalty interests:
Project
Counterparty
Country
Metal
Joint
Royalty
Lakanfla
Tabakorole
Pitiangoma Est
Ndablama
Glomin Services
Mali
Glomin Services
Resolute Mining (1)
Mali
Avesoro Resources (2) Mali
Mali
Sebessounkoto Sud Desert Gold
Djelimangara
Toura
Birsok
Notes:
Desert Gold
Firering Holdings (3)
Canyon Resources (4)
Mali
Mali
Gold
Gold
Gold
Gold
Gold
Gold
Venture
Active
Active
Active
2.5% NSR
2.5% NSR
2.0% NSR
Project sold
2.5% NPI
Project sold
2.5% NSR
Project sold
2.5% NSR
Côte d’Ivoire Nickel
Option stage 1.0% NSR
Cameroon
Bauxite
Vended-in
US$1.50/t
1 Altus retains an option to convert its project interest into the NSR royalty
2 Net Profit Interest royalty is on the southern portion of the Ndablama gold project
3 Royalty is up to 1.0% of gross revenue from the project, net of transport costs
4 Subject to the transfer of the Birsok licence to Canyon, NSR royalty is conditional upon the
award of a mining licence to Canyon on their adjacent Minim Martap bauxite project
During 2019 we elected to discontinue our discussions with Raptor Resources in respect of the
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31 December 2019 | Annual Report
Company’s portfolio of projects in Morocco and with Corben Resources in respect of the Company’s
gold projects in northern Cameroon and western Liberia.
Funding
The Company’s Ordinary Shares are listed on the AIM market (AIM: ALS) of the London Stock Exchange
in the UK and the TSX Venture Exchange (TSX-V: ALTS) in Canada. Our dual listing provides the Company
with enhanced exposure to current as well as potential investors and counterparties for project
transactions.
Market sentiment
Market conditions remained challenging through 2019 for the majority of junior resource companies
seeking to raise capital. However, the enthusiasm for and prices of companies active in the cannabis
sector also started to wane, in a similar fashion to that of cryptocurrencies the year before. The
emergence and dominance of these two sectors only served to starve the junior resource sector from
critically important speculative investment capital. The most agile resource companies such as Altus,
have adapted their strategies in order to source patient capital, including strategic partnerships with
larger mining companies, private equity funds or specialist investors.
Notwithstanding the market backdrop, the shares of Altus performed strongly during the year, rising
from a low in January of 14p to 31p as at 31 December (stated on a post-consolidation basis, following
the consolidation of Altus’ shares on a five old into one new Ordinary Share, effective 21 February 2020).
This performance reflects the substantial disconnect which had emerged between the value of our assets
and their price in the market, the significant positive news flow during the year which included a number
of discoveries, joint ventures, project transactions and the announcement of our strategic investment
agreement with La Mancha as discussed in more detail below.
Non-Brokered Private Placement
On 20 December 2019, the Company announced a conditional non-brokered private placement of
9,265,760 (post-consolidation) new Ordinary Shares at a price of C$0.45 / £0.26 per share (post-
consolidation) raising approximately £2.40 million / C$4.16 million before expenses. A number of
directors participated in the placement, subscribing for a total of 1,455,248 new Ordinary Shares (post-
consolidation) with an aggregate value of £0.38 million / C$0.65 million. The first tranche of the
placement closed on 20 December 2019 and the second and final tranche closed on 27 January 2020
as detailed below. We were delighted with the participation in the placement by existing shareholders,
as well as a number of new investors. One of our new shareholders is Delphi Unternehmensberatung
AG (“Delphi”) a family office investment fund based in Heidelberg, Germany. Following the placement
and the investment by La Mancha, Delphi holds a 9.99% interest in the Company.
La Mancha Strategic Investment
On 04 December 2019, the Company entered into a Strategic Investment Agreement with La Mancha,
whereby subject to shareholder and regulatory approval La Mancha would subscribe for 24,845,878 new
Ordinary Shares (post-consolidation) at a price of C$0.45 per share for aggregate gross proceeds of
C$11,180,645 / (£6,459,928 at the time) before expenses. A General Meeting of the Company’s
shareholders was held on 18 February 2020 in respect of the proposed investment by La Mancha and
all resolutions were duly passed, as described in ‘Subsequent Events’ below.
La Mancha is a pre-eminent Africa-focused mining investment group, which has a notable track record
in deal selection and value creation. The group is the wholly-owned mining investment vehicle of the
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31 December 2019 | Annual Report
Sawiris family and as at 31 December 2019 had strategic investments in three publicly traded mining
companies: a 29.9% holding in Endeavour Mining Corp. [TSX: EDV], a 30.2% holding in Golden Star
Resources Ltd. [TSX: GSC and NYSE: GSS] and a 6.64% holding in Evolution Mining Ltd [ASX: EVN]. These
three companies have operations in Africa and Australia with aggregate production in excess of 1.7
million gold equivalent ounces per year.
La Mancha’s strategic investment in Altus is its first external investment into the listed mineral
exploration sector. The Directors believe the investment not only represents a strong industry
endorsement of the Altus team, portfolio and business model but that it will prove transformative for
Altus, providing the capital and expertise to fast track the Company’s project and royalty generation
activities, as well as unlocking new external growth opportunities.
Specifically, the transaction benefits the Company by providing:
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additional capital to allow Altus to grow its portfolio of projects and royalties across Africa, as
well as advance its existing projects further and faster than would otherwise have been possible;
access to potential new project and corporate opportunities, introduced either directly or
indirectly through La Mancha’s significant network in Africa and the resource sector more
broadly;
a robust balance sheet, as compared to our peer group, during an optimal period in the mining
cycle, which will strengthen the Company’s position when negotiating accretive acquisition
opportunities;
the appointment of up to two La Mancha directors to Altus’ board, the first being Karim Nasr
which occurred on 06 April 2020, which will bring additional operating and technical expertise
within the mining sector and in Africa; and
- wider market recognition of the Company, its capabilities and ambitious growth plans which
may attract further investors to the Company’s equity and potential partners for its projects.
La Mancha’s investment has resulted in it owning a 35.45% share of the Company (as at 09 April 2020
– see Director’s Report, page 43), and was subject to a waiver by the UK Panel on Takeovers and Mergers
under Rule 9 of the City Code on Takeovers and Mergers in respect of the obligation of La Mancha to
make a mandatory offer for the Company. La Mancha entered into a relationship agreement with the
Company and its nominated advisor, SP Angel Corporate Finance LLP, which included provisions to
maintain the operating independence of the Company, for any transactions between La Mancha and
the Company to be conducted on an arm’s length basis, and for the Company to continue operating
under its existing corporate governance regime. La Mancha will retain the right to appoint one director
to the Board of the Company as long as it holds a 15% interest in the Company, and two directors while
its interest is at least 25%.
Director shareholdings
Further to the non-brokered private placement and investment by La Mancha, the board of Altus has
an aggregate beneficial shareholding in the Company of 14,223,454 Ordinary Shares (post
consolidation), representing 20.29% of the current issued share capital. The directors’ shareholdings and
their participation in the most recent private placement underscores the strong alignment of interests
between the Company’s board and shareholders.
As has been the case in previous years, in order to preserve cash for operating expenditures, a number
of directors elected to defer receipt of their fees, salaries and where applicable, pension contributions
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Altus Strategies Plc
31 December 2019 | Annual Report
during the year. While these accruals were settled during, or shortly after the period, it is notable that
the majority of the amounts paid to the directors were re-invested by those directors back into Altus
through the private placement.
Altus Concert Party
There have been no changes in the constitution of those shareholders who may be deemed to be acting
in concert (the “Concert Party”), as defined by the Takeover Panel of the London Stock Exchange. The
Concert Party consists of Steven Poulton, Susannah Poulton, Matthew Grainger, Anna Grainger, David
Netherway and Diane Rissik. These parties in aggregate hold interests in 10,092,038 Ordinary Shares in
the Company (post-consolidation), equivalent to 14.40%. of the Company's issued and voting share
capital. These individuals do not currently 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% of the Company's
issued and voting share capital without incurring an obligation under Rule 9 of the Takeover Code.
Outlook
Last year I reported on a significant increase in the number of JV and investor enquiries received by the
Company, with the majority emanating from Canada and Australia. These resulted in a number of
successful joint ventures and other transactions during the year. I am pleased to report that the level of
interest has only accelerated, despite COVID-19, which bodes well for the Company’s potential further
deal flow in 2020.
Our key objectives for 2020 are to:
- Continue to grow the number of projects in our portfolio.
- Advance the exploration work programmes across our existing portfolio of licences.
- Complete a number of royalty-based joint venture and other transactions on our existing assets.
-
Identify potential project, royalty and corporate acquisition opportunities and where possible
conclude accretive transactions on these.
Our long-term objective is to generate significant positive cashflow for shareholders from a diversified
portfolio of high-quality royalties, project sales and joint ventures.
In the last year we have built on our track-record of making and monetising discoveries in Africa.
Following these transactions, the private placement and the strategic investment from La Mancha, Altus
has established an incredibly robust foundation from which to accelerate the growth and value of the
business.
We are in such a strong position largely due to the vision, energy and professionalism of each member
of our entrepreneurial team and I take this opportunity to thank them for their collective endeavours. I
also take this opportunity on behalf of the Board to thank our new and existing shareholders for their
continued support.
“Steven Poulton”
Steven Poulton
Chief Executive Officer
28 April 2020
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Altus Strategies Plc
Strategic Report
31 December 2019 | Annual Report
Key Performance Indicators
The Board use a mixture of financial and non-financial KPIs to help monitor the performance of Altus’
group of companies (the “Group”). The Group is at a pre-revenue stage of development, which means
that the main financial KPIs relate to the management of cash and expenditure.
Cash balance
31 December 2019
£2,212,642
31 December 2018
£724,785
The Group’s cash balance increased by £1.5 million as it raised £2.4 million (C$4.1 million) in December
2019, through the placement of 46,328,802 new Ordinary Shares at £0.052 (C$0.09) per share. The
placement closed in two tranches with 32,328,802 Ordinary Shares issued and admitted to trading on
AIM on 23 December 2019 and 14,000,000 Ordinary Shares issued and admitted to trading on AIM on
29 January 2020. After the year end, in February 2020 the Group raised a further £6.5 million (C$11.2
million) through a strategic investment by La Mancha Holdings S.à r.l with 124,229,389 new Ordinary
Shares issued and admitted to trading on AIM on 24 February 2020. During the six-month period prior
to the fundraise, the Group sought to preserve its cash balance by focusing expenditure on its most
prospective projects as well as pursuing potential joint venture and project sale transactions across its
portfolio. The Group’s cash on hand is sufficient to fund all projected expenditure for a minimum of 24
months.
Portfolio size – projects in which Altus holds an interest
Royalties / under JV
Projects
Applications
31 December 2019
31 December 2018
8 (4)
3 (2)
16
17
2
3
The size of the Group’s portfolio reflects the scale and diversification of the Group’s project interests.
Altus selectively acquires mineral exploration licences and generates and advances projects through the
work of its technical team of exploration geologists. Any projects that prove to be uneconomic are
dropped, and successful projects progress to advanced exploration with JV partners and eventually the
definition and monetisation of the underlying asset. Altus reduces its ownership throughout this
process, but typically retains a royalty interest on each of the project’s future cash generation.
Altus capitalises the cost of its exploration licence renewals. As a number of these licences are renewed
on a typical two-yearly cycle, particularly in Mali, not all of these costs were incurred during 2019. The
Company was granted the Zager exploration licence in northern Ethiopia during the year and the
Mandoum exploration licence in Cameroon expired during 2019. The KPI, capitalisation of expenditure
costs, has not been recorded for 2019 as it was considered to be closely associated to the portfolio size
and had an immaterial impact on the balance sheet.
Single largest exposure by geography and mineral
31 December 2019
31 December 2018
By Geography
Mali - 29%
Mali - 33%
By Mineral
Gold – 57%
Gold – 56%
Risk diversification is at the heart of the Company’s philosophy, and this is enacted by exploring for a
variety of minerals at multiple locations across several jurisdictions. The single largest exposure figures
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Altus Strategies Plc
31 December 2019 | Annual Report
are an indication of the level of diversification of risk within the Group’s portfolio. As well as Mali, the
Group has interests in Ethiopia, Cameroon, Morocco, Côte d’Ivoire and, until relinquished after the
period, Liberia. The Group continually assesses potential licence applications and project acquisitions in
new jurisdictions. Aside from gold, Altus is focusing on metals that it believes will be critical in the
increasingly decarbonised electricity industry, particularly copper. The Group also has interests in nickel,
zinc and bauxite projects.
Exploration costs and Administrative expenses
2019
2018
Exploration costs
Administrative expenses
60%
63%
40%
37%
The Group focuses on deploying its cash on activities that are likely to maximise the value to
shareholders while maintaining a strict control on administrative overheads.
Exploration costs includes African-employed geologists, on site costs, assays and analysis and
exploration support costs in Africa. In 2019 UK geologists’ salaries, and an allocation of UK management
time and UK exploration support costs are also included. Under this measurement the percentage of
Exploration costs for 2018 has been re-stated from 34% to 63%. Using the adjusted method shows
Exploration costs as a proportion of total operating costs to be in line with the previous year. This reflects
the maintenance of the portfolio size, no changes to the size of the team and control of non-exploration
spending. There was an overall increase in Administrative expenses reflecting a first full year of costs as
a dual listed company on the UK’s AIM and Canada’s TSX-V.
Principal Risks and Uncertainties
Risk description and impact
Risk management strategy
The Group’s projects may not contain
Risk is diversified by holding a portfolio of
economically recoverable volumes of minerals or
projects. At every stage of the exploration
metals, due to insufficient quality or quantity.
process, projects are rigorously reviewed, both
Delays in the construction and commissioning of
consultants, to determine if the results justify
mining projects or other technical difficulties
the next stage of exploration expenditure.
may make the deposits unattractive to exploit.
internally and by qualified third-party
Exploration activities, particularly more advanced
The Group aims to comply with provisions of
activities such as drilling, carry a risk of local
PDAC’s E3+ guidance on responsible
environmental damage or other issues, such as
exploration as applicable. It maintains its own
fuel spills, contamination of water courses, dust
Environmental Management Plan, which is
creation and damage to agricultural land or wild
regularly reviewed, and publicised to site-based
flora and fauna.
employees. This contains a set of actions for
each project based on a policy of Avoid,
Mitigate, Remedy.
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Altus Strategies Plc
31 December 2019 | Annual Report
Risk description and impact
Risk management strategy
Exploration activity exposes the Group’s
The Group keeps the wellbeing of its employees
employees to additional health and safety risks,
as the highest of its priorities. Employees must
such as accessing sites, use of equipment, and
be up to date with all recommended
exposure to extreme weather or other
vaccinations, FCO travel advice is followed at all
environmental hazards.
times, and regular first aid and other
operational training is provided.
The outbreak of Covid-19 could pose a serious
The threat of global health epidemics such as
threat to the health of the Group’s employees.
Covid-19 is managed by a range of measures
including a cessation of international travel,
enabling all employees to reach their home
countries, increased working from home where
possible, and following public health advice.
An extended period of restrictions on movement
Due to the portfolio nature of the Group’s
could disrupt exploration activity on the Group’s
business, some projects are at a stage of
projects.
development that requires office-based work
such as remote sensing and historical data
analysis. At times of restricted movement
employees can be allocated to such projects to
maintain momentum on the development of
the portfolio and to minimise redundancy or
underemployment.
A reduction in global demand for gold, copper
Altus has adopted a counter-cyclical business
or other metals could lead to a significant fall in
model which seeks to grow fastest during
the value of the Group’s exploration assets and
economic downturns. It has structured itself as
the cash flow from any production, or even result
a Company that can run extremely lean
in the abandonment of a project should it prove
operations to undertake early-stage
uneconomical to develop. Similarly, commodity
exploration. The Company does not expose
prices could fall in reaction to changes in
itself to significant long-term liabilities or
international economic trends, impacting the
spending commitments, and works with funded
revenue generated by projects in which the
JV partners for the advanced stages of
Group holds an interest. This may have a
exploration.
material adverse impact on the operating results
and financial condition of the Group.
The successful exploration and development of
The Group intends to secure capital by bringing
natural resources on any project will require
in joint venture partnerships including
significant capital investment.
established mining groups and investors, and
through the issue of additional equity capital in
The Group may not be successful in procuring
the Company. This strategy is evidenced
the requisite funds on terms which are
through Altus’ joint venture agreement with
acceptable to it (or at all) and, if such funding is
Resolute Mining, a mid-tier gold producer
unavailable, the Group may be required to
which is listed on the ASX as well as its joint
reduce its level of exploration activity and divest
venture with Glomin Services, and the presence
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Altus Strategies Plc
31 December 2019 | Annual Report
Risk description and impact
Risk management strategy
or relinquish its assets.
of a number of leading natural resources sector
investors on the Company’s share register.
The exploration licences and operations of the
The Group makes every effort to ensure it has
Group are in jurisdictions outside the United
robust commercial agreements covering its
Kingdom, which subjects the Group to political
activities. It maintains comprehensive
risk. Adverse impacts could include the
documentation covering its licence assets and
withdrawal or suspension of licences, and
the board and management oversee the good
cancellation or onerous changes to permits or
standing of these assets.
regulatory consents.
The Group is dependent upon a small executive
The Remuneration Committee reviews the
team and other key personnel. The loss of these
Company’s compensation package annually to
employees or the inability to attract additional
ensure that it remains competitive (see
qualified personnel as the Group grows restrict
Directors’ remuneration report, pages 47-51).
the ability of the Group to manage an expanded
The Company maintains strong links with
portfolio of projects.
industry bodies and training establishments to
ensure access to a wide pool of talent.
As a UK-based junior mining project and royalty
In the last three years Altus has listed on both
generator, Altus could struggle to attract JV
the AIM in the UK and the TSX-V in Canada,
partners to advance its projects to mine-
building a shareholder base and an industry
readiness, and to create a long-term revenue
reputation. Potential partners are engaged in
stream.
these markets and elsewhere, including the ASX
market in Australia. Altus actively markets its
portfolio through news releases and its website,
and networks with investors and partners at
conferences and industry events.
Brexit – failure of the UK and EU to agree a trade
Altus does not expect to have any significant
deal.
exposure to the European market in the short
and medium terms. Any Brexit issues are
considered to have limited effect on the
Company’s African operations.
Financial risks
Material financial risks are listed below. Financial
risks are also discussed in Note 24.
It will take some time for revenue streams from
The Group aims to maximise the opportunities
active mines to positively impact Altus’ cashflow,
for converting projects into revenue-generating
and until then, the Group will be reliant on
assets by advancing the exploration of its
funding from shareholders.
licences and actively marketing them to
potential partners, whist at the same time
maintaining a disciplined attitude to
expenditure and preserving its cash. The Group
also seeks joint ventures on its projects with
third parties, which can reduce the Group’s
reliance on shareholder funding.
Page | 20
Altus Strategies Plc
31 December 2019 | Annual Report
Risk description and impact
Risk management strategy
The Group’s shareholder financing is
When funds are received a cashflow forecast is
denominated in pounds sterling and Canadian
prepared by currency to identify the anticipated
dollars. Its exploration expense is incurred in US
currency transactions that will be required over
dollars and a range of African currencies.
the period that the funds are expected to be
used. FX transactions are undertaken at the
earliest opportunity to minimise currency risk.
Corporate and Social Responsibility
The Board of Directors of Altus is committed to the consideration of all stakeholders in its decision-
making process and to the respectful treatment of stakeholders in the conduct of the Group’s business.
In addition, the directors are conscious of the obligations imposed by section 172 of the Companies Act
2006, their response to which is set out in the following paragraphs.
Sustainability and environmental protection
Altus is committed to conducting its business operations in a sustainable manner and strives
continuously to limit the impact of its activities on the natural environment and on the local communities
in the regions where it has operations. Altus is a mineral explorer and royalty business, not a mining
company, therefore, the environmental impact directly associated with its activities is minimal. To ensure
proper environmental stewardship on its projects, Altus ensures that all areas it explores are properly
maintained, conserved and rehabilitated.
A central tenet of the Group’s policy is the Environmental Management Plan (EMP), which guides the
Group’s on-site activities from the planning stage through on-site operation to the return of sites to
local communities once the Group’s activity has finished.
Many of the areas of operation are regions of subsistence farming, and Altus and its employees are
aware that the impact of operations may not be limited to nuisance or upset, but could have a serious
impact on the livelihoods of local people. As a result, the Group operates a number of policies to prevent
problems and to remediate those that cannot be avoided. Where arable or grazing land is affected,
rates of compensation are agreed with the local authorities before any invasive activity begins. Meetings
are held with local stakeholder groups to explain the project, to listen to local concerns and to mitigate
any potential problems. At the other end of the project cycle, once activities have ceased, the Group
arranges for replanting of crops or the promotion of flora re-growth, and returns to monitor progress
after six months.
Community engagement
Altus is mindful that it has the capacity to have a positive impact in its areas of operation, many of which
are remote and offer little alternative opportunity to local people. It employs a range of local people
from trained geologists to administrative support and drivers. At the end of 2019 it employed 17 people
in five African countries (2018: 14 people in five countries). To some of the local people in the more
rural sites, Altus offers the opportunity to get involved in the exploration activity and to gain transferable
skills such as operating geotechnical equipment. Altus has also assisted geology students from the
University at Mekele in Ethiopia to visit its exploration sites.
Human rights
Altus is committed to best-practice in socially and morally responsible exploration and in the
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Altus Strategies Plc
31 December 2019 | Annual Report
development of mineral resources for the benefit of all stakeholders. The activities of the Group are in
line with applicable laws on human rights.
Health & Safety
Altus takes the health and wellbeing of its employees extremely seriously and works continuously to
minimise the hazards encountered. A comprehensive health and safety programme is maintained
incorporating official guidelines, industry best practice, lessons from previous incidents and employee
suggestions.
There were no road traffic accidents in 2019 affecting the Group although there was one in each of the
two preceding years, both involving third party drivers and vehicles. While Altus could not have
prevented these accidents, they starkly reiterated the importance of high safety standards. Altus
continues to review all of its standards regularly and to stringently vet its suppliers and service providers.
Employees
Altus understands that its team is central to its future development and success. The aim of the Group
is to create an environment that will attract and retain staff, and motivate employees to maximise their
potential. The Company provides a fair remuneration package, and gives due consideration to requests
for flexible working arrangements. It aims to give employees exposure to wider aspects of the
Company’s operations. The Group promotes a culture of openness among its employees and welcomes
their input into the good running of its operations.
Altus has a long track record in recruiting and training promising geologists. Each year the Group
typically offers at least one MSc level project thesis to students of geology or mining geology in the UK.
The Group is also proud to provide internships for recent graduates, allowing them to gain flexible work
experience and if available the opportunity for a full-time role with the Group.
The Group welcomes diversity within its workforce and does not discriminate against its employees,
workers or job applicants on the grounds of age, gender, ethnicity, disability, nationality, race, religious
beliefs, or sexual orientation.
Page | 22
Altus Strategies Plc
Financial Review
Income
31 December 2019 | Annual Report
Income from recharging costs to JV partners reduced from £90,000 to £60,000 mainly due to the
reduction in recharges related to the JV arrangement with Canyon Resources Ltd on the Birsok licence
in central Cameroon.
Expenses
Exploration costs increased from £631,000 to £1,101,000 (see note 6), however this reflected a change
in methodology for the allocation of costs between Exploration and Administration, including UK-
employed geologists, UK technical management time and UK exploration support, which, had the same
method been applied in the comparative year would have resulted in Exploration costs of £1,152,000.
This reflects a consistency in operations from 2018 to 2019, in which the team size was maintained and
the level of on-site activity was similar across the portfolio of projects.
The Group’s cash resources were deployed across its portfolio in 2019 with four countries recording
Exploration costs of between £200,000 and £300,000; these were Mali, Ethiopia, Cameroon and
Morocco. Mali became the area of greatest spend in 2019 at £269,000, compared to a greatest spend
in 2018 of £146,000 in Cameroon. The Group had six projects in Mali for most of the year until two were
sold to TSX-V listed Desert Gold Ventures Inc. under a milestone-and-royalty based agreement in
October 2019. The six projects in Mali were acquired in January 2018 as part of the Plan of Arrangement
with Legend Gold Corp. (“Legend”).
Administrative expenses in the Income Statement reduced from £1,221,000 to £785,000 in 2019 (see
note 7), although as mentioned above, this reflected a change in allocation methodology, which, had it
been applied in the comparative period would have resulted in Administrative expenses of £700,000.
This rise in like-for-like expenses from £700,000 to £785,000 was mainly due to the effects of foreign
exchange revaluations of the Group’s bank accounts, the payment of staff bonuses in 2019 (none were
paid in 2018), and the timing of costs for audit fees. In addition, a single licence was impaired in 2019
valued at £39,000, compared to a single licence impairment of £20,000 in 2018. There was a reduction
in the use of outside consultants, resulting in a reduction of £29,000.
Staff costs increased from £746,000 to £856,000. Underlying salaries were consistent with the
comparative year and bonuses for 2019 were £86,875 compared to £2,000 in 2018. Also recorded in
2019 was a bonus figure for 2017 of £43,125 which had been deferred and not paid at the request of
the recipients. All of the directors apart from Michael Winn, who was required to remain independent,
participated in the private placement undertaken by the Company in December 2019. The directors
subscribed for a total of 6,774,263 new shares (pre-consolidation) at a price of £0.052 / C$0.09 per share
with an aggregate value of £0.35 million / C$0.61 million.
The category of Listing and acquisition related costs was expanded for 2019 to include legal, regulatory
and other such costs relating to joint venture and other corporate deals. This change contributed to an
increase in such costs from £19,000 to £89,000, and included costs expensed through the Income
Statement relating to the strategic investment in the Group by La Mancha Holdings S.à r.l., as well as
residual costs relating to the Plan of Arrangement with Legend from 2018.
Other income and costs included a loss recorded on the sale of the Company’s 100% holding in Legend
Gold Mali Holdings (BVI) Inc. and its Djelimangara and Sebessounkoto Sud licences in Mali, held through
Page | 23
Altus Strategies Plc
31 December 2019 | Annual Report
its wholly owned local subsidiary. This recognised no income in respect of future milestone or royalty
payments (see note 12) and a fair value loss on the group’s investments in Canyon Resources Ltd and
Desert Gold Ventures Inc. (acquired in October 2019) of £85,000 (2018: £282,000 gain). The Group
submitted a claim for an R&D tax credit in the UK of £129,031 through its subsidiary Altus Exploration
Management Limited for the 2017 tax year. The claim was settled in full by HMRC in February 2020.
The table below shows local costs in each location of the Group’s operations. Details of expenditure are
included in notes 5 to 14 to the Financial Statements.
£'000
Geologists
Executive
Non-exec
Admin
Consultants
Site costs
Travel
Office
Legal & prof.
Listing/deals
Other
UK
213
397
80
130
9
0
46
46
156
89
194
1,359
Assets and cash
Canada Cameroon Ethiopia
33
-
-
26
4
3
13
5
38
-
11
134
32
-
-
20
1
24
38
3
6
-
31
156
-
-
-
-
-
-
-
-
68
-
-
68
Ivory Coast Liberia Mali Morocco Total
375
397
80
240
24
36
118
70
290
89
256
1,975
39
-
-
37
0
8
18
14
3
-
5
123
36
-
-
1
7
(0)
0
0
0
-
6
51
0
-
-
0
0
0
0
0
15
-
1
15
22
-
-
26
2
2
2
2
4
-
7
68
The net assets of the Group reduced from £5,266,000 to £4,530,000, which included a drop in non-
current assets from £4,964,000 to £3,588,000 while net current assets increased from £302,000 to
£1,008,000. The drop in non-current assets was due to the sale of two of the Group’s Mali gold licences,
which had a brought forward value of £794,000, the impairment of the Mandoum bauxite licence asset
in Cameroon valued at £39,000, the sale of part of the Group’s investment in Canyon Resources Ltd
worth £674,000, and a fair value loss on the investments in Canyon Resources Ltd and in Desert Gold
Ventures Inc. of £85,000. In current assets, trade and other receivables increased from £79,000 to
£196,000 due to the outstanding R&D tax credit at the end of the year.
The Group’s cash balance increased from £725,000 to £2,213,000. This reflected the timing of the private
placements. The Group raised £2.3 million in April 2018 and £2.4 million in December 2019. The 2019
fundraise was a non-brokered private placement of 46,328,802 Ordinary Shares (pre-consolidation) at
an issue price of £0.052 (C$0.09) per share with existing and new institutional and private investors. Part
of the fundraise was subject to additional regulatory approval in respect of one of the investors, which
meant that it was recorded as a current liability rather than as share capital until approval was received
in January 2020.
After the year end, on 18 February 2020, a General Meeting of the Company’s shareholders was held
which approved a strategic investment by La Mancha Holdings S.à r.l. This investment concluded on 21
February 2020 and raised £6.5 million (C$11.2 million) before expenses through the issuance of
124,229,389 new Ordinary Shares (pre-consolidation) at an issue price of £0.052 (C$0.09) per share.
Subsequent to their investment La Mancha holds 35.45% of the issued share capital of the Company.
Based on the spending profile of 2019 and a two-year budget broadly covering 2020 and 2021 the cash
balance at the end of the year will be sufficient to fund operations for the whole of 2020. The Group will
continue to manage its cash resources carefully while making the best use of new funds to advance the
Group’s existing portfolio and to take advantage of new opportunities.
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Altus Strategies Plc
31 December 2019 | Annual Report
Review of Operations by Country
Projects held by the Group or operating under joint ventures
Mali Operations
At the end of the period Altus held four projects in Mali. The projects are held through the Company’s
100% owned subsidiary, LGN Holdings (BVI) Inc., which became part of the Group in January 2018
through a plan of arrangement with Legend. Two of the projects (Diba and Lakanfla) are located in the
Kayes region of western Mali, approximately 450km northwest of the capital city of Bamako while two
others (Tabakorole and Pitiangoma Est) are located in southern Mali, approximately 280km and 300km
southeast respectively of Bamako.
The Company previously held six projects in Mali. However, this has reduced to four following the
successful completion of a royalty and property sale transaction with TSX-V listed Desert Gold Ventures
Inc. The transaction was completed 31 October 2019 on the contiguous Djelimangara and
Sebessounkoto Sud projects in return for US$50,000 in cash, 3 million shares in Desert Gold, with a value
at that time of £213,000 (C$360,000), and a 2.5% NSR on each project (see below for Projects in which
the Group holds a royalty interest).
Korali Sud (Diba) Gold Project (83.1 km2), Western Mali
Korali Sud (“Diba”) is located 13km southwest of the Sadiola gold mine, which is operated by AngloGold
Ashanti (JSE: ANG, NYSE: AU, ASX: AGG), IAMGOLD (TSX: IMG, NYSE: IAG) and the Malian government.
Both Sadiola and Korali Sud are situated on the Senegal-Malian shear corridor within the world
renowned ‘Kenieba window’.
Korali Sud hosts the Diba historical resource (see Table 1 below), as prepared for Legend by AMEC
Americas Limited (“Technical Report and Mineral Resource Estimate Diba Badiazila Gold Property Mali,
West Africa”, 30 June 2013) and filed on SEDAR by Legend on 20 September 2013. A Qualified Person
has not done sufficient work to classify this historical estimate as current mineral resources and Altus is
not, therefore, treating this historical estimate as a current mineral resource. However, it remains
relevant to the Project and Altus believes it is also reliable. To verify this historical estimate so that the
resource can be considered current, Altus would be required to contract a qualified and independent
consultant to review historical drilling data and prepare a resource estimate in accordance with current
resource methodology. The resource comprises stacked lenses which dip approximately 35-40 degrees
ESE within the oxide zone.
Table 1: Diba project historical mineral resource
Category
Tonnes (t) Grade (g/t Au) Metal (oz Au)
Indicated
6,348,000
Inferred
720,000
1.35
1.40
275,200
32,500
Notes: Applying a 0.5g/t cut-off grade and a US$1,200/oz gold price as reported in the 2013 technical
report.
Historical drill results from the Diba prospect (unverified by the Group) include 12m at 20.66 g/t Au and
32m at 2.06 g/t Au. Diba has a potentially low mining strip ratio with relatively limited overburden and
a high proportion of the potential mineralisation is in the oxide zone. Deeper drilling at Diba targeting
the sulphide zone has intersected 1.32 g/t Au over 45m (from 93m). The sulphide zone remains open at
Page | 25
Altus Strategies Plc
depth.
31 December 2019 | Annual Report
Oxide gold mineralisation at Diba is mainly found in saprolite that is within 50m of the surface, across a
compact 1,200m² area that has been drilled to date. The deposit is controlled by a number of structures,
with gold occurring as fine-grained disseminations and localised high-grade calcite-quartz veinlets.
During the period, the Company completed a detailed review and reinterpretation of historical data and
two programmes of systematic termite mound sampling. Three drill targets have been defined within
the licence area from these programmes: Diba NW, a 2.6km2 soil anomaly which is immediately along
strike and northwest of the current historic Diba resource, Diba East, approximately 2km2 in size and
located immediately to the east of the historic Diba resource and Diba SW, located approximately 0.5km
and along strike of the Diba historical resource. Diba SW is defined by a discontinuous 1.2km long gold
in termite soil anomaly along the flanks of a ferricrete capped ridge and is also coincident with a VTEM
geophysical anomaly.
Based on the discovery of Diba SW, the Company undertook a reinterpretation of the historical
geochemical, geophysical and topographical data proximal to the historic Diba resource which has
successfully defined at least three further potential prospects, increasing the total number of new
prospects at Diba to six. Given the number and potential scale of these prospects, Altus believes the
opportunity to increase the size of the historic resource at Diba is considerable.
The Company has prepared a phase one exploration programme for Diba, which incorporates an initial
5,000m of drilling and while intending to undertake this work it is also open to a joint venture partner
should satisfactory terms be available.
Lakanfla Gold Project (24 km2), Western Mali
Lakanfla is located 5km east of Korali Sud and 6.5km from (and considered to be geologically analogous
to) the karst-type FE3 and FE4 open pits that form part of the Sadiola gold mine. It is also considered
to be geologically analogous to the Yatela karst-type gold deposit, which was mined between 2001 and
2015, located 35km to the northwest. Nevertheless, mineralization hosted on these properties is not
necessarily indicative of mineralization hosted at Lakanfla.
The project hosts a significant number of active and historical artisanal gold workings coincident with
major geochemical and gravity anomalies surrounding a granodiorite intrusion. Historical drilling
(unverified by the Group) has returned encouraging intersections including 9.78 g/t Au over 12m and
5.20 g/t Au over 16m. Historical drilling targeted breccia mineralisation of the granodiorite, and
intersected low-grade gold mineralisation in limestones, voids and loose sands at depth, features which
are indicative of a karst. The presence of a low gravity geophysical anomaly and corresponding surface
slumps features are also considered to be significant indicators. The karst targets remain to be drill
tested.
On 2 December 2019, the Company signed a Joint Venture Agreement with Glomin Services Ltd
(“Glomin JVA”) on the Lakanfla project and the Tabakorole project. Tabakorole is located in south-
eastern Mali. Under the terms of the joint venture. Altus will receive up to US$1.45 million in milestone
cash payments and will retain a 2.5% NSR royalty on each project. The Glomin JVA will involve an initial
3,500m drilling programme at Lakanfla.
Tabakorole Gold Project (100 km2), Southern Mali
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Tabakorole is located 280km south of the capital city of Bamako and sits on the Massagui Belt, which
hosts the Morila gold mine operated by Barrick. Exploration to date has identified a 2.7km long shear
zone which is up to 200m wide and hosts a historical mineral resource, see table 2 below. The resource
was prepared by H. Andrew Daniels, Consulting Geologist, P.Geo in a report entitled “Technical Report
on the Mineral Resource Update, June 2007 FT Project Mali, West Africa”, dated July 27, 2007 and filed
on SEDAR on July 27, 2007 by North Atlantic Resources Ltd. A Qualified Person has not done sufficient
work to classify this historical estimate as current mineral resources and Altus is not, therefore, treating
this historical estimate as a current mineral resource. However, it remains relevant to the Project and
Altus believes it is also reliable. To verify this historical estimate so that the resource can be considered
current, Altus would be required to contract a qualified and independent consultant to review historical
drilling data and prepare a resource estimate in accordance with current resource methodology.
Historical drilling (unverified by the Group) has returned encouraging intersections including 16m at
9.31 g/t Au, 14m at 9.84 g/t Au and 60m at 2.91 g/t Au.
Table 2: Tabakorole project historical mineral resource
Category
Oxide
Sulphide
Tonnes (t)
Grade (g/t Au) Metal (Oz Au)
Indicated
Inferred
Indicated
Inferred
1,040,000
960,000
6,840,000
9,590,000
1.01
1.114
0.94
1.03
34,000
35,000
207,000
318,000
On 2 December 2019 the Company signed the Glomin JVA on Tabakorole (see Lakanfla above). The
Glomin JVA will involve an initial 1,500m drilling programme, a 520 line km ground geophysical survey
and a 2,000 sample soil sampling programme at Tabakorole.
Following the period end the Company announced that it had commenced an air core drilling
programme and a ground magnetics geophysical survey at Tabakorole under the Glomin JVA.
Pitiangoma Est Gold Project (106 km2), Southern Mali
Pitiangoma Est is located 300km southeast of the capital city of Bamako. The licence is subject to a joint
venture with ASX-listed Resolute Mining Limited and is located on the Syama shear zone, 15km from
the Tabakoroni gold deposit and 40km from the Syama gold mine (both owned by ASX listed Resolute
Mining Ltd). Resolute can earn up to a 70% interest in the project by funding US$3million in exploration
and completing a feasibility study. Thereafter Altus may elect to co-fund its 30% interest on a pro rata
basis, or exchange its interest for a 2% NSR royalty.
Prior to the JV with Resolute, exploration at Pitiangoma Est included regolith sampling (6,930 soil and
1,230 auger samples), lithological mapping, airborne VTEM geophysics, BLEG stream sediment sampling
and RC drilling (2,160m) as well as diamond drilling (6,450m). These work programmes were completed
by Endeavour Mining Corporation which held the project prior to it being acquired by Legend. Since
the commencement of the joint venture, Resolute has reportedly completed a gradient array IP survey,
329 air core drill holes for a total of 14,193m and seven RC drill holes for a total of 708m.
On 8 May 2019 the Company announced that it had signed a two-year extension to the joint venture
with Resolute until May 2021. At the time of writing the Company is awaiting results from the most
recent field exploration programme.
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Cameroon Operations
Altus holds three projects in Cameroon including the Laboum gold project, held through the Company’s
99% owned subsidiary, Auramin Ltd, the Birsok bauxite project and the Bikoula & Ndjele iron ore project
each of which are held though the Company’s 97.3% owned subsidiary, Aluvance Ltd.
Laboum Gold Project (189 km2), Northern Cameroon
Laboum is located 600km northeast of the capital city of Yaoundé. The licence hosts a major Pan-African
age, regional shear zone which is up to 5km wide and which comprises highly prospective Birimian
metavolcanic and metasedimentary rocks. Results of a ground magnetic survey and regional soil
sampling programme completed by the Company have defined numerous anomalies coincident with
structural targets. Dilational and fold structures are considered to be excellent targets for potentially
economic gold deposits. Rock chip sampling by the Company has produced grades including 24.50 g/t
Au, 16.15 g/t Au from quartz veins and 6.86 g/t Au from sheared and silicified metasediments. The
Laboum licence is currently pending renewal. On 24 April 2019 the Company signed a letter of Intent
with Corben Resources Ltd on the Laboum and Zolowo gold projects. After the end of the period the
parties agreed by mutual consent to discontinue discussions.
Birsok (Birsok & Mandoum licences, central Cameroon, 372km², bauxite)
The Birsok licence is located 370km northeast of the capital city of Yaoundé. From 2013 to October 2018
they were under a joint venture with ASX-listed Canyon Resources Ltd. The project is contiguous with
Canyon’s Minim-Martap, a potential tier-one bauxite project.
On 11 February 2019, the Company announced that it had signed a Termination Agreement, a Sale and
Purchase Agreement and a Royalty Agreement with Canyon. For termination of the joint venture Altus
will receive a total consideration of 25 million Canyon shares. On 11 February 2020, the Company
received an initial 15 million Canyon shares, with the balance of 10 million shares to be received in
twelve months from that date. For vending the Birsok project to Canyon, Altus will receive an additional
5 million Canyon shares. The royalty will pay Altus US$1.50/tonne for bauxite mined from the Birsok
project (subject to Canyon receiving a mining licence on its contiguous Minim Martap project). Details
of these agreements with Canyon are available on the Group’s website (www.altus-strategies.com/news,
entry dated 11 February 2019). Altus has agreed with Canyon to escrow the first 15 million shares issued
in respect of the JV termination for 12 months from the date of issue.
During the period the joint venture management committee elected to not pursue the renewal of the
Mandoum licence. The Birsok licence is currently pending renewal.
Bikoula (200 km2) & Ndjele (200 km2) Iron Ore Project, Southern Cameroon
The Bikoula and Ndjele licences are located 150km south of the capital city of Yaoundé. The licences
are on the western geological strike of the Nkout iron ore deposit and 160km west of the Mbalam iron
ore deposit. The licences are adjacent to the road linking to the deep-water port at Kribi and are 30km
north of the proposed trans-Cameroon east-west iron ore rail line.
The Group has defined a maiden JORC-compliant Inferred Mineral Resource of 46 Mt at 44% Fe,
including a supergene haematite cap of 5 Mt at 52.7% Fe. The independent resource report was
prepared by Coffey Mining South Africa (Pty) Ltd and entitled ‘Mineral Resource Estimation and
Classification of the Bikoula Iron Ore Project in Cameroon’ and dated April 2014. The resource was
calculated on less than 25% of the strike of a 17km-long Libi Hills airborne geophysical target. To date
48 drill holes have been completed at Bikoula. During 2018, Altus pitted a large airborne magnetic
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anomaly at the Nkout North prospect. This work discovered further supergene haematite within reddish
clayey soils. The Group considers this prospect and the undrilled remainder of the Libi Hills prospect to
represent excellent targets for the definition of further high-grade iron ore resources. The Bikoula and
Ndjele licences are currently pending renewal.
Altus is seeking a partner to advance the project with further drilling along the anomaly, and the
preparation of an independent mineral resource estimate.
Morocco Operations
Altus holds four projects in Morocco through its 100% owned subsidiary, Aterian Resources Ltd,
targeting copper, lead, zinc, silver and gold.
Agdz Copper-Silver Project (60 km2), Central Morocco
Agdz comprises four contiguous permits in the Anti-Atlas Mountains, 350km south of the capital city
Rabat and 14km from the Bouskour copper mine which is operated by Managem, the Moroccan state
mining group.
Altus has carried out geological mapping, surface outcrop sampling, reconnaissance trenching and
ground magnetic surveys. This work has defined strongly mineralised and altered zones and a clear
structural context. Three main prospects have been identified to date at Makarn, Amzwaro and Minière
from which rock-chip samples have returned assay results up to 26.5% Cu and 448 g/t Ag and an initial
rock-chip channel sample returned 1.25% Cu and 96 g/t Ag over 9.3m, with grades up to 2.26% Cu and
223 g/t Ag. Rock-chip and spoil samples from the Minière prospect, which hosts multiple underground
workings that exploit a series of sub-parallel alteration zones, have returned 13.0% Cu, 6.0% Cu and
5.0% Cu. Mapped alteration in the Makarn prospect is analogous to that of the Bouskour mine (the
mineralisation hosted at Bouskour is not necessarily indicative of mineralisation hosted at Agdz) and
has been mapped over a 0.5km strike length to date. Exploration work conducted during the year at
Agdz included surface mapping, and sampling. Altus is actively seeking a JV partner for Agdz to conduct
trenching and to undertake a maiden drill programme.
Takzim Copper-Zinc Project (72 km2), Central Morocco
Takzim comprises five permits located 35km northeast of the city of Marrakech and 7km east of the
historical Bir-n-Hass copper mine. No significant exploration work was conducted on Takzim during the
year.
Zaer Copper Project (96 km2), Central Morocco
Zaer comprises six permits located 80km south of the capital city of Rabat in the Hercynian Massif, which
contains three large granitic plutons that have been intruded into a sequence of sediments. The region
hosts active and historical mines for copper, tin, tungsten, lead and zinc. Zaer is strategically located
covering a 20km strike length of metamorphic aureole along a granite-metasediment contact. No
significant exploration work was conducted on Zaer during the year.
Ammas Zinc-Lead Project (32 km2), Central Morocco
Ammas is comprised of two permits, located 30km south of the city of Marrakech. The project is 3km
southeast and along strike of Managem’s Hajjar Zn-Pb-Cu VMS mine (the mineralisation hosted at Hajjar
is not necessarily indicative of mineralisation hosted at Ammas). The Hajjar mine exploits a number of
buried and folded massive sulphide lenses. No significant exploration work was conducted on Ammas
during the year.
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Ethiopia Operations
Altus holds three projects in Ethiopia at Tigray-Afar, Daro, and Zager. All three projects are held by the
Company’s 100% owned subsidiary, Altau Resources Ltd and are located on the prospective Arabian
Nubian Shield of Northern Ethiopia.
Daro Copper-Gold Project (412 km2), Northern Ethiopia
Daro is located 570km north of Ethiopia’s capital city, Addis Ababa and 95km west of the Company’s
Tigray-Afar Cu-Ag project. The project targets potential Volcanogenic Massive Sulphide (“VMS”) copper
and gold deposits. It is situated in the Neo-Proterozoic Nakfa Terrane, which hosts a number of
significant VMS base metal and gold deposits and mines.
Prospecting and regional mapping has identified key geological markers for a VMS deposit type setting.
These include the presence of bimodal volcanics, extensive chert horizons and associated
metasediments, which conform to an ophiolite complex of ancient oceanic crust and seafloor sediments.
To date, five priority prospects: Keren, Teklil, Wedihazo and Simret have been defined by the Company
on the licence. The Keren prospect strikes for 2km with grab and outcrop samples returning up to 37
g/t Au and 10.35 g/t Au. At the 2.5km long Teklil prospect, located within an ophiolite complex, rock
chip and grab samples have returned 24% Cu, 6.51 g/t Au and 203 g/t Ag. Rock chip and grab sample
results at the 0.5km long Wedihazo prospect, have returned up to 22.3% Cu and 0.24 g/t Au. At the
Simret prospect, grab samples have returned up to 944 g/t Ag, 3.55 g/t Au and 2.72% Pb and discovered
Au-Ag-Cu-Pb-Zn bearing quartz veins and gossanous float.
During 2019 Altus discovered the Wedi Keshi gold prospect when the Company’s Sentinel remote
sensing programme identified a highly altered quartz-feldspar porphyry intrusion. The prospect has
now been mapped for approximately 2km in length and 300m in width and is coincident with a series
of discontinuous hard gold workings which likely represent the primary source for gold in the alluvial
artisanal workings in the area. Gold grades from rock chip sampling of quartz veins and altered wall
rock material include 21.6 g/t Au 14.1 g/t Au, 8.5 g/t Au and 7.3 g/t Au.
Altus also completed a reconnaissance ground gravity geophysical survey along an initial 300m section
of the Teklil prospect, which identified a potentially significant gravity anomaly adjacent to key VMS
markers, including a gossanous outcrop sample which returned 6.95% Cu.
Altus is actively seeking a JV partner for Daro to conduct trenching and to complete a geophysical
gravity survey with the aim of defining targets for a maiden drill programme.
Zager Copper-Gold Project (285 km2), Northern Ethiopia
The Zager prospect was granted in June 2019 and is located in the Semien Mi’irabawi Zone of Tigray in
northern Ethiopia, approximately 175km northwest of the Tigray state capital of Mekele and 610km
north of Addis Ababa. It is 80km west of the Company’s Daro project and 15km north of the Harvest
polymetallic VMS project. The project targets potential VMS copper and gold deposits. It is situated in
the Neo-Proterozoic Nakfa Terrane, which hosts a number of significant VMS base metal and gold
deposits and mines.
During the period the Company completed a maiden programme of prospecting and ground truthing.
This programme resulted in the discovery of five hard rock artisanal gold workings, two of which have
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31 December 2019 | Annual Report
shafts estimated to be up to 15m deep. Follow up exploration has identified eight additional hard rock
artisanal gold workings. Three of the newly identified workings are situated on the margin of a large
alluvial gold field, where densely spaced excavations cover an area of approximately 500m by 1,000m.
Rock chip sampling, primarily of quartz veins and spoil from the hard rock sites, have returned grades
including 27.1 g/t Au, 7.3 g/t Au and 2.9 g/t Au. Polymetallic mineralisation has also been observed at
a number of localities, with galena, chalcopyrite and bornite identified in hand specimen. These
observations have been supported by rock chip sample results up to 1.5 % Pb, 0.2 % Cu and 24 g/t Ag.
Tigray-Afar Copper-Silver Project (242 km2), Northern Ethiopia
Tigray-Afar is located 580km north of Ethiopia’s capital city, Addis Ababa and 95km east of the
Company’s Daro Cu-Au project. An evaluation of previous exploration data by the Company, has
identified a potential sediment hosted copper target within a 5km long VTEM conductor. The zone hosts
gossans at surface, which are interpreted to overlay a potential copper sulphide source which has yet
to be drill tested. No further work was undertaken during the year. The next steps for the project will be
to conduct a 2,000m five hole programme to test the presence of sedimentary hosted copper
mineralisation. Altus is actively seeking a JV partner for Tigray-Afar. The Tigray-Afar licence is currently
pending renewal.
Liberia Operations
Altus holds one licence, Zolowo, in Liberia through its 100% owned subsidiary, Auramin Ltd, targeting
orogenic lode gold deposits within the Man Shield, which forms part of the West African Craton.
Zolowo Gold Project (466 km2), Western Liberia
Zolowo is located 190km northeast of the capital city of Monrovia. The licence targets a significant 33km
long Archaean-age greenstone belt on the West African Craton. Previous results from sampling of in
situ quartz veins and spoil from artisanal workings returned encouraging grades up to 30.70g/t Au,
9.10g/t Au, 8.8g/t Au, 4.3g/t Au and 2.95g/t Au. The next phase of work will include systematic soil and
trenching programme. On 24 April 2019 the Company signed a letter of Intent with Corben Resources
Ltd on the Laboum and Zolowo gold projects. After the end of the period the parties agreed by mutual
consent to discontinue discussions. Subsequent to the end of the period, the Company elected to
relinquish the Zolowo licence given the comparatively high cost of undertaking mineral exploration in
Liberia.
Côte d’Ivoire Operations
Altus holds one granted licence, Prikro, and two licence applications in Côte d’Ivoire. The licence and
applications are held through the Company’s 100% owned subsidiary, Aeos Gold Ltd.
Prikro Gold Project (369.5 km2), Eastern Côte d’Ivoire
Prikro is located 240km northeast of the country’s largest city, Abidjan. The project targets a folded and
sheared Birimian-aged greenstone sequence intruded by felsic plutons, and hosts historical Au, Cu, Zn
and Mo mineral occurrences. No material exploration was undertaken on the project during the year.
During 2019, the Company announced that it had signed an option agreement on its Toura exploration
licence application with Firering Holdings Limited (“Firering”) upon exercise of which Firering will earn a
95% interest in the project, and Altus will receive a cash payment of €15,000, a 5% capped free carried
interest and a royalty linked to the nickel price. Further details are available on the Company’s website
(www.altus-strategies.com/news, entry dated 25 July 2019).
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Projects in which the Group holds purely a royalty interest
Leopard Rock Gold Prospect (90 km2), Western Liberia
The Leopard Rock prospect is part of the 457km2 Bea Mountain Mining Licence in western Liberia,
approximately 100km northwest of the capital city, Monrovia, and is held by Avesoro Resources Inc.
[AIM/TSX: ASO], which was taken private in January 2020. It is located in the north-eastern part of the
licence area, approximately 40km northeast of the New Liberty Gold Mine and 2km southeast of the
Ndablama project. The target area is underlain by Archaean greenstones comprising amphibolite
gneisses and ultramafic schists situated within the pressure shadow of the adjacent granitic batholith
and along the western margin of a shallow westerly-dipping shear. This deformation zone is gently
folded around the edge of the intrusion forming an open west-plunging anticline that is the key host
of mineralisation. Gold is associated with shear-hosted disseminated sulphides and hydrothermal
alteration, namely silicification, magnetite destruction, phlogopite and chlorite.
Exploration across the Leopard Rock and Ndablama prospects began in 2007 with a series of channels
highlighting the potential for gold mineralisation within the granitoid's pressure shadow. A significant
soil sampling programme was then undertaken on a 50m x 100m grid which defined a 13 km long gold-
in-soil anomaly up to 100 m wide. This zone coincided with the margin of the granitoid and the southern
extents formed the basis of the Ndablama and Leopard Rock prospects. An induced polarisation survey
was then carried out by Fugro in 2012 over a 1.8km2 area which outlined a 500m zone of potential
sulphide mineralisation in between these two areas of interest, and suggests both prospects are hosted
by a continuation of the same NW-SE trending structure. Subsequent trenching and channelling at
Leopard Rock confirmed the presence of sub-surface gold with highlights including 11m at 6.4 g/t Au
and 4m at 6.4 g/t Au, and the initial 24 hole drill programme subsequently returned intercepts of 4m at
17.6 g/t Au, 6m at 9.4 g/t Au and 4 m at 13.9 g/t Au.
Altus holds a 2.5% Net Profit Interest royalty on the former Archaean Gold licence that encompasses
the Leopard Rock prospect under a royalty agreement with Aureus Mining Inc. (now Avesoro Resources
Inc.) in May 2013.
Djelimangara & Sebessounkoto Sud Gold Projects (55 km2 and 28 km2), Western Mali
On 31 October 2019, the Company announced that it had completed a transaction with TSX-V listed
Desert Gold Venture Inc. (“Desert Gold”), for the sale of and a royalty on the Djelimangara and
Sebessounkoto Sud gold projects.
The projects are located in the Kayes region of western Mali, approximately 450km northwest of the
capital city of Bamako. The transaction included the payment to the Company of US$50,000 in cash and
3,000,000 Desert Gold shares which at the time of the transaction had a value of approximately £248,500
(C$420,000). Subject to project milestones being achieved, the Company may receive an additional
US$200,000 in cash and up to 5,000,000 additional Desert Gold shares. The transaction also includes a
2.5% NSR of which 1.5% can be repurchased by Desert Gold for up to US$6.0m, depending on the size
of the NI 43-101 reserve at the time of a definitive feasibility study.
Sebessounkoto Sud is located 15km south east of the Diba project. Historical trenching undertaken by
Barrick (formerly Randgold Resources), reportedly returned up to 0.68g/t Au over 61m. During 2018 the
Group defined the Soa gold prospect covering a 2.7km long gold-in-soil anomaly, identified from
mapping artisanal workings, and sampling spoil and termite mounds. Spoil samples returned up to
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31 December 2019 | Annual Report
5.18g/t Au, 3.98g/t Au and 2.4g/t Au.
Djelimangara is located 3km southeast of the Diba project, and comprises four priority prospects:
Sourounkoto, Kamana, Woyanda and Manankoto. These are characterised by gold-in-soil anomalies of
up to 2.5km in length, coincident with hard rock gold workings in fine metasediments. Historical drilling
(unverified by the Group) has reportedly returned encouraging intersections including 1.34g/t Au over
30m.
Cautionary note regarding historical data
Readers are cautioned that data on the Mali licences in this written disclosure is historical exploration
data that has not been verified by a Qualified Person. Not all historical samples are available and Altus
does not have complete information on the quality assurance or quality control measures taken in
connection with the exploration results, or other exploration or testing details regarding these results.
There has been insufficient exploration to define current resources and the Company cautions that there
is a risk further exploration will not result in the delineation of current mineral resources. The historical
data should therefore not be relied upon until the Company can confirm it.
Qualified Person
The technical disclosure in this document has been read and approved by Steven Poulton, Chief
Executive Officer of Altus. He has not verified the historical data disclosed in this document but has no
reason to question its accuracy. 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 National Instrument 43-101
“Standards of Disclosure of Mineral Projects” of the Canadian Securities Administrators (“NI 43-101”).
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Corporate Governance Report
Introduction
Since the implementation of changes to the London Stock Exchange AIM rules in September 2018 Altus
has formally adopted the QCA Corporate Governance Code, and applies the ten principles of the QCA
Code as set out in the statement below and detailed in this report.
Section 19 of the Corporate Finance Manual issued by the TSX Venture Exchange (the “TSX-V”) requires
only that the corporate governance practices and processes they adopt be appropriate. Therefore, since
its listing on the TSX-V, the Group has continued to follow the same practices that it adopted upon
listing on AIM in London in 2017.
The Group’s AIM Compliance Code, dating from its listing, is published on the Company’s website at
https://www.altus-strategies.com/corporate/corporate-governance/ and
in September 2018
it
published its Corporate Governance Statement.
Details of the Group’s response to the framework laid down by the QCA are contained within this report
and other sections of the Annual Report and Financial Statements as follows.
Corporate governance principle
Strategy and business model
Reference
Business Overview
Shareholder needs and expectations
Corporate Governance Report
Responsibilities to stakeholders
Strategic Report
Risk management
Composition of the Board
Corporate Governance Report
Strategic Report
Financial Statements note 24
Corporate Governance Report
Board experience, skills and capabilities
Corporate Governance Report
Board performance evaluation
Corporate culture
Governance structures
Corporate Governance Report
Corporate Governance Report
Corporate Governance Report
Communication with shareholders/stakeholders
Corporate Governance Report
Page(s)
7-9
34-42
17-22
34-42
17-22
85-87
34-42
34-42
34-42
34-42
34-42
34-42
Statement of Corporate Governance
The Board of Directors is responsible for the management of the Group on behalf of its shareholders.
The objective of the Group is to create long term value for shareholders, and the Board is responsible
for delivering that objective through its governance of the Company and its subsidiaries. The Directors
have overall responsibility for the corporate governance of the Group and recognise the importance of
the highest standards of behaviour and accountability.
Several aspects of the business in its current guise offer particular challenges to the Board in respect of
its approach to corporate governance, in particular:
Complexity of operation in relation to size
The Group’s current activities include managing licence assets, entering JV and royalty
arrangements, transferring licences and companies and managing a group structure across 10
jurisdictions, all with a team of 23 employees plus consultants.
Expansion of operations
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Having expanded into new areas of project operation from four to six countries in 2018, as well
as dual listing its stock on the TSX-V in Canada, the Company is continuously analysing
opportunities to expand its area of operations into new jurisdictions.
Areas of operation
The focus of Altus’ exploration and the location of all of its intangible assets is Africa. Of the six
countries in which it currently has project operations, only one (Morocco) appears inside the
top 100-ranked countries in the World Bank’s international index of ease of doing business
(May 2019).
Becoming a listed company
In quick succession the Company listed in London and, 10 months later, in Toronto. This
opportunity brought with it responsibilities to shareholders predominantly in Europe and North
America, and obligations for compliance with two regulatory regimes.
The Board is mindful that a strong corporate culture has a fundamental impact on the development of
the Company’s strategy, and is an essential tool in delivering that strategy, as well as in judging risk,
meeting challenges and dealing with external stakeholders.
The Board seeks to foster a culture of openness, respect, frequent communication and shared
responsibility. To do this it promotes interaction between the Board and senior management, employees
in various locations, shareholders and partners. Members of the Board make themselves accessible and
willing to act as a sounding board or a source of guidance, and by example encourage the permeation
of this culture throughout the management and wider team, both in the UK and Africa.
The effect of this open culture is to encourage dialogue at all levels, and to provide an environment in
which all employees can have the confidence to raise issues and offer solutions without fear of
recrimination or censure. With openness comes shared responsibility, as management is not viewed as
a closed shop where all decisions are taken. Instead, employees are expected to act on issues, in
discussion with relevant parties, rather than leave their resolution to someone else.
In the development and implementation of strategy this enables free and frank discussion of options
and their relative merits. It encourages all employees to highlight risks, and facilitates timely discussion
of issues and challenges, as well as swift and well-considered responses and actions. The values that
bind the team together extend to its dealings with external stakeholders, encouraging engagement with
shareholders, project partners and local communities in areas of exploration, and displaying a respect
and sense of responsibility that fosters mutual co-operation.
Board Composition
The Group’s Board of Directors comprises a non-executive Chairman, a Chief Executive Officer, one
Executive Director and two further non-executive Directors. The Group’s business is directed by the
Board and is managed on a day-to-day basis by the Chief Executive Officer and Executive Director, who
are based at the Company’s registered offices in Didcot, United Kingdom. The Group’s Chief Financial
Officer since July 2019 is not a director of the Company, and is also based at the registered office. The
Chairman and both non-executive Directors are classified as independent by the TSX-V. After the period
end, the completion of a strategic investment by La Mancha (see Chief Executive’s Review on pages 10-
16) gave La Mancha the right to appoint up to two non-executive directors to the Board. The first of
these appointments was announced on 6 April 2020 with Karim Nasr being appointed to the Board.
The articles of association were changed at the Group’s 2019 AGM to mandate that all directors,
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Altus Strategies Plc
31 December 2019 | Annual Report
including those appointed since the previous AGM, retire and stand for re-election at the AGM every
year. In 2019 all directors served for the whole of the year.
The Board members combine a broad range of skills and expertise in the fields of geology and
mineralisation, strategy, finance and corporate governance. Those in office at the end of the year are as
follows.
Position
Non-executive
Chief Executive
Executive
David Netherway
Steven Poulton
Matthew Grainger
Chairman
Appointment date
21-May-17
28-Apr-17
28-Apr-17
Status
Independent
Not independent
Not independent
Member
Member
-
-
-
-
Audit Committee
Remuneration
Committee
Position
Robert Milroy
Non-executive
Appointment date
21-May-17
Status
Independent
Audit Committee
Remuneration
Committee
Chair
Chair
David Netherway
Non-Executive Chairman
Michael Winn
Non-executive
30-Jan-18
Independent
Member
Member
Karim Nasr
Non-executive
06-Apr-20
Not independent
Member
Member
David is a mining engineer with over 40 years of experience in the mining industry. David was involved
in the construction and development of the New Liberty, Iduapriem, Siguiri, Samira Hill and Kiniero gold
mines in West Africa and has mining experience in Africa, Australia, China, Canada, India and the Former
Soviet Union. David served as the CEO of Shield Mining until its takeover by Gryphon Minerals, prior to
that he was the CEO of Toronto listed Afcan Mining Corporation, a China focused gold mining company
that was sold to Eldorado Gold in 2005. He was also the Chairman of Afferro Mining which was acquired
by IMIC in 2013. David has held senior management positions in a number of mining companies
including Golden Shamrock Mines, Ashanti Goldfields and Semafo Inc. He is a former director of Altus
Resource Capital and Altus Global Gold. David was non-executive chairman of Kilo Goldmines [TSX: KGL]
during 2019 but did not stand for re-election on 16 March 2020; he was a former director of Avesoro
Resources Inc. (formerly Aureus Mining; [AIM/TSX: ASO, taken private in January 2020]); he is currently
the non-executive chairman of Canyon Resources [ASX: CAY] which is Altus’ former partner in the Birsok
Project and he is a non-executive director of Kore Potash plc [ASX, AIM & JSE: KP2].
Steven Poulton
Chief Executive Officer
Steven is the Chief Executive and co-founder of Altus Strategies and a director of its exploration
subsidiaries. He holds an Honours degree in Geology from Southampton University and a Master's
degree in Mining Geology from the Camborne School of Mines. He started his career with Mano River
in 1998, joining the board in 2007. In 2002 he co-founded and was Chief Executive of Ariana Resources,
a gold producer in Turkey which listed on AIM in 2005 [AIM: AAU]. In 2004 he founded and was interim
Chairman of African Aura Resources which listed on the TSX-V in 2008 and which through its merger
with Mano River in 2009 created African Aura Mining. In 2011 African Aura Mining was divested into
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Altus Strategies Plc
31 December 2019 | Annual Report
Afferro Mining, which was acquired by IMIC in 2013 for approximately US$200m, and west African gold
producer Avesoro Resources (formerly Aureus Mining). In 2007 he was a founding non-executive
director of west Africa focused diamond development company Stellar Diamonds. Stellar listed on AIM
by way of a reverse takeover of West African Diamonds in 2010 and was acquired by Newfield Resources
[ASX:NWF] in 2018. In 2008 Altus co-founded and Steven was joint Investment Manager to Altus
Resource Capital, a five-year closed-ended and long-only investment fund, focused on junior resource
equities. Altus Resource Capital listed on the LSE in 2009 and by 2011 had approximately US$150m of
assets under management. He is a director of Aegis Asset Management and a co-founder of industry
networking groups 'The Oxford Mining Club' and 'Resource IQ'. He is a Fellow of the Geological Society
of London, a Fellow of the Institute of Materials, Minerals and Mining and a member of the Association
of Mining Analysts.
Matthew Grainger
Executive Director
Matthew is an Executive Director and co-founder of Altus Strategies and a director of its exploration
subsidiaries. He holds an Honours degree in Earth Science from Anglia Ruskin University and a Master's
degree in Mining Geology from the Camborne School of Mines. Matthew joined Cambridge Mineral
Resources in 1999 and in 2002 he co-founded Ariana Resources which listed on AIM in 2005 [AIM: AAU].
In 2006 he joined African Aura Resources as Chief Operating Officer which listed on the TSX-V in 2008
and, through its merger with Mano River in 2009, created African Aura Mining, which in 2011 was
divested into Afferro Mining which was acquired by IMIC in 2013 and gold producer Avesoro Resources
(formerly Aureus Mining). Matthew is a director of Aegis Holdings and a co-founder of industry
networking groups The Oxford Mining Club and Resource IQ.
Robert Milroy
Non-Executive Director
Robert is Chairman of Milroy Capital Ltd a family investment company that manages various private
equity investments in natural resources, engineering, renewable energy and commercial real estate. He
has over 40 years of operational experience either as an owner or senior manager in the investment,
mining and petroleum industries. He was a founding and Managing Director of the Corazon Capital
Group; a Guernsey regulated investment management and stockbroking company for 14 years until its
takeover by Canaccord Genuity in 2010. In addition, he was the Managing Director of Eagle Drilling, a
drilling firm that specialised in hard rock core drilling in Central and Western Africa. Currently he is a
Non-Executive Director of the EV Private Equity Funds III, IV, V, V Plus and Chairman of the Zeropex
Group Ltd a water engineering firm. Previously he was a Non-Executive Director of Altus Resource
Capital, Altus Global Gold and Genuity Energy a UK onshore oil and gas exploration firm. Robert
graduated with a Bachelor of Commerce (Honours) from the University of Manitoba in 1971. He is a
Member of the Association of Mining Analysts, Chartered Institute for Securities & Investment,
Petroleum Exploration Society of Great Britain and Institute of Directors.
Michael D. Winn
Non-Executive Director
Michael was the Chairman and CEO at Legend, a TSX-V listed company which was acquired by Altus in
January 2018. Michael is President of Seabord Capital Corp. which provides investment analysis and
financial services to companies operating in the energy and mining sectors and he is the President of
Seabord Services Corp., a Canadian company providing management and regulatory services to private
& public mining companies. Michael is also the Chairman of EMX Royalty Corp. He worked as an analyst
for Global Resource Investments Ltd. from 1993 to 1997 where he specialized in the evaluation of
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Altus Strategies Plc
31 December 2019 | Annual Report
emerging oil and gas and mining companies, and has worked in the oil and gas industry since 1983 and
the mining industry since 1992. Michael is currently a director and officer of several TSX-V and NYSE
listed companies operating in Canada, Latin America, Europe and Africa. He holds a B.S. in Geology from
the University of Southern California.
Karim Nasr
Non-Executive Director (appointed 06 April 2020)
Karim is the Chief Executive of La Mancha Group, an investment company with a portfolio of gold mining
assets in West Africa, having joined as its Chief Financial Officer in 2018. He is also a director of La
Mancha’s TSX-listed subsidiary, Golden Star Resources Ltd. Prior to La Mancha, Karim was the CEO and
CIO of Digital World Capital (DWC), an FCA regulated investment manager in Telecom and Media
companies. At DWC, Karim was in charge of the investment strategy and risk management for the DWC
Cross Com Fund on a discretionary basis and of the special situation investments and debt restructuring
advisory practice for private clients on a non-discretionary basis. Prior to DWC, Karim was in charge of
Corporate Finance for Wind Telecom, one of the largest mobile operators by subscribers, where, from
2001 to 2011, he led over 225 financing and investment projects in the telecom sector, closed US$68
billion in debt and equity financings, US$67 billion in M&A, managed up to US$30 billion in liabilities,
and closed major landmark debt restructuring deals. From 1996 to 1999, Karim was the CEO of Anzima
s.a.l., a Lebanese IT consulting and software firm. He started his career in 1995 at An-Nahar s.a.l., a
Lebanese print media group. Karim holds a Masters in Management from the University of Paris IX
Dauphine with a major in Finance. He is fluent in English, Arabic and French.
Martin Keylock
Chief Financial Officer
Martin was promoted to the position of Chief Financial Officer on 1 July 2019, having joined the Group
as its Financial Controller in November 2018. He took over from David Miles, who served as the CFO
after the conclusion of the Plan of Arrangement with Legend in January 2018. David is continuing to act
as an adviser to the Group, through the Group’s existing service agreement with Vancouver-based
Seabord Services Corp. Martin has over 17 years of experience in corporate accounting. Prior to joining
Altus, he worked in the telecoms and architecture sectors, and most recently as Financial Controller at
Velocys plc, a multinational, AIM-listed renewable fuels business. He has been a member of the ACCA
since 2007, and holds an MA from the University of Glasgow and an MSc from Aston University in the
United Kingdom.
Segregation of duties
The responsibilities of the Chairman include providing leadership to the Board, the efficient organisation
and conduct of the Board’s function, setting the Board’s agenda, briefing all directors in relation to
issues arising at Board meetings and ensuring that adequate time is available for discussion of all
agenda items. The Chairman is also responsible for ensuring an effective strategy is in place for
communicating with shareholders, arranging Board performance evaluation, promoting a culture of
openness and debate by facilitating the effective contribution to the Board of non-executive directors
in particular, and for ensuring constructive and respectful relations between the executive and non-
executive directors and between the Board and senior management.
The executive director’s co-ordinate the day-to-day running of the Group, and are responsible for
making recommendations to the Board regarding short and medium-term budgets, targets, strategies
and objectives for the Group.
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Altus Strategies Plc
31 December 2019 | Annual Report
The Company makes available independent professional and legal advice to all directors, to ensure they
are able to discharge their duties. In addition, all Board members have access to the services of the
Company Secretary, who is responsible for ensuring compliance with all Board procedures.
Function of the Board and its Committees
The Board is responsible for approving the Group strategy and policies, for safeguarding the assets of
the Group, and is the ultimate decision-making body of the Group in all matters except those that are
reserved for specific shareholder approval.
The Board generally meets on a quarterly basis with additional meetings as and when required. Through
these meetings it provides control, guidance and oversight in reference to those matters reserved for
its decision. This includes:
- approval of the budget and business plan
- major capital expenditure
- acquisitions and disposals
- risk management policies
- approval of the financial statements
The Board delegates certain aspects of its responsibilities to the Board committees which have terms of
reference as listed below.
Audit Committee
The Audit Committee comprises Robert Milroy, David Netherway and Michael Winn and is chaired by
Robert Milroy. It meets at least four times a year. The committee has responsibility for ensuring the
integrity of the financial statements, and that the financial performance of the Company is properly
measured and reported by overseeing the production of annual and interim accounts and results
announcements, and confirming any changes to accounting policies.
The Audit Committee has unrestricted access to the Company’s external auditor in London, PKF
Littlejohn LLP. It reviews reports from the auditor, including recommendations regarding accounting
and other internal controls. It advises the Board with regard to the appointment of the auditor and
monitors the extent of non-audit services undertaken.
The committee monitors the effectiveness of internal controls and risk management systems on behalf
of the Board (see “Risk Management” section later in this report).
Remuneration Committee
The Remuneration Committee comprises Robert Milroy, David Netherway and Michael Winn and is
chaired by Robert Milroy. It meets at least once a year. The committee has responsibility for determining
the Group’s remuneration policies, and, within these terms, for making recommendations to the Board
on the individual remuneration packages of the Company’s Chief Executive, Chairman and the Executive
and Non-executive Directors. This includes salary, bonus and incentive payments, and awards of shares
and share options. Decisions regarding remuneration of the Group’s employees are delegated to the
Group’s management, subject to approval of the annual budget and interim forecasts by the Board. The
committee may consult with the Chief Executive as appropriate. No Director may be involved in any
discussions relating to their own remuneration.
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Altus Strategies Plc
31 December 2019 | Annual Report
Nomination Committee
Given the size of the Board and the long-term stability of the management team, the Board has not yet
established a separate Nomination Committee. The Board is collectively responsible for reviewing the
structure, size and composition (including skills, knowledge and experience) of itself and its committees,
and for considering appointments of additional and replacement directors.
Meeting attendance
Attendance at the meetings of the Board and committee meetings during the year is set out below.
The denominator is the number of meetings the director was eligible to attend.
Board
Audit Committee
Remuneration
5/6
7/7
7/7
7/7
7/7
3/4
n/a
n/a
4/4
4/4
Committee
2/2
n/a
n/a
2/2
2/2
David Netherway
Steven Poulton
Matthew Grainger
Robert Milroy
Michael Winn
Responsibilities of the Board
Internal controls
The Board acknowledges its responsibility for the Group’s system of internal controls and procedures
for the purpose of protecting shareholders’ interests and safeguarding of the Group’s assets. This covers
operations, financial and risk management and regulatory compliance. Such systems are designed to
manage, rather than eliminate, the risk of failure to achieve business objectives; any system can provide
only reasonable, and not absolute, assurance against material misstatement or loss. In adopting its
controls and procedures, the Board takes into consideration their appropriateness to the Group, given
its size, complexity, stage of development, regulatory environment (AIM and TSX-V) and areas of
operation.
In at least one of the meetings of the Audit Committee each year the Group’s internal controls and
procedures are reviewed for effectiveness, and amended, updated and expanded as deemed necessary.
The Board ensures that its controls are applied as consistently as possible across its subsidiary
companies in the UK and overseas.
The two most significant assets of the Group are its exploration licences and its cash balances. The Board
reviews the standing of the licences each quarter with respect to the fulfilment of local requirements to
submit renewals, reports and other documentation, to pay fees and taxes, and to undertake certain
levels of exploration. The Board also monitors the Group’s treasury management, which institutions it
holds money with and the balance of currencies held relative to its operational requirements.
Risk Management
The Board considers risk assessment to be important in achieving its strategic objectives. There is a
process of evaluation of performance targets through regular reviews by senior management of
forecasts, project milestones, budgets and timelines. In identifying potential risks, the Board looks at:
Inherent risk of mining prospects
-
- Macroeconomic environment, particularly with regard to the gold price
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Altus Strategies Plc
31 December 2019 | Annual Report
-
Financing environment
- Operational environment
The Board has concluded that given the size and level of development of the Group it is currently not
appropriate to establish an internal audit function, although it will keep this option under review.
Anti-bribery and anti-corruption
The Company has implemented an anti-bribery and anti-corruption policy and also implemented
appropriate procedures to ensure that the Board, employees and consultants of the Group comply with
the UK Bribery Act 2010.
Financial information
The Group’s management has adopted internal controls to provide reasonable assurance regarding the
reliability of financial information, both for internal financial control, and for the preparation of
published financial statements. These controls are set out in a framework document entitled ‘Financial
Position and Prospects Procedures’. The controls are reviewed regularly throughout the year.
Management accounts are produced on a monthly basis, results are reviewed against an annual budget
and periodic reforecasts, and significant variances are reported.
The financial statements for 2019 have been reviewed by the Audit Committee in consultation with the
Group’s auditor, PKF Littlejohn LLP. Particular attention was paid to the Group’s cash position,
presentation of the accounts on a going concern basis and access to future funding, and to support for
the value of the Group’s intangible assets as represented by its capitalised licence costs.
The Audit Committee regularly reviews the provision of non-audit services from its auditors. It is satisfied
that the provision of non-audit services by PKF Littlejohn LLP is compatible with the general standard
of independence for auditors and does not give rise to any conflict of interest.
Share dealing code
The Company has adopted a share dealing code for the Directors and applicable employees to ensure
compliance with the AIM rules relating to dealings in the Company’s securities and with the Market
Abuse Regulations as applied to AIM-listed companies.
Relations with shareholders
The Board is accountable to the Company’s shareholders and as such it is important for the Board to
appreciate the aspirations of shareholders and equally that the shareholders understand how the
actions of the Board and short-term financial performance relate to the achievement of the Group’s
longer-term goals.
The Board is committed to effective communication with the shareholders of the Company. Formal
communication is provided through the publication of the Annual Report and quarterly operational
updates and financial results. In addition, news releases are issued throughout the year and the
Company maintains a website (www.altus-strategies.com) on which press releases, corporate
presentations and financial information are available to view. Shareholders and other interested parties
can subscribe to receive notification of news updates and other documents from the Company via email.
Enquiries from individual shareholders on matters relating to the business of the Company are
welcomed. Executive Directors meet and hold calls with major shareholders to discuss the progress of
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Altus Strategies Plc
31 December 2019 | Annual Report
the Company and provide periodic feedback to the Board following meetings with shareholders. This
includes travelling to Canada and the US to meet North American-based shareholders.
The Board welcomes the attendance of shareholders at the Annual General Meeting and the Executive
Directors are happy to answer shareholders’ questions.
By order of the Board
“David Netherway”
David Netherway
Chairman
28 April 2020
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Altus Strategies Plc
31 December 2019 | Annual Report
Directors’ Report
The directors present their annual report and financial statements for the year ended 31 December
2019.
Company
Altus Strategies plc is the parent company of the Group. It is a public limited company listed on London’s
AIM and Toronto’s TSX-V and incorporated and registered in the United Kingdom. The registered office
address is The Orchard Centre, 14 Station Road, Didcot, Oxfordshire, OX11 7LL, United Kingdom.
Principal activity
The principal activity of the Group and Company is that of a project and royalty generator in the field
of mineral exploration. An overview of the business model is included on pages 7-9, and a detailed
review of the Group’s activities, together with expected future developments and objectives of the
Group, is provided within the Strategic Report on pages 17-22.
Results and dividends
The results for the year are set out in the Group Statement of Comprehensive income.
No ordinary dividends were paid during the year (2018: £Nil). The directors do not recommend payment
of a final dividend.
Directors
The directors who, unless otherwise indicated, held office during the year and up to the date of signature
of the financial statements were as follows:
David Netherway (Non-executive Chairman)
Steven Poulton (Chief Executive Officer)
Matthew Grainger (Executive Director)
Robert Milroy (Non-executive Director)
Michael Winn (Non-executive Director)
Karim Nasr (Non-executive Director) – appointed 06 April 2020
Substantial shareholdings
The Directors are aware of the following substantial interests or holdings in 3% or more of the
Company’s ordinary called up share capital as at 09 April 2020 (number of Ordinary Shares post-
consolidation).
Major shareholders
(* indicates Director of the Company)
La Mancha Holdings S.à r.l.
DELPHI Unternehmensberatung AG
Steven Poulton*
Resource Capital Investment Corp.
Michael Winn*
David Netherway*
Share Capital
Number of shares
% of issued
24,845,878
7,000,000
5,565,096
4,691,600
3,743,980
2,441,375
capital
35.45%
9.99%
7.94%
6.69%
5.34%
3.48%
Details of the share capital and movements in share capital during the year are disclosed in note 27 to
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Altus Strategies Plc
31 December 2019 | Annual Report
the financial statements. During the year no share options were issued to directors.
Company’s listing
The Company’s ordinary shares have been trading on AIM in London since 10 August 2017 and on TSX-
V in Toronto since 6 June 2018.
Going Concern and availability of finance
The Directors have a reasonable expectation that the Group and Company will be able to access
adequate financial resources to continue in operational existence for the foreseeable future and,
therefore, they continue to adopt the going concern basis in the preparation of the annual report and
financial statements. Further details on the Directors’ assumptions are included in the statement on
going concern in note 1 of the financial statements.
Website publication
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Group’s website (www.altus-strategies.com) and for ensuring the annual
report and the financial statements are made available on its website. Financial statements are published
on the website in accordance with UK legislation governing the preparation and dissemination of
financial statements, which may vary from legislation in other jurisdictions. The Group is compliant with
AIM Rule 26 regarding the Group’s website.
Principal Risks and uncertainties
The principal risks and uncertainties of the Group are outlined in the Strategic Report on pages 17-22.
Share dealing
The Company has adopted a share dealing code for the Directors and relevant employees in accordance
with the AIM Rules and Market Abuse Regulations and takes proper steps to ensure their compliance.
Details of this code are set out in the Corporate Governance Report on pages 34-42.
Directors and their interests
The Directors who served during the year, together with their directly beneficial interests in the shares
of the Company were as follows (number of shares pre-consolidation).
31 December
2019
Pre-
consolidation
12,206,875
27,825,481
10,427,828
1,937,179
18,719,898
31 December
2019
Post-
consolidation
5.81%
2,441,375
5,565,096 13.24%
4.96%
2,085,566
0.92%
387,436
8.90%
3,743,980
31 December
2018
6.04%
10,750,600
25,150,000 14.14%
5.14%
0.32%
18,719,898 10.52%
9,147,500
575,000
David Netherway1
Steven Poulton2
Matthew Grainger3
Robert Milroy4
Michael Winn5
1. Includes 266,680 Ordinary Shares post-consolidation held by Diane Rissik (1,333,400 pre-consolidation)
2. Includes 320,000 Ordinary Shares post-consolidation held by Susannah Poulton (1,600,000 pre consolidation)
3. Includes 144,000 Ordinary Shares post-consolidation held by Anna Grainger (720,000 pre-consolidation)
4. Held through Milroy Capital Limited a company controlled by Robert Milroy
5. Figure for 31 December 2018 incorrectly stated as 17,969,898 shares in 2018 annual report; correct % was stated
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Altus Strategies Plc
31 December 2019 | Annual Report
Key performance indicators (KPIs)
Information on the Group’s KPIs is included in the Strategic Report on pages 17-22.
Section 172 requirements
The Group’s response to the requirements of section 172 of the Companies Act 2006 is included in the
Strategic Report on pages 17-22.
Suppliers & Contractors
The Group has a prompt payment policy and seeks to ensure that all liabilities are settled within the
supplier’s terms. Through fair dealings the Group aims to cultivate the goodwill of its contractors,
consultants and suppliers.
Future developments
The Group will continue to execute its project and royalty generator business model during 2020. this
is expected to include:
-
-
-
continuing to grow the number of projects in our portfolio in our existing countries of
operations as well as in new jurisdictions;
completing a number of royalty-based joint venture and other transactions on our existing
assets; and
identifying potential project, royalty and corporate acquisition opportunities and where
possible concluding accretive transactions on these.
Financial risk management
In common with all other businesses, the Group is exposed to a variety of financial risks that arise from
its area of operations. These include the effect of changes in foreign currency exchange rates, funding
risk, credit risk and liquidity risk. The Group has a risk management programme in place that seeks to
limit the adverse effects on the financial performance of the Group. The Group does not use derivative
financial instruments to manage foreign currency risk and, as such, no hedge accounting is applied.
Financial risks are detailed in the Principal risks and uncertainties section of the Strategic Report on
page 18 and in note 24 of the financial statements.
Events after the reporting date
The events after the reporting date are set out in note 30 to the Financial Statements.
Directors’ and Officers’ Indemnity Insurance
The Group maintains Directors and Officers insurance, and its provision for qualifying third-party
indemnity for the benefit of its Directors and Officers was in place throughout the year and remained
in place at the reporting date.
Annual General Meeting
The Annual General Meeting of the Company will be held at the Company’s offices of the Company on
Tuesday 16 June 2020.
Auditor
PKF Littlejohn LLP has indicated its willingness to continue in office as the Group’s auditor. A resolution
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Altus Strategies Plc
31 December 2019 | Annual Report
proposing that they be re-appointed will be put forward at the Annual General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no
relevant audit information of which the company’s auditor is unaware. Additionally, the Directors
individually have taken all the steps that they ought to have taken as directors in order to make
themselves aware of any relevant audit information and to establish that the company’s auditor is aware
of that information.
On behalf of the board,
“Steven Poulton”
Steven Poulton
Chief Executive Officer
28 April 2020
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Altus Strategies Plc
31 December 2019 | Annual Report
Directors’ Remuneration Report
Remuneration Committee
The Remuneration Committee comprises Robert Milroy, David Netherway and Michael Winn and is
chaired by Robert Milroy. It meets at least once a year. Further details are included in the Corporate
Governance Report on pages 34-42. Due to the parent company’s listing on AIM it is not required to
comply with the following regulations, and has therefore excluded certain disclosures required by these
regulations.
Report Regulations 2013
-
- UKLA Listing Rules
-
the disclosure provisions under schedule 8 to SI 2008/410 of the Large and
- Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
Remuneration policy for Executive and Non-executive Directors
The remuneration policy for executive directors is designed to provide a competitive package, to reward
good performance and to align the directors’ interests with those of shareholders. The package includes
basic salary (which may be partly deferred and paid in shares), bonus and company pension
contributions in line with Group policy, as well as share options, although during 2019 no share options
were held by or granted to any director. Remuneration packages are reviewed annually. Bonuses for
executive directors in 2019 were set at 75% of basic salary and linked to a number of KPI targets.
Considering targets that had been met and other performance factors, the Committee determined that
a bonus of 37.5% of basic salary would be payable for the year and this was paid in 2020.
Non-executive Directors receive only basic fees and do not receive bonuses or company pension
contributions. They are included in the policy on share options although during 2019 no options were
held, granted or exercised.
Contracted and deferred remuneration
In each year directors may choose to defer some of their remuneration, whether this is salary or
company pension contributions, until such time as the Company has the liquid resources available to
be able to settle the deferred amounts in cash. Deferred remuneration is recorded in the accounts by
way of an accrual. A correction was made to the accounts during 2018 to increase the accrual in respect
of the period up to the end of 2017, which means that the charge for the comparative year appears
higher than the salary or fees that were due for that year.
The total value of directors’ remuneration for 2019 was £411,875, comprising £305,000 for executive
director salaries and non-executive director fees, £84,375 for executive director bonuses and £22,500
for executive director pension contributions.
In respect of salaries and fees, £242,340 was paid during the year, of which £172,340 was paid in
December. In respect of bonuses, £21,563 was paid in the year, which was a deferred bonus from 2017.
All of the 2019 bonuses were outstanding as at 31 December 2019. The balances of deferred salary and
bonuses were paid in March and April 2020.
Certain directors participated in the private placement in December, subscribing for a total of 6,774,263
shares for total proceeds to the Company of £352,262 (C$609,684).
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Altus Strategies Plc
31 December 2019 | Annual Report
The table below is a reconciliation of remuneration payable for 2019, accrual adjustments for prior years
and the charge in the accounts in the year as recorded in note 10 to the financial statements.
David
Steven
Matthew
Netherway
Poulton
Grainger
£
£
£
Robert
Milroy
£
Michael
Total
Winn
£
£
Salary / Fees
35,000
125,000
100,000
25,000
20,000
305,000
Bonuses
Pensions
Total
-
-
46,875
12,500
37,500
10,000
-
-
-
-
84,375
22,500
35,000
184,375
147,500
25,000
20,000
411,875
The deferred bonus in respect of 2017 that was disclosed in the Directors’ Remuneration Report in 2018
had not been accrued and the charge for this of £64,687 was added during the year. The accrual for
deferred salary for 2017 was found to be £1,819 too high and was reduced in the year. Adding these
two adjustments to the figures for 2019 brought the total charge in the accounts for the combined
directors’ remuneration to £474,743.
Remuneration payable for the three years 2017 – 2019
Remuneration payable to the directors of Altus for the last three years, comprising salary or fees, bonus
and pension contributions is in the table below.
Payable:
Salary/fees
Bonus
Pension
Total
David
Steven
Matthew
Netherway
Poulton
Grainger
£
35,000
35,000
29,166
-
-
-
-
-
-
35,000
35,000
29,166
£
£
125,000
122,500
86,250
46,875
-
74,503
12,500
12,250
8,625
184,375
134,750
169,378
100,000
100,000
86,250
37,500
-
150,502
10,000
10,000
8,625
147,500
110,000
245,377
Robert
Milroy
£
25,000
25,000
20,833
-
-
-
-
-
-
25,000
25,000
20,833
Michael
Winn
£
20,000
18,333
-
-
-
-
-
-
-
20,000
18,333
Total
£
305,000
300,833
222,499
84,375
-
225,005
22,500
22,250
17,250
411,875
323,083
-
464,754
2019
2018
2017
2019
2018
2017
2019
2018
2017
2019
2018
2017
Page | 48
Altus Strategies Plc
31 December 2019 | Annual Report
Remuneration paid during the three years 2017 – 2019
Remuneration actually paid to directors (prior to the applicable deductions of tax or national insurance), either in cash or equity, for the last three years was as follows.
David Netherway
Steven Poulton
Matthew Grainger
Robert Milroy* Michael Winn
Total
Chairman
CEO
Executive
Non-executive Non-executive
Cash
Equity
Cash
Equity
Cash
Equity
Cash
Equity Cash
Equity
Cash
Equity
Total
£
£
£
£
£
£
£
£
£
£
£
£
£
Received:
Salary/fees
Bonus
Pension
Total
2019
2018
2017
2019
2018
2017
2019
2018
2017
2019
2018
2017
74,167
-
-
-
-
-
-
-
-
74,167
-
-
-
-
6,250
97,500
-
-
91,090
86,000
- 70,833
75,000
37,500 72,500
68,083
33,750
-
-
-
-
-
-
-
-
-
-
31,378
-
-
-
6,250
97,500
-
-
-
-
-
-
-
-
21,563
-
128,940
17,675
-
40,200
63,750
86,000
75,000
68,878 72,500
237,223
33,750
-
-
-
-
-
-
-
-
- 70,833
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
242,340
183,500
- 242,340
- 183,500
105,583
181,250 286,833
21,563
-
160,318
17,675
-
40,200
281,578
183,500
-
-
21,563
-
- 160,318
-
-
-
17,675
-
40,200
- 281,578
- 183,500
306,101
181,250 487,351
* Robert Milroy is a director through Milroy Capital Ltd
Equity received in lieu of cash payment of salary/fees in 2017 was at a price of 12.5p (pre consolidation) and included amounts due from 2015, 2016 and 2017:
David Netherway £75,000 (600,000 shares), Steven Poulton £72,500 (580,000 shares), Matthew Grainger £33,750 (270,000 shares)
Page | 49
Altus Strategies Plc
31 December 2019 | Annual Report
Deferred remuneration for the three years 2017 – 2019
Remuneration that directors elect to defer in order to preserve the Company’s cash balance in respect
of the three years 2017-2019, and which formed the balance of deferred remuneration at the end of the
year is as follows:
Deferred:
Salary/fees
Bonus
Pension
Total
2019
2018
2017
2019
2017
2019
2018
2017
Prior
2019
2018
2017
Prior
Total
David
Steven
Matthew
Netherway
Poulton
Grainger
£
£
£
Robert
Milroy
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
116,250
36,250
25,000
28,750
46,875
43,125
12,500
12,250
8,625
29,250
327
-
37,500
-
-
-
-
-
175,625
73,750
37,250
80,500
29,250
327
-
-
322,625
74,077
Michael
Total
Winn
£
20,000
18,333
-
-
-
-
-
-
-
20,000
18,333
-
-
£
172,500
43,660
28,750
84,375
43,125
12,500
12,250
8,625
29,250
269,375
55,910
80,500
29,250
38,333
435,035
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Purchase of Company shares by directors
In addition to deferring remuneration, the directors of the Company have used their own cash to
purchase shares in the Company; these purchases in 2017-2019 were as follows (pre-consolidation):
David
Steven
Matthew
Robert
Michael
Total
Netherway
Poulton
Grainger
Milroy*
Winn
Chairman
CEO
Executive Non-exec. Non-exec.
2019
Value £
Shares
75,727
139,125
66,578
70,834
1,456,275
2,675,481
1,280,328
1,362,179
Average price p
5.20
5.20
5.20
5.20
2018
Value £
Shares
Average price p
2017
Value £
Shares
-
-
-
25,613
15,055
11,798
795,431
400,000
325,000
3.22
3.76
3.63
41,479
163,084
101,518
31,250
1,114,000
2,056,800
3,017,800
250,000
Average price p
3.72
7.93
3.36
12.50
Total
Value £
Shares
158,685
516,519
299,724
156,930
3,684,275
8,379,943
8,115,928
2,512,179
Average price p
4.31
6.16
3.69
6.25
* Purchased by Milroy Capital Ltd
-
-
-
-
-
-
-
-
-
-
-
-
352,264
6,774,263
5.20
52,465
1,520,431
3.45
337,331
6,438,600
5.24
1,131,856
22,692,325
4.99
Page | 50
Altus Strategies Plc
31 December 2019 | Annual Report
Service period
Both executive directors have service contracts with the Group with notice periods of three months. No
director has a service agreement with a notice period in excess of three months.
Share options
The Company and its subsidiaries have not had any outstanding share options since Altus Strategies
plc’s AIM listing in 2017, when the previous scheme was cancelled. During the year, the Company
received shareholder approval to adopt a share option scheme to issue share purchase options to
directors and employees and the Company plans to grant such options during 2020.
By order of the Board
“Robert Milroy”
Robert Milroy
Chairman of the Remuneration Committee
28 April 2020
Page | 51
Altus Strategies Plc
31 December 2019 | Annual Report
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that
law the Directors have prepared the Group and Parent Company financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under
company law the directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or
loss of the Group and Parent Company for that period. The Directors are also required to prepare
financial statements in accordance with the rules of the London Stock Exchange for companies trading
securities on the AIM and in accordance with the rules of the TSX-V.
In preparing these financial statements, the directors are required to:
-
-
select suitable accounting policies and apply them consistently
state whether applicable IFRSs as adopted by the European Union have been followed for the
Group and Parent Company financial statements, subject to any material departures disclosed
and explained in the financial statements
- make judgements and accounting estimates that are reasonable and prudent
-
prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group and Parent Company will continue in business
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s and Parent Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Parent Company and enable them to ensure that the
financial statements comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Group and Parent Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may differ from legislation in other
jurisdictions.
The Company is compliant with AIM Rule 26 regarding the Company’s website.
On behalf of the board
“Steven Poulton”
Steven Poulton
Chief Executive Officer
28 April 2020
Page | 52
Altus Strategies Plc
31 December 2019 | Annual Report
Independent Auditor’s Report to the Members of Altus Strategies plc
Opinion
We have audited the financial statements of Altus Strategies plc (the parent company) and its subsidiaries
(the group) for the year ended 31 December 2019 which comprise the Group Statement of Comprehensive
Income, the Group and Parent Company Statements of Financial Position, the Group and Parent Company
Statements of Changes in Equity, the Group and Parent Company Statements 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 adopted by the European Union and as regards the parent company
financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
The financial statements give a true and fair view of the state of the group’s and of the parent
company's affairs as at 31 December 2019 and of the group’s and parent company’s loss for the
year then ended;
The group financial statements have been properly prepared in accordance with IFRSs as adopted
by the European Union;
The parent company financial statements have been properly prepared in accordance with IFRSs
as adopted by the European Union and as applied in accordance with the provisions of the
Companies Act 2006; and
The financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor's
responsibilities for the audit of the financial statements section of our report. We are independent of the
group and parent company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
We draw your attention to note 1 of the financial statements, which describes the directors of the group
and parent company’s assessment of the COVID-19 impact on its ability to continue as a going concern.
The directors have explained that the events arising from the COVID-19 outbreak do not impact the
group’s use of the going concern basis of preparation nor do they cast significant doubt about the group’s
and parent company’s ability to continue as a going concern for a period of at least twelve months from
the date when the financial statements are authorised for issue.
Our opinion is not modified in this respect.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require
us to report to you where:
the directors' use of the going concern basis of accounting in the preparation of the financial
statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties
Page | 53
Altus Strategies Plc
31 December 2019 | Annual Report
that may cast significant doubt about the group’s or the parent company’s ability to continue
to adopt the going concern basis of accounting for a period of at least twelve months from the
date when the financial statements are authorised for issue.
Our application of materiality
The materiality applied to the group financial statements was £140,000 (2018: £180,000), based on
thresholds for net assets and the loss before tax. The performance materiality for the group was £98,000
(£126,000). The materiality applied to the parent company financial statements was £30,000 (£60,000)
based upon the loss before tax. The performance materiality for the parent company was £21,000
(£42,000).
An overview of the scope of the audit
In designing our audit, we determined materiality and assessed the risk of material misstatement in the
financial statements. In particular, we looked at areas involving significant accounting estimates and
judgement by the directors and considered future events that are inherently uncertain. We also
addressed the risk of management override of internal controls, including among other matters
consideration of whether there was evidence of bias that represented a risk of material misstatement
due to fraud.
The accounting records of the parent company and all subsidiary undertakings are centrally located and
audited by us based upon materiality or risk. The key audit matters addressed, and how these were
addressed are outlined below.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current year and include the most significant assessed risks of
material misstatement (whether or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key Audit Matter
How the scope of our audit responded
to the key audit matter
Valuation
and
recoverability
of
We reviewed the Group’s exploration
exploration assets and, for the parent
licences and permits to confirm good title
company,
amounts
due
from
and standing. For licences which had
subsidiary and related undertakings
expired and are in the process of renewal,
(refer notes 16,18 and 20).
we assessed the relevant factors,
in
conjunction with discussions with
The carrying value of intangible assets as
management, regarding the likelihood of
at 31 December 2019 is £3,202,950 (2018:
renewal.
£4,071,870) which
comprises
costs
associated with early stage exploration
We reviewed the terms and status of the
licenses and projects
in Africa. The
joint venture agreements in place, in
carrying
value of
investments
in
conjunction with
the
accounting
subsidiaries, together with intra-group
treatment adopted under the terms of
receivables, was £9,190,705
(2018:
those agreements.
£7,287,035) as at 31 December 2019.
Page | 54
Altus Strategies Plc
31 December 2019 | Annual Report
The early stage projects were reviewed for
These carrying values are tested annually
indicators of impairment in accordance
for impairment. There is a risk that the
with
IFRS 6. We discussed with
carrying values are impaired given they
management the scope of their future
comprise early stage exploration projects
budgeted and planned expenditure on
and therefore require an assessment of
the licence area, together with a review of
impairment indicators under IFRS 6. The
subsequent events in relation to disposals
recoverability of investments and intra
of licenses and subsidiaries.
group receivables in turn are based upon
the
recoverability of
the underlying
The recoverability of amounts due from
exploration projects.
subsidiary and related undertakings were
assessed by reference to the underlying
exploration projects.
Other information
The other information comprises the information included in the Annual Report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information.
Our opinion on the group and parent company financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Directors' Report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or
the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns;
or
Page | 55
Altus Strategies Plc
31 December 2019 | Annual Report
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for
the preparation of the group and parent company financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the group and parent company financial statements, the directors are responsible for
assessing the group’s and the parent company’s ability to continue as a going concern, disclosing, as
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in an auditor's report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this
[Signed]
David Thompson (Senior Statutory Auditor)
for and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
28 April 2020
Page | 56
Altus Strategies Plc
31 December 2019 | Annual Report
Independent Auditor’s Report to the Members of Altus Strategies plc in
Respect of Canadian National Instrument 52-107
Opinion
We have audited the group financial statements of Altus Strategies plc and its subsidiaries (the group) for the
year ended 31 December 2019 which comprise the Group Statement of Comprehensive Income, the Group
Statement of Financial Position, the Group Statement of Changes in Equity, the Group Statement of Cash Flows
and notes to the financial statements, including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB).
In our opinion:
-
-
the group financial statements present fairly, in all material respects, the financial position of the group
as at 31 December 2019 and 31 December 2018 and its financial performance and its cash flows for the
years then ended; and
the group financial statements have been properly prepared in accordance with IFRSs as issued by the
IASB.
Basis for Opinion:
We conducted our audit in accordance with International Standards on Auditing (ISAs) as issued by the IASB
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.
Emphasis of matter
We draw your attention to note 1 of the financial statements, which describes the directors of the group and
parent company’s assessment of the COVID-19 impact on its ability to continue as a going concern. The directors
have explained that the events arising from the COVID-19 outbreak do not impact the group’s use of the going
concern basis of preparation nor do they cast significant doubt about the group’s and parent company’s ability
to continue as a going concern for a period of at least twelve months from the date when the financial
statements are authorised for issue.
Our opinion is not modified in this respect.
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.
Page | 57
Altus Strategies Plc
31 December 2019 | Annual Report
Key Audit Matter
How the scope of our audit responded to the
key audit matter
Valuation and recoverability of exploration
We reviewed the Group’s exploration licences
assets and, for the parent company, amounts
and permits to confirm good title and standing.
due from subsidiary and related undertakings
For licences which had expired and are in the
(refer notes 16,18 and 20).
process of renewal, we assessed the relevant
factors, in conjunction with discussions with
The carrying value of intangible assets as at 31
management,
regarding
the
likelihood of
December 2019 is £3,202,950 (2018: £4,071,870)
renewal.
which comprises costs associated with early stage
exploration licenses and projects in Africa. The
We reviewed the terms and status of the joint
carrying value of investments in subsidiaries,
venture agreements in place, in conjunction with
together with intra-group receivables, was
the accounting treatment adopted under the
£9,190,705 (2018: £7,287,035) as at 31
terms of those agreements.
December 2019.
The early stage projects were reviewed for
These carrying values are tested annually for
indicators of impairment in accordance with IFRS
impairment. There is a risk that the carrying
6. We discussed with management the scope of
values are impaired given they comprise early
their future budgeted and planned expenditure
stage exploration projects and therefore require
on the licence area, together with a review of
an assessment of impairment indicators under
subsequent events in relation to disposals of
IFRS 6. The recoverability of investments and intra
licenses and subsidiaries.
group receivables in turn are based upon the
recoverability of the underlying exploration
The
recoverability of amounts due
from
projects.
Other information
subsidiary and
related undertakings were
assessed by
reference
to
the underlying
exploration projects.
The other information comprises the information included in the annual report and the management discussion
and analysis, other than the financial statements and our auditor’s report thereon. The Directors are responsible
for the other information.
Our opinion on the group financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Page | 58
Altus Strategies Plc
31 December 2019 | Annual Report
Responsibilities of the directors
The directors are responsible for the preparation and fair presentation of the financial statements in accordance
with IFRSs, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group financial statements, the Directors are responsible for assessing the group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
The directors 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 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.
Page | 59
Altus Strategies Plc
31 December 2019 | Annual Report
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.
[Signed]
David Thompson (Engagement Partner)
for and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
28 April 2020
Page | 60
ALTUS STRATEGIES PLC
Group Statement of Comprehensive Income
For the Year Ended 31 December 2019
Company Registration No. 10746796
Continuing operations
Management fees and costs recovered from
Notes
4
6
7
11
4
12
13
joint venture partners
Exploration costs expensed
Administrative expenses
Listing and acquisition related costs
Loss from operations
Finance (costs)/ income
Other income
Other gains/ (losses) on investments
Loss before taxation
Income tax
Loss for the year
Other comprehensive income
Exchange differences on retranslation of net
assets of subsidiaries
Total comprehensive loss for the year
Loss for the year attributable to:
- Owners of the parent company
- Non-controlling interest
Total comprehensive income for the year attributable
- Owners of the parent company
- Non-controlling interest
2019
£
59,911
(1,101,000)
(785,031)
(88,595)
(1,914,715)
(8,338)
151,875
(627,444)
(2,398,622)
-
(2,398,622)
Restated
2018
£
89,678
(1,151,899)
(700,113)
(19,284)
(1,781,618)
62
1,977
282,227
(1,497,352)
-
(1,497,352)
(5,587)
(76,992)
(2,404,209)
(1,574,344)
(2,372,787)
(25,835)
(2,398,622)
(2,378,374)
(25,835)
(2,404,209)
(1,494,863)
(2,489)
(1,497,352)
(1,571,855)
(2,489)
(1,574,344)
Earnings per share (pence) attributable to
the owners of the parent
Basic earnings per share
14
(1.34)
(0.90)
The notes on pages 68-94 form part of these financial statements.
Page | 61
ALTUS STRATEGIES PLC
Group Statement of Financial Position
As at 31 December 2019
Company Registration No. 10746796
Notes
15
16
28
18
19
20
21
20
22
21
27
27
Non-current assets
Intangible assets
Property, plant and equipment
Right of use assets
Investments at fair value through profit
or loss
Current assets
Trade and other receivables
Held-for-sale assets
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Held-for-sale liabilities
Provisions
Non-current liabilities
Trade and other payables
Total liabilities
Net current assets
Net assets
Equity
Share capital
Share premium
Translation reserve
Other reserves
Retained earnings
Total equity attributable to owners of
the parent
Non-controlling interest
Total equity
2019
£
3,202,950
3,190
80,262
302,072
3,588,474
196,219
66,023
2,212,642
2,474,884
6,063,358
(1,438,875)
(13,182)
(15,000)
(1,467,057)
(65,797)
(1,532,854)
1,007,827
4,530,503
2,102,284
7,378,369
(82,579)
5,755,070
(10,524,314)
4,628,830
(98,327)
4,530,503
2018
£
4,071,870
7,932
-
883,763
4,963,565
79,292
-
724,785
804,077
5,767,642
(486,934)
-
(15,000)
(501,934)
-
(501,934)
302,143
5,265,708
1,777,827
6,018,822
(76,992)
5,770,070
(8,151,527)
5,338,200
(72,492)
5,265,708
The notes on pages 68-94 form part of these financial statements. The financial statements were approved by
the board of directors and authorised for issue on 28 April 2020 and are signed on its behalf by:
“Steven Poulton”
Steven Poulton
Chief Executive Officer
Page | 62
ALTUS STRATEGIES PLC
Company Statement of Financial Position
As at 31 December 2019
Company Registration No. 10746796
Notes
2019
£
2018
£
Non-current assets
Investments in subsidiaries
Investments at fair value through profit or
loss
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net current assets
Net assets
Equity
Called up share capital
Share premium
Other reserves
Retained earnings
Total equity
17
16
19
21
27
27
4,608,930
4,608,930
208,953
4,817,883
4,598,461
219,343
4,817,804
9,635,687
(1,005,510)
(1,005,510)
-
4,608,930
2,705,706
37,544
2,743,250
7,352,180
(117,033)
(117,033)
3,812,287
8,630,177
2,626,217
7,235,147
2,102,284
7,378,369
27,456
(877,932)
1,777,827
6,018,822
42,456
(603,958)
8,630,177
7,235,147
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 £273,974 (2018: £221,296).
The notes on pages 68-94 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 28 April 2020
and are signed on its behalf by:
“Steven Poulton”
Steven Poulton
Chief Executive Officer
Page | 63
ALTUS STRATEGIES PLC
Group Statement of Changes in Equity
For the Year Ended 31 December 2019
Balance at 1 January 2018
Year ended 31 December 2018
Loss for the year
Other comprehensive loss for the year
Total comprehensive income for the period
Issue of share capital
Share issue costs
Issue of warrants
Warrants exercised
Total transactions with owners, recognised
directly in equity
Balance at 31 December 2018
Year ended 31 December 2019
Loss for the year
Other comprehensive loss for the year
Total comprehensive income for the year
Share
Share
premium
Translation
Other
Notes
capital
account
reserve
reserves
Retained
earnings
£
Non-
Total
controlling
equity
interest
£
£
Total
£
5,727,614
(6,656,664)
1,146,758
(70,003)
1,076,755
£
£
1,076,808
999,000
-
-
-
-
-
-
27
684,519
5,103,396
-
-
(146,274)
-
16,500
62,700
701,019
5,019,822
£
-
-
(76,992)
(76,992)
-
-
-
-
-
£
-
-
-
-
-
42,456
-
42,456
(1,494,863)
(1,494,863)
(2,489)
(1,497,352)
-
(76,992)
-
(76,992)
(1,494,863)
(1,571,855)
(2,489)
(1,574,344)
-
-
-
-
-
5,787,915
(146,274)
42,456
79,200
5,763,297
5,338,200
-
-
-
-
-
5,787,915
(146,274)
42,456
79,200
5,763,297
(72,492)
5,265,708
1,777,827
6,018,822
(76,992)
5,770,070
(8,151,527)
-
-
-
-
-
-
-
(5,587)
(5,587)
-
-
-
-
-
-
(15,000)
(2,372,787)
(2,372,787)
(25,835)
(2,398,622)
-
(5,587)
-
(5,587)
(2,372,787)
(2,378,374)
(25,835)
(2,404,209)
-
-
1,684,004
(15,000)
-
-
1,684,004
(15,000)
Issue of share capital
Warrants expired
27
324,457
1,359,547
-
-
Total transactions with owners, recognised
directly in equity
324,457
1,359,547
(5,587)
(15,000)
(2,372,787)
(709,370)
(25,835)
(735,205)
Balance at 31 December 2019
2,102,284
7,378,369
(82,579)
5,755,070
(10,524,314)
4,628,830
(98,327)
4,530,503
The notes on pages 68-94 form part of these financial statements.
Page | 64
ALTUS STRATEGIES PLC
Company Statement of Changes in Equity
For the Year Ended 31 December 2019
Share
Share
premium
Other
Retained
capital
account
reserves
earnings
Total
Notes
£
1,076,808
£
999,000
-
-
27
684,519
-
16,500
701,019
5,103,396
(146,274)
-
62,700
5,019,822
£
-
-
-
42,456
-
42,456
£
£
(382,662) 1,693,146
(221,296)
(221,296)
-
-
-
-
-
5,787,915
(146,274)
42,456
79,200
5,763,297
Balance at 1 January 2018
Year ended 31 December 2018
Loss and total comprehensive
income for the year
Issue of share capital
Share issue costs
Issue of warrants
Exercise of warrants
Total transactions with owners,
recognised directly in equity
Balance at 31 December 2018
1,777,827
6,018,822
42,456
(603,958) 7,235,147
Year ended 31 December 2019
Loss and total comprehensive
income for the year
Issue of share capital
Expiry of warrants
Total transactions with owners,
recognised directly in equity
-
-
27
324,457
1,359,547
-
-
-
-
(15,000)
(273,974)
(273,974)
-
-
1,684,004
(15,000)
324,457
1,359,547
(15,000)
(273,974)
1,395,030
Balance at 31 December 2019
2,102,284
7,378,369
27,456
(877,932) 8,630,177
The notes on pages 68-94 form part of these financial statements.
Page | 65
ALTUS STRATEGIES PLC
Group Statement of Cash Flows
For the Year Ended 31 December 2019
Cash flows from operating activities
Loss from continuing operations
Less: movement in depreciation
Less: impairment of intangible assets
Equity-settled share based payments
Foreign exchange on foreign operations
Decrease in trade and other receivables
Increase in trade and other payables
Other working capital
2019
£
2018
£
(1,914,715)
(1,781,618)
26,210
39,210
22,103
-
32,203
185,083
29,213
7,331
20,529
-
(77,082)
34,712
7,453
1,977
Net cash outflow used in operating activities
(1,580,693)
(1,786,698)
Investing activities
Cash acquired on purchase of subsidiary
Proceeds from sale of subsidiary
Proceeds from sale of investment
Purchase of intangible assets
Purchase of property, plant and equipment
Interest received
Interest paid
Net cash generated from/(used in) investing activities
Financing activities
Net proceeds from the issue of shares
Proceeds for which issue of shares pending (see note 21)
Principal element of lease payments
Interest element of lease payments
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Exchange movements on cash and cash equivalents
Cash and cash equivalents at end of the year
Significant non- cash transactions
-
38,664
673,852
(30,587)
(1,321)
14
(183)
680,439
1,684,004
722,482
(12,073)
(6,302)
2,388,111
1,487,857
724,785
-
2,212,642
13,222
-
-
(270,534)
(12,876)
62
-
(270,126)
2,258,175
-
-
-
2,258,175
201,351
523,344
90
724,785
On 7 November 2019 Altus Strategies plc was issued 3 million shares in Desert Gold Ventures Inc. as
consideration for the purchase of the Company’s subsidiary, Legend Mali Holdings (BVI) Inc., and its indirect
holding in the Djelimangara and Sebessounkoto Sud licences located in western Mali.
The notes on pages 68-94 form part of these financial statements.
Page | 66
ALTUS STRATEGIES PLC
Company Statement of Cash Flows
For the Year Ended 31 December 2019
Cash flows from operating activities
Loss before tax
Less: Interest paid
Less: FV loss on investments
Equity-settled share based payments
Decrease in trade and other receivables
Increase in trade and other payables
Increase in intercompany balances
Other working capital
Net cash used in operating activities
Investing activities
Purchase of investments in subsidiaries
Purchase of investments
Interest paid
2019
£
2018
£
(273,974)
(221,296)
183
3,242
22,103
10,915
(18,957)
-
-
-
283
14,676
(1,740,820)
(2,167,381)
(15,000)
(2,012,308)
(2,373,718)
-
(138,000)
(208,953)
(183)
-
-
Net cash used in investing activities
(209,136)
(138,000)
Financing activities
Proceeds from the issue of shares
Proceeds for which issue of shares pending (see note 21)
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Exchange movements on cash and cash equivalents
Cash and cash equivalents at end of the year
1,684,004
722,482
2,406,486
185,042
37,544
(3,243)
219,343
2,258,175
-
2,258,175
(253,543)
291,087
-
37,544
Significant non- cash transactions
On 7 November 2019 the Company was issued 3 million shares in Desert Gold Ventures Inc. as consideration
for the purchase of the Company’s subsidiary, Legend Mali Holdings (BVI) Inc., and its indirect holding in the
Djelimangara and Sebessounkoto Sud licences located in western Mali.
The notes on pages 68-9 form part of these financial statements.
Page | 67
ALTUS STRATEGIES PLC
Notes to the Financial Statements
For the Year Ended 31 December 2019
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 17.
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 £273,974
(2018: £221,296).
Basis of consolidation
The consolidated financial statements comprise the financial statements of Altus Strategies plc and its
subsidiaries as at 31 December 2019. Subsidiaries are fully consolidated from the date on which control
is transferred to the Group.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:
power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities
of the investee)
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its future
Generally, there is a presumption that a majority of the voting rights results in control. To support this
presumption and when the Group has less than a majority of the voting rights or similar rights of an
investee, the Group considers all relevant facts and circumstances in assessing whether it has the power
over an investee, including:
The contractual arrangements with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights
-
-
-
-
-
-
Page | 68
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when
the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
“Joint ventures” as referred to in the financial statements refer to agreements with exploration partners
and not joint ventures as defined within IFRS 11.
Profit or loss and each component of other comprehensive income are attributed to the equity holders
of the parent company of the Group and to the non-controlling interests, even if this results in the non-
controlling interests having a deficit balance.
All inter-group assets and liabilities, equity income, expense and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
Going concern
Between December 2019 and February 2020, the Group concluded a non-brokered private placement of
shares and a strategic investment from La Mancha (see Chief Executive’s Review pages 10-16), which
together brought funds of £8.9 million (C$15.4 million) into the Group. As outlined in announcements
pertaining to this funding, the Group intends to deploy these funds to accelerate its existing project and
royalty generation activities, and to make new project and royalty acquisitions.
In response to the dramatic impact that the coronavirus pandemic is having on the global economy, on
the mining sector and on all aspects of business operations, the Group has reviewed its activities and
expenditure for the forthcoming months. All on site project activities were suspended in advance of local
movement restrictions and closures of international borders, and the geological team switched to home-
based research and analysis. Apart from the costs of maintaining its staff and its normal business
operations, much of the expenditure envisaged under the Group’s post-funding budget is discretionary.
There is significant scope to adjust levels of expenditure in line with long term expectations of financial
constraint.
Given the Group’s cash balances as a result of the inflow of funds, and notwithstanding the severity of the
economic impact of coronavirus, the Directors have, at the time of approving the financial statements, a
reasonable expectation that the Group has adequate resources to continue in operational existence for
the foreseeable future. It has sufficient cash to maintain its current business operations for at least twelve
months and does not expect to have to raise funds to provide additional working capital in that time.
Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial
statements.
Exceptional items
Exceptional items are disclosed separately in the financial statements where it is necessary to do so, to
provide further understanding of the financial performance of the Group. They are material items of
income or expense that have been shown separately due to the significance of their nature or amount.
IPO and acquisition related costs are included as exceptional items in profit or loss.
Page | 69
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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.
Other reserves
Other reserves consist of a non-distributable merger reserve from historic acquisitions and the share
based payment reserve as a result of the share based payments outlined in note 26.
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 2019:
IFRS 16 Leases
IFRIC 23 Uncertainty over Income Tax Treatments
-
-
-
- Annual Improvements to IFRS Standards 2015-2017 Cycle
IAS 28 (Amendments) Long-term interests in Associates and Joint Ventures
On 1 January 2019, the Group adopted all of the requirements of IFRS 16 – Leases. IFRS 16 Leases was
issued in January 2016 and provides a single lessee accounting model, requiring lessees to recognise
assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a
low value.
At 1 January 2019 the Group had no leases with a lease term greater than 12 months. Consequently, the
adoption of the standard resulted in no impact to the opening financial statements. Periodic payments
made in respect of mineral exploration site licences are capitalised under the rules of IFRS 6 and are
outside the scope of IFRS 16.
One new lease was signed during the financial year. In the Statement of Financial Position the right-of-
use asset is recorded in Non-current assets and the lease liability is split between Current liabilities for the
portion due within 12 months (£18,198) and Non-current liabilities for the remainder (£65,797).
To determine the split between principal and interest in the lease the Company applied an estimate of
the interest it would have to pay in order to finance payments under the new lease. This method was
adopted as the Company was not able to ascertain the implied interest rate in the lease agreement and
does not have borrowings to use as a benchmark. The impact of the estimate is currently considered to
be immaterial to the financial statements, but the Directors will review this approach as appropriate. The
Page | 70
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
figures brought into the Statement of Financial Position represented 2% of Non-current assets, 3% of
Current liabilities and 100% of Non-current liabilities. The net effect on Net Assets at 31 December 2019
is a reduction of £3,735. See note 28 for further detail.
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:
Amendments to references to the conceptual framework in IFRS standards
Amendments to IFRS 3 Business Combinations
Amendments to IAS 1 and IAS 8: Definition
* subject to EU endorsement
Effective date
1 January 2020
*1 January 2020
1 January 2020
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.
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.
Other gains and losses
Impairment of deferred exploration costs
Share based payments
Note 12
Note 15
Note 26
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 2019 was £59,911 (2018: £89,678).
Page | 71
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Group
Management fees and costs recovered from joint
venture partners
Loss from operations
Reportable segment assets
Reportable segment liabilities
Management fees and costs recovered from joint
venture partners
Loss from operations
Reportable segment assets
Reportable segment liabilities
UK
2018
£
40,678
Africa
2018
£
49,000
Total
2018
£
89,678
(1,143,365)
1,565,829
(441,477)
(638,253)
4,201,813
(60,547)
(1,781,618)
5,767,642
(501,934)
2019
£
13,163
2019
£
46,748
2019
£
59,911
(1,312,527)
(602,185)
(1,914,715)
2,597,590
3,465,768
6,063,358
(1,455,318)
(77,536)
(1,532,854)
Other income of £151,875 in the year included an R&D tax credit of £129,031 that was submitted during
the year in respect of 2017 and settled by HMRC in February 2020; there was no corresponding credit in
the comparative year.
Operating loss
Operating loss for the year is stated after
Exchange losses/(gains)
Exploration and development costs (note 6)
Listing and acquisition related costs
Depreciation (including right-of-use assets)
Share-based payments
Operating lease charges
2019
£
2018
£
31,825
(25,726)
1,101,000
1,151,899
88,595
26,210
22,103
26,774
19,284
7,331
12,854
38,222
Exploration and development costs
The Group’s costs derived from its operations in countries in which it holds licences are detailed below.
Location and licence
Cameroon (3 projects)
Ethiopia (3 projects)
Côte d’Ivoire (1 project)
Liberia (1 project)
Mali (4 projects)
Morocco (4 projects)
Total
Administrative
Operational
Travel
Total
expenses
expenses
expenses
2019
£
136,484
115,449
51,045
33,019
148,268
131,018
615,283
2019
£
71,426
89,505
22,585
46,705
102,693
80,626
413,540
2019
£
13,193
38,185
-
441
17,952
2,406
2019
£
221,103
243,139
73,630
80,165
268,913
214,050
72,177
1,101,000
Page | 72
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Location and licence
Cameroon (3 projects)
Ethiopia (2 projects)
Côte d’Ivoire (1 project)
Liberia (1 project)
Mali (6 projects)
Morocco (4 projects)
Other
UK costs (see below)
Total
Administrative
Operational
Travel
Total
expenses
expenses
expenses
2018
£
103,594
61,800
21,993
34,954
92,136
62,680
16,017
520,997
914,171
2018
£
31,934
46,453
15,375
41,295
18,794
18,058
25
-
2018
£
10,437
14,339
6,664
19,387
7,690
7,277
-
-
2018
£
145,965
122,592
44,032
95,636
118,620
88,015
16,042
520,997
171,934
65,794
1,151,899
During the year the Zager licence in Ethiopia was granted and the Djelimangara and Sebessounkoto Sud
licences in Mali were sold to Desert Gold (see note 15). The Company has two licence applications pending
in Côte d’Ivoire.
The table of figures for the comparative year has been condensed as geologists’ salaries and other staff
and support costs, which were the material costs in each country, were previously not split between
projects but were recorded as “general” costs. In the Statement of Comprehensive Income on page 61
the total figure for Exploration costs in 2018 has been restated from £630,902 to £1,151,899 to incorporate
an allocation of UK costs, including geologists’ salaries, management time and UK support costs. The
allocation reflects the reduction in Administrative costs as outlined in note 7.
Administrative expenses
Administrative expenses include the balances in the table below. Audit fees for the financial year 2018
were recorded in 2019, and fees for the financial year 2019 were accrued in 2019. Rent for the UK
office now falls under IFRS 16 (see note 28), reducing premises costs and increasing depreciation.
Group
Employee costs (note 9)
Consultants and contractors
Legal fees
Audit, accountancy & tax
Registrar fees
Other professional expenses
Travel expenses
Premises and office expenses
Exchange (gains)/losses
Depreciation of property, plant and equipment
Impairment of licence
Other expenses
2019
£
315,890
8,981
55,734
98,289
17,761
89,534
53,981
10,222
31,825
26,210
39,210
37,394
785,031
2018
restated
£
282,923
37,848
25,488
37,642
40,047
119,059
59,693
63,349
(25,726)
7,331
20,198
32,261
700,113
2018
£
746,022
56,808
25,488
37,642
40,047
100,073
84,151
88,826
(25,726)
7,331
20,529
39,919
1,221,110
Page | 73
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Auditor’s remuneration
Fees payable to the company’s auditor for the financial year were as follows.
For audit services
Audit of the financial statements of the group and company
2019
£
22,000
2018
£
21,500
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.
Group
Directors
Employees (excluding consultants and associates)
2019
Number
2018
Number
5
23
28
5
23
28
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.
Group
Wages, salaries and non-executive directors’ fees
Bonuses
Social security costs
Pension costs
Other costs
2019
£
554,879
130,000
65,061
105,730
(400)
855,270
2018
£
660,469
1,500
49,877
25,420
8,756
746,022
Directors’ remuneration
Details of directors’ remuneration are included in the Directors’ Remuneration Report on pages 47-51. As
noted in the report, the 2018 salaries figures and 2019 bonus include additional accruals for fees relating
to prior years. Further, each director had elected to defer some or all of their fees/salary.
Page | 74
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Fees/salaries
Bonuses
Pensions
Total
2019
2018
2019
2018
2019
2018
2019
2018
£
£
£
£
£
£
£
£
35,000
25,000
20,000
49,583
38,541
18,333
-
-
-
-
-
-
-
-
-
-
-
-
35,000
25,000
20,000
49,583
38,541
18,333
Non-executive
directors
David Netherway
Robert Milroy
Michael Winn
Executive
directors
Steven Poulton
125,000
181,679
Matthew Grainger
100,000
113,667
46,875
37,500
- 12,500
3,995
184,375
185,674
- 10,000
7,675
147,500
121,342
Total
305,000
401,803
84,375
- 22,500 11,670
411,875
413,473
Bonus accrual
2017
Salary accrual
2017
Total
-
(1,819)
-
-
64,687
-
-
-
-
-
-
-
64,687
(1,819)
303,181
401,803
149,062
- 22,500 11,670
474,743
-
-
-
During 2019 retirement benefits accrued under defined contribution schemes for 2 executive directors
(2018: 2 directors). The deferred bonus in respect of 2017 that was disclosed in the Directors’
Remuneration Report in 2018 had not been accrued and the charge for this was recognised during the
year. The accrual for deferred salary for 2017 was found to be £1,819 too high and was reduced in the
year.
Finance (costs)/ income
Group
Interest on bank deposits
Interest on lease liabilities (note 28)
Other gains and losses
2019
£
(169)
(8,169)
(8,338)
2018
£
62
-
62
See note 23 for accounting policy and detail of financial assets held at fair value through profit or loss.
Group
Unrealised
Fair value gains/(losses) on financial assets at fair value
(85,085)
282,227
2019
£
2018
£
through profit or loss
Realised
Loss on disposal of investments
Loss on disposal of subsidiaries
(21,444)
(520,915)
(627,444)
-
282,227
Page | 75
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
During 2019 the Group sold its interest in Legend Gold Mali Holdings (BVI) Inc., which, through its
subsidiary Etruscan Resources Mali SARL, holds the Djelimangara and Sebessounkoto Sud gold licences
in western Mali. The loss recorded was based on the carrying value of the investment measured against
the initial consideration received from the purchaser, Desert Gold Ventures Inc.
Djelimangara and Sebessounkoto Sud gold projects were held on the books as assets with a value of
£379,851 and £392,978 respectively. As a result of the sale of the assets for a total of £251,914, being
£38,664 (US$50,000) in cash and £213,250 (3 million shares) in equity of Desert Gold, the company wrote
off an amount of £520,915.
The sale agreement that was announced on 31 October 2019 included further milestone payments to the
Group subject to progress on the projects and a 2.5% net smelter return royalty. No income has been
recognised in respect of these future payments as the likelihood of them occurring is considered too
contingent at this stage.
Income tax
Income tax represents the sum of the tax currently payable and deferred tax.
Current tax
Current tax is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit or
loss as reported in the Statement of Comprehensive Income because it excludes items of income or
expense that are taxable or deductible in other years and it further excludes items that are never taxable
or deductible. Current tax is calculated using tax rates that have been enacted or substantively enacted
by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit or loss, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the
temporary difference arises from the initial recognition of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is
settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when
it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with
in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right
to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied
by the same tax authority.
Current tax for the year is as follows.
Group
Income tax expense
2019
2018
£
-
£
-
Page | 76
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Current tax for the year for the Company was £nil (2018: £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.
Group
Loss before taxation
Expected tax charge based on the standard rate of corporation tax
in the UK of 19% (2018: 19%)
Tax effect of:
2019
£
(2,398,622)
2018
£
(1,497,352)
(455,738)
(284,497)
- Expenses not deductible for tax purposes
- Impairment not deductible for tax purposes
- Unutilised tax losses for which no deferred tax asset is
61,632
7,450
386,656
42,581
3,900
238,016
recognised
Tax expense for the year
-
-
The Group has tax losses of approximately £1,718,000 (2018: £1,331,000) available to carry forward against
future taxable profits. No deferred tax asset has been recognised in view of the uncertainty over the timing
of future taxable profits against which the losses may be offset.
Earnings per share
The basic loss per share is calculated by dividing the loss attributable to owners of the parent company
by the weighted average number of ordinary shares in issue during the year. Dilution is represented by a
number of warrants outstanding, which at the end of the year numbered 28,303,477 (pre-consolidation).
No diluted earnings per share is presented as the loss-making nature means the warrants are anti-dilutive.
Loss attributable to owners (£)
Weighted average number of ordinary shares in issue
Basic loss per share (pence)
2019
(2,398,622)
179,031,226
(1.34)
2018
(1,494,863)
166,350,683
(0.90)
Intangible assets
Expenditure on exploration activities is written off against profit or loss in the year in which it is incurred.
Identifiable development expenditure is capitalised to the extent that the technical, commercial and
financial feasibility can be demonstrated. Amortisation is recognised so as to write off the cost or valuation
of assets less their residual values over their useful lives on the following basis.
Deferred exploration costs: Not amortised
Deferred exploration costs comprise exploration licence fees capitalised in accordance with IFRS 6
“Exploration for and Evaluation of Mineral Resources.” Licences are initially measured at cost.
Management tests quarterly whether deferred exploration costs require impairment. Each exploration
licence is subject to a quarterly review either by a consultant or senior Company geologist to determine
if the exploration results returned to date warrant further exploration expenditure and have the potential
to result in an economic discovery. This review takes into consideration long-term metal prices,
Page | 77
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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 licence 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.
At
1 January
Revaluations
At 31
Disposals &
and FX
December
2019
Additions
impairment
adjustments
2019
Group
Mali
Korali Sud (Diba)
1,373,508
Lakanfla
Djelimangara
Sebessounkoto Sud
Tabakorole
Pitiangoma Est
Adjustment on
599,233
390,476
403,970
592,447
585,712
exercise of warrants
(85,000)
Cameroon
Laboum
Bikoula
Ndjele
Birsok
Mandoum
Ethiopia
Tigray-Afar
Daro
Zager
Morocco
Agdz
Takzim
Côte d’Ivoire
Prikro
Toura (application)
Liberia
Zolowo
38,043
35,130
6,327
65,130
39,210
15,752
-
-
4,706
616
1,474
1,338
3,798
-
-
-
-
6,579
-
-
8,402
7,926
1,986
-
-
743
1,070
2,481
(62)
-
1,462
-
-
-
-
(379,851)
(392,978)
-
-
-
-
-
-
(65,130)
(39,210)
-
-
-
-
-
-
-
-
(37,365)
1,336,143
(16,303)
(10,625)
(10,992)
(16,118)
(15,935)
582,930
-
-
582,908
569,777
85,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
46,445
43,056
8,313
-
-
16,495
1,070
2,481
4,644
616
2,936
1,338
3,798
4,071,870
30,587
(877,169)
(22,338)
3,202,950
Page | 78
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
At
1
January
Additions
through
acquisition
FX
At 31
of
Disposals &
adjust-
December
2018
Additions
subsidiary
impairment
ments
2018
Group
Mali
Korali Sud (Diba)
Lakanfla
Djelimangara
Sebessounkoto Sud
Tabakorole
Pitiangoma Est
Adjustment on
exercise of warrants
Cameroon
Laboum
Bikoula
Ndjele
Birsok
Mandoum
Ethiopia
Tigray-Afar
Daro
Negash
Morocco
Agdz
Takzim
Zaer
Côte d’Ivoire
Prikro
Toura (application)
Liberia
Zolowo
Bella Yella
-
-
-
-
-
-
-
22,203
17,419
2,054
44,130
29,375
7,078
13,982
-
13,955
6,965
-
-
15,840
17,711
4,273
21,000
9,835
14,406
1,346
-
331
1,759
-
-
-
-
-
20,198
151,875
-
-
2,947
616
-
1,474
1,338
3,798
-
1,361,729
583,598
389,066
389,066
583,598
583,598
(85,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(331)
-
-
-
-
-
-
(20,198)
(20,529)
4,701
1,653
1,410
949
1,884
2,114
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,373,508
599,233
390,476
403,970
592,447
585,712
(85,000)
38,043
35,130
6,327
65,130
39,210
15,752
-
-
4,706
616
-
1,474
1,338
3,798
-
12,711
4,071,870
122,158
3,805,655
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
Page | 79
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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.
Group
Cost
At 1 January 2019
Additions
Disposals
At 31 December 2019
Amortisation and
At 1 January 2019
Charge in the year
Disposals
At 31 December 2019
Carrying amount
At 31 December 2018
At 31 December 2019
Plant and
Fixtures,
Computer
Motor
Total
machinery
fittings
equipment
vehicles
and
equipment
£
795
-
-
795
330
139
-
469
465
326
£
£
£
£
44,949
-
-
44,949
44,119
572
-
44,691
24,043
1,321
-
25,364
17,406
5,352
-
22,758
77,693
-
(10,140)
67,553
77,693
-
(10,140)
67,553
147,480
1,321
(10,140)
138,661
139,548
6,063
(10,140)
135,471
830
258
6,637
2,606
7,932
3,190
-
Page | 80
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Group
Cost
At 1 January 2018
Acquisition of subsidiary
Additions
Disposals
At 31 December 2018
Amortisation and
At 1 January 2018
Acquisition of subsidiary
Charge in the year
Disposals
At 31 December 2018
Carrying amount
At 31 December 2017
At 31 December 2018
Plant and
Fixtures,
Computer
Motor
Total
machinery
fittings
equipment
vehicles
and
equipment
£
240
-
555
-
795
240
-
90
-
330
465
£
£
£
£
4,359
40,769
-
(179)
44,949
3,022
40,769
507
(179)
44,119
22,612
-
12,321
(10,890)
24,043
21,563
-
6,734
(10,891)
17,406
23,140
54,553
-
-
77,693
23,140
54,553
-
-
77,693
1,049
6,637
830
50,351
95,322
12,876
(11,069)
147,480
47,965
95,322
7,331
(11,070)
139,548
7,932
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a revaluation increase.
Subsidiaries
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and
subsequently held at fair value; as there is no active market, fair value is considered to be amortised cost
less impairments. The investments are assessed for impairment at each reporting date and any
impairment losses or reversals of impairment losses are recognised immediately in profit or loss. None of
the non-controlling interests is material to the group.
At 1 January 2019 / 31 January 2018
Additions
Disposals
2019
£
4,608,930
-
-
4,608,930
Company
2018
£
965,808
3,643,122
-
4,608,930
Altus Strategies plc has direct investments in the following subsidiary undertakings.
Page | 81
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Name of undertaking
Altus Exploration Management Limited1
LGN Holdings (BVI) Inc11
Incorporated % Holding Principal activity
UK
BVI
100.00
Business support
services
100.00
Holding company
Altus Strategies plc is the ultimate parent but not the immediate parent of the following subsidiary
undertakings.
Name of undertaking
Aeos Gold Limited1
Auramin Limited1
Aluvance Limited1
Alures Mining Limited1
Altau Resources Limited1
Aterian Resources Limited1
Oxford Mining Club Limited1
Altau Resources Limited2
Aucam SA5
Valnord SA5
Mining & Exploration Services
Limited6
Azru Resources SARL AU8
AuCrest Sarl4
Legend Gold Mali SARL12
LGC Exploration Mali SARL12
LGC Piti SARL12
Incorporated
% Holding Principal activity
UK
UK
UK
UK
UK
UK
UK
Ethiopia
Cameroon
Cameroon
Liberia
Morocco
Côte d’Ivoire
Mali
Mali
Mali
100.00 Gold exploration
99.00 Gold exploration
97.26
Iron ore exploration
100.00 Bauxite exploration
100.00 Copper exploration
100.00 Mineral exploration
50.00 Events
100.00 Copper exploration
97.26
Iron ore exploration
99.00 Gold exploration
99.00 Gold exploration
100.00 Copper exploration
100.00 Gold exploration
100.00 Gold exploration
100.00 Gold exploration
100.00 Gold exploration
The following are dormant subsidiaries.
Name of undertaking
Aeos Resources Limited3
Altaucam Resources Limited3
Altau Holdings Limited3
Avance African Group Limited3
Aucam Resources Limited3
Inland Exploration Limited3
Westcoast Exploration Limited3
Mansion Resources Limited3
Altar Resources Limited3
Eagle Resources Limited3
Enigma Resources Limited3
Atlas Minerals3
Atlantic Minerals3
Alboran Minerals3
Addax Minerals3
Akkari Minerals3
Incorporated % Holding Principal activity
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
Seychelles
100.00 Dormant
100.00 Dormant
100.00 Dormant
97.26 Dormant
97.26 Dormant
100.00 Dormant
100.00 Dormant
99.00 Dormant
99.00 Dormant
99.00 Dormant
99.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
Page | 82
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Aures Minerals3
Azilal Minerals3
Altus Diamonds3
Avanor SARL4
Avanex SARL4
Bauxex SA5
Af Resources SARL AU7
Adrar Resources SARL AU7
Altus Mining (SL)9
Apalex Sarl4
Aza Minerals Sarl7
Akassori10
Legend Mali (BVI) II Inc
Legend Mali (BVI) III Inc
Legend Mali (BVI) IV Inc
Legend Mali (BVI) V Inc
Legend Mali (BVI) VI Inc
Seychelles
Seychelles
Seychelles
Côte d’Ivoire
Côte d’Ivoire
Cameroon
Morocco
Morocco
Sierra Leone
Côte d’Ivoire
Morocco
Chad
BVI
BVI
BVI
BVI
BVI
100.00 Dormant
100.00 Dormant
100.00 Dormant
97.26 Dormant
97.26 Dormant
97.26 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
100.00 Dormant
On 31 October 2019 the Group sold its holding in Legend Gold Mali Holdings (BVI) Inc. and its
subsidiaries Etruscan Resources Mali SARL and LGC Kayes SARL.
The registered office addresses applying to the tables in this note are as follows.
Registered office addresses.
1. 14 Station Road, Didcot, Oxfordshire OX11 7LL, United Kingdom
2. Bole Sub-City, Kebele 08/09, House No. 811/A, P.O. Box 2633, Addis Ababa, Ethiopia
3. Suite 24, First Floor, Eden Plaza, Eden Island, Victoria, PO Box 438, Mahé, Seychelles
4. Cocody Les Deux Plateux, Rue des Jardins, Résidence Aziz, Porte B, 20 BP 725 Abidjan 20, Côte
d’Ivoire
5. BP: 5405 Bastos, Dernier poteau, Yaoundé, Cameroon
6. PO Box 10-3218, 1000 Monrovia 10, Liberia
7. Appt 9, IMM 18, Rue Jbel Tazekka, Agdal, Rabat, 10090, Morocco
8. 46, Avenue Oqba, Appt No. 2, Agdal, Rabat, Morocco
9. 2, Berthan Macauley Street, Freetown, Sierra Leone
10. Quartier Diguel Nord, N’Djamena, Chad
11. MMG Trust (BVI) Corp, Pasea Estate, Road Town, Tortola, British Virgin Islands
12. Porte 608, Rue 136, Korofina Nord, Bamako, Mali
Investments
The Group holds both financial assets at amortised cost and financial assets at fair value through profit
and loss. See note 23 for further information on the accounting policies applied to financial assets.
Investments carried at fair value through profit or loss comprise listed equity shares (Level 1). The fair
value of these equity shares is determined by reference to published price quotations in an active market.
Page | 83
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2019
£
883,763
213,250
(673,852)
(21,444)
(99,645)
302,072
Group
2018
£
601,536
-
-
282,227
883,763
2019
£
-
213,250
-
(4,297)
208,953
Company
2018
£
-
-
-
-
-
At 1 January
Additions
Disposals
Gains/losses on disposal
Revaluation gains/ (losses)
Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary
course of business. They are generally due for settlement within 30 days and are therefore all classified as
current. Trade receivables are recognised initially at the amount of consideration that is unconditional,
unless they contain significant financing components, in which case they are recognised at fair value. The
group holds the trade receivables with the objective of collecting the contractual cash flows, and so it
measures them subsequently at amortised cost using the effective interest method.
Trade receivables
VAT recoverable
Amounts due from group undertakings
Amounts due from related parties
Prepayments
R&D tax credit
Other receivables
Group
2018
£
-
22,048
-
2019
£
75
15,732
-
33,432
15,380
129,031
2,569
196,219
30,037
27,204
-
3
79,292
Company
2018
£
-
10,695
2,678,105
2019
£
-
4,592
4,581,775
-
12,094
-
-
4,598,461
-
16,906
-
-
2,705,706
Trade receivables - credit risk
All trade receivables are denominated in £ sterling and are fully performing.
Fair value of trade receivables
The directors consider that the carrying amount of trade and other receivables is approximately equal to
their fair value.
No significant receivable balances are impaired at the reporting end date.
Held-for-sale assets
Assets are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use and a sale is considered highly probable. They are
measured at the lower of their carrying amount or fair value less costs to sell. Assets and liabilities
classified as held for sale are presented separately in the balance sheet in accordance with IFRS 5.
On 11 February 2019 the Group announced that it had concluded various agreements with Canyon
Page | 84
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Resources Ltd (“Canyon”) that included the transfer of the Group’s subsidiaries Aucam Resources Ltd and
Aucam SA, and the Group’s Birsok licence in Cameroon to Canyon. At the reporting date the transfer was
still pending and the assets and liabilities of Aucam SA were designated as held-for-sale.
Non-current assets
Intangible assets
Current assets
Cash and cash equivalents
Prepayments
Current liabilities
Amounts due to related parties
Trade and other payables
2019
£
65,130
399
494
66,023
(13,182)
Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using
the effective interest method.
Other payables in 2019 for both Group and Company includes funds received from a shareholder
amounting to £722,481 as part of the Private Placement in December 2019, for which part of the share
issue was deferred until January 2020 pending regulatory approval.
Liabilities arising from a lease are initially measured on a present value basis. Lease payments to be made
under reasonably certain extension options are also included in the measurement of the liability.
Current liabilities
Trade payables
Amounts due to group
Amounts due to related parties
Accruals and deferred income
Lease liabilities (IFRS 16)
Other payables
Non-current liabilities
Lease liabilities (IFRS 16)
Provisions
Group
2018
£
2019
£
Company
2018
£
2019
£
57,570
-
69,311
545,186
18,198
748,610
1,438,875
109,615
-
-
291,582
-
85,737
486,934
53,965
162,849
-
39,018
-
749,678
1,005,510
34,477
-
-
17,154
-
65,402
117,033
65,797
1,504,672
-
486,934
-
1,005,510
-
117,033
Provisions are recognised when the Group or Company has a legal or constructive present obligation as
a result of a past event and it is probable that the Group or Company will be required to settle that
obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the reporting end date, taking into account the risks and uncertainties surrounding
Page | 85
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
the obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows.
Provisions
Group
2019
£
2018
£
15,000 15,000
Company
2019
£
-
2018
£
-
All provisions are expected to be settled within 12 months of the reporting date.
A provision has been recognised in accordance with IAS 37 in respect of the company's obligation to its
landlord for dilapidations on the expiry of its lease. The provision has been recognised because there is
an obligation at the reporting date as a result of an onerous contract, where outflow is probable to settle
the obligation and a reliable estimate can be made.
Financial instruments
The Group’s financial instruments, and their respective accounting policies are as follows.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with banks and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities.
Financial assets
Financial assets are recognised in the statement of financial position when the Group or Company
becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories. The classification depends on the nature and
purpose of the financial assets and is determined at the time of recognition. Financial assets are measured
at either amortised cost or at fair value through profit or loss.
Financial assets at fair value through profit or loss are classified as current assets if expected to be settled
within 12 months, otherwise they are classified as non-current.
Trade receivables, loans and other receivables that have fixed or determinable payments that are not
quoted in an active market are held at amortised cost. Loans and receivables are measured at amortised
cost using the effective interest method, less any impairment. The Group’s and Company’s loans and
receivables comprise trade and other receivables and cash and cash equivalents.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the
recognition of interest would be immaterial. The effective interest method is a method of calculating the
amortised cost of a debt instrument and of allocating the interest income over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash receipts through the
expected life of the debt instrument to the net carrying amount on initial recognition.
Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of
impairment at each reporting end date. For loans and receivables, the amount of the loss is measured as
the difference between the asset’s carrying amount and the present value of estimated future cash flows.
Page | 86
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Financial assets are impaired where there is objective evidence that, as a result of one or more events that
occurred after the initial recognition of the financial asset, the estimated future cash flows of the
investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all the risks and rewards of ownership to another
entity.
Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other
financial liabilities.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method, with interest
expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments through the expected life of the financial liability to the net
carrying amount on initial recognition.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged,
cancelled, or they expire.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
The Group’s financial assets are recorded as follows.
Group
Investments
Cash and cash equivalents
Trade and other receivables
2019
2019
2018
2018
Assets at
Assets at
Assets at
Assets at
amortised cost
FVPL
amortised
FVPL
£
-
2,212,642
180,839
2,393,481
£
302,072
-
302,072
cost
£
-
724,785
52,089
776,874
£
883,763
-
-
883,763
Page | 87
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
The Company’s financial assets are recorded as follows.
Company
Investments
Investments in subsidiaries
Cash and cash equivalents
Trade and other receivables
2019
2019
2018
2018
Assets at
Assets at FVPL
Assets at
Assets at
amortised cost
amortised
FVPL
£
-
-
219,343
4,586,366
4,805,709
£
208,593
4,608,930
cost
£
-
-
-
-
37,544
2,688,801
£
-
4,608,930
-
-
4,817,523
2,726,345
4,608,930
The Group and Company have the following financial liabilities.
Group
Trade and other payables
Company
Trade and other payables
Financial risk management
2019
2018
Liabilities at amortised
Liabilities at
cost
£
1,504,672
£
1,005,510
amortised cost
£
195,352
£
99,878
The Group’s activities expose it to a variety of financial risks: credit risk, liquidity risk, price risk and interest
rate risk. The Group’s overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Groups financial performance. There has
been no change in the Group’s risk management programme from previous years.
Market risk
The Group’s activities potentially expose it to market risks, which is the risk that the fair value of future
cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks arise
from open positions in interest rate and foreign currency risk, all of which are exposed to general and
specific market movements and changes in the level of volatility of market rates or prices such as interest
rates and foreign exchange rates.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from holding cash in
various currencies. The Group's functional currency is pound sterling, and major purchases are transacted
in pounds sterling, US dollars, West African francs, Ethiopian birr, Moroccan dirham and the Liberian
dollar. The Group’s head office expenditures are mainly incurred in pounds sterling and the majority of
its exploration costs are incurred in the local African currencies. When funds are received a cashflow
forecast is prepared by currency to identify the anticipated currency transactions that will be required
over the period that the funds are expected to be used. FX transactions are undertaken at the earliest
opportunity to minimise currency risk. For the year ended 31 December 2019, the Group had an exchange
loss of £31,825 (2018: £25,726 gain) which was not material to its operations.
Page | 88
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Commodity price risk
The Group’s principal activity is the exploration for economic mineral deposits in Africa. The Group is
therefore exposed to commodity price risks in the valuation of base minerals, which may impact the
commercial viability of the licences it holds or impact the raising of future financing. The Group therefore
maintains a diversified portfolio of licences in order to mitigate the risk of changes in the prices of
individual base metals.
Credit risk
Credit risk is the risk of suffering financial loss should the Group’s customers, clients or counterparties fail
to fulfil their contractual obligations to the Group. The Group’s core business is the exploration for
economic mineral deposits in Africa and therefore the majority of expenditure is incurred in cash. The
Group therefore only has significant exposure on its cash and cash equivalents. The Group mitigates this
risk by depositing surplus cash with financial institutions with acceptable credit ratings. The carrying value
of financial assets approximates their fair value and the maximum exposure as at the Statement of
Financial Position date is outlined in the following table.
Group
Trade receivables
Other receivables
R&D tax credit
VAT recoverable
Amounts due from related parties
Prepayments
Cash and cash equivalents
Held-for-sale assets
2019
£
75
2,569
129,031
15,732
33,432
15,380
2,212,64
66,023
2,474,88
2018
£
-
3
-
22,048
30,037
27,204
724,785
804,077
Interest rate risk
Interest rate risk is the possibility that changes in interest rates will result in higher financing costs or
reduced income from the Group’s interest-bearing financial assets and liabilities. The Group is primarily
financed through equity and interest rate risk arising on interest income is immaterial. The Group
therefore does not currently consider it necessary to actively manage interest rate risk.
Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its
financial liabilities when they fall due. Prudent liquidity risk management is achieved by maintaining
sufficient cash balances and the availability of funding through an adequate amount of committed credit
facilities. The Group manages liquidity by maintaining sufficient cash with banks to meet its changing
commitments. The Group’s objective is to ensure that there are sufficient committed financial resources
to meet its current obligations and its future business requirements for a minimum of twelve months. At
present the Group does not make use of any credit or debit facilities.
The table below presents the cash flows payable by the Group under remaining contractual maturities at
the Statement of Financial Position date. The amounts disclosed in the table are the contractual
undiscounted cash flows. The carrying values of financial liabilities approximates their fair values.
Page | 89
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2019
Trade payables
Lease payables
Other payables
Accruals and deferred income
Provisions
Available-for-sale liabilities
2018
Trade payables
Other payables
Accruals and deferred income
Provisions
Retirement benefit schemes
Up to 3
months
£
126,882
6,250
737,639
545,186
-
13,182
1,429,139
Up to 3
months
£
109,615
31,203
291,582
-
432,400
3 to 12
months
Over 12
months
£
-
18,750
10,970
-
-
-
29,720
3 to 12
months
£
-
32,603
-
-
32,603
£
-
58,995
-
-
15,000
-
73,995
Over 12
months
£
-
21,931
-
15,000
36,931
Total
£
126,882
83,995
748,609
545,186
15,000
13,182
1,532,854
Total
£
109,615
85,737
291,582
15,000
501,934
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
For those employees that pay into a Self-Invested Personal Pension scheme (SIPP) the Company matches
their contributions up to an agreed salary percentage. At 31 December 2019 unpaid employer’s pension
liabilities stood at £81,518 (2018: £74,557) of which £62,875 was for Executive Directors (2018: £57,800).
Defined contribution scheme
Charge for the year
Share based payments
2019
£
105,730
2018
£
25,420
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the
fair value of the equity instruments granted using the Black Scholes model. The fair value determined at
the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares
that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted
are subsequently modified, the fair value of the share-based payment under the original terms and
conditions and under the modified terms and conditions are both determined at the date of the
modification. Any excess of the modified fair value over the original fair value is recognised over the
remaining vesting period in addition to the grant date fair value of the original share-based payment. The
share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an
acceleration of vesting and the amount that would have been recognised over the remaining vesting
period is recognised immediately.
Page | 90
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Equity instrument movements in the year
No shares were allotted to directors or employees during the year (2018: nil shares), but 425,053 shares
were allotted to consultants in respect of services provided resulting in a charge to the income statement
of £22,103 (2018: £nil).
The Company does not currently operate a share option scheme either for directors or employees. Of the
schemes previously in operation there were no options outstanding at 31 December 2019. No expense
was recorded in the year in respect of share options schemes (2018: £nil).
During the year no warrants were issued (2018: 911,861) and 300,000 warrants expired.
On 19 December a private placement was concluded that resulted in the issue of 32,328,802 shares. The
issue of shares subscribed for by directors and employees was included in this placement.
The details of the warrants outstanding at the end of the year are as follows.
2019
2018
Outstanding as at 1 January
28,603,477
Number
Weighted
average
exercise price
(£)
0.164
Weighted
average
exercise
Number
price (£)
110,000
Granted
Expired
Exercised
-
-
30,253,477
(300,000)
0.048
(110,000)
-
-
(1,650,000)
Outstanding as at 31 December
28,303,477
Exercisable at 31 December
28,303,347
0.173
0.173
28,603,477
28,603,477
0.100
0.158
0.100
0.048
0.164
0.164
The weighted average remaining life of the warrants outstanding is 3.2 years.
Share capital and share premium
Share capital and share premium include ordinary shares in Altus Strategies plc issued to shareholders
and warrants and options that have been exercised.
Company
At 1 January 2018
Issue of new shares
Share issue costs
Exercise of warrants
At 31 December 2018
Issue of new shares
At 31 December 2019
Number of shares*
share capital
Ordinary
107,680,814
68,451,872
-
1,650,000
177,782,686
32,445,775
210,228,461
£
1,076,808
684,519
-
16,500
1,777,827
324,457
2,102,284
* All shares have been issued, authorized and fully paid
Share
premium
£
999,000
5,103,396
(146,274)
62,700
6,018,822
1,359,546
7,378,369
Page | 91
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Details on the share consolidation which occurred on 20 February 2020 are provided below under
subsequent events.
Leases
The group holds one lease that it accounts for under IFRS 16. Other leases are either small in value or
cover a period of less than 12 months. The lease, which is for the Company’s UK office, was signed early
in the year and therefore no qualifying leases were held when the standard was adopted on 1 January
2019, and there was no impact on the financial statements resulting from adoption of the standard (see
also note 1).
To determine the split between principal and interest in the lease the Company applied an estimate of
the interest it would have to pay in order to finance payments under the new lease. This method was
adopted as the Company was not able to ascertain the implied interest rate and does not have borrowings
to use as a benchmark. The impact of the estimate is currently considered to be immaterial to the financial
statements, but the Directors will review this approach as appropriate.
For the year
Cash outflow
Capital
Interest
Depreciation charge
Interest charge
At 31 December 2019
Right-of-use asset
At 1 January
Additions
Depreciation
At 31 December
Lease liability
Less than 12 months
Greater than 12 months
Total lease liability
2019
£
18,375
12,073
6,302
20,064
8,169
-
100,326
(20,064)
80,262
18,198
65,797
83,995
Lease liabilities are included in trade and other payables as shown in note 21.
Rent payable under operating leases, less any lease incentives received, is charged to Administrative
expenses on a straight-line basis over the term of the relevant lease except where another more
systematic basis is more representative of the time pattern in which economic benefits from the lease
asset are consumed.
At the reporting date the group had outstanding commitments for future minimum lease payments under
non-cancellable operating leases, on which the short-term exemption has been taken, which fall due as
Page | 92
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
follows.
Group
Within one year
Between 2 and 5 years
2019
£
4,791
-
4,791
2018
£
4,519
-
4,519
Related party transactions
For detail on directors’ remuneration in the year see the Directors’ Remuneration Report on pages 47-51
and note 10.
Seabord Services Corp. (“Seabord”) is a management services company that provides to the Group the
services of its adviser, David Miles, and his administrative support team. Seabord provided similar services
to Legend Gold Corp. before its acquisition by the Group in January 2018, and David Miles was the Chief
Financial Officer of the Company until 1 July 2019 through a contract with Seabord. One non-executive
director of the Group is also a director of Seabord. The value of services provided by Seabord in the year
was £43,936 (2018: £21,295). The amount payable to Seabord at the end of the year was £69,311 (2018:
£44,775).
Canyon Resources Ltd (“Canyon”) is a joint venture partner of the Group in respect of the Birsok project
in Cameroon. One non-executive director of the Group is also a director of Canyon. The value of services
provided to Canyon during the year was £5,951 (2018: £18,580). The amount receivable from Canyon at
the end of the year was £43,501 (2018: £37,550).
The Aegis group of companies (“Aegis”) comprises Aegis Holdings Ltd, Aegis Asset Management Ltd,
Aegis Asterion Ltd and Aegis Exploration Management Ltd, and shares three directors with the Group
(Aegis Exploration Management Ltd two directors). The value of costs recharged to Aegis during the year
was £300 (2018: £482). The amount receivable from Aegis at the end of the year was £790 (2018: £490).
Subsequent events
Issue of equity
On 7 January 2020 the Company announced that it had issued 2,000,000 shares to AGMEX Sarl (“AGMEX”)
in respect of an agreement relating to a royalty held by AGMEX on the Company’s Lakanfla gold project
in western Mali.
On 27 January 2020 the Company announced that it had closed the second and final tranche of a non-
brokered private placement (the first part of which took place in December 2019) issuing 14,000,000
shares to Delphi Unternehmensberatung AG, which increased its holding in the Company to 35,000,000
shares (pre share consolidation).
On 21 February 2020 the Company announced that all of the conditions had been fulfilled in respect of a
strategic investment in the Company by La Mancha Holdings Sarl (“La Mancha”), and that 124,229,389
shares had been issued to La Mancha. The issue was approved at a General Meeting of shareholders on
18 February 2020. The shares were issued at a price of C$0.09 resulting in funding to the Company of
C$11,180,645. La Mancha became a cornerstone shareholder of the Company with a 35.4% of the
enlarged share capital.
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ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
The shareholders also approved the consolidation of the Company’s shares (the “Share Consolidation”)
at the General Meeting. Under the Share Consolidation one consolidated Ordinary Share (“Consolidated
Ordinary Share”) was issued for every five existing Ordinary Shares. The Share Consolidation occurred
after the close of trading in the Company’s shares on AIM and the TSX-V on 21 February 2020. Dealings
in the Consolidated Ordinary Shares commenced on 24 February 2020. The ISIN and CUSIP for the
Consolidated Ordinary Shares is GB00BJ9TYB96 and G03676122 respectively
Investments
On 11 February 2020 the Company announced that it had received 15 million shares in ASX-listed Canyon
Resources Ltd (“Canyon”), which were issued in accordance with the JV Termination Agreement (“JVTA”)
signed in February 2019. The shares had a market value of £1.1 million (C$1.9 million) at that time and
are subject to a voluntary 12-month escrow. The JVTA related to the Company’s Birsok bauxite licence in
Cameroon. The income arising from the receipt of the shares was considered contingent at the reporting
date as, during 2019, the approval of Canyon’s shareholders to issue the shares had expired, and the
renewed approval given in November 2019 was due to expire in February 2020.
Coronavirus
The outbreak of the coronavirus pandemic in the months after the reporting date is considered to be a
non-adjusting event. As outlined in note 1, the Group is continuing to report on a going concern basis,
and while on site activity has been suspended, staff are working on desktop studies to generate
exploration targets across the Group’s portfolio and in new jurisdictions. The Group’s response to the
outbreak is described in the Chief Executive’s Review on pages 10-16. The unknown length of the outbreak
is a source of uncertainty and the Board will continue to monitor events and to provide updates as the
situation develops.
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