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
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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
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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
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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
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• 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
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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
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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
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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
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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
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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.
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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
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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
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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.
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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
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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,
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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
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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
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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
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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.
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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.
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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.
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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.
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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).
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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
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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.
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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.
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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).
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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-
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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%
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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.
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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.
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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
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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.
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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
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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
-
-
-
-
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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.
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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.
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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
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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.
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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.
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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
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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
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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.
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