Altius Minerals
Annual Report 2020

Plain-text annual report

ALTUS STRATEGIES PLC ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Company Registration No. 10746796 (England and Wales) Altus Strategies Plc Contents 31 December 2020 | Annual Report Contents ....................................................................................................................................................... 2 Company Information ................................................................................................................................ 3 Key Highlights ............................................................................................................................................. 5 Chairman’s Statement ................................................................................................................................ 7 Business Overview ...................................................................................................................................... 9 Chief Executive’s Review.......................................................................................................................... 12 Strategic Report ........................................................................................................................................ 19 Key Performance Indicators (“KPIs”) ............................................................................................................................... 19 Principal Risks and Uncertainties ..................................................................................................................................... 20 Corporate and Social Responsibility ................................................................................................................................ 23 Financial Review ........................................................................................................................................ 25 Review of Operations by Country .......................................................................................................... 28 Projects held by the Group or operating under joint ventures ............................................................................... 28 Projects in which the Group holds a royalty interest ................................................................................................. 38 Corporate Governance Report ................................................................................................................ 41 Directors’ Report ....................................................................................................................................... 50 Directors’ Remuneration Report ............................................................................................................ 54 Statement of Directors’ Responsibilities ............................................................................................... 59 Independent Auditor’s Report to the Members of Altus Strategies plc .......................................... 60 Independent Auditor’s Report to the Members of Altus Strategies plc in Respect of Canadian National Instrument 52-107 .................................................................................................................... 66 Group Statement of Comprehensive Income ....................................................................................... 70 Group Statement of Financial Position.................................................................................................. 71 Company Statement of Financial Position ............................................................................................ 72 Group Statement of Changes in Equity ................................................................................................. 73 Company Statement of Changes in Equity ........................................................................................... 74 Group Statement of Cash Flows ............................................................................................................. 75 Company Statement of Cash Flows ........................................................................................................ 76 Notes to the Financial Statements ......................................................................................................... 77 Page | 2 Altus Strategies Plc 31 December 2020 | 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 Chief Financial Officer Martin Keylock General Counsel Sandra Bates 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 OX11 8RP United Kingdom Nominated Adviser & Broker SP Angel Corporate Finance LLP Prince Frederick House 35-39 Maddox Street London W1S 2PP United Kingdom Page | 3 Altus Strategies Plc Solicitors (Canada) 31 December 2020 | Annual Report 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. PR Adviser Stock market trading symbols 510 Burrard St, 3rd Floor Vancouver British Columbia V6C 3B9 Canada Yellow Jersey Mappin House Oxford Street London W1W 8HF United Kingdom Alternative Investment Market: ALS London Stock Exchange TSX Venture Exchange: ALTS Toronto Stock Exchange OTCQX: ALTUF OTC Markets Page | 4 Altus Strategies Plc 31 December 2020 | Annual Report 2020 Key Highlights Operational highlights • • Independent Mineral Resource Estimate (“MRE”) published on Diba gold project, western Mali, comprising 4,834,000 tonnes at 1.39 g/t gold (“Au”) for 217,000 ounces in the Indicated category and 5,479,000 tonnes at 1.06 g/t Au for 187,000 ounces in the Inferred category Excellent results received from metallurgical test work on oxide and sulphide samples at Diba, testing the amenability of ores to carbon-in-leach (“CIL”) and heap leach processing • Updated Preliminary Economic Assessment (“PEA”) published for Diba project, with 32% increase in after-tax net present value (“NPV”) to US$107 million based on 10% discount rate and US$1,500/oz gold price • Results of an MRE announced for the Tabakorole gold project, southern Mali, comprising 1.2 g/t Au for 620,000 ounces in the Indicated category, 1.2 g/t Au for 290,000 ounces in the Inferred category, completed under the Company’s joint venture (“JV”) with Australian Securities Exchange (“ASX”)-listed Marvel Gold Limited (“Marvel Gold”, formerly called Graphex Mining Limited) Encouraging results from 70-hole 2,042m shallow aircore (“AC”) drilling at Tabakorole, defining 200m northwest extension to mineralisation Environmental Impact Assessment of Agdz silver and copper project, eastern Morocco, accepted by Ministry of Interior, and new targets generated on the project using predictive mapping techniques • • Corporate highlights • Definitive Purchase & Sale and Royalty agreements signed with TSX Venture Exchange (“TSX- V”)-listed Stellar AfricaGold Inc. (“Stellar”) in respect of the Company’s 100% interest in the Prikro and Zenoula gold projects in Côte d’Ivoire for 2.5m Stellar shares, warrants to purchase a further 2.5m Stellar shares, milestone payments and a 2.5% Net Smelter Return (“NSR”) royalty on each project • Grant of share options to certain directors and employees to acquire 5.1 million ordinary shares of £0.05 par value (“Ordinary Shares”) at an exercise price of £0.7315 per Ordinary Share, representing a 10% premium to the closing market price on the date of grant • Appointment to the Altus Board of Karim Nasr, CEO of La Mancha Holdings S.à r.l. (“La Mancha”), as its representative • Appointment of Alister Hume as Business Development Manager, Sandra Bates as General Counsel and Richard Belcher as VP Exploration • Commencement of quotation of the Company’s Ordinary Shares on the OTCQX ‘Best Market’ in the United States under the ticker symbol ‘ALTUF’, enhancing visibility of the Company to potential US investors Financial highlights • Strategic Investment Agreement with La Mancha concluded, resulting in an investment by La Mancha of £6.5m / C$11.2m and La Mancha holding a 35.45% interest in the Company • Consolidation of the Company’s ordinary shares on a five-for-one basis • Initial 15 million shares with a value of £1.1m / C$1.9m in ASX-listed Canyon Resources Ltd (“Canyon”) received in accordance with agreement to terminate the JV on the Birsok bauxite project in central Cameroon Page | 5 Altus Strategies Plc 31 December 2020 | Annual Report • Cash balance of £5.9m / C$10.3m as at 31 December 2020 • Cash outflow for operating activities of £2.3m / C$4.1m for the year • Balance of listed equity holdings of £1.3m / C$2.3m as at 31 December 2020 Post-period end • Completion of oversubscribed fundraising for £7.70m / C$13.35m at an issue price of £0.75 / C$1.30 per share with net proceeds to be primarily used to accelerate gold exploration programmes in Egypt and Mali • Expansion of activities into Egypt through award of four gold exploration licences totalling 1,565km2 located in the Eastern Desert through a competitive international bidding process • Grant of three new copper and silver exploration projects totalling 252km2 within the prospective western Anti-Atlas belt of Morocco • Receipt of second tranche of 10 million shares in Canyon with a value of £0.6m / C$1.1m • Completion of strategic review of Bikoula iron project in southern Cameroon by Mining Plus UK Ltd (“Mining Plus”) to determine next steps for development • Drilling at Tabakorole gold project extending strike length by 150m to over 3km Page | 6 Altus Strategies Plc 31 December 2020 | Annual Report Chairman’s Statement Reflection on the year In this statement a year ago, I reflected on the recent successful completion of a fundraising by the Company and looked ahead with a degree of uncertainty to the potential challenges that would be posed by the unfolding pandemic. A year on and uncertainty remains regarding the direction of the pandemic, tempered by hope for the efficacy of the global vaccine rollout, but I am delighted to be once again reflecting on the recent successful completion of a fundraising by the Company. This is testament to how, against the backdrop of an unprecedented health crisis and global economic upheaval, the team at Altus has managed to continue driving exploration programmes, refining the Company’s portfolio of projects and building value that continues to make the Company attractive to shareholders. Altus was in the fortunate position of facing the pandemic period with a strong working capital balance sheet, having successfully concluded the process by which La Mancha, a pre-eminent Africa-focused mining investment group, made its strategic investment in the Company. Altus has deployed these resources across its projects in a disciplined and effective manner. Significant progress was made at the Diba gold project in western Mali, with the Company undertaking its first drilling programme, conducting metallurgical testwork, and reporting the results of an independent MRE and PEA. Two further projects in Mali, Lakanfla and Tabakorole, were the subject of accelerated exploration activity, with a resource update and a series of drilling programmes being conducted by our JV partner. The Company’s portfolio of assets continued to be replenished, with a successful application for four gold exploration licences in Egypt – a new jurisdiction for Altus, and the sale of two gold projects in Côte d’Ivoire for upfront and milestone payments and future royalties. This brought the number of projects on which Altus holds a royalty to nine, and further demonstrated how Altus is growing and developing its project and royalty business. Management and Board For a company of our size, Altus has a strong senior management team, Board of Directors and corporate governance procedures. During the year, we welcomed Karim Nasr to the Board. Karim is the CEO of La Mancha and Altus immediately began benefiting from his considerable business acumen and insights. The senior management team was significantly bolstered by three appointments in 2020; Alister Hume joined as Business Development Manager, Sandra Bates joined as General Counsel and Richard Belcher took up the role of VP Exploration. Alister is an experienced investment and business development manager with over a decade of expertise working in private equity and capital markets in the natural resources industry. Sandra is an international lawyer with over 20 years’ experience, having advised listed and private companies in the natural resources sector on complex commercial negotiations and Environmental, Social and Governance (ESG) engagement. Richard is a talented geologist with a track record of exploration and discovery across the African continent. I am delighted to welcome all three of them to the management team. Looking forward I am looking forward to what could prove to be an exciting year for Altus, as we establish our presence in Egypt and start work on new licence ground in Morocco. A return to normal travel and site operations is much anticipated by our team, not least our UK-based geologists. For all of our employees, we will maintain their health and safety as our highest priority. Whatever the challenges and opportunities of the coming 12 months, Altus is in a strong position to Page | 7 Altus Strategies Plc 31 December 2020 | Annual Report deal with them, backed by 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 and once again exceed expectations. On behalf of the Board, I thank the entire team at Altus for their contributions to a successful year in challenging circumstances, and I thank our existing and new shareholders for their continued support. David Netherway Non-executive Chairman 27 April 2021 Page | 8 Altus Strategies Plc 31 December 2020 | Annual Report Business Overview Our project and royalty generator business model Altus is a mining Royalty Generator focused on becoming the leading royalty company for African resource assets. The Company is based in the United Kingdom and is dual-listed in the UK (AIM:ALS) and in Canada (TSX-V:ALTS). Its shares also trade on the OTCQX in the United States (OTCQX:ALTUF). Since being founded in 2007, the Company has developed a portfolio of resource assets, diversified by commodity and jurisdiction. The team’s track record of success in Africa and unique business model has attracted La Mancha, one of the world’s largest mining investors, as a strategic shareholder. La Mancha’s involvement is transformational for the Company, accelerating its royalty generation activities and expanding the pipeline of new project opportunities in Africa. The business is managed from our UK head office in Oxfordshire and is currently active in Mali, Egypt, Ethiopia, Morocco, Côte d’Ivoire and Cameroon. Altus’ unique and risk-diversified business model generates short and long-term income whilst also providing investors with exposure to the multiple potential returns that can be generated from the discovery process. Altus is growing its portfolio of royalties through organic royalty generation and the potential acquisition of royalties from third parties. The Company’s portfolio approach reduces risk exposure through commodity and geographic diversification. By entering JVs with third parties on its own discoveries, Altus preserves shareholder capital for investing in further discovery opportunities. The royalties are designed to yield sustainable long-term income for Altus. The Discovery strategy leverages the Company’s expertise and proven ability to identify and rapidly advance early-stage, potentially high-value projects. Altus aims to acquire multiple exploration licences in diverse jurisdictions and then undertakes exploration on these simultaneously. Once a discovery has been made, project funding is met from JV partnerships, reducing risk and preserving capital. Income is generated through JV milestone payments which occur at exploration and development landmarks. Altus typically retains a residual minority equity position in the project, providing longer term optionality. Finally, Altus retains a royalty which provides long-term cash flow potential once the project enters production. The Acquisition strategy focuses on accelerating the growth of the portfolio through direct purchase of existing royalties from third parties, or by royalty creation through the provision of strategic capital to select exploration and mining companies. This acquisition strategy aims to enhance the quality of the Page | 9 Altus Strategies Plc 31 December 2020 | Annual Report Company’s royalty portfolio, provide further diversification, and accelerate income to the group from cash-generating assets. Risk diversification Risk diversification is at the heart of the Company’s philosophy, and is enacted by diversifying our portfolio across a variety of minerals at multiple locations across several jurisdictions. At the date of this report, Altus had a growing portfolio of 26 assets comprising six royalties, three JV projects with royalties and 17 exploration projects (including one project under application), spanning seven countries and across seven metals. 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. More than half of the Company’s portfolio is comprised of gold projects, the most advanced of which are located in western and southern Mali. Aside from gold, Altus is focused on metals that it 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. 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 While Altus’ acquisition strategy targets assets in all parts of the world, the Company’s discovery strategy is focused on the continent of Africa where, due to the relative lack of exploration using modern techniques compared to many other parts of the world, economic mineral deposits can still be Page | 10 Altus Strategies Plc 31 December 2020 | Annual Report discovered cropping out at surface. It is reported that 24% of all discoveries in the last decade were found on the continent, despite receiving only 14% of the global exploration budget (source: MinEx Consulting). According to the same survey, deposits in Africa (excluding South Africa) are being discovered at average depths of just 9m, which is much shallower than average global depths of 78m; in Canada and the USA the average discovery depths are even greater, at 125m and 198m respectively. A growing portfolio of assets across Africa Since the reporting date, the Company has been awarded four licences in Egypt, a new jurisdiction for Altus, and a further three new licences in Morocco. This opportunity to make discoveries across Africa without recourse to expensive subsurface exploration technologies, including drilling programmes, means that our shareholder capital can potentially generate more value and at greater speed if applied to exploration in Africa than it might in many other parts of the world, thus increasing the discovery potential per Altus share. Given the collective geographical, geological and operational expertise of our management and advisor team, we believe Altus is well positioned to maximise this opportunity. Page | 11 Altus Strategies Plc 31 December 2020 | Annual Report The coordinated drive to decarbonise the global economy and the unprecedented monetary stimulus following the COVID pandemic have the potential to inflate and supercharge what may otherwise have been a normal and long anticipated cyclical upturn for copper, gold and other key metals. Chief Executive’s Review Introduction I am pleased to report on a transformational year for Altus. Our team performed admirably despite the horrendous impacts of the Covid-19 pandemic and unprecedented international response. While prioritising the safety and security of our colleagues and the communities with whom we work, Altus grew its portfolio of assets during the year and completed a number of transactions which realised value for our shareholders. In this report I review our progress to date, discuss the current market conditions and set out our objectives for the year ahead. A key milestone for the year was the completion of the strategic investment by La Mancha which closed in February 2020 with effectively unanimous shareholder support. La Mancha is the wholly-owned, mining investment vehicle of the Egyptian-born Sawiris family, which also has strategic stakes in Endeavour Mining Corporation and Golden Star Resources Ltd. These are two leading Canadian-listed gold mining groups, both with a focus on Africa. Coincident with the strategic investment into Altus, we consolidated our share capital on a 5:1 basis. In April 2020, we were delighted to welcome Karim Nasr, the CEO of La Mancha, to our Board. We also bolstered the team with the appointment of a number of highly talented individuals, including Sandra Bates as General Counsel, Alister Hume as Business Development Manager and Richard Belcher as VP Exploration. Royalty & Project Transactions Altus successfully closed a number of project and royalty transactions in the year, including: - - The receipt of an initial 15 million shares in ASX-listed Canyon, with a current value of approximately £1.0m / C$1.7m, in relation to the termination of the Birsok bauxite JV in central Cameroon. The sale of two gold projects in Côte d’Ivoire to TSX-V-listed Stellar, in return for 2,500,000 shares of Stellar and 2,500,000 share purchase warrants, each exercisable to purchase a Stellar share for 24 months at C$0.07, the potential for future project milestone equity-based payments and a 2.5% NSR royalty on each project. - An agreement with ASX-listed Marvel Gold under which Marvel Gold acquired the JV earn-in rights previously held by Glomin Services Limited (“Glomin”) on the Company’s Lakanfla and Tabakorole gold projects, in western and southern Mali respectively. Under the JV, Marvel Gold has the right to earn up to an 80% interest in each project by completing up to four key stages, culminating in a Definitive Feasibility Study (“DFS”). Altus will receive up to US$1,450,000 in future milestone cash payments, maintain the option to co-finance a 20% equity interest in the projects on completion of the DFS and will retain a 2.5% NSR royalty on each project. - The acquisition of a 2% NSR royalty held by AGMEX SARL on the Company’s Lakanfla gold project in western Mali, with the option to acquire the final 1% NSR royalty held by AGMEX Page | 12 Altus Strategies Plc 31 December 2020 | Annual Report SARL. The commencement of trading of the Company’s shares on the OTCQX ‘Best Market’ in the - United States, under the ticker symbol ‘ALTUF’. After the period, in February 2021, Altus announced the receipt of the final 10 million tranche of shares in Canyon in respect of the Joint Venture Termination Agreement (“JVTA”) signed in February 2019. The Company currently holds 26.1 million Canyon shares with a market value of approximately £1.7m / C$2.9m representing 4.2% of Canyon’s issued capital. As at the end of the period, Altus had the following active joint venture and royalty interests. Counterparty Country Metal Status Project Lakanfla Tabakorole Pitiangoma Est Ndablama Marvel Gold Mali Mali Marvel Gold Resolute Mining (1) Mali Avesoro Resources (2) Mali Mali Sebessounkoto Sud Desert Gold Djelimangara Desert Gold Mali Prikro Zenoula Birsok Notes Stellar Stellar Canyon (3) Gold Gold Gold Gold Gold Gold Active JV Active JV Active JV Sold Sold Sold Sold Sold Royalty 2.5% NSR 2.5% NSR 2.0% NSR 2.5% NPI 2.5% NSR 2.5% NSR 2.5% NSR 2.5% NSR Côte d’Ivoire Gold Côte d’Ivoire Gold Cameroon Bauxite Vended-in US$1.50/t 1 Altus retains an option to co-fund its project interest at 30% or dilute to an NSR royalty 2 Net Profit Interest royalty is on the southern portion of the Ndablama gold project 3 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 Joint Venture Activities During and after the period, Marvel Gold undertook a series of significant drilling programmes at the Lakanfla and Tabakorole JV projects in western and southern Mali respectively. These programmes have resulted in significant progress at Tabakorole in particular, where Marvel Gold has announced an updated MRE, increasing the previous MRE by approximately 50%. Marvel Gold has also extended the strike of the known deposit as well as discovered a potential new parallel zone. Project Generation Activities During 2020, we accelerated our exploration programmes in Africa, with a specific focus on our 100% owned Diba gold project in western Mali. This work included an updated MRE, completion of metallurgical testwork, an independent PEA and a 10,000m Reverse Circulation (“RC”) drilling programme. Each of these programmes generated positive results and Diba is now emerging as an exciting new gold opportunity in west Africa. Elsewhere, Altus continued its project generation activities, completing a series of programmes that included trenching, mapping and sampling in Cameroon, Morocco and Ethiopia, primarily exploring for gold, copper and silver deposits. The Company also placed two of its projects, namely Daro and Zager, in northern Ethiopia under Force Majeure, due to the ongoing regional instability in the Tigray region. After the year end, in February 2021, we were delighted to announce that the Egyptian Mineral Resource Authority (“EMRA”) had awarded Altus four gold projects (comprising nine licence blocks), totalling Page | 13 Altus Strategies Plc 31 December 2020 | Annual Report 1,565km2 in the Eastern Desert of Egypt. The projects were carefully selected by Altus based on their high geological prospectivity and were awarded as part of a competitive international bidding process, which included a number of multinational gold mining companies. We are currently establishing our operational base in Egypt and are looking forward to commencing exploration imminently. Also after the year end, the Company relinquished its Tigray-Afar copper project, in northern Ethiopia due to insufficient exploration success. 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 shares also trade on the OTC market (OTCXQ:ALTUF) in the United States. These listings provide the Company with enhanced exposure to current as well as potential investors and counterparties for project transactions. 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 subscribed for 24,845,878 new Ordinary Shares (post-consolidation) at a price of £0.26 / C$0.45 per share for aggregate gross proceeds of £6.5 million / C$11.2 million 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. 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 Sawiris family and as at 31 December 2020 had strategic investments in two publicly traded mining companies: a 19% holding in Endeavour Mining Corp. (TSX:EDV) and a 34% holding in Golden Star Resources Ltd. (TSX:GSC and NYSE:GSS). These two 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 and royalty 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: - - - - 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 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 and which will bring additional operating and technical expertise within the mining sector and in Africa; and - wider market recognition for the Company, its capabilities and ambitious growth plans which may attract further investors to the Company’s equity and potential partners for its projects. Page | 14 Altus Strategies Plc 31 December 2020 | Annual Report La Mancha’s investment has resulted in it owning a 35.43% share of the Company (as at 12 April 2021 – see Director’s Report, page 50), 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 adviser, SP Angel Corporate Finance LLP (“SP Angel”), 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 retains 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%. Private Placement (Post Period) After the period, on 21 March 2021, the Company completed a private placement of 10,266,668 Ordinary Shares at a price of £0.75 / C$1.30 per share (“Placement”) raising approximately £7.70 million / C$13.35 million before expenses. The two Executive Directors participated in the Placement, subscribing for a total of 50,394 new Ordinary Shares with an aggregate value of approximately £37,800 / C$65,500. We were delighted with the participation in the placement by existing shareholders, as well as a number of new institutional and family office investors. Altus also welcomed Shard Capital Partners LLP (“Shard”) as joint broker to the Company, alongside the Company’s existing broker SP Angel. Altus paid broker commissions of approximately £118,000 / C$206,000 in respect of the Placement (representing 1.54% of the amount raised before expenses) and issued a total of 63,065 broker warrants. Each broker warrant has an exercise price of 112.5 pence and is exercisable for a period of two years from the completion of the Placement. The completion of the Placement has strengthened our balance sheet, to allow the Company to accelerate its exploration activities, specifically in respect of Egypt and Mali, as well as provide capital for potential accretive project and royalty acquisition opportunities. Director Shareholdings Further to the post period Placement, the Board of Altus has an aggregate beneficial shareholding in the Company of 14,441,315 Ordinary Shares, representing 17.97% of the current issued share capital. The Directors’ shareholdings underscore the strong alignment of interests between the Company’s Board and shareholders. 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 individuals in aggregate hold interests in 10,297,335 Ordinary Shares equivalent to 12.81%. of the Company's issued and voting share capital. These individuals do not currently hold any warrants in the Company and hold an aggregate of 2,200,000 share purchase options, which have an exercise price of £0.7315 per option and which expire on 01 September 2025. 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. Market Commentary Markets suffered an indiscriminate and sustained sell-off following the realisation of the likely profoundly negative economic implications of the Covid-19 pandemic. The FTSE100 was trading at Page | 15 Altus Strategies Plc 31 December 2020 | Annual Report around 7,500 in mid-February, but fell dramatically by approximately 33% to below 5,000 by the end of March to levels first hit in 1997. The index then rallied approximately 30% higher to almost 6,500 by June 2020 and, after further volatility, closed the year just above the 6,500 level. The price of oil briefly went negative with WTI Crude hitting -$37 a barrel, as supply overwhelmed demand and as a dispute erupted between Saudi Arabia and Russia within the OPEC price fixing cartel. WTI ended the year at US$48 a barrel and currently trades at around US$61. The price of ‘Dr’ copper followed a similar pattern to the equity markets, falling 25% from US$2.8/lb to US$2.1/lb between January and March, before rallying 67% in a strong upward trend, boosted by constrained mine supply due to Covid-19 restrictions, hitting US$3.5/lb in December 2020. Gold was already in a cyclical uptrend rising from US$1,517 at the start of the year to US$1,673 by early March. However, it too fell sharply by 12% to US$1,469 by the third week of March. Thereafter gold benefitted from the economic distress, climbing 41% to an all-time high of US$2,068 in early August, before pulling back to US$1,896 by the end of the year. The shares of mining equities, including Altus, were not spared from the broad equity sell-off in the first quarter of 2020. However, after the initial sell-off had occurred, mining equities trended higher, mirroring the price of gold, copper and other metals. The GDX, an exchange-traded fund for gold miners, started the year at 29.17 and fell 35% to 19.00 by the middle of March. Thereafter it rallied to a high of 42.74 in August before slipping to 36.02 by the end of the year. At the time of writing, the FTSE100 is above 6,950, copper is above US$4.4/lb, gold is above US$1,777/oz and the GDX is trading above 35.80. The shares of Altus outperformed the market during the year, rising from 31.0p in January to 77.5p as at 31 December 2020. This exceptional performance reflects the Company’s significant corporate transactions and project developments during the year. These include the excellent exploration results from the Company’s Diba gold project, the Tabakorole gold JV project and the strategic investment by La Mancha. Commodity Market Outlook The market’s short term reaction to the pandemic underscored the attraction of gold’s safe-haven properties, when generating no yield is of zero consequence. Gold has since pulled back from its highs, but remains 6% above the pre-pandemic levels. Other markets and risk assets remain buoyant, with a leading indicator being speculation in Bitcoin which is trading above $53,000 per ‘coin’. Real estate markets are also resilient and seemingly indicating sustained or higher prices, with interest rates expected to remain lower for longer. In general, investors are (perhaps correctly) anticipating a strong post-pandemic economic rebound which may be supercharged by the combined effects of the inflation in the money supply by various governments, under the guise of ‘stimulus’ (borrowing) and the rising wages, standards of living and ultimately domestic demand for goods and services in emerging markets. In almost all scenarios, rising inflation tends to favour the price of gold and other hard assets. Meanwhile and perhaps concerningly, bond yields are also recovering, with the 10-year US treasury having initially traded at around 1.8% in January 2020, before collapsing to 0.5% in July 2020. Yields are now approaching 1.8% again, effectively erasing all the Covid-19 related rush into the perceived safety of US government ‘reserve currency’ bonds. A sell off in treasuries combined with a falling gold price, suggests the market is anticipating price inflation and rising real interest rates. Equity markets tend to be negatively impacted by rising rates, as higher discount rates are applied to the future earnings. In turn, falling equity prices can self-reinforce, triggering over-leveraged investors to face margin calls, Page | 16 Altus Strategies Plc 31 December 2020 | Annual Report stop-loss prices to be broken through and increasing speculative short-positions. A second and perhaps more fundamental negative impact of rising real interest rates is the affordability of government and corporate debt piles and the diversion of capital (raised in taxation) from productive uses, such as infrastructure and wages, into purely servicing debt interest. These forces tend to self-limit runaway inflation. Altus Portfolio Balance Equity and commodity markets are facing a number of unprecedented factors. The coordinated drive to aggressively decarbonise the global economy has potentially transformational implications for the demand for copper, nickel and the so called ‘rare earth metals’ which are fundamental to generating, transmitting and using renewable energy. Meanwhile and in addition, the seemingly relentless growth of China, the significant amounts of yet to be printed money being earmarked for infrastructure spending (perhaps exceptionally so in the USA) and the rapid technology-driven progress (and related wealth creation) in emerging markets represent a potential perfect demand-side upward pressure for all major metals, including gold. However, as government debt burdens across the world rise to unprecedented levels as nations seek to underwrite their economies, a ‘too big to fail’ mentality regarding the global economy may form, if it hasn’t already. Should confidence in the economic growth outlook fall, for whatever reason, in a period of excessive debt and rising inflation, the potential for a substantial economic reset will be significant. As government, commercial and domestic debts are defaulted on and insolvencies rise, bank and other financial equities will come under sustained and systemic pressure. In such a scenario, and in a similar fashion to the post 2008 crisis period, gold could prove once again to be the ultimate store of value. In light of the above, the Altus portfolio of projects and royalties will continue to be weighted towards gold, with an allocation above 50%. However, Altus will continue to seek to increase its exposure to the metals which are critical to the decarbonisation, infrastructure and global growth themes. Outlook This has been a transformational year for the Company, catalysed by the strategic investment by La Mancha. We have laid strong foundations to further grow and realise value for our shareholders. In addition to expanding our portfolio of royalties and projects, most notably in Egypt, we have also welcomed a number of high calibre professionals to the team. In my report last year, I noted that while Altus is not immune to market turmoil, our business model protects our shareholders from some of the downside risk without limiting exposure to the upside. The events of the last 12 months have amplified the intrinsic benefits for our shareholders from: - - - - - - 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 JV payments and project sales; creating potential long-term income streams from project royalties; and identifying and making accretive project, royalty and corporate acquisitions. Commodity markets are turning higher. After almost a decade of under investment in the exploration and development of new mineral projects, the world is now faced with shortfalls which will likely lead Page | 17 Altus Strategies Plc 31 December 2020 | Annual Report to higher commodity prices. Talk of a ‘Super Cycle’ may prove premature. However, the coordinated drive to decarbonise the global economy and the unprecedented monetary stimulus in response to the Covid-19 pandemic have the potential to inflate and supercharge what may otherwise have been a normal and long anticipated cyclical upturn for copper, gold and other key metals. Our key objectives for 2021 will be to continue: - - - - - to grow the number of projects in our portfolio; to advance the exploration work programmes across our existing portfolio of licences; to seek and complete a number of royalty-based JV and other transactions on our existing projects; and to identify potential project, royalty and corporate acquisition opportunities and, where possible, conclude accretive transactions on these. to conduct business with due regard for the Company’s stakeholders and its environmental and social responsibilities Our long-term objective is to realise substantial returns for shareholders, by generating significant positive cashflow from a diversified portfolio of high-quality royalty, project and JV interests. Altus has never had a stronger outlook and with our Board, I very much look forward with you to the year ahead. In the meantime, I take this opportunity to thank all of the Altus team for their hard work and dedication throughout what has been an unequivocally challenging year. I also take this opportunity to thank our new and existing shareholders for their continued support. Steven Poulton Chief Executive Officer 27 April 2021 Page | 18 Altus Strategies Plc Strategic Report 31 December 2020 | Annual Report Key Performance Indicators (“KPIs”) The Board use a mixture of financial and non-financial KPIs to help monitor the performance of Altus’ group of companies (the “Group”). Cash balance 31 December 2020 £5,937,486 31 December 2019 £2,212,642 On 24 February 2020, the Group’s cash balance increased by £3.7 million as it raised £6.5 million (C$11.2 million) through a strategic investment by La Mancha with 24,845,878 new Ordinary Shares (post- consolidation basis) issued and admitted to trading on AIM. The Group focuses its expenditure on its most prospective projects, and seeks to reduce costs by pursuing potential JV and project sale transactions across its portfolio. The Group’s cash on hand is sufficient to fund all projected expenditure for a minimum of 12 months from the date of this report. Portfolio size – projects in which Altus holds an interest Royalties JVs + Royalty Projects Applications 31 December 2020 31 December 2019 6 3 3 4 9 12 1 2 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 typically reduces its ownership throughout this process and 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 2020. The Company sold its Prikro licence and Zenoula application, both in Côte d’Ivoire, during the year and decided to relinquish two licences, Zolowo in Liberia and Tigray-Afar in Ethiopia. After the year end, in Q1 2021, the Company announced that it had been a successful bidder for four gold exploration licences in Egypt and three licences, primarily for copper and silver, in Morocco. This took the number of projects to 17 (including one application), making a total of 26 assets in the Company’s portfolio. Single largest exposure by geography and mineral 31 December 2020 31 December 2019 By Geography Mali - 32% Mali - 29% By Mineral Gold – 63% Gold – 57% 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 are an indication of the level of diversification of risk within the Group’s portfolio. The Group has royalty and exploration project interests in Mali, Ethiopia, Cameroon, Morocco, Côte d’Ivoire, Liberia and (post period) Egypt. The Group continually assesses potential licence applications, projects and third party royalty 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 Page | 19 Altus Strategies Plc 31 December 2020 | Annual Report interests in nickel, zinc, iron, silver and bauxite projects. Exploration costs and Administrative expenses 2020 2019 Exploration costs expensed Administrative expenses 73% 60% 27% 40% 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/analysis and exploration support costs in Africa, as well as UK geologists’ salaries, and an allocation of UK management time and UK exploration support costs. There was a significant acceleration of exploration activity on the Group’s projects in Mali during the year. The UK support team was expanded and this increased the proportion of exploration expenditure in overall costs. Principal Risks and Uncertainties Risk description and impact Risk management strategy The Group’s projects may not contain economically recoverable volumes of minerals or metals, due to insufficient quality or quantity. Risk is diversified by holding a portfolio of projects. At every stage of the exploration process, projects are rigorously reviewed, either Delays in the construction and commissioning of mining projects or other technical difficulties may make the deposits unattractive to exploit. internally or by qualified third-party consultants, to determine if the results justify the next stage of exploration expenditure. Exploration activities, particularly more advanced The Group aims to comply with provisions of activities such as drilling, carry a risk of local environmental damage or other issues, such as PDAC’s ‘E3+’ guidance on responsible exploration as applicable. It maintains its own fuel spills, contamination of water courses, dust creation and damage to agricultural land or wild Environmental Management Plan, which is regularly reviewed, and publicised to site-based flora and fauna. Exposure to Covid-19 could pose a serious threat to the health of the Group’s employees. Long- term working from home could adversely impact the mental health of employees. employees. This contains a set of actions for each project based on a policy of Avoid, Mitigate, Remedy. All public health advice is immediately put into practice and local restrictions are strictly adhered to. The isolation of working from home is mitigated by regular video calls involving all team members. Exploration activity exposes the Group’s employees to additional health and safety risks, The Group keeps the wellbeing of its employees as the highest of its priorities. Employees must such as accessing sites, use of equipment, and exposure to extreme weather or other be up to date with all recommended vaccinations. FCO travel advice is followed at all environmental hazards. times, and regular first aid and other operational training is provided. Page | 20 Altus Strategies Plc 31 December 2020 | Annual Report Risk description and impact Risk management strategy An extended period of restrictions on movement could disrupt exploration activity on the Group’s projects. Due to the portfolio nature of the Group’s business, some projects are at a stage of 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. The Group’s Africa-based staff has been able to continue on-site operations as local restrictions permitted. A reduction in global demand for gold, copper or other metals could lead to a significant fall in the value of the Group’s exploration assets and the cash flow from any production, or even result in the abandonment of a project should it prove Altus has adopted a counter-cyclical business model which seeks to grow fastest during economic downturns. It has structured itself as a Company that can run extremely lean operations to undertake early-stage uneconomical to develop. Similarly, commodity prices could fall in reaction to changes in exploration. The Company, at this stage, does not expose itself to significant long-term international economic trends, impacting the revenue generated by projects in which the liabilities or spending commitments, and works with funded JV partners for the advanced Group holds an interest. This may have a material adverse impact on the operating results and financial condition of the Group. stages of exploration. The successful exploration and development of The Group enters JV partnerships with natural resources on any project will require significant capital investment. established exploration and mining groups who fund exploration activity in return for an equity The Group may not be successful in procuring share in the exploration assets. The Group takes a disciplined and objective the requisite funds on terms which are acceptable to it (or at all) and, if such funding is approach to its portfolio, and by relinquishing licences that it does not believe offer good unavailable, the Group may be required to reduce its level of exploration activity and divest prospects, maintains a high quality range of assets that is attractive to investors. This or relinquish its assets. strategy is evidenced by a number of leading natural resources sector investors on the Company’s share register. The exploration licences and operations of the Group are in jurisdictions outside the United The Group makes every effort to ensure it has robust commercial agreements covering its Kingdom, which subjects the Group to political risk. Adverse impacts could include the withdrawal or suspension of licences, and cancellation or onerous changes to permits or regulatory consents. activities. It maintains comprehensive documentation covering its licence assets and the Board and management oversee the good standing of these assets. The Group’s Africa- based staff maintains a continual dialogue with local government agencies. Page | 21 Altus Strategies Plc 31 December 2020 | Annual Report Risk description and impact Risk management strategy The Group is dependent upon a small executive team and other key personnel. The loss of these employees or the inability to attract additional qualified personnel as the Group grows restrict the ability of the Group to manage an expanded portfolio of projects. As a UK-based junior mining project and royalty generator, Altus could struggle to attract JV partners to advance its projects to mine- readiness, and to create a long-term revenue stream. The Remuneration & Nominations Committee reviews the Company’s compensation package annually to ensure that it remains competitive (see Directors’ remuneration report, pages 54- 58). The Company maintains strong links with industry bodies and training establishments to ensure access to a wide pool of talent. The management team was expanded during the year to six members. Since 2017, Altus has listed on both the AIM in the UK and the TSX-V in Canada, building a shareholder base and an industry reputation. During 2020 the Company’s shares also began trading on the OTCQX market in the United States. Potential partners are engaged in 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. Financial risks Material financial risks are listed below. Financial risks are also discussed in Note 26. It will take some time for revenue streams from active mines to positively impact Altus’ cashflow, and until then, the Group will be reliant on funding from shareholders. The Group aims to maximise the opportunities for converting projects into revenue-generating assets by advancing the exploration of its licences and actively marketing them to The Group’s shareholder financing is denominated in pounds sterling and Canadian dollars. Its exploration expense is incurred in US dollars and a range of African currencies. potential partners, whist at the same time maintaining a disciplined attitude to expenditure and preserving its cash. The Group also seeks JVs on its projects with third parties, which can reduce the Group’s reliance on shareholder funding. 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. Page | 22 Altus Strategies Plc 31 December 2020 | Annual Report 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 limited. However, the Company is well aware that good environmental stewardship of its projects is fundamental to its operations, and the Company endeavours to ensure that all areas it explores are properly maintained, and conserved, and rehabilitated once operations are completed. A central tenet of the Group’s policy is the Environmental Management Plan, 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 conscious 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 2020, it employed 16 people in four African countries (2019: 17 people in five countries). To some of the local people in the more rural sites, Altus offers the opportunity to be involved in the exploration activity and to gain transferable skills, such as operating geotechnical equipment. Altus has also assisted students of geology 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 development of mineral resources for the benefit of all stakeholders. The activities of the Group are undertaken 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. Page | 23 Altus Strategies Plc 31 December 2020 | Annual Report There have been no road traffic accidents affecting the Group during the last two years of operation, 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 fully appreciates 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. In order to improve the gender balance of its workforce, in its process of recruitment, Altus has engaged with the Women in Mining group. During the year, one female member of the management team and two female geologists were appointed, and at the end of the year women represented 21% of the Company’s workforce. 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, sexual orientation or religious belief. Page | 24 Altus Strategies Plc Financial Review Income 31 December 2020 | Annual Report Revenue and costs recovered from JV partners increased to £361,000 (2019: £60,000) resulting from a significant increase in activities on the JV with Marvel Gold covering the Lakanfla and Tabakorole projects in western and southern Mali. Income included milestone stage payments and JV management fees as well as recharges of project costs. Expenses Exploration costs expensed in the Income Statement increased significantly to £2,350,000 (2019: £1,101,000). This was driven to a large extent by work to advance the Company’s projects in Mali, and included the Diba project, which is managed by the Company itself, as well as those projects managed under the JV with Marvel Gold. All three projects incurred drilling costs during the year, and there were higher associated costs for assays, surveying work, camp operations and travel. The split between exploration costs recovered from JV partners and those borne by the Company is shown in note 6 to the financial statements. Expenditure relating to projects relating in Mali was £1,497,000 which accounted for 64% of total exploration costs (2019: £269,000 and 24%). All other countries of operation reduced their share of exploration costs as a result, although expenditure increased in relation to projects in Cameroon to £319,000 (2019: £221,000) to support a trenching and sampling programme on the Laboum project, and in Morocco to £268,000 (2019: £214,000) to support an Environmental Impact Assessment and predictive mapping programme. Expenditure reduced in Ethiopia to £202,000 (2019: £243,000) due to the suspension of on-site operations in response to the security situation, and in Côte d’Ivoire to £58,000 (2019: £74,000) due to the sale of the Company’s Prikro project in November 2020. There was virtually no expenditure in Liberia (2019: £80,000) as the Company relinquished its Zolowo licence in Q1 2020. Staff costs for UK-based geologists and the corporate team increased to £997,000 (2019: £855,000). The Company responded to the transformative strategic investment by La Mancha earlier in the year by building its capability to grow a diversified portfolio of royalty and project assets. This included the appointments of a business development manager, an in-house legal counsel, a VP Exploration as well as the appointment of a Non-executive Director representing La Mancha. Staff costs for the Group increased to £1,210,000 (2019: £1,098,000). Notwithstanding the curtailment of onsite activities during the year, the Group retained its full team of geologists. Staff costs including share-based payments increased to £1,814,000 (2019: £1,098,000) mainly resulting from the fair value charge for share options granted during the year. Administrative expenses in the Income Statement increased to £849,000 (2019: £731,000). This included the increase in staff costs as well as higher legal and investor relations costs. The Company’s internal staff development was supported by the retention of legal advisors in Canada and the UK, and of advisors to improve the marketing of the Company’s portfolio and to strengthen communication with current and potential shareholders. There were reductions in accounting costs, as more functions were brought in-house, and in travel costs as refunds were obtained for cancelled flights. Listing and acquisition related costs includes legal, regulatory and other such costs relating to JV and other corporate transactions, including prospective agreements relating to project partnerships, project sales and royalty acquisitions. Costs for the year were £88,000 (2019: £89,000). Page | 25 Altus Strategies Plc 31 December 2020 | Annual Report Other income and costs Other operating costs increased to £993,000 (2019: £54,000) and included a share based payment charge of £664,000 (2019: £22,000) resulting from the valuation of share options granted to Directors and employees in August 2020, and a foreign exchange loss of £329,000 (2019: £32,000) which was mainly an accounting translation of balances into the functional currency rather than a realised loss. Other income increased to £1,939,000 (2019: £152,000) with its main component of £1,727,000 being in respect of the receipt of 25 million shares of Canyon, in accordance with the JVTA. The first tranche of 15 million shares was received in February 2020, the second tranche of 10 million shares was received in February 2021 and accrued at the reporting date. Other income also included R&D tax credits in the UK for the 2018 and 2019 tax years totalling £206,000 (2019: £129,000 for the 2017 tax year). By January 2021, both tax claims had been settled in full by HMRC. The loss on revaluation of the Group’s external investments during the year was £162,000 (2019: £85,000). Assets and cash The net assets of the Group increased to £10,301,000 (2019: £4,531,000) which was reflected in a higher closing cash balance of £5,937,000 (2019: £2,213,000), a higher value of external investments of £1,321,000 (2019: £302,000), higher trade and other receivables of £854,000 (2019: £196,000) and lower trade and other payables of £1,145,000 (2019: £1,439,000). An increase in the Group’s cash balance resulted from the strategic investment by La Mancha which was approved at a General Meeting of the Company’s shareholders on 18 February 2020. The investment concluded on 21 February 2020 and raised £6.5 million (C$11.2 million) before expenses through the issuance of 24,845,879 new Ordinary Shares at an issue price of £0.26 (C$0.45) per share (number of shares and issue price on a post-consolidation basis). Subsequent to the investment La Mancha held 35.45% of the issued share capital of the Company. The increase in the balance of external investments arose from the receipt of 15 million shares of ASX- listed Canyon as outlined above. The tranche of 10 million shares was recorded as accrued income at the reporting date and was the main constituent in the increase in the balance of trade and other receivables. The Group was also the recipient of 2.5 million shares of TSX-V-listed Stellar as initial consideration for the sale of the Group’s Prikro gold project and Zenoula gold application in Côte d’Ivoire. The reduction in the balance of trade and other payables was primarily due to the issue of 14 million pre-consolidation ordinary shares of the Company to Delphi Unternehmensberatung AG (“Delphi”) in January 2020, which settled the carry-over liability arising from Delphi’s subscription for Ordinary Shares in December 2019 which was delayed due to regulatory approval. The Group’s operating cash outflow for the year increased to £2,348,000 (2019: £1,581,000) as a result of the increase in exploration and administrative expenses outlined above. The Group recorded an investing cash outflow of £104,000 (2019: £680,000 cash inflow) as it did not sell any externally held investments during the year (2019: proceeds of £674,000). Fundraising On 22 March 2021, the Company raised £7.7 million (C$13.4 million) through an oversubscribed placement of 10,266,668 Ordinary Shares of the Company at a price of £0.75 (C$1.30) per share with existing and new institutional and private investors. La Mancha and certain directors and employees of Page | 26 Altus Strategies Plc 31 December 2020 | Annual Report the Group participated in the placement. The fundraising was led by joint brokers SP Angel and Shard. The issue price of the new Ordinary Shares represented a discount of approximately 8.0% to the closing mid-market price of £0.815 / C$1.41 on 19 March 2021. The new Ordinary Shares represented approximately 12.77% of the Company's enlarged issued share capital. The Ordinary Shares issued to La Mancha and the Altus Directors and officers participating in the fundraising are subject to a TSX-V four month hold period and the Ordinary Shares issued to Canadian investors are subject to a Canadian regulatory four month hold period. The hold period will expire on 26 July 2021. The net proceeds from the placement will be used to aggressively accelerate the Group’s exploration programmes in Egypt and Mali, as well as enabling the Company to consider potential project and royalty acquisition opportunities. Further details of the placement are included in the Company’s news release dated 22 March 2021 (www.altus-strategies.com/news, titled ‘Altus Closes Over-Subscribed £7.70m / C$13.35m Equity Fundraising and Appoints Shard Capital Partners LLP as Joint Broker’). Going concern The Directors have assessed the cash resources available to the Company, including balances of cash at the reporting date and funds raised post year end, and investments held in publicly traded companies. They have reviewed a detailed 24-month budget prepared by the Company, assessing the likelihood of receiving projected income and the breakdown between committed and discretionary projected expenditure. The assessment included an analysis of the impact on the Company’s business of Covid-19. Since the onset of the Covid-19 pandemic, the Company has managed to undertake operations, which included on site work as well as desk-based research, and believes that it will be able to sustain these operations in the coming months. The basis of this judgement is discussed further in note 1 to the financial statements. In making their assessment, the Directors acknowledged the existence of a number of material uncertainties including volatility in financial and commodity markets, political and security risks, and uncertainty regarding the future impact of Covid-19. These and other risks faced by the Company are outlined in detail in the Strategic Report on pages 20 to 22. Based on their assessment, 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 12 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. Page | 27 Altus Strategies Plc 31 December 2020 | Annual Report Review of Operations by Country Projects held by the Group or operating under joint ventures At the reporting date, the Company held an interest in 19 project and royalty assets. Three of the projects were under JV, and Altus held royalties on these three JV projects and on a further six projects. Having been granted additional exploration licences in the first quarter of 2021, at the date of issuing this annual report the Company held an interest in 26 assets, two of which were minority interests due to equity earn-in by a JV partner. The project and royalty assets are listed in the Business Overview on page 10. Mali Operations At the end of the period, Altus held an interest in four projects in Mali. 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 the others (Tabakorole and Pitiangoma Est) are located in southern Mali, approximately 280km and 300km southeast respectively of Bamako. The projects are held through two of the Company’s 100% owned subsidiaries, LGN Holdings (BVI) Inc., which became part of the Group in January 2018 through a plan of arrangement, and Legend Gold Limited, a UK-registered subsidiary. The Lakanfla and Tabakorole projects are the subject of a JV with Marvel Gold Limited (ASX:MVL), while the Pitiangoma Est project is the subject of a JV with Resolute Mining Limited (ASX:RSG and LSE:RSG). The Company also holds separate royalty interests in two gold projects in western Mali, Djelimangara and Sebessounkoto Sud. Details of these projects are included on page 39. Korali Sud (Diba) Gold Project (83.1km2), Western Mali Korali Sud (Diba) is located 13km southwest of the Sadiola gold mine, which is operated by Allied Gold Corp, a private Australian mining company, and the Malian government. Both Sadiola and Korali Sud are situated on the Senegal-Malian shear corridor within the world renowned ‘Kenieba window’. Oxide gold mineralisation at Diba is mainly found in saprolite which 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. 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) (not true width of interval). The sulphide zone remains open at depth. During Q3 2020, an MRE on Diba was announced, which included a PEA to outline the potential economics for an open pit gold mine. Both studies were undertaken by independent UK-based technical consultants Mining Plus. The results of the MRE, outlined in the table below, were announced in Altus’ news release entitled “Significant Gold Resource at Diba Project, Western Mali” dated 6 July 2020 and are contained in a technical report entitled “Altus Strategies Plc Diba Project Mineral Resource Estimation (NI 43-101)” dated 06 July 2020. Julian Aldridge, CGeol (Geological Society of London), a Mining Plus employee, is the Qualified Person (the responsible person required under National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) of the Canadian Securities Administrators) for the estimate. The technical report represents a significant increase in the MRE compared to a historical report prepared in 2013. Page | 28 Altus Strategies Plc 31 December 2020 | Annual Report Diba project mineral resource estimate Indicated Inferred Domain Tonnes (t) Grade (g/t) Oxide Fresh Total 3,900,000 934,000 4,834,000 1.46 1.12 1.39 Contained gold (oz) 183,100 33,600 217,000 Tonnes (t) Grade (g/t) 939,000 4,540,000 5,479,000 1.10 1.05 1.06 Contained gold (oz) 33,200 153,300 187,000 Note: Applying a 0.5g/t Au cut-off grade The results of the PEA were announced on 22 July 2020, reporting an after-tax NPV of US$81 million (US$115 million before tax) based on a 10% discount rate and a US$1,500/oz gold price. It is noted that mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA envisages a simple low-cost and low-strip ratio open-pit gold mine that will use standard heap-leach processing. In October 2020, the Company announced the results of metallurgical test work on oxide and sulphide samples from the Diba project, which was undertaken to ascertain the amenability of ores on the project to CIL and heap leach processing. Excellent gold recoveries were reported including: - - - 98.3% recovery at moderate (75µm) grind size on oxide sample for CIL scenario 86.8% recovery at moderate (75µm) grind size on sulphide samples for CIL scenario 95.8% recovery at coarse (6.3mm) crush size on oxide sample for heap leach scenario Based on the high gold recoveries from heap leaching of oxide ores, an updated PEA was announced on 18 November 2020 which showed a significant increase in the NPV to US$107 million after tax (US$152 million before tax), using a 10% discount rate and a US$1,500/oz gold price. Seven further prospects have been defined within the licence area to date. These include 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. An RC drilling programme was undertaken at Diba between November 2020 and completed after the reporting period in January 2021. The programme was undertaken by Capital Drilling Limited (“Capital Drilling”) and comprised a total of 10,308m over 114 holes. A total of 4,932m was drilled (incorporating 57 drill holes) in and around the Diba deposit testing potential up dip, down dip and along strike extensions, as well as infilling areas within the MRE envelope to increase the resource confidence. A further 5,376m were drilled to test a number of prospects located within 3km of the Diba deposit. All the drill holes were drilled at -60 degrees inclination and ranged between 50m to 270m in length. Drilling was orientated perpendicular to the strike of the Diba deposit and the interpreted structural orientation of the target areas. Following the reporting period, assay results from these holes received to date were reported in three news releases (www.altus-strategies.com /news, see announcements on 07 January, 26 January and 11 February 2021). Page | 29 Altus Strategies Plc 31 December 2020 | Annual Report Results from the drilling programme led to the delineation of a significant and coherent, shallow- dipping and near-surface potential gold deposit at Diba NW. The prospect is located just 1.5km northwest of the existing Diba deposit. Intersections at Diba NW included 1.45 g/t Au over 22m (not true width) from 55m downhole, within an area that is currently 550m long by 150m wide. The highest grades appeared to be situated on the northern margin of an igneous intrusion, which is interpreted to be up to 1.5km long. Diba NW remains open along strike and down dip. Results received to date also confirmed the discovery of a new zone of mineralisation, which may potentially extend the Diba deposit by approximately 100m to the west, including (intersections are down-the-hole and not true widths) 11.03 g/t Au over 3m from 37m downhole, 1.21 g/t Au over 8m from 10m downhole and 1.05 g/t Au over 13m from 25m downhole. A programme of ground geophysics and follow up drilling are planned in the first half of 2021 for the project. Lakanfla Gold Project (24km2), Western Mali Lakanfla is located 5km east of Korali Sud and 6.5km from the karst-type FE3 and FE4 open pits that form part of the Sadiola gold mine to which it is considered to be geologically analogous. It is also considered to be geologically analogous to the Yatela karst-type gold deposit, which was mined between 2001 and 2015, and which is located 35km to the northwest. Nevertheless, mineralisation hosted on these properties is not necessarily indicative of mineralisation hosted at Lakanfla. The project hosts a significant number of active and historical artisanal gold workings coincident with significant 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 (not true widths). 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 system. The presence of a low gravity geophysical anomaly and corresponding surface slumps features are also considered to be significant indicators. In November 2019, Altus signed a JV agreement with Glomin to advance the Lakanfla and Tabakorole projects. On 16 June 2020 the JV earn-in rights held by Glomin were acquired by ASX-listed Marvel Gold, and the Company entered a new JV with Marvel Gold. Under the terms of the JV, Altus will receive up to US$1.45 million in milestone cash payments, retain the option to co-finance each project with a 20% equity position on completion of a DFS and hold a 2.5% NSR royalty on each project. A 3,800m Stage-1 RC drilling programme and associated passive seismic surveys were undertaken during Q4 2020 by Marvel Gold and these were completed in January 2021. The programme proved the existence of a karst system, helped to define its likely size and shape and returned multiple intersections of anomalous albeit low-level gold. A three-dimensional structural interpretation was created based on the passive seismic survey data. This interpretation will be used to direct follow up drilling to better target the ‘shoulders’ of the central granodiorite body, which may host a supergene blanket of enriched gold mineralisation. Systematic soil sampling completed in tandem with the drilling programme has defined a number of encouraging targets, with peak values of 39.1 g/t Au and 4.2 g/t Au. The first of these samples were located in a new area in the north of the Lakanfla licence, approximately 4km from the former (karst- Page | 30 Altus Strategies Plc 31 December 2020 | Annual Report style) open pits of the Sadiola gold mine. These targets do not appear to have any associated artisanal workings and as such represent new targets. The programme was funded by Marvel Gold, which, with the completion of Stage-1 commitments after the year end, had earned a 33% interest in the project. Tabakorole Gold Project (100km2), Southern Mali 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 Firefinch Limited (ASX:FFX) (formerly owned by Barrick Gold). Mineralisation hosted at Morila is not necessarily indicative of mineralisation hosted by Tabakorole. The project is subject to the JV agreement with Marvel Gold as outlined above. A 70-hole (2,042m) shallow AC drilling programme was completed in May 2020. The AC programme established a strong correlation between magnetic anomalies and drilled mineralisation. Intercepts (not true widths) included 1.05 g/t Au over 12m from 9m, 0.77 g/t Au over 21m from surface and 0.95 g/t Au over 15m from surface and defined a potential 200m north-westerly strike extension to the 2.7km- long FT Prospect (formerly known as the FT Project). A high-resolution ground magnetic programme was completed in Q3 2020 covering an area of 25km2 and comprising 163 NE-SW orientated lines spaced 50m apart for a total 520 line-kilometres. Initial interpretation of the geophysical data from this survey has identified nine priority magnetic targets to date, with a cumulative strike length of over 8km. These anomalies are interpreted to be extensions to the known shear structure as well as splays or sub-parallel and offset structures to it. The anomalies are typically coincident with geochemical samples with elevated gold values from a range of surface to shallow subsurface sampling techniques including soil, termite-mound, AC drilling and auger drilling. None of the nine targets has undergone any systematic drill testing to date. Additionally, in Q3 2020, Marvel Gold completed a 1,544m diamond drilling programme on the FT Prospect, along with an additional 1,813m AC programme. The programme was designed to test high- grade plunge extensions, drill untested gaps in the deposit plus a single hole into the north-west strike extension and to provide QAQC support for the deposit model. The diamond drilling was undertaken by Capital Drilling and consisted of eight diamond drill holes for a total of 1,544m. The holes were drilled between -52 and -60 degrees inclination, perpendicular to the strike of the FT Prospect and ranged between 62.5m to 293.0m in length. Intersections included 4.7 g/t Au over 14.0m and 1.2 g/t over 31.0m (not true widths). The results confirmed a 600m north-west extension to the FT prospect. Metallurgical testwork was undertaken on four composite samples of fresh rock collected from diamond drillholes. The composites targeted the current MRE grade of 1.2 g/t Au and ranged from 1.1 to 1.9 g/t Au. All samples were taken in fresh rock as this material represents approximately 90% of the Tabakorole MRE. Initial bottle roll testing is the industry standard first-step to determine gold recoveries from cyanide leaching. Results from the testing showed average leach recoveries of 92.7%, 94.8% and 96.6% for the four samples at three different grind sizes. The high recoveries indicate that the gold is likely to be recoverable via a simple CIL process flow sheet, with no indications of refractory gold. In September 2020, the results of an MRE commissioned by Marvel Gold were announced (see table below). The MRE was prepared by International Resource Solutions Pty Ltd (Perth, Australia) under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Page | 31 Altus Strategies Plc 31 December 2020 | Annual Report Institute of Geoscientists and Minerals Council of Australia (“JORC Code”) and was reported as at 30 September 2020. A Qualified Person has not undertaken sufficient work to classify the MRE in accordance with NI 43-101, and the Company is not treating it as such. Tabakorole project mineral resource estimate 30 September 2020 Category Tonnes (t) Grade (g/t) Oxide Fresh Indicated Inferred Indicated Inferred Note: Cut-off grade 0.6 g/t Au 1,000,000 1,500,000 6,300,000 15,100,000 1.3 1.3 1.2 1.2 Contained gold (oz Au) 40,000 60,000 250,000 560,000 A further 6,300m of RC drilling was undertaken on the project by Capital Drilling on behalf of Marvel Gold commencing in December 2020 and concluding after the year end in February 2021. Initial results from 19 of the 39 holes in the programme extended the strike length of the FT Prospect by 150m to over 3km, and showed broad and high-grade intersections. Final results from the remaining 20 holes of the 39-hole programme, received after the year end, included an intersection of 2.0 g/t over 16m from 75m located approximately 50m northeast of the current deposit, representing the discovery of a potential new and parallel gold zone. Results from these intersections were reported in four news releases (www.altus-strategies.com /news, see announcements on 18 February, and 02, 18, and 23 March 2021). After the year end, in March 2021, Marvel Gold commenced a five-hole, 750m diamond drilling programme in the southeast of the deposit and a 6,000m AC drilling programme to test potential strike extensions. A high-resolution ground magnetic survey was also commenced to extend and improve the resolution of the area surveyed. Marvel Gold has completed Stage-2 of the project and made milestone payments totalling US$175,000 to date, earning a 51% interest in Tabakorole. Altus currently retains a 49% equity interest. Marvel Gold has the right to earn up to an 80% interest in Tabakorole by sole funding a further stage of exploration, culminating in a DFS, and making further milestone payments to Altus. Thereafter, Altus has the right to co-fund or dilute its 20% interest in the project. Altus also retains a 2.5% NSR royalty on the project. Marvel Gold will have the right to reduce the royalty to 1.0% for a payment to Altus of between US$9.99 million and US$15 million (subject to the size of the resource at Tabakorole). Pitiangoma Est Gold Project (106km2), Southern Mali Pitiangoma Est is located 300km southeast of the capital city of Bamako. The licence is subject to a JV with ASX-listed Resolute Mining Limited (“Resolute”) and is located on the Syama shear zone, 15km from the Tabakoroni gold deposit and 40km from the Syama gold mine (both owned by Resolute). Resolute can earn up to a 70% interest in the project by funding US$3 million 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 Page | 32 Altus Strategies Plc 31 December 2020 | Annual Report 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 JV, 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. Egypt Operations After the end of the reporting period, on 25 January 2021, the Company announced that it had been awarded four gold projects (comprising nine gold exploration licences) in the Eastern Desert of Egypt by the Egyptian Mineral Resources Authority as part of an international bidding process. The four gold projects, Wadi Jundi, Bakriyah, Abu Diwan and Wadi Dubur, total 1,565km2 and will be held by the Company’s 100% owned subsidiary, Akh Gold Limited. The licences have been awarded for an initial two-year term, with each licence renewable for up to two further periods each of two years duration. The projects have the potential to host orogenic gold deposits within volcanic formations and granitic intrusions, as well as potential gold-bearing Volcanogenic Massive Sulphide (“VMS”) systems hosted in ancient seafloor sequences. Wadi Jundi Gold Project (696km2), Eastern Egypt The Wadi Jundi project consists of four licence blocks, covering a total area of 696km2. The project is located approximately 40km south of the historic El Sid gold mine, which reportedly contributed around 45% of Egypt's gold production during the 20th century, and is 115km north-west of the Sukari gold mine which produces approximately 400,000 ounces of gold per year. Mineralisation hosted at El Sid and Sukari is not necessarily indicative of mineralisation hosted at the Wadi Jundi project. Wadi Jundi is directly accessible by secondary tracks from the Al Kosair-Qena asphalt highway, which runs along the Licence's northern boundary and connects the city of Luxor and coastal town of Quseer. Altus believes Wadi Jundi is prospective for orogenic gold mineralisation related to deformed volcanic sequences proximal to granite intrusions, as well as VMS deposits. Bakriyah Gold Project (348km2), Eastern Egypt The Bakriyah project consists of two licence blocks, covering a total area of 348km2. The project is located approximately 60km south of the historic El Sid gold mine, and 115km north-west of the Sukari gold mine. Mineralisation hosted at El Sid and Sukari is not necessarily indicative of mineralisation hosted at the Bakriyah project. Bakriyah is accessible by secondary tracks from a major E-W asphalt road 30km to the south, which connects to the Red Sea coastal town of Marsa Alam. Altus believes Bakriyah is prospective for orogenic gold mineralisation related to granite intrusions. Abu Diwan Gold Project (346km2), Eastern Egypt The Abu Diwan project consists of two licence blocks, covering a total area of 346km2. The project is located approximately 30km north-east of the historic El Sid gold mine, and 160km north-west of the Sukari gold mine. Mineralisation hosted at El Sid and Sukari is not necessarily indicative of mineralisation hosted at the Abu Diwan project. Abu Diwan is directly accessible by asphalt road from the Red Sea coastal city of El Quseir, located 30km to the south-east. Altus believes Abu Diwan is prospective for orogenic gold mineralisation hosted in an ophiolite belt proximal to a granite intrusion. Wadi Dubur Gold Project (175km2), Eastern Egypt The Wadi Dubur project consists of one licence block, covering a total area of 175km2. The project is located 5km west of the historic Atud gold mine and approximately 40km north-west of the Sukari gold mine. Mineralisation hosted at Atud and Sukari is not necessarily indicative of mineralisation hosted at the Wadi Dubar project. Wadi Dubur is directly accessible by asphalt road from the Red Sea coastal Page | 33 Altus Strategies Plc 31 December 2020 | Annual Report town of Marsa Alam, 60km to the east. Altus believes Wadi Dubur is prospective for orogenic gold mineralisation hosted in a north-west trending ophiolite belt. Also following the end of the reporting period, the Company announced on 10 March 2021 that systematic remote sensing had been undertake on the four Egyptian projects which had resulted in the identification of over 100 potential hard rock gold workings, with a number of workings being up to 375m in length. Fieldwork is expected to commence in the second quarter of 2021 to follow up on the priority targets generated from the remote sensing programme. Cameroon Operations Altus holds two projects in Cameroon, the Laboum gold project, held through the Company’s 99% owned subsidiary, Auramin Ltd, and the Bikoula iron ore project, held through the Company’s 97.3% owned subsidiary, Aluvance Ltd. The Company also holds a royalty interest in the Birsok bauxite project in central Cameroon, details of which are provided on pages 39-40. Laboum Gold Project (189km2), Northern Cameroon Laboum is located 600km northeast of the capital city of Yaoundé. The licence, which is currently pending renewal, 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. During Q4 2020, Altus commenced a systematic reconnaissance trenching and sampling programme, with 13 trenches totalling approximately 5,000m. The trenches are orientated perpendicular to the general north-easterly trend of the Laboum shear zone and associated gold-in-soil anomalies, at the time of reporting Altus is waiting for assay results. Results were reported from the discovery of a new array of quartz veins at the Tapare prospect. The discovery comprises 21 quartz veins, ranging from between 10m to 345m in length, within a 150m wide zone. The veins are hosted in metasiltstone and metagreywacke formations. A total of 141 reconnaissance samples have been collected as part of the current field programme at Laboum of which 27 samples were collected from the Tapare discovery, including vein samples which returned grades of up to 36.20 g/t Au and 1.13 g/t Au. Bikoula Iron Ore Project (194km2), Southern Cameroon The Bikoula project comprises the Bikoula and Ndjele licences, with an area of 99km2 and 95km2 respectively, and is 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, which are currently pending renewal, 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 Inferred MRE of 46 Mt at 44% Fe, including a supergene haematite cap of 5 Mt at 52.7% Fe, under the JORC Code. 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. In 2018, Altus pitted a large airborne magnetic anomaly at the Nkout North Page | 34 Altus Strategies Plc 31 December 2020 | Annual Report 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. After the period end, on 17 March 2021, the Company announced the completion of a strategic review of the project by independent consultants Mining Plus. The review included analysing the work completed to date to create an updated financial model and incorporated the potential positive impacts from recent infrastructure upgrades in Cameroon, including the completion of the deep water port at Kribi (located 350km to the west of the Project) and the construction of new roads. The strategic review will be used by the Company to determine the next steps for developing the project, including the potential to undertake a resource expansion drilling programme. An Environmental and Social Impact Assessment Study was also completed by the Company. Altus is seeking a partner to advance the project with further drilling along the anomaly, and the preparation of an independent MRE. Morocco Operations At the end of the year Altus held four projects in Morocco through its 100% owned subsidiary, Aterian Resources Ltd, primarily targeting copper, silver and zinc. On 15 March 2021 the Company announced that it had been granted a further three copper and silver projects following a competitive tendering process. Altus has applied for a number of additional licences across Morocco and awaits the results of these submissions. Agdz Copper-Silver Project (60km2), Central Morocco Agdz comprises four contiguous permits in the Anti-Atlas Mountains, 350km south of the capital city of 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 at the Agdz project. 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% copper (“Cu”) and 448 g/t silver (“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 considered analogous to that of the Bouskour mine. However, 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. In Q1 2020, an Environmental Impact Assessment was completed by an independent Moroccan environmental consultancy, which was approved by the Ministry of the Interior in Q4 2020. The approval is valid for a period of five years and is renewable thereafter. Attainment of the approval of an EIA is a key milestone for the granting of a future mining licence. In Q4 2020, the Company also announced the results of a predictive mapping programme for Agdz which was carried out at the BRGM Campus of the University of Orléans in France. Using modern techniques, analysis was undertaken on all surface data compiled by Altus to date, including surface Page | 35 Altus Strategies Plc 31 December 2020 | Annual Report rock and trench results, mapping data and gamma spectrometry and ground magnetic survey results. A number of broad targets were identified from the study, encompassing parts of the Amzwaro and Makarn Prospects. One of the priority targets is approximately 1km long and strikes in a north easterly direction in the northern portion of the Makarn Prospect. Altus is actively seeking a JV partner for Agdz to conduct trenching and to undertake a maiden drill programme. Limited work was undertaken on the Company’s three other exploration projects in Morocco (Takzim, Zaer, and Ammas) due to travel restrictions related to the Covid-19 pandemic. Takzim Copper-Zinc Project (72km2), 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. However, the mineralisation hosted at Bir-n-Hass is not necessarily indicative of mineralisation hosted at Takzim. No significant exploration work was conducted on Takzim during the year. Zaer Copper Project (96km2), 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 (32km2), Central Morocco Ammas comprises two permits, located 30km south of the city of Marrakech. The project is 3km southeast and along strike of Managem’s Hajjar zinc, lead and copper VMS mine. However, 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. Following the period end, the Company announced the grant of three new copper and silver projects totalling 252km2 in central Morocco and which are detailed below. Remote sensing is underway on these projects and exploration programmes are expected to commence shortly. Igzougza Copper-Silver Project (24km2), Western Morocco Igzougza comprises two permits and is located 380km south of the capital city of Rabat, in the central Anti-Atlas Mountains. The project hosts a major regional east-west trending strike-slip fault zone between Proterozoic granite-migmatite terrain and Neoproterozoic volcano-sediments overlain unconformably by Cenozoic volcano-sediments. The project is located 20km from the Zgounder silver mine operated by Aya Gold & Silver Inc. (TSX:AYA). Mineralisation hosted at Zgounder is not necessarily indicative of mineralisation at Izougza. Numerous copper, silver, gold and cobalt mineral occurrences are reported along strike to the east and west with an apparent association with the major strike-slip fault zone. Azrar Copper Project (85km2), Western Morocco Azrar comprises six permits and is located 430km south of Rabat, on the flank of the Agadir-Melloul inlier in the western Anti-Atlas Mountains. The project hosts terminal Neoproterozoic volcano- sediments overlain unconformably by Adoudounian sediments. These sedimentary sequences are known to host copper deposits in the Western and Central Anti-Atlas. A series of north to northeast Page | 36 Altus Strategies Plc 31 December 2020 | Annual Report striking faults and fold hinges traverse the project and are cut by a series of west-northwest interpreted structures. Tata Copper Project (143km2), Western Morocco Tata comprises nine permits and is located 465km south of Rabat, in the Tata inlier of the western Anti- Atlas Mountains. The project hosts Palaeoproterozoic flysch sequences deposited in a tectonic basin, intruded by a granitic complex and complexly deformed during successive Eburnean, Pan-African and Hercynian orogenies. The Palaeoproterozoic metasediments are unconformably overlain by Neoproterozoic volcano-sediments, in turn unconformably overlain by Adoudounian sediments that are known host to major sedimentary copper deposits in the Western and Central Anti-Atlas. Ethiopia Operations Altus holds two projects in Ethiopia at Daro, and Zager. Both 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. The Company decided not to renew its Tigray-Afar licence at the end of 2020, as exploration results indicate that the mineralisation potential did not meet Altus target size criteria. During 2020, hostilities broke out between the regional government of Tigray-Afar and the Ethiopian federal government with military action taking place in and around Mekele, the capital of Tigray region. The Company immediately suspended site operations and ensured the safe return home of its staff. Site operations remain suspended pending the cessation of hostilities and the restoration of a safe working environment. The Company formally notified the Ethiopian authorities of force majeure in accordance with the relevant clauses in the exploration agreements. Daro Copper-Gold Project (412km2), Northern Ethiopia Daro is located 570km north of Ethiopia’s capital city, Addis Ababa. 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. 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. A reconnaissance ground gravity geophysical survey along an initial 300m section of the Teklil prospect identified a potentially significant gravity anomaly adjacent to key VMS markers, including a gossanous outcrop sample which returned 6.95% Cu. 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% lead (“Pb”) and discovered Au-Ag-Cu-Pb-Zn bearing quartz veins and gossanous float. The Wedi Keshi gold prospect has been mapped as a highly altered quartz-feldspar porphyry intrusion with a strike length of approximately 2km and up to 300m in width. The intrusion 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. Rock chip sampling of quartz veins and altered wall rock material have returned 21.6 g/t Au 14.1 g/t Au, 8.5 g/t Au and 7.3 g/t Au. Altus is seeking a JV partner for Daro, to conduct trenching and to complete a geophysical gravity survey Page | 37 Altus Strategies Plc 31 December 2020 | Annual Report with the aim of defining targets for a maiden drill programme. Zager Copper-Gold Project (285km2), Northern Ethiopia The Zager prospect 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. The project 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. Initial prospecting and ground truthing programme on Zager have resulted in the discovery of five hard rock artisanal gold workings, two of which have 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. Altus is seeking a JV partner for Zager to conduct trenching and complete a geophysical gravity survey with the aim of defining targets for a maiden drill programme. Côte d’Ivoire Operations Altus holds one exploration licence application in Côte d’Ivoire, for the Toura Ni-Co project. The application is held through the Company’s 100% owned subsidiary, Aeos Gold Ltd. In November 2020, the Company completed the sale of its interest in the Prikro gold project and the Zenoula licence application to Stellar as detailed above with further details of the transaction available on the Company’s website (www.altus-strategies.com/news, entry dated 27 November 2020) and on page 40. During 2019, the Company announced that it had signed an option agreement on its Toura 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). Liberia Operations Altus no longer holds any projects in Liberia, having elected to relinquish its Zolowo licence during 2020 due to the comparatively high cost of undertaking mineral exploration in Liberia. The Company retains its royalty interest in the Leopard Rock Gold Prospect (see following section). Projects in which the Group holds a royalty interest Leopard Rock Gold Prospect (90km2), Western Liberia The Leopard Rock prospect is part of the 457km2 Bea Mountain Mining Licence in western Liberia, located approximately 100km northwest of the capital city, Monrovia, and held privately by Avesoro Resources Inc. (formerly AIM & TSX:ASO), which was taken private in January 2020. It is located in the north-eastern part of the Bea licence area, approximately 40km northeast of the New Liberty Gold Mine Page | 38 Altus Strategies Plc 31 December 2020 | Annual Report 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 13km long gold- in-soil anomaly up to 100m 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 4m 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) in May 2013. Djelimangara & Sebessounkoto Sud Gold Projects (55km2 and 28km2), Western Mali Djelimangara and Sebessounkoto Sud gold projects are located in the Kayes region of western Mali, approximately 450km northwest of the capital city of Bamako. Sebessounkoto Sud is located 15km south east of the Company’s Diba project. Historical trenching undertaken by Barrick (formerly Randgold Resources), reportedly returned up to 0.68g/t Au over 61m. During 2018, while the projects were held by the Group, the Soa gold prospect covering a 2.7km long gold-in-soil anomaly was defined, identified from mapping artisanal workings, and sampling spoil and termite mounds. Spoil samples returned up to 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) reportedly returned encouraging intersections including 1.34g/t Au over 30m. The Company held a 100% interest in the project until October 2019, when it sold its interest to TSX-V- listed Desert Gold Venture Inc. (“Desert Gold”). The transaction included 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 included a 2.5% NSR royalty of which 1.5% can be repurchased by Desert Gold for up to US$6.0m, depending on the size of the reserve at the time of a DFS. Birsok Bauxite Project (372km²), Central Cameroon Birsok is located 370km northeast of the capital city of Yaoundé. From 2013 to October 2018, the project Page | 39 Altus Strategies Plc 31 December 2020 | Annual Report was under a JV with ASX-listed Canyon. The project is contiguous with Canyon’s Minim-Martap, a potential tier-one bauxite project. The Birsok licence is currently pending renewal. On 11 February 2019, the Company announced that it had signed a JV Termination Agreement, a Sale and Purchase Agreement and a Royalty Agreement with Canyon. For termination of the JV, a total of 25 million Canyon shares have been issued to Altus. These shares were received in two tranches of 15 million, as announced on 11 February 2020, and 10 million on 12 February 2021. Each tranche of shares is subject to a voluntary escrow period of 12 months from the date of issue. This escrow period has now expired for the initial 15 million shares granted on 11 February 2020. For vending the Birsok project to Canyon, Canyon will issue a further 5 million ordinary shares to Altus (subject to a 12-month voluntary escrow agreement), upon the execution of a mining convention on the Minim Martap Project. Altus will also receive a US$1.50 per tonne ‘life of mine’ royalty on sales of ore mined from Birsok. Details of these agreements with Canyon are available on the Group’s website (www.altus-strategies.com/news, entry dated 11 February 2019). Altus currently holds 26,100,000 fully paid ordinary shares in Canyon representing an approximate 4.25% interest in Canyon on an undiluted basis at the time of the recent share grant. Prikro Gold Project (369.5km2), 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 gold, copper, zinc and molybdenum mineral occurrences. On 7 November 2020, the Company announced the completion of a definitive Sale & Purchase agreement with TSX-V listed Stellar in respect of the Prikro gold exploration licence and Zenoula gold licence application in Côte d’Ivoire. Under the agreement Stellar acquired a 100% interest in the projects through the acquisition of Aeos Resources Ltd, a wholly owned Seychelles incorporated subsidiary of the Company. The consideration consisted of an initial 2.5 million units of Stellar, where each unit comprised one Stellar share and one warrant to purchase a further Stellar share for C$0.07 for two years, with further shares to be issued upon definition of a resource and completion of a DFS. Altus retains a 2.5% NSR royalty on each of the projects, and Stellar has the right to repurchase up to 1.0% of each royalty for US$0.5 million for each 0.5% repurchased. Cautionary note regarding historical data Readers are cautioned that some 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 approved by Steven Poulton, Chief Executive 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 NI 43-101. Page | 40 Altus Strategies Plc 31 December 2020 | Annual Report 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 10 principles of the QCA Code as set out in the statement below and detailed in this report. The Group’s AIM Compliance Code, dating from its listing, is published on the Company’s website at it https://www.altus-strategies.com/corporate/corporate-governance/ and in September 2018 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 Reference Page(s) Strategy and business model Shareholder needs and expectations Business Overview Corporate Governance Report Responsibilities to stakeholders Strategic Report Risk management Composition of the Board Corporate Governance Report Strategic Report Financial Statements note 26 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 9-11 41-49 19-24 41-49 19-24 98-100 41-49 41-49 41-49 41-49 41-49 41-49 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 24 employees plus consultants. Expansion of operations • The Company undertook project operations in five countries during 2020, and has announced that it will be expanding operations into Egypt in 2021 with four new projects, as well being granted three additional projects in Morocco; the Company is continuously analysing opportunities to expand its area of operations into new jurisdictions, and to extend its business through the acquisition of third party royalties. Page | 41 Altus Strategies Plc 31 December 2020 | Annual Report • Areas of operation The focus of Altus’ exploration and the location of all of its intangible assets is Africa. Of the five 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 2020). • Operating as a dual-listed company The Company listed on the AIM market in August 2017 and, 10 months later, on the TSX-V. This opportunity brought with it responsibilities to shareholders predominantly in Europe and North America, and obligations for compliance with regulatory regimes in the UK and Canada. 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 three 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 is not a director of the Company, and is also based at the registered office. The Chairman, David Netherway, and two of the three Non-executive Directors are classified as independent under Canadian securities laws and the QCA Corporate Governance Code. David Netherway has been a Director of Altus Strategies Plc and previously Altus Strategies Limited since 2007. The Board considers that he makes a significant contribution to the Company and that he has retained his independence of character and judgement notwithstanding his long-term relationship with the Company. The strategic investment by La Mancha (see Chief Executive’s Review on pages 12-18) 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 (the CEO of La Mancha) being appointed to the Board. All other Directors served for the whole year in 2020. Following a change to the Company’s articles of association approved at the Page | 42 Altus Strategies Plc 31 December 2020 | Annual Report Group’s 2019 AGM, all Directors, including those appointed since the previous AGM, retire and stand for re-election at the AGM every 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. David Netherway Steven Poulton Matthew Grainger Position Appointment date Status Audit Committee Remuneration Committee Position Appointment date Status Audit Committee Remuneration Committee Non-executive Chairman 21-May-17 Independent Member Member Robert Milroy Non-executive 21-May-17 Independent Chair Chair Chief Executive Executive 28-Apr-17 Not independent 28-Apr-17 Not independent - - - - Michael Winn Non-executive 30-Jan-18 Independent Member Member Karim Nasr Non-executive 06-Apr-20 Not independent - - David Netherway Non-Executive Chairman 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) until March 2020; he was a former director of Avesoro Resources Inc. (formerly Aureus Mining; AIM & TSX: ASO, taken private in January 2020); he is a non-executive director of Kore Potash plc (ASX, AIM & JSE: KP2). In December 2020 he stood down as chairman of Canyon (ASX:CAY), which is Altus’ former partner in the Birsok bauxite project, but remains a non-executive director. 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 Page | 43 Altus Strategies Plc 31 December 2020 | 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 Diamonds 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 Holdings 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 and a Fellow of the Institute of Materials, Minerals and Mining. 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 Winn Non-Executive Director Michael was the Chairman and CEO at Legend Gold Corp., a TSX-V listed company which was acquired by Altus in January 2018. Michael is President of Seabord Capital Corp., a US company which provides investment analysis and financial services to companies operating in the energy and mining sectors and President of Seabord Services Corp., a Canadian company providing management and regulatory services to private and public mining companies. Michael is also the Chairman of EMX Royalty Corp., a Canadian royalty company listed on the TSX-V and NYSE American. He worked as an analyst for Global Resource Investments Ltd. from 1993 to 1997 where he specialized in the evaluation of emerging oil Page | 44 Altus Strategies Plc 31 December 2020 | Annual Report and gas and mining companies, and has worked in the oil and gas industry since 1983 and the mining industry since 1992. Michael is a former director and officer of several TSX-V and NYSE listed companies operating in Canada, Latin America, Europe and Africa, and is currently a director of Atico Mining Corp. (TSX-V:ATY). 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 and NYSE-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 in July 2019, having joined the Group as its Financial Controller in November 2018. 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 Directors 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. 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’s in-house Legal Counsel and of the Company Secretary, who is responsible for ensuring Page | 45 Altus Strategies Plc 31 December 2020 | Annual Report 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 and Nominations Committee The Remuneration and Nominations 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. On 18 August 2020 the Board voted to extend the Terms of Reference of the then Remuneration Committee to include the duties and responsibilities of a nominations committee. The committee Page | 46 Altus Strategies Plc 31 December 2020 | Annual Report became responsible for reviewing the structure, size and composition (including skills, knowledge and experience) of the Board 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. David Netherway Steven Poulton Matthew Grainger Robert Milroy Michael Winn Karim Nasr Responsibilities of the Board Board Audit Committee Remuneration Committee 8/8 11/11 11/11 10/11 10/11 6/7 4/4 n/a n/a 4/4 3/4 n/a 3/3 n/a n/a 4/4 3/4 n/a 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 - Financing environment Page | 47 Altus Strategies Plc 31 December 2020 | Annual Report - 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 Board is committed to ensuring that the Company conducts its business ethically and has led the implementation of an anti-bribery and anti-corruption policy and has also put in place appropriate procedures to ensure that Directors, employees and consultants of the Group comply with the UK Bribery Act 2010. Regular training is given to all staff on the terms and implications of the policy, and the policy is publicised to people working on behalf of the company and to companies with which the Group engages. 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 each 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 2020 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 of the Group 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 regularly 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. The Company has an active presence on Twitter and Linked-In as a means of improving accessibility to Page | 48 Altus Strategies Plc Company newsfeeds. 31 December 2020 | Annual Report 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 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 Chairman 27 April 2021 Page | 49 Altus Strategies Plc 31 December 2020 | Annual Report Directors’ Report The Directors present their annual report and financial statements for the year ended 31 December 2020. Company Altus Strategies plc is the parent company of the Group. It is a public limited company listed on the AIM market of the London Stock Exchange and the TSX-V in Canada, and incorporated and registered in the United Kingdom. The Company’s shares also trade on the OTCQX ‘Best Market’ in the United States. 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 9-11, 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 19-24. 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 (2019: £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 6 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 12 April 2021. Major shareholders (* indicates Director of the Company) La Mancha Holdings S.à r.l. Delphi Unternehmensberatung AG Steven Poulton* Resource Capital Investment Corp. (Sprott) Michael Winn* David Netherway* Number of shares % of issued capital 28,483,360 7,000,000 5,757,061 4,691,600 3,743,980 2,441,375 35.43% 8.71% 7.16% 5.84% 4.66% 3.04% Page | 50 Altus Strategies Plc 31 December 2020 | Annual Report Share Capital Details of the share capital and movements in share capital during the year are disclosed in note 29 to the financial statements. On 1 September 2020, a total of 3,000,000 share options were issued to Directors and 2,100,000 share options were issued to employees. Details of these share options are provided in note 28 to the financial statements. Company’s listing The Company’s Ordinary Shares have been trading on AIM in London since 10 August 2017, on TSX-V in Canada since 6 June 2018 and on OTCQX in the United States since 23 September 2020. 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 Financial Review on page 27 and 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. 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 41-49. Directors and their interests The Directors who served during the year, together with their directly beneficial interests in the shares of the Company, including those held by a spouse or civil partner, were as follows. 31 December 2020 31 December 2019 Post- consolidation Pre- consolidation 2,441,375 5,720,000 2,085,566 400,000 3,743,980 - 3.48% 8.16% 2.97% 0.57% 5.34% - 2,441,375 5,565,096 2,085,566 387,436 3,743,980 n/a 12,206,875 27,825,481 10,427,828 1,937,179 18,719,898 n/a 5.81% 13.24% 4.96% 0.92% 8.90% n/a David Netherway Steven Poulton Matthew Grainger Robert Milroy1 Michael Winn Karim Nasr 1. Held through Milroy Capital Limited a company controlled by Robert Milroy Key performance indicators (KPIs) Information on the Group’s KPIs is included in the Strategic Report on pages 19-24. Page | 51 Altus Strategies Plc 31 December 2020 | Annual Report Principal Risks and uncertainties The principal risks and uncertainties of the Group are outlined in the Strategic Report on pages 19-24. 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 19-24. 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 2021. 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 JV 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 22 and in note 26 of the financial statements. Events after the reporting date The events after the reporting date are set out in note 32 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 Monday 14 June 2021. Auditor PKF Littlejohn LLP has indicated its willingness to continue in office as the Group’s auditor. A resolution proposing that they be re-appointed will be put forward at the Annual General Meeting. Page | 52 Altus Strategies Plc 31 December 2020 | Annual Report 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 Chief Executive Officer 27 April 2021 Page | 53 Altus Strategies Plc 31 December 2020 | Annual Report Directors’ Remuneration Report Remuneration and Nominations Committee The Remuneration and Nominations 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 41-49. 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. Remuneration packages are reviewed annually. 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. Bonuses for Executive Directors in 2020 were set at 50% 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 the full bonus would be payable for the year and this was paid in 2021. Non-executive Directors receive only basic fees and do not receive bonuses or company pension contributions, although they are included in the policy on share options. Contracted and deferred remuneration The total value of Directors’ remuneration for 2020 was £451,080, comprising £316,080 for Executive Director salaries and Non-executive Director fees, £112,500 for Executive Director bonuses and £22,500 for Executive Director pension contributions. 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. The balance of deferred remuneration brought forward was £247,409 in respect of salaries and Board fees, and £62,875 in respect of company pension contributions. This was in addition to outstanding bonus payments of £127,500. These balances were settled during the year. Excluding bonuses, which are paid in the year following that to which they relate, and monthly pension contributions, which are paid in the following month, there were no outstanding balances of deferred remuneration at the end of the year. The following tables present Directors’ remuneration for the years 2018 to 2020, comprising salaries, bonuses payable, and company pension contributions for Executive Directors, and Board fees for Non- executive Directors. As well as contractual amounts, the tables show amounts paid for the current year and prior years (prior to the applicable deductions of tax or national insurance), amounts deferred for the year and the balance of deferred remuneration. Certain of this information is also presented in note 11 to the financial statements. Page | 54 Altus Strategies Plc 31 December 2020 | Annual Report Executive Directors Steven Poulton, Chief Executive Officer Contractual salary Bonus payable Pension payable Total payable Salary paid (for current year) Salary paid (unpaid in prior years) Bonus paid (unpaid in prior years) Pension paid (for current year) Pension paid (unpaid in prior years) Total paid Salary deferred Bonus to be paid Pension deferred / to be paid Total deferred Deferred salary balance Bonus payable balance Pension payable balance Total deferred balance Matthew Grainger, Executive Director Contractual salary Bonus payable Pension payable Total payable Salary paid (for current year) Salary paid (unpaid in prior years) Bonus paid (unpaid in prior years) Pension paid (for current year) Pension paid (unpaid in prior years) Total paid Salary deferred Bonus to be paid Pension deferred / to be paid Total deferred Deferred salary balance Bonus payable balance Pension payable balance Total deferred balance 2020 £ 125,000 62,500 12,500 200,000 125,000 172,500 90,000 11,458 62,875 461,833 - 62,500 1,041 63,541 - 62,500 1,041 63,541 100,000 50,000 10,000 160,000 100,000 36,576 37,500 9,167 - 183,243 - 50,000 833 50,833 - 50,000 833 50,833 2019 £ 125,000 46,875 12,500 184,375 6,250 - - - - 2018 £ 122,500 - 12,250 134,750 97,500 - - - - 6,250 97,500 118,750 46,875 12,500 178,125 172,500 90,000 62,875 325,375 100,000 37,500 10,000 147,500 91,090 - 21,563 10,000 7,675 25,000 - 12,250 37,250 53,750 43,125 50,375 147,250 100,000 - 10,000 110,000 86,000 - - - - 130,328 86,000 8,910 37,500 - 46,410 36,576 37,500 - 74,076 14,000 - 10,000 24,000 27,666 21,563 7,675 56,904 Page | 55 Altus Strategies Plc 31 December 2020 | Annual Report Non-executive Directors David Netherway, Chairman Board fees payable Board fees paid (for current year) Board fees paid (unpaid in prior years) Total paid Board fees deferred Balance of deferred fees Robert Milroy * Board fees payable Board fees paid (for current year) Board fees paid (unpaid in prior years) Total paid Board fees deferred Balance of deferred fees Michael Winn Board fees payable Board fees paid (for current year) Board fees paid (unpaid in prior years) Total paid Board fees deferred/to be paid Balance of deferred fees Karim Nasr Board fees payable Board fees paid Board fees to be paid Balance of deferred fees * Robert Milroy is a director through Milroy Capital Ltd 2020 £ 35,000 35,000 - 35,000 - - 25,000 25,000 - 25,000 - - 20,000 15,000 38,333 53,333 5,000 5,000 11,080 - 11,080 11,080 2019 £ 35,000 35,000 39,167 74,167 - - 25,000 25,000 45,833 70,833 - - 20,000 - - - 20,000 38,333 - - - - 2018 £ 35,000 - - - 35,000 39,167 25,000 - - - 25,000 45,833 18,333 - - - 18,333 18,333 - - - - Page | 56 Altus Strategies Plc 31 December 2020 | Annual Report Total for all Directors Contractual salary / Board fees Bonus payable Pension payable Total payable Salary / Board fees paid (for current year) Salary / Board fees paid (unpaid in prior year) Bonus paid (unpaid in prior years) Pension paid (for current year) Pension paid (unpaid in prior years) Total paid Salary / Board fees deferred / to be paid Bonus to be paid (for current year) Pension deferred / to be paid Total deferred Deferred salary / Board fees balance Bonus to be paid balance Pension deferred / to be paid balance Total deferred balance 2020 £ 316,080 112,500 22,500 451,080 300,000 247,409 127,500 20,625 62,875 758,409 16,080 112,500 1,875 130,455 16,080 112,500 1,875 130,455 2019 £ 305,000 84,375 22,500 411,875 159,840 85,000 21,563 10,000 7,675 281,578 145,160 84,375 12,500 242,035 247,409 127,500 62,875 437,784 2018 £ 300,833 - 22,250 323,083 183,500 - - - - 183,500 117,333 - 22,250 139,583 184,749 64,688 58,050 307,487 Share options On 28 August 2020 the Company issued to the Directors 3,000,000 share options to acquire Ordinary Shares in the Company at an exercise price of 73.15p, which represented a 10% premium on the grant date market price. For Non-executive Directors, 50% of the share options vest immediately and 50% after 12 months. For Executive Directors, 50% of the share options vest after one year and 50% after 18 months. The number of share options granted to each Director is as follows. Non-executive Directors Executive Directors Director David Netherway Robert Milroy * Michael Winn Karim Nasr Steven Poulton Matthew Grainger Number of share options 400,000 300,000 250,000 250,000 1,000,000 800,000 Further details of the Company’s share options scheme are provided in note 28 to the financial statements. Purchase of Company shares by Directors Certain directors have used their own funds to purchase shares in the Company, including participation in the private placement of December 2019 and March 2021. The number and value of shares purchased is shown in the table below. All shares are shown on a post-consolidation basis. Page | 57 Altus Strategies Plc 31 December 2020 | Annual Report David Netherway Steven Poulton Matthew Grainger Robert Milroy* Total 2021 (at date of report) Value £ Shares Average price p 2020 Value £ Shares Average price p 2019 Value £ Shares Average price p 2018 Value £ Shares Average price p Total Value £ Shares Average price p - - - - - - 75,727 291,255 26.00 - - - 75,727 291,255 26.00 27,795 37,061 75.00 96,468 154,903 62.28 139,125 535,096 26.00 25,613 159,086 16.10 289,001 886,146 32.61 10,000 13,333 - - - - 66,578 256,066 26.00 15,055 80,000 18.80 91,633 349,399 26.20 - - - 8,583 12,564 68.31 70,834 272,436 26.00 11,798 65,000 18.15 91,215 350,000 26.06 37,795 50,394 75.00 105,051 167,467 62.73 352,264 1,354,853 26.00 52,465 304,086 17.25 509,781 1,826,406 27.91 * Robert Milroy purchased shares through Milroy Capital Limited Michael Winn and Karim Nasr did not purchase any shares during the period covered by the table above (Karim Nasr was appointed as a Non-executive Director in April 2020). By order of the Board, Robert Milroy Chairman of the Remuneration and Nominations Committee 27 April 2021 Page | 58 Altus Strategies Plc 31 December 2020 | 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 accounting standards in conformity with the Companies Act 2006. 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 Canadian securities laws. In preparing these financial statements, the Directors are required to: - - select suitable accounting policies and apply them consistently state whether international accounting standards in conformity with the Companies Act 2006 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 Chief Executive Officer 27 April 2021 Page | 59 Altus Strategies Plc 31 December 2020 | 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 2020 which comprise the Group Statement of Comprehensive Income, the Group and Parent Company Statement of Financial Position, the Group and Parent Company Statement of Changes in Equity, the Group and Parent Company 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 accounting standards in conformity with the requirements of the Companies Act 2006 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 2020 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 international accounting standards in conformity with the requirements of the Companies Act 2006; the parent company financial statements have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 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. Separate opinion in relation to IFRSs as issued by the IASB As explained in note 1 to the group financial statements, the group, in addition to complying with its legal obligation to apply international accounting standards in conformity with the requirements of the Companies Act 2006, has also applied IFRSs as issued by the International Accounting Standards Board (IASB). In our opinion the group financial statements give a true and fair view of the consolidated financial position of the group as at 31 December 2020 and of its consolidated performance and its cash flows for the year then ended in accordance with IFRSs as issued by the IASB. 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. Page | 60 Altus Strategies Plc 31 December 2020 | Annual Report Conclusions relating to going concern In auditing the financial statements, we have concluded that the Director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of accounting included reviewing the group’s forecasts and assumptions used in preparation. Our work included comparing these forecasts to actual results and significant events subsequent to the year end. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s or parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. Our application of materiality The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures. The materiality applied to the group financial statements was £200,000 (2019: £140,000), based on thresholds for net assets and the loss before tax. The benchmarks used and the percentages applied are unchanged from the prior period and were selected as the exploration assets and exploration costs are the primary drivers of the business. The performance materiality was £140,000 (2019: £98,000) and triviality of £10,000 (2019: £7,000). The materiality applied to the parent company financial statements was £30,000 (2019: £30,000) based upon the loss before tax. The performance materiality for the parent company was £21,000 (2019: £21,000). Component materiality for all entities within the group was set lower than our overall group materiality and ranged from £1,000 to £75,000 with a performance materiality set at 70% of overall materiality. We agreed with the audit committee that we would report all audit differences identified during the course of our audit in excess of £10,000 at group level, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. Our approach to the audit Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement, aspects subject to significant management judgement as well as greatest complexity, risk and size. As part of 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. The recoverability of intangible assets and investments in subsidiary undertakings were assessed as areas which involved significant judgements by management. 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. Page | 61 Altus Strategies Plc 31 December 2020 | Annual Report The accounting records of the parent company and all subsidiary undertakings are centrally located and audited by us based upon group materiality or risk to the group. The key audit matters 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 exploration assets and, for the parent company, amounts We reviewed the Group’s exploration licences and permits to confirm good title and standing. due from subsidiary and related undertakings (refer notes 17,19 and 21). For licences which had expired and are in the process of renewal, we assessed the relevant The carrying value of intangible assets as at 31 factors, in conjunction with discussions with likelihood of management, regarding the December 2020 is £3,277,381 (2019: £3,202,950) associated with costs which comprises renewal. exploration licenses and projects in Africa. The carrying value of investments in subsidiaries, We reviewed the terms and status of the joint venture agreements in place, in conjunction with together with £14,912,031 intra-group receivables was (2019: £9,190,705) as at 31 December 2020. the accounting treatment adopted under the terms of those agreements. The early stage projects were reviewed for Management is required to assess annually whether there is any indication that the group’s indicators of impairment in accordance with IFRS 6. We discussed with management the scope of intangible assets are impaired, and consider whether the carrying value exceeds the expected their future budgeted and planned expenditure on the licence area. recoverable amount. The carrying value of investments in subsidiaries, including intra group receivables, is directly linked to the underlying exploration assets. Evaluating the recoverable amount, particularly for early stage exploration projects, requires significant estimation and judgement. This makes this area a key focus for the audit. recoverability of amounts due from The related undertakings were subsidiary and the underlying assessed by exploration projects. Management’s impairment assessments were reviewed for reasonableness. reference to We considered any other information obtained during the course of our work, including applicable subsequent events, to assess whether there were any potential indicators of impairment not identified by management. Based on the procedures performed, we consider Page | 62 Altus Strategies Plc 31 December 2020 | Annual Report management’s judgements to be reasonable and the related disclosures appropriate. 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 contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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 the 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 in relation to which 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 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. Page | 63 Altus Strategies Plc 31 December 2020 | Annual Report 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 applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. 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 the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: • We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussion with management, our expertise in the sector and through the application of cumulative audit knowledge. • We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from the Companies Act 2006, IFRS accounting standards, and the operating terms set out in the exploration licenses, as well as local laws and regulations. • We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the group and parent company with those laws and regulations. These procedures included, but were not limited to: o enquiries of management; and o review of minutes and other correspondence. • We also identified the risks of material misstatement of the financial statements due to fraud at both the group and parent company level. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, whether key management judgements could include management bias was identified in relation to the carrying value of the exploration assets and we addressed this as outlined in the Key Audit Matters section. • As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. • Compliance with laws and regulations at the subsidiary level was ensured through enquiry of management and review of ledgers and correspondence for any instances of non-compliance. Page | 64 Altus Strategies Plc 31 December 2020 | Annual Report Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. 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 report, or for the opinions we have formed. David Thompson (Senior Statutory Auditor) for and on behalf of PKF Littlejohn LLP Statutory Auditor 15 Westferry Circus Canary Wharf London E14 4HD 27 April 2021 Page | 65 Altus Strategies Plc 31 December 2020 | 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 2020 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 2020 and 31 December 2019 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 IAASB and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the group financial statements in the UK, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the following key audit matters and set out our findings: Key Audit Matter Valuation and recoverability of exploration assets and, for the parent company, amounts due from subsidiary and related undertakings (refer notes 17,19 and 21). The carrying value of intangible assets as at 31 December 2020 is £3,277,381 (2019: £3,202,950) which associated with costs exploration licenses and projects in Africa. The comprises How the scope of our audit responded to the key audit matter We reviewed the Group’s exploration licences and permits to confirm good title and standing. For licences which had expired and are in the process of renewal, we assessed the relevant factors, in conjunction with discussions with likelihood of management, renewal. regarding the Page | 66 Altus Strategies Plc 31 December 2020 | Annual Report carrying value of investments in subsidiaries, receivables was intra-group together with £14,912,031 (2019: £9,190,705) as at 31 December 2020. We reviewed the terms and status of the joint venture agreements in place, in conjunction with the accounting treatment adopted under the terms of those agreements. Management is required to assess annually whether there is any indication that the group’s intangible assets are impaired, and consider whether the carrying value exceeds the expected recoverable amount. The carrying value of investments in subsidiaries, including intra group receivables, is directly linked to the underlying exploration assets. Evaluating the recoverable amount, particularly for early stage exploration projects, requires significant estimation and judgement. This makes this area a key focus for the audit. The early stage projects were reviewed for indicators of impairment in accordance with IFRS 6. We discussed with management the scope of their future budgeted and planned expenditure on the licence area. recoverability of amounts due from The related undertakings were subsidiary and assessed by the underlying exploration projects. Management’s impairment assessments were reviewed for reasonableness. reference to We considered any other information obtained during the course of our work, including applicable subsequent events, to assess whether there were any potential indicators of impairment not identified by management. Based on the procedures performed, we consider management’s judgements to be reasonable and the related disclosures appropriate. Other information The other information comprises the information included in the annual report and the management discussion and analysis, other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information. Our opinion on the 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. Responsibilities of Directors As explained more fully in the Directors’ responsibilities statement, 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 are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Page | 67 Altus Strategies Plc 31 December 2020 | Annual Report 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. 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. • Are required to report on consolidated financial statements, obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for the audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Page | 68 Altus Strategies Plc 31 December 2020 | Annual Report 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. David Thompson (Engagement Partner) for and on behalf of PKF Littlejohn LLP Statutory Auditor 15 Westferry Circus Canary Wharf London E14 4HD 27 April 2021 Page | 69 ALTUS STRATEGIES PLC Group Statement of Comprehensive Income For the Year Ended 31 December 2020 Notes 4 7 8 12 13 14 14 15 Continuing operations Revenue and costs recovered from JV partners Exploration costs expensed Administrative expenses Listing and acquisition related costs Foreign exchange gains/(losses) Share based payments Loss from operations Finance (costs)/ income Other income Gain / (loss) on disposal 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 to: - Owners of the parent company - Non-controlling interest Earnings per share (pence) attributable to the owners of the parent 2020 £ 361,425 (2,350,028) (848,794) (88,440) (328,787) (663,945) (3,918,569) (4,923) 1,938,615 68,897 (163,409) (2,079,389) - (2,079,389) 2019 £ 59,911 (1,101,000) (731,103) (88,595) (31,825) (22,103) (1,914,715) (8,338) 151,875 - (627,444) (2,398,622) - (2,398,622) - (2,079,389) (5,587) (2,404,209) (2,076,435) (2,954) (2,079,389) (2,076,435) (2,954) (2,079,389) (2,372,787) (25,835) (2,398,622) (2,378,374) (25,835) (2,404,209) Basic earnings per share 16 (3.12) (6.63) The notes on pages 77-105 form part of these financial statements. Page | 70 ALTUS STRATEGIES PLC Group Statement of Financial Position As at 31 December 2020 Company Registration No. 10746796 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 21 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 Notes 17 18 30 20 21 22 23 22 24 29 29 2020 £ 3,277,381 4,720 60,198 1,320,542 4,662,841 853,629 86,765 5,937,486 6,877,880 11,540,721 (1,144,754) (34,020) (15,000) (1,193,774) (45,848) (1,239,622) 5,684,106 10,301,099 3,504,580 13,222,115 (82,579) 6,359,013 (12,600,749) 10,402,380 (101,281) 10,301,099 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 The notes on pages 77-105 form part of these financial statements. The financial statements were approved by the Board of Directors and authorised for issue on 27 April 2021 and are signed on its behalf by: Steven Poulton Chief Executive Officer Page | 71 ALTUS STRATEGIES PLC Company Statement of Financial Position As at 31 December 2020 Company Registration No. 10746796 Notes 2020 £ 2019 £ 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 19 20 21 23 29 29 4,608,930 4,608,930 413,634 5,022,564 10,375,059 460,131 10,835,190 15,857,754 (328,404) (328,404) 10,506,786 15,529,350 3,504,580 13,222,115 631,399 (1,828,744) 208,953 4,817,883 4,598,461 219,343 4,817,804 9,635,687 (1,005,510) (1,005,510) 3,812,294 8,630,177 2,102,284 7,378,369 27,456 (877,932) 15,529,350 8,630,177 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 £950,812 (2019: loss of £273,974). The notes on pages 77-105 form part of these financial statements. The financial statements were approved by the Board of Directors and authorised for issue on 27 April 2021 and are signed on its behalf by: Steven Poulton Chief Executive Officer Page | 72 ALTUS STRATEGIES PLC Group Statement of Changes in Equity For the Year Ended 31 December 2020 Balance at 1 January 2019 Year ended 31 December 2019 Loss for the year Other comprehensive loss for the year Total comprehensive income for the period Total transactions with owners, recognised directly in equity Balance at 31 December 2019 Year ended 31 December 2020 Loss for the year Other comprehensive loss for the year Total comprehensive income for the year Share Notes Share capital £ premium account Translation reserve £ £ Other reserves £ Retained earnings £ Non- Total equity controlling interest £ £ Total £ 1,777,827 6,018,822 (76,992) 5,770,070 (8,151,527) 5,338,200 (72,492) 5,265,708 - - - - - - - (5,587) (5,587) (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) 324,457 1,359,547 2,102,284 7,378,369 (82,579) 5,755,070 (10,524,314) - - - 1,684,004 (15,000) 1,669,004 4,628,830 - - - 1,684,004 (15,000) 1,669,004 (98,327) 4,530,503 - - - - (15,000) (15,000) - - - Issue of share capital Warrants expired 29 324,457 1,359,547 - - Issue of share capital Share based payments 29 28 1,402,296 - 5,843,746 - Total transactions with owners, recognised directly in equity 1,402,296 5,843,746 - - - - - - - - - - - - - - - (2,076,435) - (2,076,435) - (2,954) - (2,079,389) - (2,076,435) (2,076,435) (2,954) (2,079,389) - 603,943 603,943 - - - 7,246,042 603,943 7,849,985 - - - 7,246,042 603,943 7,849,985 Balance at 31 December 2020 3,504,580 13,222,115 (82,579) 6,359,013 (12,600,749) 10,402,380 (101,281) 10,301,099 The notes on pages 77-105 form part of these financial statements. Page | 73 ALTUS STRATEGIES PLC Company Statement of Changes in Equity For the Year Ended 31 December 2020 Share Share capital premium account Other reserves Retained earnings Total Notes £ 1,777,827 £ 6,018,822 £ 42,456 £ £ (603,958) 7,235,147 - - - (273,974) (273,974) 29 324,457 - 324,457 1,359,547 - 1,359,547 - (15,000) (15,000) - 1,684,004 - (15,000) - 1,669,004 Balance at 1 January 2019 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 Balance at 31 December 2019 2,102,284 7,378,369 27,456 (877,932) 8,630,177 Year ended 31 December 2020 Loss and total comprehensive income for the year Issue of share capital Share based payments Total transactions with owners, recognised directly in equity - - - (950,812) (950,812) 29 28 1,402,296 5,843,746 - - - 603,943 1,402,296 5,843,746 603,943 - 7,246,042 - 603,943 - 7,849,985 Balance at 31 December 2020 3,504,580 13,222,115 631,399 (1,828,744) 15,529,350 The notes on pages 77-105 form part of these financial statements. Page | 74 ALTUS STRATEGIES PLC Group Statement of Cash Flows For the Year Ended 31 December 2020 Cash flows from operating activities Loss from continuing operations Less: net interest paid Less: movement in depreciation Less: impairment of intangible assets Less: equity-settled share based payments Less: bad debt provision Less: fair value (gain)/loss on investments Less: receipt of shares as consideration (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables Other working capital 2020 £ (2,079,389) 4,923 23,845 20,952 663,945 (430) 94,512 (1,180,838) (609,255) 387,622 (2,364) 2019 £ (1,914,715) - 26,210 39,210 22,103 - - - 32,203 185,083 29,213 Net cash outflow used in operating activities (2,676,477) (1,580,693) Investing activities 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 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 Cash and cash equivalents at end of the year - - (95,383) (5,310) 1,775 (4,947) (103,865) 6,523,561 - (13,473) (4,902) 6,505,186 3,724,844 2,212,642 5,937,486 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 Significant non-cash transactions In January 2020 the Company issued 400,000 Ordinary Shares (post consolidation) to AGMEX SARL in relation to the acquisition of a 2% NSR royalty on the Company’s Lakanfla project, and a further 2,800,000 Ordinary Shares (post consolidation) to Delphi Unternehmensberatung AG in respect of funds of £722,481 received as part of the non-brokered private placement in December 2019. In February 2020 ASX-listed Canyon issued 15 million shares valued at £1,108,999 to the Company in accordance with the JVTA. In August 2020 the Company granted 5,100,000 options to purchase new Ordinary Shares in the Company at an exercise price of £0.7315 per share to Directors and employees of the Company. The notes on pages 77-105 form part of these financial statements. Page | 75 ALTUS STRATEGIES PLC Company Statement of Cash Flows For the Year Ended 31 December 2020 Cash flows from operating activities Loss before tax Less: Interest paid Less: fair value (gain) / loss on investments Less: Equity-settled share based payments Less: Receipt of shares as consideration (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables (Increase)/decrease in intercompany balances Other working capital Net cash used in operating activities Investing activities Purchase of investments Interest paid Net cash used in investing activities Financing activities Proceeds from the issue of shares Proceeds for which issue of shares pending 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 2020 £ 2019 £ (950,812) 396 (132,848) 663,943 (71,833) (55,271) 36,691 (5,772,643) - (273,974) 183 3,242 22,103 - 10,915 (18,957) (1,740,820) (15,000) (6,282,377) (2,012,308) - (396) (396) (208,953) (183) (209,136) 6,523,561 - 6,523,561 240,788 219,343 - 460,131 1,684,004 722,482 2,406,486 185,042 37,544 (3,243) 219,343 Significant non- cash transactions In January 2020 the Company issued 400,000 Ordinary Shares to AGMEX SARL in relation to the acquisition of a 2% NSR royalty on the Company’s Lakanfla project, and a further 2,800,000 Ordinary Shares to Delphi Unternehmensberatung AG in respect of funds of £722,481 received as part of the non-brokered private placement in December 2019. In August 2020 the Company granted 5,100,000 options to purchase new Ordinary Shares in the Company at an exercise price of £0.7315 per share to Directors and employees of the Company. The notes on pages 77-105 form part of these financial statements. Page | 76 ALTUS STRATEGIES PLC Notes to the Financial Statements For the Year Ended 31 December 2020 Accounting policies Company information Altus Strategies plc is a public company limited by shares and incorporated in England and Wales. The registered office is 14 Station Road, Didcot, Oxfordshire, OX11 7LL, United Kingdom. The Group consists of Altus Strategies plc and all of its subsidiaries, as listed in note 19. Basis of preparation These financial statements have been prepared in accordance with International Accounting Standards in conformity of the Companies Act 2006 and International Financial Reporting Standards (IFRS) and IFRS interpretations committee (IFRS IC) 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 presented in British Pounds Sterling (£), which is also 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 £950,812 (2019: loss of £273,974). Basis of consolidation The consolidated financial statements comprise the financial statements of Altus Strategies plc and its subsidiaries as at 31 December 2020. 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 | 77 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 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 12-18), which together brought cash funds of £8.9 million (C$15.4 million) into the Group. During the year these funds have been deployed to accelerate its existing project and royalty generation activities, and at the end of the year the Group reported a cash balance of £5.9 million. In addition, the Group holds shares in three publicly traded companies with a total value at the reporting date of £1.3 million. On 22 March 2021, the Company announced that it had raised £7.7 million (C$13.4 million) through an oversubscribed placement of 10,266,668 Ordinary Shares of the Company at a price of £0.75 (C$1.30) per share with existing and new institutional and private investors. La Mancha and certain directors and employees of the Group participated in the placement. The placement was led by joint UK brokers SP Angel Corporate Finance LLP and Shard Capital Partners LLP. The issue price of the new Ordinary Shares represented a discount of approximately 8.0% to the closing mid-market price of £0.815 / C$1.41 on 19 March 2021. The new Ordinary Shares represented approximately 12.77% of the Company's enlarged issued share capital. The Ordinary Shares issued to La Mancha and the Altus Directors and employees participating in the fundraising will be subject to a TSX-V four month hold period and the Ordinary Shares issued to Canadian investors will be subject to a Canadian regulatory four month hold period. The hold period will expire on 26 July 2021. The Group maintains a 24-month budget projection that is founded on its strategic objectives. Apart from the costs of maintaining its staff and its normal business operations, much of the expenditure envisaged under the Group’s budget is discretionary. There is significant scope to adjust levels of expenditure in line with long term expectations of financial constraint. In response to the dramatic impact that the coronavirus pandemic continues to have on the global economy, on the mining sector and on all aspects of business operations, the Directors regularly review the Group’s activities. During 2020, the Company was able to advance its exploration activities in Mali and conduct a drilling programme at its Diba gold project. It was able to safely deploy its Malian staff and move employees from other countries with low infection rates in line with international travel restrictions. The Company’s two other projects in Mali were also drilled, by the Company’s JV partner, Marvel Gold. The Company entered a new jurisdiction, Page | 78 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 successfully bidding for exploration licences in Egypt, and commenced setting an operational base there. Due to restrictions imposed in response to the pandemic, no UK employees were able to travel to the Company’s projects for the remainder of 2020. Instead, employees focussed on desk-based research of both current Company projects and potential new projects. This research enabled the selection of licence priorities for the Company’s participation in the Egyptian International Bid Round and for the process of ‘Black Permit’ applications in Morocco. The research identified several new drilling targets at the Diba project in Mali, and supported the update of both the Mineral Resource Estimate and Preliminary Economic Assessment at Diba. Although it is the wish of the Company that UK employees return to site as soon as it is legal and safe to do so, until that time they will continue to make a valuable contribution to the ongoing business operation, and to expanding, refining and marketing the Company’s portfolio of projects. The Directors remain confident, given the experience of operating under Covid-19 restrictions for the past year, that the Group can continue in operation for the foreseeable future under similar or improved conditions. The UK government vaccine roll-out programme is on target. It is reasonable to expect that a high proportion of the overall population will be fully vaccinated by late summer of 2021, and that restrictions on movement will be consequently relaxed. However, the Directors acknowledge that there is an inherent uncertainty for all businesses regarding the future direction of the pandemic. Other material risks and uncertainties faced by the business are outlined in the Strategic Report on pages 20-22. 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. 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. Page | 79 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Foreign exchange Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the date 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 28. 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 2020: - Amendments to References to the Conceptual Framework in IFRS Standards - Amendments to IFRS 3: Business Combinations - Amendments to IAS 1 and IAS 8: Definition of Material - Amendments to IFRS 9, IAS 39 and IFRS 17: Interest rate Benchmark Reform The Group and Company has assessed the adoption of these standards and amendments and there has been no material impact on the financial statements as a result of the adoption. 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: Amendment to IFRS 16: Leases - COVID 19 - Related Rent Concessions Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform – Phase 2 Annual Improvements to IFRS Standards 2018-2020 Cycle * subject to endorsement Effective date 1 June 2020 *1 January 2021 *1 January 2022 The Group and Company are 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 as follows. Exploration and development costs Fair value of financial assets Impairment of deferred exploration costs Share based payments Note 7 Note 14 Note 17 Note 28 Page | 80 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Revenue and costs recovered from JV partners Costs recovered from JV partners and management fees relating to JV projects are recognised in the month in which they arise. Milestone payments, which relate to various stages of JV projects including on signature of an agreement, election by the JV partner to proceed to the next project stage, definition of a resource or completion of a feasibility study, are recognised once the Company’s performance obligation is satisfied, in accordance with IFRS 15 Revenue from Contracts with Customers. No revenue is currently recognised on the Company’s portfolio of royalties. Costs recovered from JV partners Milestone payments Management fees Total Segmental analysis 2020 £ 298,891 38,262 24,272 361,425 2019 £ 19,114 40,797 - 59,911 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. Group Revenue and costs recovered from JV partners Loss from operations Reportable segment assets Reportable segment liabilities Revenue and costs recovered from JV partners Loss from operations Reportable segment assets Reportable segment liabilities Operating loss Operating loss for the year is stated after Exchange losses/(gains) Exploration and development costs (note 7) Depreciation (including right-of-use assets, note 8) Operating lease charges Other administrative costs Listing and acquisition related costs Share-based payments UK 2019 £ 13,163 (1,312,530) 2,597,590 (1,455,318) Africa 2019 £ 46,748 (602,185) 3,465,768 (77,536) Total 2019 £ 59,911 (1,914,715) 6,063,358 (1,532,854) 2020 £ 2,983 2020 £ 358,442 2020 £ 361,425 (2,882,546) 7,701,600 (1,036,023) 3,839,121 (3,918,569) 11,540,721 (991,704) (247,918) (1,239,622) 2020 £ 328,790 2,350,028 23,845 20,604 804,346 88,440 663,945 2019 £ 31,825 1,101,000 26,210 26,774 678,119 88,595 22,103 Page | 81 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Exploration and development costs The Group’s costs derived from its operations in countries in which it holds licences are detailed below. The number of projects at the end of the year is indicated. Admin. expenses Operations expenses Travel expenses Total 2020 2020 2020 2020 £ 102,686 80,211 16,541 8 £ 43,870 5,211 - 28 £ 318,754 201,500 57,835 90 Costs recovered from JV partners 2020 £ - - - - Costs not recovered 2020 £ 318,754 201,500 57,835 90 1,171,568 97,550 7,371 1,475,935 81,667 8,066 - 1,496,876 267,506 7,467 138,842 2,350,028 (267,493) - - (267,493) 1,229,383 267,506 7,467 2,082,535 Location and number of projects Cameroon (3) Ethiopia (2) Côte d’Ivoire (0) Liberia (0) Mali (4) Morocco (4) Other countries Total £ 172,198 116,078 41,294 54 243,641 161,890 96 735,251 Admin. Operations Travel Total Costs Costs not expenses expenses expenses 2019 2019 2019 2019 £ 136,484 115,449 51,045 33,019 148,268 131,018 £ 71,426 89,505 22,585 46,705 102,693 80,626 £ 13,193 38,185 - 441 17,952 2,406 £ 221,103 243,139 73,630 80,165 268,913 214,050 recovered from JV partners 2019 £ - - - - (1,719) - recovered 2019 £ 221,103 243,139 73,630 80,165 267,194 214,050 615,283 413,540 72,177 1,101,000 (1,719) 1,099,281 Location and number of projects Cameroon (3) Ethiopia (3) Côte d’Ivoire (1) Liberia (1) Mali (4) Morocco (4) Total The table of figures includes an estimate of costs relating to the allocation of UK costs, including geologists’ salaries, management time and UK support costs, based on the number of projects running in each country during the year. During the year the Group relinquished one project in Ethiopia (Tigray-Afar) and one project in Liberia (Zolowo) and sold one project in Côte d’Ivoire (Prikro). It held two projects in Morocco that do not have any intangible assets (Ammas and Zaer). The Group was awarded four projects in Egypt and three projects in Morocco after the reporting date. Page | 82 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Administrative expenses Administrative expenses include the balances in the table below. Group Employee costs (note 10) Consultants and contractors Legal fees Audit, accountancy & tax Registrar and Nomad fees Investor relations Other professional expenses Travel expenses Premises and office expenses Depreciation of property, plant and equipment Depreciation of leased assets Impairment of licence Other expenses 2020 £ 392,723 3,000 75,547 87,535 76,646 66,109 68,726 7,979 20,127 3,780 20,064 20,952 5,606 848,794 2019 £ 315,890 8,981 55,734 98,289 17,761 18,574 70,960 53,981 10,222 6,146 20,064 39,210 15,291 731,103 The figure reported for Administrative expenses in 2019 in the prior year’s financial statements was £785,031 which included a foreign exchange loss of £31,825 and share based payment charge of £22,103. These figures are shown in Other operating costs in the following note. 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 2020 £ 25,500 2019 £ 22,000 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) 2020 Number 2019 Number 6 24 30 5 23 28 Page | 83 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Of the employees, eight were employed in the UK and 16 were employed in four countries in Africa. Remuneration of African-contracted employees is included in Exploration Costs, while remuneration of Directors and UK-contracted employees is allocated between Exploration and Administrative Costs on a time basis. Costs for the year were as follows. Group Exploration staff costs Administrative staff costs Wages, salaries and Non-executive Directors’ fees Contractors Bonuses Social security costs Pension costs Other costs Total UK costs Overseas staff Share based payments Directors’ remuneration 2020 £ 817,328 392,723 1,210,051 654,087 32,493 168,000 93,772 45,924 2,733 997,009 213,042 1,210,051 603,942 1,813,993 2019 £ 782,462 315,890 1,098,352 554,879 - 130,000 65,061 105,730 (400) 855,270 243,082 1,098,352 - 1,098,352 Details of Directors’ remuneration are included in the Directors’ Remuneration Report on pages 54-58. Fees/salaries Bonuses Pensions Total 2020 2019 2020 2019 2020 2019 2020 2019 £ £ 35,000 25,000 20,000 11,080 35,000 25,000 20,000 - £ - - - - £ £ £ £ £ - - - - - - - - - - - - 35,000 25,000 20,000 11,080 35,000 25,000 20,000 - 125,000 100,000 125,000 100,000 62,500 50,000 46,875 37,500 12,500 12,500 10,000 10,000 200,000 160,000 184,375 147,500 316,080 305,000 112,500 84,375 22,500 22,500 451,080 411,875 Non-executive Directors D. Netherway R. Milroy M. Winn K. Nasr Executive Directors S. Poulton M. Grainger Total Bonus accrual 2017 Salary accrual 2017 - - - (1,819) - - 64,687 - - - - - - - 64,687 (1,819) Total 316,080 303,181 112,500 149,062 22,500 22,500 451,080 474,743 During 2020 retirement benefits accrued under defined contribution schemes for two Executive Directors (2019: two Directors). Page | 84 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Finance (costs)/ income Group Interest on bank deposits Interest on lease liabilities (note 30) Other interest payments Other income Other income for the financial year was as follows. Group Receipt of shares in respect of contract termination R&D tax credit Event sponsorship Other income 2020 £ 1,775 (6,302) (396) (4,923) 2020 £ 1,726,578 206,040 5,750 247 1,938,615 2019 £ (169) (8,169) - (8,338) 2019 £ - 129,031 22,844 - 151,875 Other gains and losses See note 25 for accounting policy and detail of financial assets held at fair value through profit or loss. Group Unrealised Gain/(loss) on revaluation of investments Other unrealised gains/(losses) Total fair value gains/(losses) on financial assets at fair value through profit or loss Realised Gain/(loss) on disposal of investments Gain/(loss) on disposal of subsidiaries 2020 £ 2019 £ (162,368) (1,041) (163,409) - 68,897 (94,512) (85,085) - (85,085) (21,444) (520,915) (627,444) During 2020, the Group sold its interest in Aeos Resources Limited, which, through its subsidiary AuCrest SARL, held the Prikro gold licence and Zenoula gold licence application in Côte d’Ivoire. The loss recorded was based on the carrying value of the investment in Aeos Resources Limited measured against the initial consideration received from the purchaser, Stellar AfricaGold Inc. The completion of the agreement that was announced on 27 November 2020 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 uncertain at this stage. Page | 85 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 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 for the Company was £nil (2019: £nil), as follows. Group Income tax expense 2020 2019 £ - £ - 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% (2019: 19%) Tax effect of: Expenses not deductible for tax purposes Impairment not deductible for tax purposes - - - Unutilised tax losses for which no deferred tax asset is recognised %)3 Tax expense for the year 2020 £ (2,079,389) 2019 £ (2,398,622) (395,084) (455,738) 181,819 3,981 209,284 - 61,632 7,450 386,656 - The Group has tax losses of approximately £1,927,000 (2019: £1,718,000) 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. Page | 86 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 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 and options outstanding, which at the end of the year numbered 5,660,695 and 5,100,000 respectively. No diluted earnings per share is presented as the loss-making nature means the warrants and options are anti- dilutive. A 5:1 consolidation of shares was undertaken after market close on 21 February 2020. The comparative figures are presented on a post-consolidation basis. The original (pre-consolidation) figure presented for weighted average number of ordinary shares in issue was 179,031,225 and the basic loss per share was 1.34 pence. Loss attributable to owners (£) Weighted average number of Ordinary Shares in issue Basic loss per share (pence) Intangible assets 2020 (2,076,435) 66,475,493 (3.12) 2019 (2,372,787) 35,788,467 (6.63) 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, 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 JV 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 JV 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. Page | 87 Additions Disposals & impairment ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Group Mali Korali Sud (Diba) Lakanfla Tabakorole Pitiangoma Est Cameroon Laboum Bikoula Ndjele Ethiopia Tigray-Afar Daro Zager Morocco Agdz Takzim Côte d’Ivoire Prikro Toura (application) Liberia Zolowo Egypt Wadi Jundi Bakriyah Abu Diwan Wadi Dubur At 1 January 2020 1,336,143 582,930 582,908 569,777 46,445 43,056 8,313 16,495 1,070 2,481 4,644 616 2,936 1,338 3,798 - - - - 3,202,950 8,436 - 31,758 - 7,714 8,047 3,666 659 - 411 - - - - - 16,723 8,362 8,362 4,181 98,319 At 31 December 2020 1,344,579 582,930 614,666 569,777 54,159 51,103 11,979 - 1,070 2,892 4,644 616 - 1,338 - - - - - - - (17,154) - - - - (2,936) - (3,798) - - - - - 16,723 8,362 8,362 4,181 (23,888) 3,277,381 Page | 88 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Group Mali Korali Sud (Diba) Lakanfla Djelimangara Sebessounkoto Sud Tabakorole Pitiangoma Est Adjustment on exercise of warrants Cameroon At 1 January 2019 1,373,508 599,233 390,476 403,970 592,447 585,712 Revaluations At 31 Additions Disposals & impairment and FX adjustments December 2019 - - - - 6,579 - - - (379,851) (392,978) - - (37,365) (16,303) (10,625) (10,992) (16,118) (15,935) 1,336,143 582,930 - - 582,908 569,777 (85,000) - - 85,000 - 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 8,402 7,926 1,986 - - 743 1,070 2,481 (62) - 1,462 - - - - - (65,130) (39,210) - - - - - - - - - - - - - - - - - - - - - 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 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 Computers Plant and Machinery 4 years straight line 2 years straight line 4 years straight line Motor vehicles 2 years straight line The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in profit or loss. Page | 89 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 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. The 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 2020 Additions Disposals At 31 December 2020 Amortisation and impairment At 1 January 2020 Charge in the year Disposals At 31 December 2020 Carrying amount At 31 December 2019 At 31 December 2020 Plant and machinery Fixtures, fittings and equipment Computer equipment Motor vehicles Total £ 795 - - 795 469 139 - 608 326 187 £ £ £ £ 44,949 - (220) 44,729 44,691 150 (220) 44,621 25,364 5,310 (4,783) 25,891 22,758 3,491 (4,783) 21,466 67,553 - - 67,553 67,553 - - 67,553 138,661 5,310 (5,003) 138,968 135,471 3,780 (5003) 134,248 258 108 2,606 4,425 - - 3,190 4,720 Page | 90 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Group Cost At 1 January 2019 Additions Disposals At 31 December 2019 Amortisation and impairment 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 machinery Fixtures, Computer Motor Total fittings and equipment equipment vehicles £ 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 1,0491,049 7,932 3,190 - - 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 Additions Disposals 2020 £ 4,608,930 - - 4,608,930 Company 2019 £ 4,608,930 - - 4,608,930 Altus Strategies plc has direct investments in the following subsidiary undertakings. Page | 91 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Name of undertaking Altus Exploration Management Limited1 UK Altus Royalties Limited1 UK LGN Holdings (BVI) Inc11 BVI Incorporated % Holding Principal activity 100.00 100.00 100.00 Business support services Royalty holding company 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 Akh Gold 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 Legend Gold Mali SARL12 LGC Exploration Mali SARL12 LGC Piti SARL12 The following are dormant subsidiaries. Incorporated % Holding Principal activity UK UK UK UK UK UK UK Ethiopia Cameroon Cameroon Liberia Morocco Mali Mali Mali 100.00 Gold exploration 99.00 97.26 100.00 100.00 100.00 50.00 100.00 97.26 99.00 99.00 100.00 100.00 100.00 100.00 Gold exploration Iron ore exploration Bauxite exploration Copper exploration Mineral exploration Events Copper exploration Iron ore exploration Gold exploration Gold exploration Copper exploration Gold exploration Gold exploration Gold exploration Name of undertaking 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 Aures Minerals3 Azilal Minerals3 Altus Diamonds3 Incorporated % Holding Principal activity Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles Seychelles 100.00 100.00 97.26 97.26 100.00 100.00 99.00 99.00 99.00 99.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Page | 92 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Avanor SARL4 Avanex SARL4 Bauxex SA5 Adrar Resources SARL AU7 Altus Mining (SL)9 Apalex Sarl4 Aza Minerals Sarl7 Akassori10 Legend Mali (BVI) II Inc11 Legend Mali (BVI) III Inc11 Legend Mali (BVI) IV Inc11 Legend Mali (BVI) V Inc11 Legend Mali (BVI) VI Inc11 Akh Gold I Limited1 Akh Gold II Limited1 Akh Gold III Limited1 Akh Gold IV Limited1 Akh Gold V Limited1 Akh Gold VI Limited1 Legend Gold Limited1 Legend Mali (UK) I Limited1 Legend Mali (UK) II Limited1 Legend Mali (UK) III Limited1 Côte d’Ivoire Côte d’Ivoire Cameroon Morocco Sierra Leone Côte d’Ivoire Morocco Chad BVI BVI BVI BVI BVI UK UK UK UK UK UK UK UK UK UK 97.26 97.26 97.26 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant Dormant On 27 November 2020 the Group sold its holding in Aeos Resources Limited and its subsidiary AuCrest SARL. The registered office addresses applying to the tables in this note are as follows. Registered office addresses 1. 1. 14 Station Road, Didcot, Oxfordshire OX11 7LL, United Kingdom 2. 2. Bole Sub-City, Kebele 08/09, House No. 811/A, P.O. Box 2633, Addis Ababa, Ethiopia 3. 3. Suite 24, First Floor, Eden Plaza, Eden Island, Victoria, PO Box 438, Mahé, Seychelles 4. 4. Cocody Les Deux Plateux, Rue des Jardins, Résidence Aziz, Porte B, 20 BP 725 Abidjan 20, Côte d’Ivoire 5. 5. BP: 5405 Bastos, Dernier poteau, Yaoundé, Cameroon 6. 6. PO Box 10-3218, 1000 Monrovia 10, Liberia 7. 7. Appt 9, IMM 18, Rue Jbel Tazekka, Agdal, Rabat, 10090, Morocco 8. 8. 46, Avenue Oqba, Appt No. 2, Agdal, Rabat, Morocco 9. 9. 2, Berthan Macauley Street, Freetown, Sierra Leone 10. 10. Quartier Diguel Nord, N’Djamena, Chad 11. 11. MMG Trust (BVI) Corp, Pasea Estate, Road Town, Tortola, British Virgin Islands 12. 12. Porte 608, Rue 136, Korofina Nord, Bamako, Mali Page | 93 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Investments The Group holds both financial assets at amortised cost and financial assets at fair value through profit and loss. See note 25 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. At 1 January Additions Disposals Gains/(losses) on disposal Revaluation gains/ (losses) 2020 £ 302,072 1,180,838 - - (162,368) 1,320,542 Group 2019 £ 883,763 213,250 (673,852) (21,444) (99,645) 302,072 2020 £ 208,953 71,839 - - 132,842 413,634 Company 2019 £ - 213,250 - (4,297) 208,953 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 Accrued income Accrued other income from receipt of shares R&D tax credit Other receivables Group 2019 £ 75 15,732 - 2020 £ - 30,526 - Company 2019 £ - 4,592 4,581,775 2020 £ - 13,833 10,303,101 33,366 63,089 5,919 617,579 100,288 2,862 853,629 33,432 15,380 - - - 58,125 - - - 12,094 - - 129,031 2,569 196,219 - - 10,375,059 - - 4,598,461 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. Page | 94 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 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 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 2020 £ 85,967 798 - 86,765 2019 £ 65,130 399 494 66,023 (34,020) (13,182) Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method. 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. Deferred income for the Group in 2020 includes a US$200,000 milestone payment received from a JV partner for which the Company’s obligations had not been met at the reporting date. Other payables in 2019 for both Group and Company included funds received from a shareholder as part of the Private Placement in December 2019 for which the share issue was deferred until January 2020 pending regulatory approval. Current liabilities Trade payables Amounts due to group undertakings Amounts due to related parties Accruals and deferred income Lease liabilities (IFRS 16) Other payables Non-current liabilities Lease liabilities (IFRS 16) Group 2019 £ 2020 £ Company 2019 2020 £ £ 291,843 - 59,034 772,232 20,065 1,580 1,144,754 57,570 - 69,311 545,186 18,198 748,610 1,438,875 38,266 111,533 - 178,605 - - 328,404 53,965 162,849 - 39,018 - 749,678 1,005,510 45,848 1,190,602 65,797 1,504,672 - 328,404 - 1,005,510 Page | 95 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Provisions Provisions are recognised when the Group or Company has a legal or constructive present obligation as a result of a past event and the Company judges that it is probable that it 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 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 £ 15,000 15,000 2020 £ Company 2019 £ - 2020 £ - 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. 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 Page | 96 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 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. 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 2020 Assets at amortised cost £ - 5,937,486 790,540 2020 Assets at FVPL £ 1,320,542 - - 6,728,026 1,320,542 2019 Assets at amortised cost £ - 2,212,642 180,839 2,393,481 2019 Assets at FVPL £ 302,072 - 302,072 Page | 97 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 The Company’s financial assets are recorded as follows. Company Investments Investments in subsidiaries Cash and cash equivalents Trade and other receivables 2020 Assets at amortised cost £ - 4,608,930 460,131 10,316,934 15,385,995 2020 Assets at FVPL £ 413,634 - 2019 Assets at amortised cost £ - - - - 219,343 4,586,366 2019 Assets at FVPL £ 208,593 4,608,930 - - 413,634 4,805,709 4,817,523 The Group and Company have the following financial liabilities. Group Trade and other payables Company Trade and other payables Financial risk management 2020 Liabilities at 2019 Liabilities at amortised cost £ amortised cost £ 1,190,602 1,504,672 £ 328,404 £ 1,005,510 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 Egyptian pounds. 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 2020, the Group had an exchange loss of £328,790 (2019: £31,825 loss) which was not considered material to its operations. Page | 98 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 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 Accrued income Accrued other income from receipt of shares Cash and cash equivalents Held-for-sale assets 2020 £ - 2,862 100,288 30,526 33,366 63,089 5,919 617,579 5,937,486 86,765 6 6,877,880 2019 £ 75 2,569 129,031 15,732 33,432 15,380 - - 2,212,642 66,023 2,474,884 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 | 99 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 2020 Trade payables Related parties Lease payables Other payables Accruals and deferred income Provisions Held-for-sale liabilities 2019 Trade payables Lease payables Other payables Accruals and deferred income Provisions Held-for-sale liabilities Up to 3 months £ 291,843 59,034 4,841 1,580 772,232 - 34,020 1,163,550 Up to 3 months £ 126,882 6,250 737,639 545,186 - 13,182 1,429,139 3 to 12 months £ - - 15,224 - - - - 15,224 3 to 12 months £ - 18,750 10,970 - - - 29,720 Over 12 months £ - - 45,848 - - 15,000 - 60,848 Over 12 months £ - 58,995 - - 15,000 - 73,995 Total £ 291,843 59,034 65,913 1,580 772,232 15,000 34,020 1,239,622 Total £ 126,882 83,995 748,609 545,186 15,000 13,182 1,532,854 Retirement benefit schemes 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, the Company matches their contributions up to an agreed salary percentage. At 31 December 2020 unpaid employer’s pension liabilities stood at £16,732 (2019: £81,518) of which £3,959 was for Executive Directors (2019: £62,875). Defined contribution scheme Charge for the year Share based payments 2020 £ 45,924 2019 £ 105,730 At the Annual General Meeting of the Company held on 16 June 2020 shareholders re-ratified the Company’s share options scheme, and on 28 August 2020 the Company granted options to acquire 5,100,000 Ordinary Shares to Directors and employees. There were no performance conditions attached to the options, and the grant included both EMI and non-EMI options. Options are measured at fair value at the date of grant. The basic assumptions that feed into both models are volatility of the share price, annual risk free rate and dividend yield. Volatility is estimated using the average daily share price from the previous three years, the risk free rate is based on the Bank of England’s yield curve tables, and it is assumed no dividend will be paid over the life of the option. The vesting terms of the options granted in August 2020 vary between immediate, 12 months and 18 months from the date of grant, subject to the employee completing a corresponding service period, and they expire after five years. The exercise price is the mid-market value of Altus Strategies plc’s Ordinary Shares on the day prior to grant plus a 10% premium. Options are fair valued at grant date using the Black-Scholes model, and expensed over the vesting period. Page | 100 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Movements in the number of options outstanding and their related weighted average exercise prices were as follows. At 1 January Granted At 31 December 2020 Weighted average exercise price (p) 2019 Weighted average exercise price (p) Number of options - 73.15 73.15 - - - - - - Number of options - 5,100,000 5,100,000 Of the 5,100,000 options outstanding at 31 December 2020, 1,200,000 were exercisable. The weighted average exercise price of the exercisable options was 73.15p. All outstanding options will expire in 2025. The fair value of options granted during the year, as calculated using the Black Scholes model, was 31.50p per option. The significant inputs into the model were as follows. Weighted average share price at grant date Weighted average exercise price Weighted average expected volatility Weighted average risk free rate Dividend yield Weighted average expected life 2020 66.50p 73.15p 60% 0.00% 0.00% 5 years The total share based payment expense recognised in the income statement was £663,945 (2019: £22,103) of which £603,943 (2019: £nil) was in respect of director and employee share options, £60,000 was in respect of the Company’s repurchase of a 2% Net Smelter Return royalty on the Company’s Lakanfla project, and £2 was in respect of fractional shares issued. No shares were issued to consultants during the year in respect of services provided (2019: £22,103). During the year no warrants were issued (2019: nil) and no warrants expired (2019: 300,000). Outstanding warrants relate to the private placement undertaken in combination with the Company’s listing on the TSX-V in April 2018, under which each new share entitled the subscriber to one warrant, exercisable for five years, to purchase one Ordinary Share at an exercise price of C$1.50 (post consolidation). These warrants were not valued using the Black Scholes model as the full value paid was attributed to the associated shares. Details of the warrants outstanding at the end of the year are as follows. Outstanding as at 1 January Consolidation 5:1 Granted Expired Exercised Outstanding as at 31 December Exercisable at 31 December 2020 Weighted average exercise price (£) 0.173 - - - - 0.864 0.864 Number of warrants 28,303,477 (22,642,782) - - - 5,660,695 5,660,695 Number of warrants 28,603,477 - - (300,000) - 28,303,477 28,303,347 2019 Weighted average exercise price (£) 0.164 - - 0.048 - 0.173 0.173 Page | 101 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 During the year ending 31 December 2020, the number of warrants was reduced and their value correspondingly increased due to a 5:1 consolidation of the Company’s shares (see note 29). The weighted average remaining life of the warrants outstanding is 2.2 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 2019 Issue of new shares At 31 December 2019 Issue of new shares (pre-consolidation) Consolidation 5:1 Issue of new shares (post consolidation) Number of shares* 177,782,686 32,445,775 210,228,461 140,229,389 (280,366,280) 31 Ordinary share capital £ 1,777,827 324,457 2,102,284 1,402,294 - 2 Share premium £ 6,018,822 1,359,546 7,378,369 5,843,746 - - At 31 December 2020 70,091,601 3,504,580 13,222,115 * All shares have been issued, authorized and fully paid At a General Meeting of the Company’s shareholders on 18 February 2020, approval was given for a consolidation of the Company’s shares (the “Share Consolidation”). Under the Share Consolidation one 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 Ordinary Shares commenced on 24 February 2020. The ISIN and CUSIP for the Ordinary Shares is GB00BJ9TYB96 and G03676122 respectively. Leases The group holds one lease that it accounts for under IFRS 16, which was signed in January 2019. 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. Other leases are either small in value or cover a period of less than 12 months. For the year Cash outflow Capital Interest Depreciation charge Interest charge 2020 £ 24,500 18,198 6,302 20,064 6,302 2019 £ 18,375 12,073 6,302 20,064 8,169 Page | 102 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 At 31 December 2020 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 80,262 - (20,064) 60,198 20,065 45,848 65,913 - 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 23. 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 follows. Group Within one year Between 2 and 5 years 2020 £ 4,587 - 4,587 2019 £ 4,791 - 4,791 Related party transactions For detail on Directors’ remuneration in the year see the Directors’ Remuneration Report on pages 54-58 and note 11. 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. Michael Winn, a non-executive director of the Group, is the sole shareholder and a director of Seabord. The value of services provided by Seabord in the year was £53,386 (2019: £43,936). The amount payable to Seabord at the end of the year was £nil (2019: £69,311). Canyon is a JV 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 £nil (2019: £5,951). The amount receivable from Canyon at the end of the year was £43,501 (2019: £43,501). 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 £509 Page | 103 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (2019: £300). The amount payable to Aegis at the end of the year was £53,386 (2019: £790 receivable), which included a short term cash loan of £59,609. Subsequent events Project updates Since the reporting date the Company has made a series of announcements providing updates on progress at the Company’s projects in Mali, Diba and Lakanfla in western Mali, and Tabakorole in the south of the country. Exploration activities at Lakanfla and Tabakorole are conducted under a JV between the Company and ASX- listed Marvel Gold Limited, and funded by Marvel Gold. Stages 1 and 2 of the JV have been completed at Tabakorole and Stage 1 has been completed at Lakanfla, earning Marvel a 51% interest in Tabakorole and a 33% interest in Lakanfla. In announcements on 07 January and 26 January 2021, the Company reported encouraging results from a 10,300-metre RC drilling programme at Diba, which saw the hosted near-surface deposit extended by 100 metres. Results from the programme are included in the Operations Report on pages 28-30. On 11 February 2021 the Company announced the delineation of a shallow-dipping, near-surface potential gold deposit at Diba NW, located approximately 1.5km from the primary Diba deposit. On 27 January 2021, the Company announced the results of preliminary metallurgical testwork undertaken on composite samples of fresh rock collected from core drilling on the FT Prospect at Tabakorole. A further announcement, on 11 February 2021, reported that RC drilling at the project had extended the strike length of the FT Prospect by at least 150m, to beyond 3km. These were the results from the first 8 out of 39 holes in the 6,300-metre programme. The commencement of a high resolution magnetic survey was also announced, along with an upcoming AC drilling programme designed to define further potential strike extensions and parallel targets. On 02 March 2021, the Company announced broad and high grade intersections from a further three holes in the RC drilling programme. Further positive results were announced on 18 March 2021, and results from the final 20 holes were announced on 23 March 2021, which included the discovery of a potential new parallel zone of mineralisation. The results of a 3,800-metre RC drilling programme at Lakanfla were announced on 27 January 2021 along with associated passive seismic surveys. These results confirmed a significant karst-style system along a 6km margin of granite intrusion. In two news releases on 25 January and 09 February 2021, the Company announced that its wholly-owned subsidiary Akh Gold Limited had been granted four gold exploration licences comprising nine licence blocks and totalling 1,565km2 in the Eastern Desert of Egypt. The licences were awarded by EMRA as part of a competitive international bidding process. The four licences, Wadi Jundi, Bakriyah, Abu Diwan and Wadi Dubur are situated between 30km and 100km from the Red Sea coast, and were granted for an initial two-year term. On 15 March 2021, the Company announced the granting of three new copper and silver exploration projects totalling 252km2 in the western Anti-Atlas Mountains of Morocco, following a competitive tender process. With the grant of the three projects, Izougza, Azrar and Tata, the Company approximately doubled its land holding to 511km2 and increased its portfolio to seven base and precious metals projects in Morocco. Investments On 12 February 2021, the Company announced that it had received 10 million fully paid ordinary shares in ASX- listed Canyon. These shares were the final tranche from a total of 25 million shares to be issued in accordance with the previously announced JVTA between Altus and Canyon dated 09 February 2019 regarding the Birsok Page | 104 ALTUS STRATEGIES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 bauxite JV project in Cameroon. The issued shares had a market value at the date of issue of £0.64 million (C$1.15 million). After the issue of these shares, the Company held a total of 26.1 million shares in Canyon. Issue of equity The Company issued 6,000 Ordinary Shares on 16 February 2021 following an exercise of warrants at C$1.125 (£0.64) for gross proceeds of C$6,750 (£3,840), 20,000 Ordinary Shares on 15 March 2021 following an exercise of warrants at C$1.125 (£0.64) for gross proceeds of C$22,500 (£12,970), and a further 7,266 Ordinary Shares on 12 April 2021 following an exercise of warrants at C$1.125 (£0.65) for gross proceeds of C$8,174 (£4,700). On 22 March 2021, the Company raised £7.7 million (C$13.4 million) through an oversubscribed private placement of 10,266,668 new Ordinary Shares of the Company at a price of £0.75 (C$1.30) per share with existing and new institutional and private investors. La Mancha and certain directors and employees of the Group participated in the placement. The fundraising was led by joint UK brokers SP Angel Corporate Finance LLP and Shard Capital Partners LLP. The issue price of the new Ordinary Shares represented a discount of approximately 8.0% to the closing mid-market price of £0.815 / C$1.41 on 19 March 2021. The new Ordinary Shares represented approximately 12.77% of the Company's enlarged issued share capital. The Ordinary Shares issued to La Mancha and the Altus Directors and officers participating in the fundraising are subject to a TSX-V four month hold period and the Ordinary Shares issued to Canadian investors are subject to a Canadian regulatory four month hold period. The hold period will expire on 26 July 2021. Page | 105 

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