ALTUS STRATEGIES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Company Registration No. 10746796
(England and Wales)
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31 December 2021 | Annual Report
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Contents
Contents .......................................................................................................................................................... 2
Company Information ...................................................................................................................................... 3
2021 Key Highlights ......................................................................................................................................... 5
Chairman’s Statement ..................................................................................................................................... 7
Business Overview ........................................................................................................................................... 9
Chief Executive’s Review ............................................................................................................................... 12
Strategic Report ............................................................................................................................................. 17
Key Performance Indicators ............................................................................................................................. 17
Principal Risks and Uncertainties .................................................................................................................... 21
Corporate and Social Responsibility ................................................................................................................ 24
Financial Review ............................................................................................................................................ 27
Portfolio Review ............................................................................................................................................ 31
Corporate Governance Report ....................................................................................................................... 49
Directors’ Report ........................................................................................................................................... 59
Directors’ Remuneration Report .................................................................................................................... 63
Statement of Directors’ Responsibilities ........................................................................................................ 68
Independent Auditor’s Report to the Members of Altus Strategies plc .......................................................... 69
Independent Auditor’s Report to the Members of Altus Strategies plc in Respect of Canadian National
Instrument 52-107 ......................................................................................................................................... 75
Group Statement of Comprehensive Income ................................................................................................. 80
Group Statement of Financial Position .......................................................................................................... 81
Company Statement of Financial Position ..................................................................................................... 82
Group Statement of Changes in Equity .......................................................................................................... 83
Company Statement of Changes in Equity ..................................................................................................... 84
Group Statement of Cash Flows ..................................................................................................................... 85
Company Statement of Cash Flows ................................................................................................................ 86
Notes to the Financial Statements ................................................................................................................. 87
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Company Information
Board
Non-executive Chairman
David Netherway
Chief Executive Officer
Steven Poulton
Executive Director
Matthew Grainger
Non-executive Director
Robert Milroy
Non-executive Director
Michael Winn
Non-executive Director
Karim Nasr
Non-executive Director
Gérard de Hert (appointed 7 March 2022)
Chief Financial Officer
Martin Keylock
General Counsel
Sandra Bates
Company Secretary
Amilha Young
Company number
10746796
Registered office
The Orchard Centre
14 Station Road
Didcot
Oxfordshire
OX11 7LL
United Kingdom
Independent Auditor
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
United Kingdom
Bankers
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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Broker
Shard Capital Partners LLP
20 Fenchurch Street
London
EC3M 3BY
United Kingdom
Solicitors (Canada)
Northwest Law Group
Suite 704, 595 Howe Street
Vancouver
British Columbia V6C 2T5
Canada
Registrar (UK)
Computershare Investor Services Plc
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
United Kingdom
Registrar (Canada)
Computershare Investor Services Inc.
510 Burrard St, 3rd Floor
Vancouver
British Columbia V6C 3B9
Canada
Public Relations Adviser
Yellow Jersey
Mappin House
Oxford Street
London
W1W 8HF
United Kingdom
Stock market trading symbols
Alternative Investment Market (“AIM”): ALS
(London)
TSX Venture Exchange (“TSX-V”): ALTS
(Toronto)
OTCQX: ALTUF
(OTC Markets)
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2021 Key Highlights
Corporate highlights
Acquisition of an effective 0.418% Net Smelter Return (“NSR”) royalty on the Caserones copper
mine (“Caserones”) in northern Chile for US$34.1m
Caserones royalty acquired via a strategic 50:50 partnership with NYSE-American and TSX-V
listed EMX Royalty Corp (“EMX”) through a Chilean special purpose vehicle (“SPV”)
Receipt of maiden royalty income of £1.7m (before tax) in respect of Q2 and Q3 2021
production at Caserones
Acquisition of 24 royalty interests from Newcrest Mining Ltd (“Newcrest”) for US$24.0m,
including royalties on two producing gold mines, one near-producing gold mine and 21
development and exploration stage projects (23 of which are located in Australia and one in
Côte d’Ivoire)
Newcrest royalties acquisition undertaken through a strategic joint venture with private
company AlphaStream Limited (“AlphaStream”) through SPVs in United Arab Emirates and
Australia; first close of the acquisition covering all assets except nine development and
exploration stage assets for US$20.0m
US$29 million strategic acquisition loan facility provided by the Company’s largest shareholder
La Mancha Fund SCSp (“La Mancha”)
Moroccan portfolio of 14 primarily silver and copper projects to be vended to Eastinco Mining
and Exploration Plc (“Eastinco”) subject to Eastinco listing on the Standard List of the London
Stock Exchange; Altus to retain NSR royalty rights on all projects, to gain a royalty right on
Musasa tantalum mine in Rwanda and to become a major shareholder of Eastinco
Appointments to the senior management team strengthen the Company’s corporate and
technical capabilities across its key areas of operation:
o
Mark Campbell appointed as Non-Executive Chairman of 100% owned subsidiary Akh
Gold Holdings Ltd and General Manager (Egypt)
o
Amilha Young appointed as Company Secretary and Legal Counsel
o
Boubacar Thera appointed as Corporate Manager (Mali)
o
David Hall appointed as Strategic Advisor (Egypt)
Operational highlights
Expansion of activities into Egypt through award of gold exploration licences, forming four
projects, totalling 1,565km2 located in the Eastern Desert through a competitive international
bidding process; discovery of numerous hard rock artisanal gold workings from field
reconnaissance at Gabal Om Ourada and Wadi Dubur projects
Western Mali: High grade intersections including 21.9 grams per tonne (“g/t”) gold (“Au”) over
10.2m from 28m from diamond drilling (“DD”) at Diba gold deposit in western Mali (results are
down-the-hole and not true widths)
Southern Mali: Gold resource exceeds one million ounces at Tabakorole gold project in
Southern Mali under Joint Venture (“JV”) with Australian Securities Exchange (“ASX”) listed
Marvel Gold Ltd (“Marvel Gold”). Upgraded Mineral Resource Estimate (“MRE”) generated a
24% increase in indicated ounces and 7% increase in inferred ounces, with 70% of MRE within
150m of the surface; encouraging DD results and discovery of a potential new parallel zone of
mineralisation; significant increase in JV landholding at Tabakorole (by 100km2 to 292km2)
Morocco: Grant of 10 new exploration licences taking the Company’s portfolio to 14 projects
covering 824km2 targeting primarily copper and silver; discovery of high-grade copper and
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silver from reconnaissance exploration at the newly granted Azrar, Izougza and Tata projects
Completion of strategic review of Bikoula iron project in southern Cameroon by Mining Plus UK
Ltd (“Mining Plus”) to determine next steps for project development
Financial highlights
Completion in March 2021 of oversubscribed fundraising for £7.7m / C$13.4m at an issue price
of £0.75 / C$1.30 per Ordinary Share with net proceeds primarily used to accelerate gold
exploration programmes in Egypt and Mali
Receipt of second tranche of 10 million shares in Canyon Resources Ltd (“Canyon”) with a value
at the time of £0.6m / C$1.1m
Completion in December 2021 of oversubscribed fundraising for £19.8m / C$33.7m at an issue
price of £0.535 / C$0.90 per Ordinary Share with net proceeds primarily used for completion of
the Newcrest royalty acquisition
Cash balance of £6.4m / C$10.9m as at 31 December 2021
Cash outflow from operating activities of £7.9m / C$13.4m for the year
Listed equity holdings of £1.7m / C$2.9m as at 31 December 2021
Post-period end
Second and final close of the Newcrest royalties acquisition covering nine development and
exploration stage assets located in Australia for consideration of US$4.0m
Completion of 11,832m drilling programme at Diba and Lakanfla gold project with latest results
of up to 1.27 g/t Au over 127m from 21m on the Lakanfla Central prospect and 1.81 g/t Au over
10m from 256m at the Diba NW prospect (results are down-the-hole and not true widths)
Extension of La Mancha loan facility to 30 June 2022 with annualised interest rate increased to
10% plus the United States Dollar (“USD”) London Inter-bank Offered Rate (“LIBOR”)
1.0% Gross Revenue Royalty (“GRR”) generated on Toura Nickel-Cobalt project in Côte d’Ivoire
through sale of interest in local subsidiary to Firering Strategic Minerals Plc (“Firering”) for
€15,000
Revised joint venture agreement signed with Marvel Gold whereby the Company regained a
100% interest in the Lakanfla licence in western Mali, located 5km east of the Company’s Diba
project, and reduced its interest in the Tabakorole gold project in southern Mali to 30%; Altus
retains a 2.5% NSR royalty on the Tabakorole project
Award of a ten year (renewable) mining licence at the Agdz project in central Morocco covering
an area of 34.36km2, representing the area of copper and silver mineralisation discovered to
date
Award of a four year (renewable) ‘small scale’ mining licence at the Diba gold project in western
Mali covering an area of 83.1km2, incorporating the Diba Deposit and other key prospects
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Chairman’s Statement
Reflection on the year
I am delighted to be able to report on a steep and transformational growth trajectory for Altus during
the past year. The long-held business strategy of holding a diverse portfolio of royalties and discovery
projects took a series of strong steps forward in 2021.
Perhaps the most significant new development was the acquisition of an interest in a cash-paying
royalty at the Caserones copper mine in northern Chile. Not only was this the initial example of the
parallel strategies of royalty acquisition and royalty generation working together in the business, it was
also the Company’s first asset outside of Africa as well as being a first in terms of taking a joint venture
approach with a royalty partner. Within a month of the acquisition, we were delighted to report that the
first royalty revenue was received in Altus’ bank account.
In the same month that the first Caserones royalty was received, the Company opened a branch office
in Cairo. Having been notified of the success of its bid for approximately 1,550km2 of gold exploration
licences in Egypt’s highly prospective Eastern Desert, our team began setting up the operations of our
Egyptian subsidiary, Akh Gold Limited. In just a few months, the Company has built a team of talented
and well-connected local geologists and support staff, including the appointment of Mark Campbell as
Akh Gold’s General Manager. Having completed the formalities for officially receiving the exploration
licences, the team has rapidly commenced reconnaissance work across the nine licence blocks that make
up the four projects. The area covered by these four projects is vast and largely unexplored, and offers
a fantastic opportunity for the Company to make some exciting discoveries. The exploration bid process
in Egypt has attracted major industry players including Barrick Gold, Centamin and B2 Gold amongst
others.
Caserones and Egypt together perfectly illustrate the parallel strategy of royalty acquisitions that, as well
as providing short term returns, also contribute to the Company’s discovery activities, which, over time,
offer the prospect of significant shareholder returns. In the coming years the team at Altus will seek to
maintain the optimal balance of short term capital returns and long term income exposure across our
portfolio of assets.
Altus finished the year strongly with the acquisition of a significant, high quality portfolio of
predominantly gold metals royalties in Australia and Côte d’Ivoire, including the cash-paying or near-
production royalties at the Ballarat, SKO and Bonikro mines. Altus started the year holding nine royalties
– it ended it holding 24, a great achievement and a substantial platform for the future of the Company.
Management and Board
For a company of our size, Altus has a strong and experienced senior management team, Board of
Directors and corporate governance procedures. There were no changes to the composition of the
Board during the year, but following the year end, Gérard de Hert was appointed as a non-executive
director. Gérard is the Managing Director of Technical Services at La Mancha, our largest shareholder,
and, in accordance with the Strategic Investment Agreement with La Mancha of February 2020, he
represents La Mancha’s second appointee to our Board alongside La Mancha’s CEO Karim Nasr. Prior
to joining La Mancha, Gérard held senior management positions with a number of Africa-focused
multinational gold miners, and his technical expertise in the exploration and development of mines in
Africa will be of considerable value to Altus. I welcome Gérard as a director and look forward to working
with him.
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During the year, a number of key management appointments were made that further strengthened the
Company’s corporate and technical capabilities in line with our growth. Amilha Young was appointed
Company Secretary and Legal Counsel. Amilha has over 20 years’ experience in corporate governance
in the financial services and natural resources sectors in Africa and the UK. Mark Campbell who lives in
Cairo joined as the General Manager in Egypt, a key appointment in the establishment of the Company’s
business in Egypt, and was also appointed Non-executive Chairman of Akh Gold Holdings Ltd. Mark has
over 40 years’ experience in the mining, investment banking and petroleum industries, with 31 of those
years being in Egypt. Also in Egypt, David Hall joined us as Strategic Advisor for Egypt, bringing 35 years
of experience in the exploration and mining sector assessing exploration projects and mines in over 55
countries. In Mali, Boubacar Thera was appointed as Corporate Manager, to support our operations
there, specifically, as we advance our 100% owned Diba & Lakanfla gold project, and to enhance the
Company’s profile in the region. Boubacar is a Malian lawyer with over 25 years’ professional experience
in the natural resources industry in Africa focused on contract, joint venture and mining title
negotiations.
After the year end, the Company’s business development team was strengthened. Michael Starke was
appointed VP Corporate Development to support the realisation of value from Altus’ growing asset
portfolio as well as to manage corporate communications. Michael has over 14 years’ experience in
corporate finance and will support Alister Hume, who was promoted to Chief Investment Officer, having
played a pivotal role in the acquisitions of the Caserones royalty and the portfolio of royalties in Australia
and Côte d’Ivoire from Newcrest.
Looking forward
The energetic team at Altus never lets the grass grow under its feet. Notwithstanding the effort that has
gone into advancement of the Company along its strategic path during 2021, I have no doubt that the
team will pursue new opportunities with diligence and resolve, and will work with intelligence and
commitment to develop and grow Altus’ exciting portfolio of royalties and projects.
On behalf of the Board, I thank the entire team at Altus for their contributions to a momentous year,
and I thank our existing and new shareholders for their continued support.
David Netherway
Non-executive Chairman
28 April 2022
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Business Overview
Our royalty generator business model
Altus is a mining Royalty Generator focused on becoming a leading royalty business. The Company is
based in the United Kingdom and dual-listed in the UK (AIM: ALS) and Canada (TSX-V: ALTS). Its shares
also trade in the United States (OTCQX: ALTUF). The Company was founded by three of its current
directors in 2007; namely Steven Poulton, Matthew Grainger and David Netherway. Since its formation,
Altus has developed a portfolio of resource assets, diversified by commodity and jurisdiction and it has
sought partnerships on our assets to further reduce risks and accelerate its growth. The team’s track
record of success in Africa and differentiated business model has also attracted notable institutional
and other sophisticated investors. La Mancha is one such group, which joined the Company’s register
in 2020 as the largest shareholder with a 35% interest. As one of the world’s largest and most respected
mining investors, La Mancha’s involvement has been transformational for the Company and the growth
of both elements of its two-pronged strategy of generating royalties and increasing value per share,
namely the Acquisition Strategy and the Discovery Strategy.
The Acquisition Strategy focuses on accelerating the growth of the Company’s portfolio and cash flows
through the acquisition of existing royalties on third party mines and development projects around the
world, or by royalty creation through the provision of strategic capital to select mining and exploration
companies. Our acquisition strategy aims to expand the Company’s royalty portfolio, provide further
diversification, maintain a high degree of quality assets to yield long term, sustainable income for Altus
from cash-generating assets. This approach provides Altus with a steadily growing stream of lower-risk
cash flows which it can deploy to further grow its royalty portfolio and to fund its discovery strategy.
The Discovery Strategy provides the Company’s shareholders with exposure to the potentially
significant outsized returns which can be generated from the success of targeted discovery work.
Leveraging the Company’s expertise and proven ability to identify and rapidly advance early-stage
prospects, Altus aims to generate high-value projects by selectively acquiring multiple exploration
licences in diverse jurisdictions and advance these through targeted appraisal undertaken by the
Company’s exploration geologists. As projects progress up the ‘value curve’, the Company typically
enters JVs with third parties who fund advanced exploration and development, thereby reducing risk
and preserving shareholder capital for investing in further opportunities. Income is generated through
JV milestone payments which occur at exploration and development landmarks. As each project matures
and develops, Altus’ ownership may dilute but the Company looks to retain a minority equity position
as well as a royalty, providing longer term optionality and cash flow potential once the project enters
production.
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The Company’s global portfolio of royalties
Discovery Strategy focused on Africa
While Altus’s 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
discovered close to and in many cases cropping out at surface.
The Company’s portfolio of pre-royalty projects in Africa
It is reported that 24% of all discoveries in the last decade were found on the continent of Africa, despite
it receiving only 14% of the global exploration budgets (source: MinEx Consulting). According to the
same survey, deposits in Africa (excluding South Africa) are being discovered at average depths of just
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9m below surface, 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.
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 board, management and advisors, we believe
Altus is well positioned to maximise this opportunity. The Company currently has interests in exploration
licences in Egypt, Mali, Morocco, Cote d’Ivoire, Cameroon and Ethiopia.
Risk diversification
Risk diversification is at the heart of the Company’s business model and is enacted by diversifying our
asset portfolio across a variety of metals at different stages across several jurisdictions. Altus has a
growing portfolio of 33 royalties comprising four royalties on producing mines, 15 royalties on
development projects with mineral resources and 14 royalties on pre-resource projects, as of the
publication date of this report. In addition to the royalty portfolio, the Company’s project pipeline
comprises 24 exploration projects, of which one is under JV (Tabakorole in Mali) while the Company’s
14 Moroccan projects are in the process of being spun out into Eastinco Mining and Exploration plc
which is seeking to list on the London Stock Exchange. Together, the Company’s royalties and projects
span nine countries and encompass nine commodities.
More than half of the Company’s discovery portfolio is comprised of gold projects, the most advanced
of which are located in western 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 and implement ‘Net Zero’ policies. Copper will be paramount among these. Other
metals such as nickel, 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.
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Chief Executive’s Review
The year in summary
Acquisition of cash paying royalties
As our Chairman has highlighted, the acquisition of a royalty on the Caserones copper mine in northern
Chile perhaps marked the most significant milestone for the Company in the year. Our team had been
working hard to deliver on the Company’s publicised parallel strategy of acquiring cash-paying royalties
alongside generating our own royalties. This hard work came to fruition in August when an agreement
was signed for the purchase of a 0.418% NSR copper royalty for $34.1 million. The Caserones mine is
situated in a Tier-1 jurisdiction and at that time represented our first asset outside of Africa. The mine
is owned and operated by JX Nippon Mining & Metals Corporation of Japan and had an estimated
minimum 17 years of production remaining at the time of our NSR acquisition.
The Company was delighted to secure the acquisition of the Caserones royalty in partnership with NYSE-
American and TSX-V listed EMX Royalty Corporation. Altus and EMX worked closely together on the
deal and incorporated a special purpose vehicle in Chile which is jointly owned and managed by Altus
and EMX. The Company’s partnership with EMX is strengthened by Michael Winn, who is the Chairman
of EMX, as well as being a Non-Executive Director of Altus.
The commitment made to the long-term development of Altus by our significant 35% shareholder, La
Mancha, was underscored through the provision of a US$29.0 million acquisition bridge loan facility,
which was drawn down to part-fund the acquisition. The facility, which was repayable in February 2022,
has since been extended to 30 June 2022. The Company does not yet have alternative financing in place
but has received a number of proposals to re-finance the loan.
Following the closing of the Caserones transaction, the team quickly moved on to its second acquisition
of the year, which closed in December 2021. This deal saw Altus acquire interests in a portfolio of
primarily precious metal royalties from Newcrest Mining Ltd for US$24 million. The portfolio includes
two current gold mines and one near-production gold mine as well as 21 near-term development and
exploration stage projects. All but one of the projects are located in Australia, further diversifying Altus’
portfolio and adding another Tier-1 jurisdiction, the other is in Côte d’Ivoire, where Altus already holds
royalties on two self-generated projects, one for gold and one for nickel-cobalt.
The first income from the Ballarat and SKO royalties in Australia was received in March 2022, which,
together with Caserones, brought the quarterly gross income from royalties to approximately US$1.8
million.
For the transaction with Newcrest, Altus was delighted to be working with another royalty partner,
AlphaStream Limited, a specialist mining royalty investment and streaming company. Altus and
AlphaStream incorporated two SPV’s one of which holds a 100% interest in an Australian subsidiary
“Altus is building a differentiated royalty business, where our shareholders not only have
exposure to immediate, long-term royalty cash flows from established operating mines
globally, but also the substantial upside from our high impact ‘boots on the ground’ royalty
creation strategies across Africa.”
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holding the Australian royalty assets, and the other which holds the royalty asset in Côte d’Ivoire directly.
The transaction with Newcrest was supported by a placing and subscription of new Ordinary Shares
raising US$26.1 million from both existing as well as new institutional investors alongside a concurrent
subscription by the Company’s major shareholder, La Mancha, as well as various Altus directors, officers
and other investors. Further details of the royalties acquired in Chile, Australia and Côte d’Ivoire are
provided in the portfolio review on pages 31 to 34.
Our Portfolio of gold projects in Mali
The Company has made notable progress during the year on its Diba and Lakanfla gold project in
western Mali, where a series of drilling programmes has been undertaken across the project targeting
strike extensions and new zones of mineralisation. Altus took the decision to self-fund these drilling
programmes to accelerate advancement of the project, and to build on the MRE and PEA produced by
Mining Plus UK Ltd in 2020.
In January 2022 Altus regained 100% ownership of the Lakanfla licence from its joint venture partner
Marvel Gold. Lakanfla is located just 5km east of the Diba licence and is considered to be highly
prospective based on previous exploration programmes and the presence of substantial hard rock
artisanal gold workings. The drilling programme was expanded to test the on strike and down-dip
potential of the Diba Deposit, Diba NW prospect and the Lakanfla Central prospect. An updated MRE
and PEA for the combined Diba and Lakanfla project will be prepared once the results from the drilling
programmes have been assessed.
In southern Mali, progress has continued with our joint venture on the Tabakorole gold project funded
by partner Marvel Gold. An updated MRE on Tabakorole was published in October 2021 and exceeded
one million ounces, (comprising 17.3 million tonnes at 1.2 g/t Au for 665,000 ounces (“oz”) in the
Inferred category, 9.2 million tonnes at 1.2 g/t Au for 360,000oz in the Indicated category). This is a
major milestone for the project, and includes 70% of the upgraded MRE being within 150m of surface
complemented by high metallurgical gold recoveries averaging 97%. Tabakorole is shaping up to be a
potentially significant gold development project in west Africa with substantial upside for Altus. At the
year end, Altus held a 49% interest in Tabakorole, which has since been reduced to 30% in line with the
JV agreement. Altus holds a 2.5% NSR royalty on the Tabakorole project.
A new portfolio of gold projects in Egypt
The establishment of operations in Egypt in 2021 represents perhaps the most significant expansion of
our activities since our plan of arrangement with TSX-V listed Legend Gold in 2018 for its portfolio of
gold projects in Mali. Nine licences were awarded to Altus in Egypt in 2021, from the internationally
competitive inaugural licence bid round process. The licences form four distinct project areas and cover
a substantial area of the highly prospective Eastern Desert. By the end of the year, exploration was
already underway on two of the projects, namely Gabal Al-Shaluhl and Wadi Dubur, representing
1,044km2 of the 1,565km2 of the Company’s licence base in Egypt.
The ramp up of operations has been swift. An office has been set up in Cairo managed by Mark
Campbell, our newly appointed General Manager in Egypt, ably supported by an enthusiastic and well-
connected technical and administrative team. The Company is also delighted to have David Hall on the
team, as Strategic Advisor for Egypt.
I am extremely pleased with the development of our growing and high-calibre team in Egypt and
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confident that they will make rapid progress in advancing our projects in the coming year. While
exploration is still in its early stages, our initial reconnaissance is revealing a high incidence of hard rock
artisanal gold workings within highly prospective geological belts which underscore the very high
prospectivity of our licences.
Further details of the Company’s discovery assets are provided in the Portfolio Review – Discovery
Projects Portfolio on pages 36 to 48.
Divestment of Moroccan silver and base metal portfolio
Our royalty generation business is dynamic and predicated on our ability to make new mineral
discoveries and monetise these for royalty interests, plus cash and equity. The sale of the Company’s
fourteen, primarily copper and silver, exploration projects in Morocco is in line with this strategy. We
signed an agreement with Eastinco in November 2021 to divest Altus’ interest in its Moroccan projects.
Subject to the admission of the shares of Eastinco onto the LSE Standard List, Altus will become a
material shareholder of Eastinco holding up to 25% of the issued capital, receive a reimbursement of
up to £250,000 in respect of exploration expenditures incurred and retain a 2.5% NSR royalty interest
on each of the Moroccan projects. Altus will also obtain an NSR royalty interest in Eastinco’s producing
Musasa tantalum project in Rwanda.
Funding
The Company completed two successful equity fundraisings during the year, raising a total of £27.5
million before expenses. The first of these, in March 2021, was undertaken to support the development
of the Company’s royalty generation assets, principally in Mali and Egypt. The second, completed in
December 2021, provided funding for the acquisition of the portfolio of royalties from Newcrest. A
number of existing investors participated in the equity fundraisings, including our cornerstone
shareholder La Mancha, and we also welcomed several new and notable institutional investors to our
register. A number of directors and senior managers also participated in the fundraisings.
La Mancha further demonstrated its strategic support for the Company through the provision of a
US$29 million strategic acquisition debt facility to partly fund the acquisition of the Caserones royalty.
This was the Company’s first such use of debt funding and it was fundamental to catalysing our royalty
acquisition strategy.
Market positioning
The Altus portfolio of royalties and projects is weighted towards gold, with exposure being over 50%.
Gold remains the ultimate liquid “safe-haven” for investors seeking protection from heightened
geopolitical risks and the value-destructive impacts of inflation on cash and cash-like investments.
The gold price started the year at around $1,900/oz, eased to around $1,700/oz by early March before
recovering to around $1,800/oz, where it remained for much of 2021. Following the Russian incursion
in Ukraine in early March 2022, gold rose briefly almost touching $2,100/oz before falling back closer
to $1,900/oz. Our portfolio of cash paying and development stage gold royalties which Altus acquired
from Newcrest in December 2021, provides our shareholders with direct and relatively low risk exposure
to the current and future strength in the price of gold.
Notwithstanding the concerning situation in Ukraine and its wider geopolitical and inflationary
implications, the world’s major economies continue to promote an agenda to decarbonise the global
economy with a “Net Zero” target. This objective will have potentially transformational, and perhaps yet
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to be fully appreciated, implications for the demand for copper, nickel and rare earth metals given their
fundamental role in the generation, transmission and consumption of renewable energy. Altus
continues to seek to increase its exposure to these metals and others which also stand to benefit from
a post-Covid-19 recovery in global growth and infrastructure development. Already, there has been a
sustained surge in the prices of many commodities, as global supply chains restock and government
infrastructure spending increases. The copper price was on an upward trend at the start of the year,
opening at around US$3.50 per pound (”lb”). It broke through US$4.00/lb in early February and
remained above this threshold for the rest of 2021, dipping close to US$4.00/lb again in April and July,
but climbing above US$4.70/lb in May and October. It too soared in early March 2022 to above
US$4.90/lb before falling back slightly. Our ownership of a strategic royalty interest on the Caserones
copper mine in Chile, acquired by Altus for US$34.5 Million in August 2021, provides our shareholders
with direct and relatively low risk exposure to the current and future strength in the price of copper.
In response to accelerating inflation, central banks around the world have now started, arguably
belatedly, to raise interest rates with the chairs of central banks guiding that more aggressive interest
rate rises may be required in the months and years ahead. Should confidence in economic growth fall
for whatever reason, in a period of rising interest rates and excessive (government, corporate and
personal) debt, the potential for a substantial economic reset will be significant. Gold continues to
represent the ultimate hedge against the potential dramatic consequences of a systemic debt driven
financial crisis, as well as the impacts of real negative interests, for as long as inflation rates continue to
exceed interest rates.
Outlook
This has been another transformational year for Altus and our asset portfolio. We have completed two
landmark transactions to acquire cash paying royalties, received our maiden royalty income from these,
expanded our discovery portfolio into the highly prospective Eastern Desert of Egypt, advanced our the
Diba & Lakanfla gold project in Mali though successful drilling programmes, structured the divestment
and royalty creation on our Moroccan portfolio of assets and embodied the Company’s strategy of
generating growth for shareholders through diversification.
Commodity markets are being pushed higher by the drive to decarbonise, the post-covid global
recovery and by geopolitical events. The growth of Altus over the past year and the balance of assets in
our portfolio puts us in a strong position to not just meet the challenges ahead, but to generate superior
performance for our shareholders.
Our key objectives for 2022 are to:
-
continue to grow the Company’s revenues with the acquisition of further cash-paying royalties;
-
continue to grow and realise value from our royalty generation activities across Africa;
-
to conduct business with due regard for the Company’s stakeholders and our environmental as
well as 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 and project interests. Altus has
never had a stronger asset base, team or outlook and I very much look forward to the year ahead.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 16
In the meantime, I take this opportunity to thank all of the Altus team for their exceptionally hard work
and dedication throughout what has been an extraordinarily busy year. I also take this opportunity to
thank our new and existing shareholders for their continued support.
Steven Poulton
Chief Executive Officer
28 April 2022
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 17
Strategic Report
Key Performance Indicators
The Board uses a mixture of financial and non-financial Key Performance Indicators (“KPIs”) to help
monitor the performance of Altus’ group of companies (the “Group”). The following four categories of
KPI’s are used to assess the Group’s performance:
1. Health, Safety, Environment and Communities (HSEC)
2. Portfolio growth and diversity
3. Financial KPIs
4. Share price performance
1. Health, Safety, Environment and Communities (HSEC)
The health and safety of our employees, contractors and suppliers is core to how we conduct our
business. The Group promotes a strong culture of health and safety to ensure individuals take
responsibility for doing the right work in the right way and ensure any breaches of this are recorded.
This culture is supported by comprehensive processes, training and personal protective equipment to
ensure a safe and healthy working environment. In 2021, the Group achieved a Lost Time Injury
Frequency Rate (LTIFR) of 0 (2020: 0). LTIFR is calculated as (Number of lost time injuries in the reporting
period x 1,000,000 ÷ Total hours worked in the reporting period). The Group’s drilling contractor at the
Diba project had one on site incident resulting in one day of lost time for one of its employees. This is
reportable under the contractor’s Health and Safety statistics.
The Group has implemented an Environmental Management Plan in relation to its active exploration
operations in several countries in Africa. The exploration process involves the short-term collection of
small volumes of physical data from the earth including soil sampling, channel sampling, trenching and
drilling. The potential impact to the environment from these activities is relatively minor, but includes
very limited emissions to soil, water and air. Under the Group’s Environmental Management Plan,
potential emissions are mitigated in all circumstances in order to reduce any impacts. The Group has a
goal of ensuring no significant environmental incidents across its operations with none reported in the
year to 31 December 2021 (2020: none).
As part of its exploration operations in several countries in Africa, the Group ensures its “Social Licence
to Operate” by building and maintaining strong relationships with the communities in which it operates.
Through its programme of community engagement, the Group ensures effective two-way
communication and resolution of potential issues.
2. Portfolio growth and diversity
The Group has a two-pronged approach to generating royalties, namely via its acquisition strategy and
its discovery strategy. The KPI relating to the operational performance of each of these strategies
focuses on the management of the existing portfolio of assets as well as the growth of the portfolio.
The Group continually assesses potential licence applications, projects and third-party royalty
acquisitions in new jurisdictions.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 18
Acquisition Strategy
Discovery Strategy
Portfolio management
The Group actively engages
with the 3rd party operators of
assets
over
which
it
has
acquired royalties. This includes
management calls, production
reviews
and
site
visits.
In
addition, monitoring of news
flow is undertaken.
The Group’s generated royalties
cover assets which are relatively
earlier stage than it’s acquired
royalties.
Nevertheless,
the
Group
maintains
proactive
engagement with third party
operators.
Portfolio growth
During the year to 31
December 2021, the Group
acquired a total of 25 existing
royalties:
1) On 17 August 2021, the
Group announced the
US$34.1m acquisition of an
effective 0.418% NSR royalty
on the Caserones copper mine
in Chile.
2) On 13 December 2021, the
Group announced the
US$24.0m acquisition of a
portfolio of 24 gold royalties
from Newcrest Mining (the
second close for nine of these
royalties took place in January
2022).
During the year to 31
December 2021, the Group
generated a total of 15 new
potential royalties:
1) On 22 November 2021, the
Group announced the
proposed divestment of its
Moroccan focussed subsidiary
in return for 14 royalties
generated over the projects in
Morocco as well as one royalty
over the Musasa tantalum mine
in Rwanda.
Portfolio growth
Acquired royalties
Generated royalties
31 December 2021
16
8
31 December 2020
0
9
The Group’s discovery strategy is underpinned by a solid pipeline of project across a number of
commodities and jurisdictions. In February 2021, the Group was awarded nine gold exploration licences
in Egypt and between March and July 2021, the Group was awarded ten licences, primarily for copper
and silver, in Morocco.
Number of Projects by Country
31 December 2021
31 December 2020
Egypt
4
0
Mali
3
4
Morocco
14
4
Cameroon
2
2
Côte d’Ivoire (under application)
1
1
Ethiopia
2
2
TOTAL
26
13
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 19
Risk diversification is a key part of the Group’s business model. This is achieved through both geographic
diversification as well as commodity diversification.
Number of Royalties by Country
31 December 2021
31 December 2020
Australia
14
0
Mali
4
5
Côte d’Ivoire
3
2
Chile
1
0
Cameroon
1
1
Liberia
1
1
TOTAL
24
9
Aside from gold, the Group is focusing on metals that it believes will be critical in the increasingly
decarbonised electricity industry, particularly copper. The Group also has interests in nickel, zinc, iron
ore, silver and bauxite projects. The Group’s single largest exposure by country and by mineral in terms
of the number of royalties and projects in its portfolio is as follows.
By Geography
By Commodity
31 December 2021
Australia and Morocco – 29%
Gold – 65%
31 December 2020
Mali – 32%
Gold – 63%
3. Financial KPIs
The financial performance of the Group’s asset portfolio is another important KPI and is focused on the
management of income and expenditure associated with the implementation and advancement of each
of these strategies. The Group focuses its expenditure on its most prospective opportunities for growth,
and seeks to reduce project costs by pursuing potential JV and project sale transactions across its
portfolio. Royalty income in 2021 was through an associate of the Group and is included under share of
profit of associate in the Statement of Comprehensive Income.
2021
2020
£’000
£’000
Royalty income (pre-tax)
2,641
-
Royalty acquisitions
(39,913)
-
Exploration costs includes 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.
The following is a breakdown of costs included in loss from operations in the Statement of
Comprehensive Income (excluding foreign exchange losses and share based payments).
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 20
Exploration costs
expensed
Administrative
expenses
Listing & acquisition
related costs
2021
63%
30%
7%
2020
71%
26%
3%
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. The Group’s cash on hand
and investments in marketable securities at 31 December (see table below) are sufficient to fund all
projected expenditure for a minimum of 12 months from the date of this report.
31 December 2021
31 December 2020
£’000
£’000
Cash and cash equivalents
6,355
5,937
Investments (listed equities)
1,721
1,321
Total
8,076
7,258
4. Share price performance
The Company’s share price performance broadly reflects the market appetite for the equity of resource
companies and specifically for the Group’s asset portfolio and growth prospects. In addition to
providing returns to shareholders, a higher market valuation reduces the cost of capital for existing
shareholders by reducing the amount of dilution when raising new capital through the issuance of
equity. The remuneration of certain directors, management and other employees is part settled through
the award of share options, further aligning the interests of shareholders and the Company’s employees.
Altus Strategies plc 12 month share price March 2021 to March 2022
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 21
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.
Delays in the construction and commissioning of
mining projects or other technical difficulties
may make the deposits uneconomic to exploit.
Risk is diversified by holding a portfolio of
projects. At every stage of the exploration
process, projects are rigorously reviewed, either
internally or by qualified third-party
consultants, to determine if the results justify
the next stage of exploration expenditure.
Exploration activities, particularly more advanced
activities such as drilling, carry a risk of local
environmental damage or other issues, such as
fuel spills, contamination of water courses, dust
creation and damage to agricultural land or wild
flora and fauna.
The Group aims to comply with provisions of
PDAC’s ‘E3+’ guidance on responsible
exploration as applicable. It maintains its own
Environmental Management Plan, which is
regularly reviewed, and publicised to site-based
employees. This contains a set of actions for
each project based on a policy of Avoid,
Mitigate, Remedy.
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.
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,
such as travel to and from remote sites, use of
equipment, and exposure to extreme weather or
other environmental hazards.
The Group keeps the wellbeing of its employees
as the highest of its priorities. As part of a risk-
based approach, FCO travel advice is followed
at all times, and regular first aid and other
operational training is provided. Employees
must also be up to date with all recommended
vaccinations.
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.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 22
Risk description and impact
Risk management strategy
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 as
well as the cash flow from royalties and any
production, or even result in the abandonment
of a project should it prove uneconomical to
develop. Similarly, commodity prices could fall in
reaction to changes in international economic
trends, impacting the revenue generated by
royalties and projects in which the Group holds
an interest. This may have a material adverse
impact on the operating results and financial
condition of the Group.
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
exploration, and works with funded JV partners
for the advanced stages of exploration.
The Company diversifies its cash-paying royalty
portfolio, holding assets principally in tier-1
jurisdictions, with high coverage levels for its
debt facility.
The successful exploration and development of
natural resources on any project will require
significant capital investment. The Group may
not be successful in procuring the requisite
funds on terms which are acceptable to it (or at
all) and, if such funding is unavailable, the Group
may be required to reduce its level of
exploration activity and divest or relinquish its
assets.
The Group enters JV partnerships with
established exploration, development and
mining companies who fund exploration activity
in return for an equity share in the exploration
assets. The Group takes a disciplined and
objective approach to its portfolio and
maintains a high quality range of assets that is
attractive to investors by relinquishing licences
that it does not believe offer good prospects.
This 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
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.
The Group makes every effort to ensure it has
robust commercial agreements covering its
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.
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 restricts
the ability of the Group to manage an expanded
portfolio of projects.
The Remuneration & Nominations Committee
reviews the Company’s compensation package
annually to ensure that it remains competitive
(see Directors’ remuneration report, pages 63-
67). 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 eight members.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 23
Risk description and impact
Risk management strategy
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.
Since 2017, Altus has listed on both the AIM in
the UK and since 2018 also on the TSX-V in
Canada, building a shareholder base and an
industry reputation. During 2020 the Company’s
shares also commenced 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 29.
Income from the Group’s cash-producing
royalties may vary depending on commodity
prices and the operational performance of the
mine and its operator.
The Group holds a diverse portfolio of cash-
producing royalties across several different
mines, countries and commodities. This
diversification is part of its business model and
seeks to protect revenues.
It will take some time for the Company’s
discovery projects to develop into operational
mines with revenue streams able to positively
impact Altus’ cashflow. Until then, the Group will
be reliant on funding from shareholders to
continue its discovery programme insofar as this
is not covered by the net income from cash
paying royalties and dividends from associates
less payments on borrowings.
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
potential partners, whilst 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.
The Company’s loan liability to La Mancha is
repayable by 30 June 2022 and a re-financing
has not yet been put in place. Were the
Company unable to secure a re-financing of the
loan, it could potentially impact the Company’s
ability to maintain its current business
operations.
Altus has received a number of proposals to re-
finance the loan before 30 June 2022.
The Group’s shareholder financing is
denominated in pounds sterling and Canadian
dollars. Its royalty income is in US dollars and
Australian dollars. Its exploration expenditure is
incurred in US dollars and a range of 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.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 24
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 (England & Wales), 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. The business of Altus involves the acquisition and generation of
royalties on producing mines as well as exploration activities on potential mining projects, and does not
involve mining itself. Therefore, the environmental impact directly associated with its activities is limited.
However, the Company is keenly 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 (“EMP”), which guides the
Group’s on-site activities from the planning stage through on-site operation to the return of sites to
local communities once the Group’s activity has finished.
Many of the areas of operation are regions of subsistence farming, and Altus and its employees are
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.
At the Diba gold project in western Mali, the Group applied its EMP to the drilling programmes
undertaken during 2021. At Diba NW, the Group delayed commencing its drilling programme until after
the harvest had been collected, and the team was given a radius of operations for each drill pad to give
scope to avoid cutting down trees. Avoidance of damage is always the preferable option, but at Diba,
where for approximately a quarter of the drill-pad movements it was not possible to avoid affecting
farming land, compensation was paid to farmers at rates agreed with the local community before the
programme commenced. Post-drilling, sites were inspected to ensure all waste material had been
removed, diamond drilling sumps had been filled and ground had been levelled and raked.
The Board and management consider the potential ESG impact of its discovery business to be relatively
low. This is based on the minimal footprint of these operations, particularly in terms of the limited scope
and duration of the Company’s own field activities. Nevertheless, the Group’s portfolio of royalties
includes royalties on mines which are already in development or production. These operations have the
potential for a more significant environmental and social impression. As such, the Company ensures a
programme of acquisition due diligence as well as ongoing monitoring and assessment of these assets.
The Group acquired its first cash-paying royalty, which is located in Chile, in August 2021 and a further
two cash-paying royalties (each located in Australia) in December 2021. In conducting its due diligence
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 25
on these projects, the Group assessed the available information on aspects of ESG processes and
management.
The Group is putting into practice a programme for the effective management of its ESG responsibilities
with respect to assets it does not itself control. This will include engagement with mining operators for
the purpose of sharing policies, and identifying and encouraging best practice. The Company will seek
to have an effective positive influence wherever possible. It will be the specified responsibility of a team
within the Company to monitor third-party operators from an ESG perspective, and to obtain a
comprehensive and, where possible, independent picture in order to form a fair opinion. On an ongoing
basis, the Company will assess the effectiveness of its portfolio of third-party royalty assets through an
ESG lens and not just in terms of financial performance.
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 2021, it employed 30 people
in five African countries (2020: 16 people in four 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. Before the declaration of force majeure, Altus also
assisted students of geology from the University at Mekele in Ethiopia to visit its exploration sites.
In August 2021, Altus completed the first phase of a community development programme (“CDP”) at
the Diba gold project in western Mali. Altus undertook a consultation process with representatives of
the local communities close to Diba in order to prioritise programmes that would have the greatest
positive impact. Following this consultation, the specialist environmental company, EBEF-Mali, was
commissioned to install a low-maintenance system to provide safe drinking water on tap to the school
and nearby village of Koropoto, which is located 2km to the east of the project, outside of the current
Diba licence area. The project involved drilling a 72.5m borehole, construction of a 12m high water tank
with a solar-powered water pump and installation of all other necessary infrastructure. The CDP will
prioritise other health as well as education projects, and in time will be extended to other communities
in the surrounding area.
Anti-corruption and bribery
It is the Group’s policy to conduct its business in an honest and ethical manner. The Group takes a zero-
tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with
integrity in all business dealings and relationships in our countries of operation. As part of this, it aims
to implement and enforce effective systems to counter potential bribery and corruption.
The Group will uphold all laws relevant to countering bribery and corruption in the jurisdictions in which
we operate. We also remain bound by UK laws, including the Bribery Act 2010, in respect of our conduct
both in the UK and abroad. The Group’s policy on Anti-corruption and bribery is available via the
Company’s website and forms an important part of the appointment of all new employees, contractors
and suppliers.
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.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 26
Health & Safety
Altus takes the health and wellbeing of its employees, contractors and suppliers extremely seriously and
works continuously to minimise the potential hazards encountered. A comprehensive health and safety
programme is maintained incorporating official guidelines, industry best practice, lessons from previous
incidents and employee suggestions.
There have been no road traffic accidents affecting the Group during the last three 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 reiterated the importance of high
safety standards. Altus continues to review all of its standards regularly and to ensure its suppliers and
service providers adhere to these at all times.
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 line with its commitment towards a gender balance in its workforce, Altus has engaged with the
Women in Mining (“WIM”) group, both in the UK and internationally. Annually, the Group offers at least
one internship through WIM. At the end of 2021, the following numbers were represented on the
Company’s team (includes employees and contractors).
Women
Percentage
Board
-
0%
Management team
2
25%
Geologists/technical
2
9%
Administration/support
5
31%
Total
9
18%
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.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 27
Financial Review
Income
Due to the holding structure of the Group’s royalty assets, income from royalties received in 2021 was
recognised in the Statement of Comprehensive Income under share of profit of associates which is
detailed in note 21. The share of profit of associates was £985,000 for the year (2020: £nil) and related
solely to the royalty on the Caserones copper mine in northern Chile. The associate in question is SLM
California, registered in Chile, in which Altus holds a 21.5% interest through its joint operation with EMX.
The profit figure includes the royalty from the mine, amortisation of the royalty asset based on quarterly
production figures, minimal local expenses and a provision for Chilean income tax. The profit relates to
royalties declared in Q3 and Q4 of 2021 in respect of production in the preceding quarters.
Revenue and costs recovered from JV partners decreased to £318,000 (2020: £361,000) as a result of
the JV with Marvel Gold covering the Lakanfla and Tabakorole projects in western and southern Mali
progressing during the year to a stage where the Company no longer charges management fees or
incurs rechargeable costs.
Expenses
Exploration costs expensed in the Statement of Comprehensive Income increased to £3,206,000 (2020:
£2,350,000). This was driven to a large extent by costs associated with the drilling programmes on the
Company’s Diba gold project in western Mali. Although drilling costs themselves were lower at £725,000
(2020: £891,000), costs of associated assays increased from £49,000 to £297,000 and other on-site
operational costs, principally at Diba but to a lesser extent also on the Company’s four new projects in
Egypt, resulted in an increase from £95,000 to £313,000. The split between exploration costs recovered
from JV partners and those borne by the Company is shown in note 7 to the financial statements.
Expenditure relating to projects in Mali was £1,876,000 which accounted for 59% of total exploration
costs (2020: £1,497,000 and 64%). The Company commenced the establishment of operations in Egypt
in the spring of 2021, opening an office in Cairo in September, and sending its first geologists to site in
the fourth quarter. Exploration expenditure in Egypt was £425,000 in the year, which represented 13%
of the Company’s total (2020: £8,000 which was <1%). The principal areas of expenditure were local and
UK salaries (£222,000), on-site operations (£60,000), travel (£57,000) and business support costs
(£55,000). Expenditure in Morocco increased to £429,000 (2020: £268,000) in the areas of technical
consultants and travel, resulting from a high-resolution IP survey at the Agdz project. Exploration
expenditure in the Company’s other countries of operation reduced; in Cameroon it was £290,000 (2020:
£319,000) due to a reduction in the number of assays analysed, in Ethiopia it was £177,000 (2020:
£202,000) where operations were suspended under force majeure for the whole of 2021, and in Côte
d’Ivoire to £6,000 (2020: £58,000) following the sale of the Company’s Prikro gold project in November
2020.
Staff costs for UK-based geologists and the corporate team increased to £1,328,000 (2020: £997,000),
which took staff costs for the Group to £1,873,000 (2020: £1,210,000). A key element of the increase was
the new team in Egypt, which by the end of 2021 included a General Manager, five geologists and a
logistics and administration support team in Cairo. Another element was the continued development of
the team in the UK, which included the appointment of a full-time Company Secretary and Legal
Counsel, and full-year salaries for those people hired in the course of 2020. The Company furloughed
two members of technical staff for a short period in 2020, and there were no redundancies as a result
of the pandemic. Staff costs including share-based payments increased to £2,851,000 (2020: £1,814,000)
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31 December 2021 | Annual Report
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mainly resulting from the full year, fair value charge for share options granted in August 2020.
Administrative expenses in the Statement of Comprehensive Income increased to £1,789,000 (2020:
£849,000), and excluding impairment charges on intangible assets were £1,219,000 (2020: £828,000).
This included the increase in staff costs as well as costs of a second broker to the Company in the UK,
the use of advisors to make improvements in shareholder communications and higher insurance
premiums. There was a renewed attendance at industry conferences and events as travel restrictions
were lifted, and additional premises costs for the Company’s new office in Cairo. There was a reduction
in external legal costs as work was brought in-house.
Listing and acquisition related costs for the year increased to £443,000 (2020: £88,000), which included
in-house and external legal fees, tax advice and stamp duty for the royalty acquisitions in Chile, Côte
d’Ivoire and Australia.
Other income and costs
Other operating costs increased to £1,255,000 (2020: £993,000) and included a share based payment
charge of £982,000 (2020: £664,000) resulting from the valuation of share options granted to Directors
and employees in August 2020 and August 2021, and a foreign exchange loss of £273,000 (2020:
£329,000) which was mainly an accounting translation of cash balances into the functional currency
rather than a realised loss.
Other income reduced to £227,000 (2020: £1,939,000) which was principally made up of the accrued UK
Research & Development (“R&D”) tax credit for the 2020 tax year that was filed at the end of 2021 and
received in January 2022. The Group recorded a gain on revaluation of its three external investment
holdings during the year of £45,000 (2020: £162,000 loss).
Assets and cash
The net assets of the Group increased to £31,862,000 (2020: £10,301,000) which was reflected in the
creation of a new line in the Company’s balance sheet valued at £25,367,000 for investments in
associates, a higher value of investments in external investments of £1,721,000 (2020: £1,321,000) and
higher intangible assets of £16,994,000 (2020: £3,277,000), offset by the addition of borrowings of
£18,349,000 (2020: £nil).
Investments in associates comprises the Group’s interests in two companies, SLM California in Chile and
Legend Gold Mali SARL in Mali. SLM California is the entity holding the Caserones royalty in which Altus
acquired a 21.5% interest in August 2021 for US$34.1 million. Legend Gold Mali SARL is the entity
holding the Lakanfla and Tabakorole exploration licences interests which were the subject of a JV with
Marvel Gold throughout 2021. Under the terms of the JV, the Group’s interest in the entity reduced to
49% upon completion of a certain project stage, from which point the entity was derecognised as a
subsidiary and recognised as an associate. Following the end of the period the Lakanfla licence was
removed from the JV with Marvel Gold and the Company’s interest in the UK incorporate JV holding
company was reduced to 30%.
The increase in the balance of external investments was due to the receipt of a final tranche of 10 million
shares of ASX-listed Canyon arising from the termination of the JV agreement in 2019.
The increase in the balance of intangible assets was due to the acquisition of the portfolio of royalty
assets from Newcrest, the first close of which took place in December 2021 for a value of US$20.0
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31 December 2021 | Annual Report
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million. This included the Ballarat and SKO royalties in Australia and the Bonikro royalty in Côte d’Ivoire,
as well as royalties on 12 development and exploration stage assets in Australia. The increase was offset
by the full impairment of the Pitiangoma Est licence in southern Mali which was relinquished during the
year, and due to the Lakanfla and Tabakorole projects ceasing to be recognised as intangible assets,
instead being recognised as part of the investment in associate, Legend Gold, as detailed above. The
Caserones royalty is accounted for as an intangible asset of its associate company, SLM California, and
appears in the balance sheet under investment in associate rather than intangible assets.
The addition of a line in the balance sheet for borrowings represents the receipt of the US$29.0 million
loan to the Group by La Mancha, which was used to partly fund the Caserones royalty acquisition. Of
the balance of the facility drawn down, US$5.0 million was repaid during the year.
The Group’s cash balance at the end of the year was £6,355,000 (2020: £5,937,000). Operating cash
outflow increased to £3,245,000 (2020: £2,348,000) comprising an adjusted loss figure of £3,834,000
and positive movements in working capital of £589,000. Investing cash outflow was £40,315,000 (2020:
£104,000) primarily for the acquisition of the Caserones royalty and Newcrest royalty portfolio, and also
including £614,000 for interest on the loan provided by La Mancha. Financing cash inflow was
£43,978,000 arising from the two equity fundraises, in March and December 2021, and the loan from La
Mancha.
Fundraising
During the year, the Company raised a total £27.5 million (C$47.1 million) in two equity fundraisings. In March
2021, the Company raised £7.7 million (C$13.4 million) through a 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 fundraising was led by joint brokers in the UK, 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.
In December 2021, the Company raised £19.8 million (C$33.7 million) before expenses through a
placement of 36,930,143 Ordinary Shares of the Company at a price of £0.535 (C$0.90) per share with
existing and new institutional and private investors. La Mancha and certain directors and employees of
the Group participated in the placement. BMO Capital Markets Limited acted as Sole Bookrunner with
SP Angel and Shard acting as Lead Managers and Sprott Global Resource Investments Ltd acted as a
finder in respect of some of the subscription shares. The issue price of the new Ordinary Shares
represented a discount of approximately 7.0% to the closing mid-market price of £0.575 / C$1.01 on 14
December 2021.
Going concern
The Directors have assessed the cash resources available to the Company, including balances of cash
and investments held in publicly traded companies at the reporting date. They have reviewed a detailed
24-month budget prepared by the Company, assessing the likelihood of receiving projected royalty and
other income, debt coverage and the breakdown between committed and discretionary projected
expenditure. Given the Company’s previous statement of the low impact of Covid-19 on operations in
the short-to-medium term, a renewed outbreak of Covid-19 has not been included in the analysis. Based
on their assessment, the Directors anticipate that net income from the current portfolio of royalties is
unlikely to be sufficient to cover exploration and other costs of the business over the next 12 months
and that in that period the Company may have to raise additional funding. In making their assessment,
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31 December 2021 | Annual Report
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the Directors acknowledged the existence of a number of material uncertainties including volatility in
financial and commodity markets, and political and security risks. These and other risks faced by the
Company are outlined in detail in the Strategic Report on pages 21 to 23.
The Company’s loan liability to La Mancha, the balance of which was £18.3 million at 31 December 2021,
is repayable by 30 June 2022. As at the date of this report, a re-financing of the loan has not been put
in place. The Directors note that, were the Company unable to secure a re-financing of the loan, it could
potentially impact the Company’s ability to maintain its current business operations, and acknowledge
that this constitutes a material uncertainty. However, the Directors also note that Altus has received a
number of proposals to re-finance the loan before 30 June 2022, and they remain confident that the
necessary funding will be secured.
Based on their assessment, the Directors have, at the time of approving the financial statements, a
reasonable expectation that the Group will have adequate resources to continue in operational existence
for the foreseeable future. Therefore, the Directors continue to adopt the going concern basis of
accounting in preparing the financial statements.
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Portfolio Review
The Company has a diversified portfolio of resource assets comprising interests in royalties, projects
and equities.
The Company’s royalty portfolio comprises four royalties on producing mines, 15 royalties on
development projects with mineral resources and 14 royalties on pre-resource projects, as of the
publication date of this report. The four producing mines over which the Company owns royalties are
the Caserones copper mine (Chile), the SKO gold mine (Australia), the Ballarat gold mine (Australia) and
the Bonikro gold mine (Côte d’Ivoire). The 29 development and pre-resource assets over which the
Company owns royalties are located in Australia (21), Mali (3), Cote d’Ivoire (3), Cameroon (1) and Liberia
(1). The Company’s project portfolio comprises 24 projects covering Egypt (4), Mali (2), Morocco (14),
Cameroon (2) and Ethiopia (2).
The following is a review of the Company’s activities by jurisdiction and project during the year ending
31 December 2021 and up to the date of this report.
PRODUCING ROYALTIES
Chile
Caserones Copper Mine (170km2), Northern Chile
Caserones is a large, open-pit porphyry copper-molybdenum deposit, located within a 17,000-hectare
land package at an elevation of approximately 4,300m above sea level in the borough of Tierra Amarilla,
in the Atacama region of northern Chile. The mine is approximately 15km from the border with
Argentina, 162km southeast of the city of Copiapó and 800km north of the capital, Santiago.
Located at the southern end of the well documented Maricunga mineral belt, the geology of Caserones
comprises an Early-Miocene porphyry system associated with a cluster of dacite porphyries and breccias
intruding Palaeozoic granitic, volcanic, and metamorphic rocks. Caserones has a well-developed
supergene enrichment profile of oxide copper and secondary chalcocite that overlies hypogene
sulphide (chalcopyrite-molybdenite) mineralisation.
The mine is owned and operated by Minera Lumina Copper Chile SpA (“Minera Lumina”), an indirect
100%-owned subsidiary of JX Nippon Mining & Metals Corporation (“JX Nippon”) of Japan. It produces
copper and molybdenum concentrates from a conventional crusher, mill and flotation plant, as well as
copper cathodes from a dump leach, solvent extraction and electrowinning plant.
The mine has been in operation for five years, following a reported capital investment of approximately
US$4.2 billion. It has a reported average waste-to-ore strip ratio of 0.47 and in 2020 reportedly produced
104,917 tonnes of copper and 2,452 tonnes of fine molybdenum in concentrates, as well as 22,056
tonnes of fine copper in cathodes in that year. Caserones has an estimated 16 years of operation
remaining under its current mine plan, along with significant exploration potential (actual results may
vary, see Forward Looking Information on pages 47-48). In a news release dated 9 November 2020, JX
Nippon encouragingly announced plans for “stepping up exploration efforts in areas around the mine”
in an effort to expand production and further extend the mine life.
On 17 August 2021, the Company announced the acquisition of a royalty interest on Caserones via a
private Chilean SPV, Minera Tercero SpA, which is owned jointly 50% by the Company and 50% by NYSE-
American and TSX-V listed EMX Royalty Corp. Tercero entered into a share purchase agreement with
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certain selling shareholders of Sociedad Legal Minera California Una de la Sierra Peña Negra (“SLM
California”). SLM California owns a 1.944% NSR royalty on Caserones. Tercero acquired 43% of the
issued and outstanding shares of SLM California for US$68.2 million. The 43% interest represents an
effective 0.836% NSR royalty held by Tercero. Altus paid US$34.1 million as its 50% share in Tercero for
an effective 21.5% indirect equity interest in SLM California. Thereby Altus acquired an effective 0.418%
NSR royalty interest on copper and molybdenum production from Caserones.
The first royalty paid by Minera Lumina to SLM California after the acquisition was in September 2021,
of which the Company’s share was £0.97 million before taxes or deductions. This was in respect of
production at the mine during Q2 2021. Royalties in respect of two further quarters of production have
since been paid by Minera Lumina. The Company’s share of total royalty income received by SLM
California in respect of 2021 production was £2.6 million. This is before expenses and local taxes are
deducted by SLM California, after which the net value is paid as a dividend to the Company through
Tercero.
Australia
South Kalgoorlie Operations (SKO) Gold Mine (842km2), Western Australia
Located in Kalgoorlie, Western Australia, SKO is an underground gold mine operated by Northern Star
Resources Limited (“Northern Star”). The mine has a long history of stable production, exploration
success, and consistent royalty receipts. The mine comprises part of Northern Star’s wider Kalgoorlie
Operations which have targeted production of 40,000 oz per annum with an estimated 18 year mine life
based on the Company’s assumptions. SKO’s relatively large resource base has had a record of
consistent resource conversion with a reserve life of four to six years over the past five years (actual
results may vary, see Forward Looking Information on pages 47-48).
The Company acquired an 80.1% interest in a production royalty on the SKO mine through Alcrest
Royalties Australia (Pty) Ltd (“Alcrest”), the Australian-registered company it set up jointly with private
and UAE based Alphastream Limited, to be the holding company of the Australian portfolio of royalties
acquired from ASX listed Newcrest Mining Limited in a transaction which closed in December 2021 and
January 2022. Alcrest received an initial royalty payment from Northern Star in February 2022.
The SKO royalty is payable at a rate of A$10/oz produced along with a discovery bonus of A$1 million
for each new orebody on the royalty tenement package with a reserve greater than 250,000 oz of gold.
Australia
Ballarat Gold Mine (152km2), Victoria
Located in Victoria, Australia, Ballarat is an underground gold mine operated by Golden Point Group
Pty Ltd (“GPG”), a wholly-owned subsidiary of Shen Yao Holdings, a Singapore-listed public company.
The mine has a historical production rate of approximately 40,000 oz per annum and a proven track
record of resource replacement. The mine has produced over 300,000 oz at an average grade of 5.7 g/t
Au since operations re-commenced in 2011. Total Resources have been estimated at 4.4Mt at a grade
of 5.9 g/t Au totalling 833,000 oz of gold. Based on the current resource and the Company’s
assumptions, the mine has an estimated remaining mine life of at least 13 years (actual results may vary,
see Forward Looking Information on pages 47-48).
Through Alcrest, the Company holds an 80.1% interest in the NSR royalty on the Ballarat gold mine at
a royalty rate of 2.50% and also holds ownership of approximately US$1 million in accrued royalty
payments. Alcrest received its initial royalty payment from GPG after the year end in February 2022.
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The Company is aware of the recent enhancements to the operational management team of the Ballarat
gold mine and their review process with Australian regulators. Key risks have been assessed and were
incorporated into the acquisition cost. The Company maintains close dialogue and active engagement
with the new operational management team.
Côte d’Ivoire
Bonikro Gold Mine (37km2), Southern Côte d’Ivoire
Located in Côte d'Ivoire, Bonikro is an open pit gold mine with a proven history of operations. Since
commercial production commenced in 2008, the mine has produced over 1 million oz of gold and is
expected to continue to produce in excess of the royalty cap (of 560,000 oz), which represents
approximately 56% of Bonikro’s remaining resources. The mine is owned and operated by Allied Gold
Corp, a privately-owned company which acquired the asset from Newcrest Mining in 2017.
The Company understands that Allied Gold has commenced development of the next push back of the
open pit (“PB5”) and is targeting a ramp up to nameplate production of 100,000 oz per annum in
1Q 2023 (actual results may vary, see Forward Looking Information).
The Company acquired a 50% interest in a NSR royalty on the Bonikro mine’s PB5 through Alpha 2 SPV
Limited (“Alpha 2”), the UAE-registered company it set up jointly with Alphastream Limited to be the
holding company of the Bonikro royalty. The royalty is at a rate of up to 4.50%, capped at 560,000 oz.
The NSR royalty rate varies depending on the gold price as outlined below.
USD Gold Price
Applicable NSR Royalty
US$1,250 or less
0.00%
US$1,251to US$1,299
2.50%
US$1,300 to US$1,349
3.00%
US$1,350 to US$1,399
3.50%
US$1,400 to US$1,449
4.00%
US$1,450 and above
4.50%
PRE-PRODUCTION ROYALTIES
Australia royalties
Royalties on Exploration and Development Stage Projects, Australia
As part of the transaction with Newcrest Mining as announced by the Company in December 2021, the
Company also acquired a portfolio of royalty interests across 21 prospective development and
exploration stage projects in Australia. These include several which cover large land positions in well-
known mining districts and which are owned by established operators, such as BHP, Northern Star
Resources, Gold Fields, Sandfire Resources, Evolution Mining and Silver Lake Resources. The portfolio is
primarily on gold assets with by-products including copper, silver and zinc.
The transaction closed in two parts with the second part closing after the year end, on 31 January 2022.
The list of these assets is as follows.
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Project
Operator
Royalty
Resource/primary
target commodities
1. Ashburton (Merlin)
Northern Star Resources
2.5% GSR
Gold
2. Bills Find
Northern Star Resources
Sliding scale
Gold
3. Gidginbung
Sandfire Resources
2.0% NSR
Copper
4. Hampton Nickel
Gold Fields / BHP
A$10/oz
Gold
5. Kintore
Evolution Mining
Various
Gold
6. Kunanalling (Catherwood)
Evolution Mining
3.64% GPR
Gold
7. Mertondale
Specrez
2.0% NSR
Gold
8. Mount Cannindah
Cannindah Resources
0.9% NSR
Copper, Gold and Silver
9. Mungana
Consolidated Tin Mines
3.0% GPR
Gold, Copper, Lead, Zinc
10. Nupower
UAU Pty Ltd
0.9% NSR
Uranium
11. Randalls
Silver Lake Resources
A$1/oz
Gold
12. Zuleika South & Rose Hill
Northern Star Resources
A$10/oz
Gold
13. Bullfinch (Copperhead)
Barto Gold Mining
10% NPI
Gold
14. Mount Wall
Hancock Prospecting
1% Gross
Iron Ore
15. Mount Coolon (Rosetta)
GBM Resources
3% NSR
Gold
16. Mount Isa (Brightlands)
GBM Resources
2% NSR
Gold
17. Mount Isa (Other)
GBM Resources
2% NSR
Gold
18. Wudinna (Minnipa)
Andromeda/Cobra
1.5% NSR
Gold (excludes Coal)
19. Mayfield
GBM Resources
2.0% NSR
Gold
20. Mount Success
Resolute Mining
0.381% NSR
Gold (capped at A$762k)
21. Mulgarrie
Zijin
1.2% GPR
Gold (capped at 225koz)
Notes:
NSR
Net Smelter Return Royalty
GPR
Gross Production Royalty
GSR
Gross Smelter Royalty
NPI
Net Profit Interest
Mali royalties
Djelimangara & Sebessounkoto Sud Gold Projects (55km2 and 28km2)
The Djelimangara and Sebessounkoto Sud gold projects are located in the Kayes region of western Mali,
approximately 450km northwest of the capital city of Bamako. The Company held a 100% interest in
these projects until October 2019, when it sold its interest to Desert Gold Ventures Inc (TSX-V: DAU).
The transaction included payment to the Company of US$50,000 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 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$6.0 million, depending on the size of the reserve at the
time of a feasibility study.
Sebessounkoto Sud is located 15km southeast of the Company’s Diba gold project. Historical trenching
undertaken by Barrick Gold Corporation (formerly Randgold Resources), reportedly returned up to
0.68g/t Au over 61m (not true width). 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
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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
(not true width).
Tabakorole Gold Project (292km2) Western Mali
See Tabakorole description on pages 39-41 of the Discovery Projects Portfolio.
Cameroon royalties
Birsok Bauxite Project (372km²), Central Cameroon
Birsok is located 370km northeast of the capital city of Yaoundé. From 2013 to October 2018 the project
was under a JV with ASX-listed Canyon Resources Ltd (“Canyon”). The project is contiguous with
Canyon’s Minim-Martap, a potential tier-one bauxite project. The Birsok licence is currently pending
renewal.
In February 2019, the Company signed a JV Termination Agreement (“JVTA”), a Sale and Purchase
Agreement and a Royalty Agreement with Canyon. For termination of the JV, a total of 25 million Canyon
shares were issued to Altus. These shares were received in two tranches, 15 million in February 2020 and
10 million on 12 February 2021. The tranche of 10 million shares was subject to a voluntary escrow
period that expired in February 2022. 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).
As at the date of this report Altus held 25.07 million fully paid ordinary shares in Canyon representing
an approximate 3.57% interest in Canyon on an undiluted basis.
Liberia royalties
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, which is held privately by Avesoro
Holdings. It is located in the north-eastern part of the Bea licence area, approximately 40km northeast
of the New Liberty Gold Mine (such mining is not necessarily indicative of a resource at Leopard Rock)
and 2km southeast of the Ndablama gold 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-
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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 gold
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 (not true widths).
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) dated 23
November 2011.
Côte d’Ivoire royalties
Prikro Gold Project (369.5km2), Zenoula Gold Project (400km2) 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. The Zenoula project comprises a 400 km2 licence
application which is currently pending grant in the Marahoue Department in central Ivory Coast,
approximately 300 km north of Abidjan. Geologically, the project reportedly comprises metasediments,
metabasalts and syntectonic granitoid intrusives. Zenoula targets a 22 km long oblique ENE trending
structure, interpreted by historic air magnetic data.
In November 2020 the Company signed a Sale & Purchase agreement with TSX-V listed Stellar
AfricaGold Inc (“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 feasibility study. 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.
DISCOVERY PROJECTS PORTFOLIO
Mali Operations
At the end of the period Altus held an interest in three gold projects in Mali. Two of the projects, Lakanfla
and Tabakorole, were the subject of a JV with Marvel Gold Limited (ASX:MVL). After the year end, an
amended JV agreement was signed with Marvel under which the Company regained a 100% beneficial
interest in Lakanfla and retained a 30% interest in Tabakorole. In Q4 2021, the Company relinquished
its interest in the Pitiangoma Est project following the receipt of a notification from Resolute Mining Ltd
of its wish to terminate the JV agreement covering the project following the expiry of the original
exploration licence.
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Projects
Mineral
Korali Sud (Diba)
Lakanfla
Tabakorole
Gold
Ownership
Location
Diba is 100% owned through subsidiary
LGN Holdings (BVI) Inc.
Lakanfla & Tabakorole are under JV with Marvel
Gold and were 49% owned at 31 December
2021 through subsidiary Legend Gold Ltd
Kayes region of western Mali (Diba & Lakanfla)
Southern Mali (Tabakorole)
Diba & Lakanfla Gold Project (105km2), Western Mali
The Diba & Lakanfla Gold Project comprises the Korali Sud (Diba) licence and the Lakanfla licence, which
are situated 5km apart on the Senegal-Malian shear corridor within the world renowned ‘Kenieba
window’. The nearby Sadiola gold mine, 13km from Diba and 6.5km from Lakanfla, is operated by Allied
Gold Corp, a private Australian mining company, and the Malian government. The karst-type FE3 and
FE4 open pits that form part of the Sadiola gold mine, are considered to be geologically analogous to
the Lakanfla licence, as is the Yatela karst-type gold deposit, located 35km to the northwest, which was
mined between 2001 and 2015. Mining and mineralisation hosted on these properties is not necessarily
indicative of a resource at Lakanfla.
During 2021, Lakanfla was one of two licences subject to a joint venture with ASX-listed Marvel Gold.
Under a revised JV agreement, signed after the year end on 19 January 2022, the Company regained a
100% beneficial interest in the licence.
Geology of the licences
Over 50% of the current MRE at the Diba Deposit prospect reports to the oxide zone which has
favourable metallurgical characteristics. The defined resource at the Diba Deposit prospect, consists of
a series of shallow dipping, sediment-hosted stacked lenses that are typically between 20m and 40m
thick. The mineralisation covers a compact footprint of approximately 700m x 700m and is near-surface,
with mineralisation often occurring within the first 10m. At present, the mineralisation is considered to
be open down-dip. Seven prospects have been defined within the Diba licence area to date. These
include Diba NW, which is immediately along strike and northwest of the Diba Deposit, Diba East which
is approximately 2km2 in size and located immediately to the east of the Diba Deposit and Diba Far East
is located approximately 7km east of the Diba Deposit.
The Lakanfla licence hosts a significant number of active and historic artisanal hard rock gold workings
which are coincident with major geochemical and gravity anomalies. These workings primarily surround
the Kantela granodiorite intrusion and cover an area of approximately 900m x 500m. Significantly, there
is evidence of ground collapse at surface, indicative of karst style voids at depth within carbonate rock
units. The gold mineralisation at Lakanfla is typically hosted within breccia zones which cut the
granodiorite and surrounding carbonate metasediments. Four key prospects have been defined within
the Lakanfla licence area to date, the most advanced of which is the Lakanfla Central prospect.
Diba Mineral Resource Estimate and Preliminary Economic Assessment
In Q3 and Q4 2020 respectively, an updated MRE and updated PEA on the Diba Deposit prospect were
announced. These outlined the potential economics for an open pit oxide gold mine at the Diba Deposit.
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Both studies were undertaken by independent UK-based technical consultants Mining Plus UK Limited.
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 for the MRE.
Diba project mineral resource estimate 06 July 2020
Indicated
Inferred
Domain
Tonnes (t)
Grade (g/t)
Contained
gold (oz)
Tonnes (t)
Grade (g/t)
Contained
gold (oz)
Oxide
3,900,000
1.46
183,100
939,000
1.10
33,200
Fresh
934,000
1.12
33,600
4,540,000
1.05
153,300
Total
4,834,000
1.39
217,000
5,479,000
1.06
187,000
Note: Applying a 0.5 g/t Au cut-off grade
The results of the updated PEA were announced in November 2020 (see news entitled release “Updated
PEA Delivers US$107 Million (After-Tax) NPV for Diba Gold Project”, dated 18 November 2020. The PEA
reported an after-tax NPV of US$107 million (US$152 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 Carbon in Leach (“CIL”) as well as 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
Exploration programme at Diba & Lakanfla (H1 2021)
Results from a programme of over 15,000m of RC drilling completed in January 2021 led to the
delineation of a significant and coherent, shallow-dipping and near-surface potential gold deposit at
Diba NW. Intersections at Diba NW included 1.45 g/t Au over 22m (results are down-the-hole and not
true width) from 55m downhole, within an area that is estimated to be approximately 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
also confirmed the discovery of a new zone of mineralisation, which may potentially extend the Diba
Deposit by approximately 100m to the west, including 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 (not true widths).
In Q2 2021, a 48km2 high resolution ground magnetic survey was completed at Diba, using an in-house
GEM Systems Overhuaser Magnetometer, with data processing and quality control performed by
Terratec Geophysical Services GmbH & Co. (Germany). Geophysical lines were orientated NE-SW and
spaced 50m apart. Survey lines are considered to be oblique to structures identified from historical data.
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The survey generated numerous structural targets across the licence, including at the Diba Far East and
Diba NW prospects.
A 3,800m stage-1 RC drilling programme and associated passive seismic survey was completed by
Marvel Gold in January 2021. This programme proved the existence of a karst system with intersections
of anomalous low grade gold. A three-dimensional structural interpretation was created based on the
passive seismic survey data. Systematic soil sampling, completed in tandem with the drilling
programme, 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 south of the former (karst-style) open pits of the Sadiola gold mine.
Exploration programme at Diba & Lakanfla (H2 2021 & Q1 2022)
A follow up drilling programme commenced on the Diba licence in May 2021 and resumed after the
end of the rainy season in October 2021. The programme was extended to the Lakanfla licence after
Altus regained a 100% interest in the licence in January 2022. The 11,832m drilling programme was
completed by Capital Drilling Limited after the year end in March 2022 and comprised 1,359m of DD,
1,433m of AC drilling and 9,040m of RC drilling.
The programme was designed to test the high grade zone at the Diba deposit, to potentially expand
and increase the confidence of the MRE, and to test for strike and down dip extensions of the Diba NW
prospect. In November 2021 the Company reported on a number of high grade intersections at the
Diba Deposit prospect, including 21.9 g/t Au over 10.2m and 2.0 g/t Au over 25.4m (not true widths).
In January 2022, the Company also reported a number of high grade intersections at the Diba NW
prospect, including 4.76 g/t Au over 12m from 102m and 8.74 g/t Au over 7m from 119m (not true
widths). These new high-grade intersections at Diba NW indicate the presence of potentially enriched
zones, or sub-vertical mineralised structures, which will be the subject of follow-up exploration.
RC drilling results from the Lakanfla Central prospect were reported after the period in February and
March 2022. These included 1.23 g/t Au over 127m from 21m, 1.32 g/t Au over 26m from 85m and 0.90
g/t Au over 66m from 41m (not true widths). These results extended the known mineralised strike length
of the Lakanfla Central prospect by approximately 200m to approximately 750m, with mineralisation
remaining open to the northeast and at depth. The results confirmed the presence of a broad gold
mineralised package at the Lakanfla Central prospect. Altus intends to commission an updated
independent MRE and an updated independent PEA on the Diba & Lakanfla project.
Tabakorole JV Gold Project (292km2), 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, formerly owned by Barrick Gold Corporation and now operated by ASX
listed Firefinch Limited (ASX: FFX).
Tabakorole, together with the Lakanfla licence, was the subject of a JV from November 2019 until
January 2022, initially with Glomin Services Limited and subsequently Marvel Gold. After the year end,
on 19 January 2022, an updated JV agreement was signed with Marvel Gold comprising Tabakorole and
two contiguous licences, Npanyala and Sirakoroble Sud, for a total area of 292km2 (“JVA Licences”).
Marvel holds a 70% equity interest in the JVA Licences and may increase its holding to 75% by sole
funding US$5 million of exploration by December 2023 and to 80% by sole funding a definitive feasibility
study (“DFS”) on the JVA Licences. Altus currently retains a 30% equity interest and holds a 2.5% NSR
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31 December 2021 | Annual Report
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royalty on the JVA Licences. Exploration activities under the JVA are currently being sole funded by
Marvel Gold.
Tabakorole Mineral Resource Estimate
An initial MRE, prepared by International Resource Solutions Pty Ltd (Perth, Australia) (“IRS Perth”)
under the JORC Code, was published by Marvel Gold in December 2020. On 05 October 2021, Marvel
Gold released an updated MRE prepared by IRS Perth under the JORC Code – see the Company’s news
release “Gold Resource Exceeds One Million Ounces at Tabakorole in Southern Mali” dated 5 October
2021. The revised estimate is as follows.
Tabakorole project mineral resource estimate 05 October 2021
Category
Tonnes (t)
Grade (g/t)
Contained gold (oz Au)
Oxide
Indicated
1,400,000
1.2
50,000
Inferred
1,300,000
1.3
55,000
Fresh
Indicated
7,800,000
1.2
310,000
Inferred
16,000,000
1.2
610,000
Notes: 1. Cut-off grade 0.6 g/t Au
2. MRE is shown on a gross (100%) basis
3. Marvel Gold is the operator of the JV. Tabakorole is currently 30% beneficially owned by Altus
and 70% owned by Marvel Gold. Marvel Gold can earn a 75% interest in Tabakorole by sole
funding US$5 million of exploration by December 2023.
Tabakorole exploration programmes
DD drilling on the FT Prospect in 2020 returned intersections including 4.7 g/t Au over 14.0m and 1.2 g/t
Au over 31m (not true widths). The results confirmed an approximate 600m north-west extension to the
FT Prospect. Results from a 39-hole, 6,300m RC drilling programme completed in February 2021 further
extended the strike length of the FT Prospect by 150m to over 3km, and showed broad and high-grade
intersections, including 2.0 g/t over 16m from 75m (not true width) located approximately 50m
northeast of the current deposit, which indicates the existence of a parallel gold zone.
Drilling by Marvel Gold at the Tabakorole deposit in 2021 has produced some notable highlights
including:
Northwest Zone: potential increase in strike length by 150m with potential improvement of
grade in this zone
Parallel Zone: discovery of shallow, high-grade mineralisation outside of the existing deposit
Central Zone: discovery of further mineralisation outside of the existing deposit with potential
improvement of grade in this zone
Southeast Zone: potential increase in strike length by 150m
In June 2021, Marvel Gold completed a six-hole, 950m DD programme in the southeast of the deposit,
adding a further 150m to the strike length of the known mineralisation. In Q3 2021, results from five DD
holes totalling approximately 1,000m showed a continuation of shallow, high-grade intersections from
the central zone of the deposit, while results from a further eight holes confirmed the existence of a
parallel shallow, high-grade gold zone outside of the existing deposit model, which remains open along
strike and at depth. Results included 2.4 g/t Au over 24m from 35m in the parallel zone and 3.6 g/t Au
over 16.5m from 3.2m (not true widths) in the northwest zone.
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Metallurgical testwork was undertaken on four composite samples of fresh rock collected from diamond
drill holes by Marvel Gold. Fresh rock represents approximately 90% of the December 2020 MRE. Initial
bottle roll testing, the industry standard first-step to determining gold recoveries from cyanide leaching,
returned average leach recoveries of 92.7%, 94.8% and 96.6% for the four samples, indicating that the
gold is likely to be recoverable via a simple CIL process flow sheet, with no indications of refractory gold.
In addition to the drilling programmes, Marvel Gold collected 4,267 soil samples and completed 5,300
line kilometres of high-resolution ground magnetics, as part of its ongoing regional exploration
programme. All soil samples were subjected to a fire assay for gold and an ultra-low detection 48-
element analysis to establish the gold pathfinder elements in the broader Tabakorole structural corridor.
Egypt Operations
In January 2021, the Company was awarded four gold projects (comprising nine gold exploration
licences) totalling 1,565km2 by the Egyptian Mineral Resources Authority as part of a competitive
international bidding process. The licences were awarded for an initial two-year term, renewable for two
further periods of two years each.
Projects
Mineral
Wadi Jundi
Gabal Al-Shaluhl
Gabal Om Ourada
Wadi Dubur
Gold
Ownership
Location
Projects are 100% owned through subsidiary
Akh Gold Ltd
Projects are located in the Eastern Desert
Altus selected the four Egyptian projects based upon an extensive process of desk-based prospectivity
mapping. This work comprised a review of available datasets, including historical mineral occurrences,
geological maps and satellite-borne remote sensing data.
The Eastern Desert of Egypt forms part of the north-western limb of the Neoproterozoic Arabian-Nubian
shield, a rapidly emerging world-class province for orogenic gold deposits, with reported discoveries
totalling more than 45 million oz Au and Au equivalent in the last two decades. Historic mining in the
Eastern Desert dates back to Pharaonic times. Large areas of the Eastern Desert remain relatively
underexplored and provide highly prospective greenfield targets.
Wadi Jundi, Gabal Al-Shaluhl and Gabal Om Ourada are located within 30 to 60km of the historic El Sid
gold mine, which reportedly contributed around 45% of Egypt’s gold production during the 20th
century. They are also within 115km to 160km of the Sukari gold mine (operated by LSE-listed Centamin
Plc), which produces approximately 400,000 ounces of gold per year. Wadi Dubur is located 5km from
the historic Atud gold mine and 40km from Sukari. Mineralisation hosted at El Sid, Atud and Sukari is
not necessarily indicative of mineralisation hosted at the Company’s projects.
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Wadi Jundi Gold Project (696km2), Eastern Egypt
The Wadi Jundi project consists of four licence blocks, covering a total area of 696km2. Altus considers
Wadi Jundi is prospective for orogenic gold mineralisation related to deformed volcanic sequences
proximal to granite intrusions, as well as Volcanogenic Massive Sulphide (“VMS”) deposits.
Gabal Al-Shaluhl Gold Project (348km2), Eastern Egypt
The Gabal Al-Shaluhl project consists of two licence blocks, covering a total area of 348km2. Altus
considers Gabal Al-Shaluhl is prospective for orogenic gold mineralisation related to granite intrusions.
A first phase reconnaissance exploration programme on the Wadi Jundi and Gabal Al-Shaluhl projects
is due to start in Q1 2022 and will include an assessment of the priority targets identified during the
prospectivity mapping exercise.
Gabal Om Ourada Gold Project (346km2), Eastern Egypt
The Gabal Om Ourada project consists of two licence blocks, covering a total area of 346km2. The project
is accessible by asphalt road from the coastal city of El Quseir, 30km away. In Q3 2021, 4 of the 12
priority targets identified by remote sensing were visited and numerous artisanal hard rock workings
were discovered up to 375m in length. A number of the priority targets were designated for follow up
work.
Wadi Dubur Gold Project (175km2), Eastern Egypt
The Wadi Dubur project consists of one licence block, covering a total area of 175km2. It is 60km from
Marsa Alam and directly accessible by asphalt road. In Q3 2021, 4 of the 10 priority targets identified by
remote sensing were visited. Both mechanised and smaller scale artisanal workings were observed up
to 250m in length. Follow up work will focus on the priority targets identified.
Cameroon Operations
Altus holds two projects in Cameroon as well as a royalty interest in the Birsok bauxite project in central
Cameroon, details of which are provided on page 35.
Projects
Minerals
Laboum
Bikoula
Gold (Laboum)
Iron Ore (Bikoula)
Ownership
Location
Laboum is 99% owned through subsidiary
Auramin Ltd
Bikoula is 97.3% owned through subsidiary
Aluvance Ltd
Northern Cameroon (Laboum)
Southern Cameroon (Bikoula)
Laboum Gold Project (189km2), Northern Cameroon
The Laboum project is located 600km northeast of the capital city of Yaoundé. The licence, which is
currently pending renewal, hosts a major 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. Rock chip sampling by the Company has
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31 December 2021 | Annual Report
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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.
In H1 2021, Altus concluded a systematic reconnaissance trenching and sampling programme with 13
trenches totalling approximately 5,000m. A new array of quartz veins was discovered at the Tapare
prospect, comprising 21 quartz veins ranging from 10m to 345m in length within a 150m wide zone.
The veins are hosted in metasiltstone and metagreywacke formations. Results from 141 reconnaissance
samples (27 of which were from the Tapare prospect) returned grades of up to 36.20 g/t Au and 1.13 g/t
Au.
Altus is actively seeking a JV partner for Laboum.
Bikoula Iron Ore Project (194km2), Southern Cameroon
The Bikoula project comprises the Bikoula and Ndjele licences and is located 150km south of the capital
city of Yaoundé. The licences, which are currently pending renewal, are on the western geological strike
of the Nkout iron ore deposit, 160km west of the Mbalam iron ore deposit. Such deposits are not
necessarily indicative of mineralisation hosted at the Bikoula project.
The Group has defined a maiden JORC compliant Inferred Mineral Resource of 46Mt at 44% Fe, from
less than 25% of the 17km-long Libi Hills target. Drilling results from 48 holes returned 57.8m at 51.4%
Fe, including 30.8m at 57.9% Fe from 3.8m and a supergene haematite cap of 5Mt at 52.7% Fe. The
western extension of the Libi Hills magnetic anomaly comprises an additional 13km of mineralised strike
potential in addition to the 17km strike identified. Grab samples returned up to 64.84% Fe and low silica
contents. Tests on the colluvial and supergene ore conducted by Bureau Veritas (Perth) and SGS (Truro)
respectively returned positive results, indicating a yield of 62.26% Fe concentrate from gravity
separation alone.
In Q1 2021, a strategic review of the project was undertaken by independent consultants Mining Plus
to create an updated financial model incorporating the potential impact of recent infrastructure
upgrades in Cameroon, such as the deep-water port at Kribi and a proposed trans-Cameroon rail line.
An Environmental and Social Impact Assessment Study has also been completed by Digby Wells
Environmental. The Company is determining the next steps for developing Bikoula and is actively
seeking a JV partner for the project.
Morocco Operations
During the year, Altus increased its portfolio of projects in Morocco to 14 following the award of new
projects as part of a competitive tendering process. In November 2021, the Company agreed to divest
its portfolio of projects to Eastinco Mining & Exploration Plc, subject to Eastinco completing a capital
raise and securing a listing of its shares on the Standard List of the LSE. As at the date of this report,
these conditions had not yet been satisfied.
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Projects
Minerals
Agdz, Takzim, Zaer, Ammas, Azrar, Izougza, Tata,
Amsa, Tiddas, Jafra, Agoudim, Assif, Anezal,
Tazoult
Copper, Silver, Zinc, Lead, Tin
Ownership
Location
All projects are 100% owned through subsidiary
Aterian Resources Ltd
Central Morocco (11 projects)
Southern Morocco (3 projects)
Agdz Copper-Silver Project (60km2), Central Morocco
Agdz comprises four contiguous permits in the Anti-Atlas Mountains, 350km south of Rabat and 14km
from the Bouskour copper mine which is operated by Managem, the Moroccan state mining group.
Exploration work at Agdz has defined strongly mineralised and altered zones and a clear structural
context. Three main prospects (Makarn, Amzwaro and Minière) have returned rock-chip assay results
up to 26.5% copper (“Cu”) and 448 g/t silver (“Ag”). Rock-chip and spoil samples from the Minière
prospect, which hosts multiple underground workings, have returned 13.0% Cu, 6.0% Cu and 5.0% Cu.
Alteration in the Makarn prospect has been mapped for over 0.5km in strike length and is considered
analogous to that of the Bouskour mine. Mineralisation hosted at Bouskour is not necessarily indicative
of mineralisation hosted at Agdz.
In 2020, an Environmental Impact Assessment (“EIA”) was completed by an independent Moroccan
environmental consultancy, and approved by the Moroccan Ministry of the Interior. 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, a predictive mapping programme was
carried out at the Bureau de Recherches Géologiques et Minières (“BRGM”) Campus at the University
of Orléans in France analysing surface data compiled by Altus. It identified a number of broad targets
up to 1km in length in the Amzwaro and Makarn Prospects.
In Q3 2021, a high resolution, induced polarisation (“IP”) survey was undertaken by Terratec Geophysical
Services of Germany, which will be used to define and prioritise targets for trenching and drilling within
the four key prospects discovered to date at Agdz. In parallel, the field team undertook further mapping
and sampling across key prospects.
After the year end, on 12 April 2022, the Company announced that it had been awarded a ten year
Mining Licence for Agdz by the Ministry of Energy Transition and Sustainable Development. The mining
licence covers an area of 34.36km2, representing the area of copper and silver mineralisation discovered
to date.
Takzim Copper-Zinc Project (77km2), Central Morocco
Takzim comprises five permits located 35km northeast of Marrakech and 7km east of the historical Bir-
n-Hass copper mine. 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.
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Zaer Copper Project (96km2), Central Morocco
Zaer comprises six permits located 80km south 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 is comprised of two permits, located 30km south of Marrakech. The project is 3km southeast
and along strike of Managem’s Hajjar zinc, lead and copper VMS mine. 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.
The following 10 new projects in Morocco were awarded to the Company during the year. Mineralisation
hosted at existing producing mines referred to in the table is not necessarily indicative of mineralisation
at the Company’s projects. A systematic in-house remote sensing and mineral prospectivity programme
is being undertaken on these projects, which incorporates the synthesis of satellite imagery with
extensive historical exploration datasets.
Azrar
Copper
85km2
Western Morocco
Comprises six licence blocks. Located 45km from the Tizert copper mine. Results from reconnaissance
exploration undertaken in Q3 2021 included samples grading 3.41% Cu and 56 g/t Ag from breccia
outcrop over a 50m strike, and 1% Cu and 16 g/t Ag from a ferruginous stratiform bed of 1m width.
Izougza
Copper-Silver
22km2
Western Morocco
Comprises two licence blocks. Located 20km from the Zgounder silver mine, operated by Aya Gold
and Silver (TSX: AYA). Results from reconnaissance exploration undertaken in Q2 2021 included
samples grading 8.57% Cu from a highly weathered, ferruginous breccia.
Tata
Copper
143km2
Western Morocco
Comprises nine licence blocks. Located 50km from the Tizert copper mine. Results from initial
exploration undertaken in Q2 2021 included samples grading 0.24% Cu from a 1m wide silty dolomite
unit.
Amsa
Tin
67km2
Central Morocco
Comprises five licence blocks. Located 8.5km from the Achmmach tin deposit being developed by
Kasbah Resources Ltd. No significant exploration work conducted before the end of the year.
Tiddas
Copper-Lead
64km2
Central Morocco
Comprises four licence blocks. Located 7km from the El Karit tin mine. No significant exploration work
conducted before the end of the year.
Jafra
Copper-Zinc-Lead
29km2
Central Morocco
Comprises two licence blocks. Located 35km from the former Roc Blanc silver mine and 32km by rail
to the coastal port. No significant exploration work conducted before the end of the year.
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Agoudim
Lead
29km2
Central Morocco
Comprises two licence blocks. Located 30km from the Imiter silver mine operated by Managem Group
(CSE: MNG). No significant exploration work conducted before the end of the year.
Assif
Copper
26km2
Central Morocco
Comprises two licence blocks. Located 31km from the Bouskour copper mine which is operated by
state mining group, Managem. No significant exploration work conducted before the end of the year.
Anezal
Copper
64km2
Central Morocco
Comprises four licence blocks. Located 30km from the Zgounder silver mine. No significant
exploration work conducted before the end of the year.
Tazoult
Silver
13.5km2
Central Morocco
Comprises one licence block. Located 3km from the Zgounder silver mine and close to paved roads.
No significant exploration work conducted before the end of the year.
Ethiopia Operations
Altus holds two exploration projects in Ethiopia. In 2020, hostilities broke out in the northern Tigray-
Afar region which led to military action in and around the city of Mekele, the capital of the Tigray region.
The Company has suspended on site operations 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 its licence agreements.
Projects
Minerals
Daro
Zager
Copper & Gold
Ownership
Location
All projects are 100% owned through subsidiary
Altau Resources Ltd
Arabian-Nubian Shield, Northern Ethiopia
Altus is seeking JV partners for the projects to conduct trenching and geophysical gravity surveys, with
the aim of defining targets for a maiden drill programme.
Daro Copper-Gold Project (412km2), Northern Ethiopia
The Daro 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. To
date, the Company has defined five priority prospects 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, 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 a 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.
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Rock chip and grab sample results at the 0.5km long Wedihazo prospect 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, which is up to 300m in width and coincident with a series of hard rock
gold workings. Results from rock chip sampling has returned up to 21.6 g/t Au.
Zager Copper-Gold Project (285km2), Northern Ethiopia
The Zager prospect is also situated in the Neo-Proterozoic Nakfa Terrane, in the Semien Mi’irabawi Zone
of Tigray in northern Ethiopia, and is 15km north of the Harvest polymetallic VMS project. The project
targets potential VMS copper and gold deposits. An initial prospecting and ground truthing programme
discovered hard rock artisanal gold workings with shafts estimated to be up to 15m deep. Several of
these 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 has returned grades
including 27.1 g/t Au, 7.3 g/t Au and 2.9 g/t Au. Polymetallic mineralisation has been observed at a
number of locations, supported by rock chip sample results up to 1.5 % Pb, 0.2 % Cu and 24 g/t Ag.
Côte d’Ivoire Operations
Altus holds one exploration licence application in Côte d’Ivoire and retains NSR royalty interests with
Stellar on the Prikro gold project and the Zenoula gold licence application, as detailed on page 36.
Project
Minerals
Toura
Nickel
Ownership
Location
The project is 100% owned through subsidiary
Aeos Gold Ltd
Western Côte d’Ivoire
After the year end, on 14 March 2022, the Company executed a Sale and Purchase Agreement with
Firering for the sale of the Toura application for consideration of €15,000 and a GRR of up to 1.0% on
nickel and cobalt sales from the project.
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.
Forward Looking Information
This report may contain “forward-looking statements” that reflect the Company’s current expectations
and projections about its future results. When used in this report, words such as “estimate”, “intend”,
”expect”, ”anticipate” and similar expressions are intended to identify forward-looking statements,
which, by their very nature, are not guarantees of the Company’s future operational or financial
performance, and are subject to risks and uncertainties and other factors that could cause Altus’ actual
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 48
results, performance, prospects or opportunities to differ materially from those expressed in, or implied
by, these forward-looking statements. These risks, uncertainties and factors may include, but are not
limited to: variation in factors used in modelled forecasts, unavailability of financing, failure to identify
commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties
in obtaining required approvals for the development of a mineral project and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak
only as of the date of this report or as of the date otherwise specifically indicated herein. Due to risks
and uncertainties, including the risks and uncertainties identified above and elsewhere in this report,
actual events may differ materially from current expectations. The Company disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise except as required by securities law.
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 National Instrument 43-101 Standards of Disclosure
for Mineral Projects of the Canadian Securities Administrators (“NI 43-101”).
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 49
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
https://www.altus-strategies.com/corporate/corporate-governance/ and in October 2020 it reissued 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
Pages
Strategy and business model
Business Overview
9-11
Shareholder needs and expectations
Corporate Governance Report
49-58
Responsibilities to stakeholders
17-26
Risk management
Corporate Governance Report
Strategic Report
Financial Statements note 29
49-58
17-26
111-114
Composition of the Board
Corporate Governance Report
49-58
Board experience, skills and capabilities
Corporate Governance Report
49-58
Board performance evaluation
Corporate Governance Report
49-58
Corporate culture
Corporate Governance Report
49-58
Governance structure
Corporate Governance Report
49-58
Communication with shareholders/stakeholders
Corporate Governance Report
49-58
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 monitoring royalty assets, managing licence assets,
entering JV and royalty arrangements, transferring licences and companies and managing a
group structure across 14 jurisdictions, with a team of 34 employees and consultants.
Expansion of operations:
The Company acquired its first cash-paying and near-production royalties in 2021 and
established joint operations companies with two royalty partners; it expanded its exploration
activities into Egypt in 2021, opening offices in Cairo, Marsa Alam and Quseir after being
awarded four new projects in the Eastern Desert; the Company is continually assessing a
pipeline of royalty and discovery projects in a range of jurisdictions.
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31 December 2021 | Annual Report
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Areas of operation
The focus of Altus’ exploration and the location of all of its discovery 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
(most recent publication, 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 four Non-executive Directors, one of whom was appointed after the year end.
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 and Chief Investment Officer are not directors of
the Company, and are also based at the registered office. The Chairman, David Netherway, and two of
the four 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
in the Company La Mancha in February 2020 included the right to appoint up to two Non-executive
Directors to the Board. Karim Nasr, the CEO of La Mancha, was appointed on 6 April 2020. The second
appointee, Gérard de Hert, joined the Board after the year end on 7 March 2022. All other Directors
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31 December 2021 | Annual Report
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served for the whole year in 2021. 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 economic geology,
strategy, finance and corporate governance. Those in office at the end of the year and up to the date of
publication are as follows.
David Netherway
Steven Poulton
Position
Non-executive
Chairman
Chief Executive
Appointment date
21-May-17
28-Apr-17
Status
Independent
Not independent
Audit Committee
Member
-
Remuneration
Committee
Member
-
Robert Milroy
Matthew Grainger
Position
Non-executive
Executive
Appointment date
21-May-17
28-Apr-17
Status
Independent
Not independent
Audit Committee
Chair
-
Remuneration
Committee
Chair
-
Michael Winn
Karim Nasr
Gérard de Hert
Position
Non-executive
Non-executive
Non-executive
Appointment date
30-Jan-18
06-Apr-20
07-Mar-22
Status
Independent
Not independent
Not independent
Audit Committee
Member
-
-
Remuneration
Committee
Member
-
-
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, Altus Global Gold, African Aura Mining, Afferro Mining, Avesoro Resources and Kilo
Goldmines. Mr. Netherway is currently a non-executive Director of Kore Potash [ASX, AIM & JSE: KP2]
and Canyon Resources [ASX: CAY].
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
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31 December 2021 | Annual Report
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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] and built the Sindirgi gold mine. In
2004 he founded and was interim Chairman of African Aura Resources which listed on the TSX-V in 2008
and through its merger with Mano River in 2009 created African Aura Mining. In 2011 African Aura
Mining was divested to Afferro Mining, which was acquired by IMIC in 2013 for approximately US$200m,
and west African gold producer Avesoro Resources (formerly Aureus Mining) [TSX/AIM: ASO]. In 2007
he was a founding non-executive director of west Africa focused diamond development company Stellar
Diamonds. Stellar listed on AIM by way of a reverse takeover of West African Diamonds in 2010 and
was acquired by Newfield Resources [ASX: NWF] in 2018. In 2008 Altus co-founded and Steven was joint
Investment Manager to Altus Resource Capital, a five-year, closed-ended investment fund, focused on
junior resource equities. Altus Resource Capital listed on the LSE in 2009 and by 2011 had approximately
US$150m of assets under management. He is a director of Aegis Asset Management and a co-founder
of industry networking groups The Oxford Mining Club and Resource IQ. He is a Fellow of the Geological
Society of London 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) [TSE/AIM: ASO]. 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 Energy Venture 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 Chairman of 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 Chartered Institute for Securities & Investment, Petroleum Exploration Society of Great
Britain and Institute of Directors.
Michael Winn
Non-Executive Director
Michael is the Chairman of EMX Royalty Corp. a precious, base, and battery metals royalty company
which is listed on the NYSE-American and TSX-V. He is the President of Seabord Capital Corp. which
Altus Strategies Plc
31 December 2021 | Annual Report
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provides investment analysis and financial services to companies operating in the energy and mining
sectors. Michael is also President of Seabord Services Corp., a Canadian company providing
management and regulatory services to private & public mining companies. He worked as an analyst
for Global Resource Investments Ltd. from 1993 to 1997 where he specialized in the evaluation of
emerging oil and gas and mining companies, and has worked in the oil and gas industry since 1983 and
the mining industry since 1992. Michael is currently a director and officer of several TSX-V and NYSE
listed companies operating in Canada, Latin America, Europe and Africa. He holds a B.S. in Geology from
the University of Southern California.
Karim Nasr
Non-Executive Director
Karim is the Chief Executive of La Mancha Group. La Mancha, the holding company of the La Mancha
Group, is a privately held gold mining investment company with a portfolio of gold mining assets in
West Africa. Karim joined La Mancha as its Chief Financial Officer in 2018. Prior to La Mancha, Karim was
the CEO and CIO of Digital World Capital (DWC), an FCA regulated investment manager investing
globally and across the capital structure 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, and member of the group's Executive and
Investment Committees. From 2001 to 2011, Karim led over 225 financing and investment projects in
the telecom sector. He 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. Karim
joined Wind Telecom in 2000, first serving within the business development group of Orascom Telecom,
where he participated in the acquisition of greenfield licenses, and successful operational launch of 6
wireless operators. Karim served on the boards of Wind Telecom (Italy), Wind Telecomunicazioni (Italy),
Wind Hellas (Greece), Telecel Globe (Sub Saharan Africa), as well as on the board of most of the group's
holding and financing companies. 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.
Gérard de Hert (appointed 7 March 2022)
Non-Executive Director
Gérard serves as Managing Director, Technical Services for La Mancha, where he oversees the technical
assessment of new and existing investments. For more than 20 years, he has worked on the appraisal
and extraction of several of Africa’s largest epigenetic gold deposits for Endeavour Mining, IAMGOLD,
AngloGold Ashanti, and Randgold Resources (now Barrick Gold). He holds a Masters in mineralogy and
geology from the Catholic University of Louvain as well as a Masters in mineral exploration from the
University of Leicester. Mr De Hert is a Qualified Professional (QP) registered with the Mining &
Metallurgical Society of America, and is also registered with the European Federation of Geologists.
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 19 years’ 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
Altus Strategies Plc
31 December 2021 | Annual Report
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of the ACCA since 2007, and holds an MA from the University of Glasgow and an MSc from Aston
University in the United Kingdom.
Alister Hume
Chief Investment Officer
Alister is an investment and business development manager with over a decade of experience working
in private equity and capital markets in the natural resources industry. He has gained significant
international exposure to the sector through his roles as an investment advisor at Morgans, Australia’s
largest corporate broker, an investment manager at The Sentient Group, a US$2.7bn private equity fund
focused on metals and mining, and as director of business development at KoBold Metals, a data
science-led resource investment vehicle. Alister previously held board positions for East Africa Copper
and Meridian Mining (TSX-V: MNO). He holds a Bachelor of Commerce (Finance and Accounting) from
Sydney University and has completed level I of the CFA programme in 2020. He is currently enrolled in
level II.
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
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
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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.
The committee is also 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.
Board
Audit
Committee
Remuneration &
Nominations Committee
David Netherway
14/14
4/4
3/3
Steven Poulton
14/14
n/a
n/a
Matthew Grainger
14/14
n/a
n/a
Robert Milroy
14/14
4/4
3/3
Michael Winn
12/14
3/4
3/3
Karim Nasr
14/14
n/a
n/a
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Responsibilities of the Board
Internal controls
The Board is responsible for protecting shareholders’ interests and safeguarding the Group’s assets
through its management of the Group’s system of internal controls and procedures. 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
the Group’s 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 or 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 most significant assets of the Group are its portfolio of royalty assets, its exploration licences and
its cash balances. Following the acquisition of the Group’s first cash-paying and near-production
royalties during the year, the Board has tasked management with building a robust system of controls
to ensure and monitor the good standing of the Company’s royalty assets and the collection of
attributable cashflows from these assets. The Board currently reviews the good standing of its
exploration licences each quarter, with respect to the fulfilment of local requirements to submit
renewals, reports and other such documentation, to pay fees and taxes, and to undertake certain levels
of exploration. The Board also monitors the Group’s treasury management, with which institutions it
holds cash and the balance of currencies held relative to its operational requirements.
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.
Risk Management
The Board considers risk assessment to be essential in achieving its strategic objectives. The acquisition
of a portfolio of mining royalties during the year provided impetus to review the Company’s
management of risk.
Risk is not just inherent in Altus’ business, it is fundamental to the business model. Non-business risk is
managed through a well-publicised strategy of diversification, by pursuing a parallel model that
combines the acquisition of cash-paying or other third party royalties and the generation of new
royalties on its own projects. A portfolio approach diversifies the Company’s assets principally by
geography and commodity. A robust process of evaluation is applied to all new projects, and the
existing portfolio is reviewed with consideration given to forecasts, project milestones, budgets and
timelines. In identifying potential risks, the Board looks at:
-
The inherent risks of mining a project
-
The macroeconomic environment, particularly with regard to the price of gold, copper and
other commodities
-
The equity financing environment
-
The operational environment in country
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Altus has a low tolerance of business risk. Under the aegis of the Audit Committee, a Risk Management
Committee has been instigated whose responsibility is to identify and document risks faced by the
Company, to decide suitable responses including management, mitigation or monitoring of risks, and
to report results. The committee will co-ordinate existing risk management practices and recommend
new systems and procedures as required.
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 2021 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 royalty and exploration assets and investments in associates or joint operations
holding such assets.
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
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 58
can subscribe to receive notification of news updates and other documents from the Company via email.
The Company has an active presence on social media as a means of improving accessibility to Company
newsfeeds.
Enquiries from individual shareholders on matters relating to the business of the Company are
welcomed. Executive Directors meet and hold calls with shareholders to discuss the progress of the
Company and provide periodic feedback to the Board following such meetings. 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
28 April 2022
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 59
Directors’ Report
The Directors present their annual report and financial statements for the year ended 31 December
2021.
Company
Altus Strategies plc is the parent company of the Group. It is a public limited company incorporated and
registered in the United Kingdom. The Company’s shares are listed on the AIM market of the London
Stock Exchange in the United Kingdom and the TSX-V in Canada. Its shares also trade on the OTCQX
‘Best Market’ in the United States. The Company’s 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 mining royalty company, generating
royalties on its own discoveries and acquiring royalties through financings and acquisitions with third
parties. 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 17-26.
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 (2020: £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)
Gérard de Hert (Non-executive Director) (appointed 7 March 2022)
Substantial shareholdings
The Directors are aware of the following substantial interests or holdings in 3% or more of the
Company’s ordinary called up share capital as at 09 April 2022.
Major shareholders
(* indicates Director of the Company)
Number of shares
% of issued capital
LMH Explorers S.à r.l.
41,158,454
35.08%
Condire Resource Master Partnership LP
11,170,102
9.52%
Delphi Unternehmensberatung AG
7,000,000
5.97%
Steven Poulton*
6,600,000
5.63%
Resource Capital Investment Corp. (Sprott)
5,600,647
4.77%
Michael Winn*
3,743,980
3.19%
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 60
Share Capital
Details of the share capital and movements in share capital during the year are disclosed in note 32 to
the financial statements. During the year, share options to purchase 575,000 Ordinary Shares were
issued to directors and employees of the Company, and warrants to purchase 63,065 Ordinary Shares
were issued to third parties. Details of these share options and warrants are provided in note 31 to the
financial statements.
Company’s listing
The Company’s Ordinary Shares have been trading on AIM in the UK 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 pages 29-30 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 49-58.
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 2021
31 December 2020
David Netherway
2,478,758
2.11%
2,441,375
3.48%
Steven Poulton
6,524,205
5.56%
5,720,000
8.16%
Matthew Grainger
2,127,589
1.81%
2,085,566
2.97%
Robert Milroy1
600,000
0.51%
400,000
0.57%
Michael Winn
3,743,980
3.19%
3,743,980
5.34%
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 17-20.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 61
Principal Risks and uncertainties
The principal risks and uncertainties of the Group are outlined in the Strategic Report on pages 21-23.
Section 172 requirements
The Group’s response to the requirements of section 172 of the Companies Act 2006 (England & Wales)
is included in the Strategic Report on pages 24-26.
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 royalty acquisition and royalty generation business model during
2022. This is expected to include:
-
identifying potential royalty, project and corporate acquisition opportunities and where
possible concluding accretive transactions on these opportunities;
-
continuing to grow the number of projects in its portfolio in existing countries of operations as
well as new jurisdictions; and
-
completing a number of royalty-based JV and other transactions on our existing projects.
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 23 and in note 29 of the financial statements.
Events after the reporting date
The events after the reporting date are set out in note 35 to the financial statements.
Directors’ and Officers’ Indemnity Insurance
The Group maintains Directors and Officers insurance, and its provision for qualifying third-party
indemnity for the benefit of its Directors and Officers was in place throughout the year and remained
in place at the reporting date.
Annual General Meeting
The Annual General Meeting of the Company will be held at the Company’s offices of the Company on
Tuesday 21 June 2022.
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.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 62
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
28 April 2022
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 63
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 49-58. 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.
-
Companies Act 2006 Strategic Report and Directors’ 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 purchase 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 2021 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 the bonuses payable in respect of the year, and these were paid in 2022. 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 2021 was £508,500, comprising £415,000 for Executive
Director salaries and Non-executive Director fees, £65,000 for Executive Director bonuses and £28,500
for Executive Director pension contributions.
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 Directors’
remuneration at the end of the year.
The following tables present Directors’ remuneration for the years 2019 to 2021, 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
12 to the financial statements.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 64
Executive Directors
2021
2020
2019
£
£
£
Steven Poulton, Chief Executive Officer
Contractual salary
175,000
125,000
125,000
Bonus payable
50,000
62,500
46,875
Pension payable
17,500
12,500
12,500
Total payable
242,500
200,000
184,375
Salary paid (for current year)
175,000
125,000
6,250
Salary paid (unpaid in prior years)
-
172,500
-
Bonus paid (unpaid in prior years)
62,500
90,000
-
Pension paid (for current year)
16,249
11,458
-
Pension paid (unpaid in prior years)
1,041
62,875
-
Total paid
254,790
461,833
6,250
Salary deferred
-
-
118,750
Bonus to be paid
50,000
62,500
46,875
Pension deferred / to be paid
2,292
1,041
12,500
Total deferred
52,292
63,541
178,125
Deferred salary balance
-
-
172,500
Bonus payable balance
50,000
62,500
90,000
Pension payable balance
2,292
1,041
62,875
Total deferred balance
52,292
63,541
325,375
Matthew Grainger, Executive Director
Contractual salary
110,000
100,000
100,000
Bonus payable
15,000
50,000
37,500
Pension payable
11,000
10,000
10,000
Total payable
136,000
160,000
147,500
Salary paid (for current year)
110,000
100,000
91,090
Salary paid (unpaid in prior years)
-
36,576
-
Bonus paid (unpaid in prior years)
50,000
37,500
21,563
Pension paid (for current year)
10,916
9,167
10,000
Pension paid (unpaid in prior years)
833
-
7,675
Total paid
171,749
183,243
130,328
Salary deferred
-
-
8,910
Bonus to be paid
15,000
50,000
37,500
Pension deferred / to be paid
917
833
-
Total deferred
15,917
50,833
46,410
Deferred salary balance
-
-
36,576
Bonus payable balance
15,000
50,000
37,500
Pension payable balance
917
833
-
Total deferred balance
15,917
50,833
74,076
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 65
Non-executive Directors
2021
2020
2019
£
£
£
David Netherway, Chairman
Board fees payable
45,000
35,000
35,000
Board fees paid (for current year)
45,000
35,000
35,000
Board fees paid (unpaid in prior years)
-
-
39,167
Total paid
45,000
35,000
74,167
Board fees outstanding for the year
-
-
-
Balance of fees payable
-
-
-
Robert Milroy *
Board fees payable
35,000
25,000
25,000
Board fees paid (for current year)
35,000
25,000
25,000
Board fees paid (unpaid in prior years)
-
-
45,833
Total paid
35,000
25,000
70,833
Board fees outstanding for the year
-
-
-
Balance of fees payable
-
-
-
Michael Winn
Board fees payable
25,000
20,000
20,000
Board fees paid (for current year)
18,750
15,000
-
Board fees paid (unpaid in prior years)
5,000
38,333
-
Total paid
23,750
53,333
-
Board fees outstanding for the year
6,250
5,000
20,000
Balance of fees payable
6,250
5,000
38,333
Karim Nasr
Board fees payable
25,000
11,080
-
Board fees paid (for current year)
12,500
-
-
Board fees paid (unpaid in prior years)
11,080
-
-
Total paid
23,580
-
-
Board fees outstanding for the year
12,500
11,080
-
Balance of fees payable
12,500
11,080
-
* Robert Milroy is a director through Milroy Capital Ltd
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 66
Total for all Directors
2020
2020
2019
£
£
£
Contractual salary / Board fees
415,000
316,080
305,000
Bonus payable
65,000
112,500
84,375
Pension payable
28,500
22,500
22,500
Total payable
508,500
451,080
411,875
Salary / Board fees paid (for current year)
396,250
300,000
159,840
Salary / Board fees paid (unpaid in prior year)
16,080
247,409
85,000
Bonus paid (unpaid in prior years)
112,500
127,500
21,563
Pension paid (for current year)
27,165
20,625
10,000
Pension paid (unpaid in prior years)
1,874
62,875
7,675
Total paid
553,869
758,409
281,578
Salary / Board fees outstanding for the year
18,750
16,080
145,160
Bonus to be paid (for current year)
65,000
112,500
84,375
Pension deferred / to be paid
3,209
1,875
12,500
Total deferred
86,959
130,455
242,035
Deferred salary / Board fees balance
18,750
16,080
247,409
Bonus to be paid balance
65,000
112,500
127,500
Pension deferred / to be paid balance
3,209
1,875
62,875
Total deferred balance
86,959
130,455
437,784
Share options
On 28 August 2020 the Company issued to the Directors options to acquire 3,000,000 Ordinary Shares
at an exercise price of 73.15p, which represented an approximate 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.
No additional options were granted to the Directors during 2021. After the year end, additional options
were issued to Directors to acquire 1,600,000 Ordinary Shares at an exercise price of 65.00p, which
represented an approximate 11% premium on the grant date market price. The number of Ordinary
Shares issuable under share options held by each Director as at 31 December 2021 and the additional
Ordinary Shares issuable under share options granted after the year end are as follows.
Issuable
Ordinary
Shares
Exercisable
Issuable
Ordinary
Shares
Exercisable
Awarded
after year
end
31 December balance
2021
2021
2020
2020
David Netherway
400,000
400,000
400,000
200,000
250,000
Robert Milroy *
300,000
300,000
300,000
150,000
200,000
Michael Winn
250,000
250,000
250,000
125,000
175,000
Karim Nasr
250,000
250,000
250,000
125,000
175,000
Steven Poulton
1,000,000
500,000
1,000,000
500,000
500,000
Matthew Grainger
800,000
400,000
800,000
400,000
300,000
*Options issued to Milroy Capital Limited
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 67
Further details of the Company’s share options scheme are provided in note 31 to the financial
statements.
Purchase of Ordinary Shares by Directors
Certain directors have used their own funds to purchase Ordinary Shares, including through the
participation in the private placements of March 2021 and December 2021. The number and value of
shares purchased is shown in the table below.
David
Netherway
Steven
Poulton
Matthew
Grainger
Robert
Milroy*
Total
2022 (at date of report)
Value £
-
43,893
-
-
43,893
Shares
-
75,795
-
-
75,795
Average price (pence)
-
57.91
-
-
57.91
2021
Value £
20,000
447,739
26,351
107,000
601,090
Shares
37,383
804,205
42,024
200,000
1,083,612
Average price (pence)
53.50
55.67
62.71
53.50
55.47
2020
Value £
-
96,468
-
8,583
105,051
Shares
-
154,903
-
12,564
167,467
Average price (pence)
-
62.28
-
68.31
62.73
2019
Value £
75,727
139,125
66,578
70,834
352,264
Shares
291,255
535,096
256,066
272,436
1,354,853
Average price (pence)
26.00
26.00
26.00
26.00
26.00
Total (from 2019 to date of report)
Value £
95,727
727,224
92,929
186,417
1,102,298
Shares
328,638
1,569,999
298,090
485,000
2,681,727
Average price (pence)
29.13
46.32
31.17
38.44
41.10
* Robert Milroy purchased shares through Milroy Capital Limited
Michael Winn and Karim Nasr did not purchase Ordinary Shares during the period covered by the table
above (Karim Nasr was appointed as a Non-executive Director in April 2020). Gérard de Hert was
appointed to the board on 7 March 2022.
By order of the Board,
Robert Milroy
Chairman of the Remuneration and Nominations Committee
28 April 2022
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 68
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 UK-adopted international accounting standards. 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 UK-adopted international accounting standards 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 (England & Wales). 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
28 April 2022
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 69
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 2021 which comprise the Group Statement of
Comprehensive Income, the Group and Company Statement of Financial Position, the Group and
Company Statement of Changes in Equity, the Group and Company Statement of Cash Flows and notes
to the financial statements, including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK-adopted international accounting
standards 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 2021 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
the parent company financial statements have been properly prepared in accordance with UK-
adopted international accounting standards 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 UK-adopted international accounting standards, 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 2021 and of its consolidated financial 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.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements, which indicates that the Group is reliant on
additional raising of capital or financing to refinance the existing debt facility in the going concern period.
As stated in note 1, these events or conditions indicate that a material uncertainty exists that may cast
significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 70
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 company’s ability to continue to adopt the going concern basis of
accounting included reviewing the group’s existing financing arrangements, the ongoing refinancing,
forecasts and assumptions used in their preparation. Our work included comparing these forecasts to
actual results and significant events subsequent to the year end.
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 £275,000 (2020: £200,000),
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 intangible assets and exploration
costs are the primary drivers of the business. The performance materiality was £192,500 (2020: £140,000)
and triviality of £13,750 (2020: £10,000). The materiality applied to the parent company financial
statements was £80,000 (2020: £30,000) based upon the loss before tax. The performance materiality for
the parent company was £56,000 (2020: £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 £13,750 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.
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
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 71
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 due from subsidiary
and related undertakings (refer notes
17,19, and 21).
The carrying value of intangible assets as at
31 December 2021 is £16,993,769 (2020:
£3,277,381) which comprises royalty assets
acquired during the year and costs
associated with exploration licenses and
projects in Africa. The royalty assets are
considered in more detail in a separate Key
Audit matter below.
The carrying value of investments in
subsidiaries, together with intra-group
receivables
was
£56,856194
(2020:
£14,912,031) as at 31 December 2021.
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 royalty and
exploration projects, requires significant
estimation and judgement. This makes this
area a key focus for the audit.
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 management, regarding the likelihood
of renewal.
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.
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.
The recoverability of amounts due from subsidiary and
related undertakings were assessed by reference to the
underlying
exploration
projects.
Management’s
impairment
assessments
were
reviewed
for
reasonableness.
We reviewed the terms of the agreement leading to the
loss of control and deconsolidation of the assets in
Legend Mali sarl. We reviewed the accounting entries
and ensured they were in line with IFRS 10.
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.
Accounting treatment and valuation of
acquired royalty interests during the
period (refer notes 17 and 20)
During the year, the group entered into an
agreement to acquire an effective 0.418%
net smelter return (“NSR”) royalty interest
on the producing Caserones Copper Mine
of northern Chile.
In December
2021,
the group also
Caserones
We reviewed the acquisition agreements and corporate
structure of the proposed royalty assets. We reviewed
management’s assessment of the accounting treatment
of the proposed structure and agreed that the entity
holding the royalty should be accounted for as an
investment in associate under IFRS 11 and IAS 28. We
reviewed the good title to the assets shown.
The accounting treatment and entries made upon
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 72
completed the first stage of completion on
the acquisition of a portfolio of 24 royalty
projects for US$24m.
There is a risk that the acquisitions have not
been correctly accounted for or valued in
accordance with the financial reporting
framework.
acquisition were reviewed with reference to the royalty
sale and purchase agreement and the consideration was
substantively tested.
We reviewed the equity accounting and recognition of
the share of profit of the associate with reference to the
royalties received and dividends paid.
We reviewed management’s assessment of the carrying
value of the assets and indicators of impairment.
Newcrest royalties
We reviewed the acquisition agreements and corporate
structure of the proposed royalty assets. We reviewed
management’s assessment of the accounting treatment
of the proposed structure and agreed that the
arrangement constituted a jointly controlled operation
under IFRS 11 and as a result is accounted for under the
proportionate consolidation method. We reviewed the
good title to the assets shown.
The accounting treatment and entries made upon
acquisition were reviewed with reference to the royalty
sale and purchase agreement and the consideration
transferred was substantively tested.
We reviewed management’s assessment of the carrying
value of the assets and indicators of impairment.
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 the 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
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 73
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.
In preparing the group and parent company financial statements, the directors are responsible for
assessing the group 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.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 74
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.
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
28 April 2022
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 75
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 2021 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 2021 and 31 December 2020 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
How the scope of our audit responded to the 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).
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
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 76
The carrying value of intangible assets as
at 31 December 2021 is £16,993,769 (2020:
£3,277,381) which comprises royalty assets
acquired during the year and costs
associated with exploration licenses and
projects in Africa. The royalty assets are
considered in more detail in a separate Key
Audit matter below.
The carrying value of investments in
subsidiaries, together with intra-group
receivables
was
£56,856194
(2020:
£14,912,031) as at 31 December 2021.
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 royalty and
exploration projects, requires significant
estimation and judgement. This makes this
area a key focus for the audit.
discussions with management, regarding the likelihood
of renewal.
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.
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.
The recoverability of amounts due from subsidiary and
related undertakings were assessed by reference to the
underlying
exploration
projects.
Management’s
impairment
assessments
were
reviewed
for
reasonableness.
We reviewed the terms of the agreement leading to the
loss of control and deconsolidation of the assets in
Legend Mali sarl. We reviewed the accounting entries
and ensured they were in line with IFRS 10.
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.
Accounting treatment and valuation of
acquired royalty interests during the
period (refer notes 17 and 20)
During the year, the group entered into an
agreement to acquire an effective 0.418%
net smelter return (“NSR”) royalty interest
on the producing Caserones Copper Mine
of northern Chile.
In December 2021, the group also
completed the first stage of completion on
the acquisition of a portfolio of 24 royalty
projects for US$24m.
There is a risk that the acquisitions have
not been correctly accounted for or valued
in accordance with the financial reporting
framework.
Caserones
We reviewed the acquisition agreements and corporate
structure of the proposed royalty assets. We reviewed
management’s assessment of the accounting treatment
of the proposed structure and agreed that the entity
holding the royalty should be accounted for as an
investment in associate under IFRS 11 and IAS 28. We
reviewed the good title to the assets shown.
The accounting treatment and entries made upon
acquisition were reviewed with reference to the royalty
sale and purchase agreement and the consideration
was substantively tested.
We reviewed the equity accounting and recognition of
the share of profit of the associate with reference to the
royalties received and dividends paid.
We reviewed management’s assessment of the carrying
value of the assets and indicators of impairment.
Newcrest royalties
We reviewed the acquisition agreements and corporate
structure of the proposed royalty assets. We reviewed
management’s assessment of the accounting treatment
of the proposed structure and agreed that the
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 77
arrangement constituted a jointly controlled operation
under IFRS 11 and as a result is accounted for under the
proportionate consolidation method. We reviewed the
good title to the assets shown.
The accounting treatment and entries made upon
acquisition were reviewed with reference to the royalty
sale and purchase agreement and the consideration
transferred was substantively tested.
We reviewed management’s assessment of the carrying
value of the assets and indicators of impairment.
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 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.
In preparing the 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.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 78
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.
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.
Altus Strategies Plc
31 December 2021 | Annual Report
Page | 79
David Thompson (Engagement Partner)
for and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
28 April 2022
Page | 80
ALTUS STRATEGIES PLC
Group Statement of Comprehensive Income
For the Year Ended 31 December 2021
The notes on pages 87-119 form part of these financial statements.
2021
2020
Continuing operations
Notes
£
£
Revenue and costs recovered from JV partners
4
318,496
361,425
Exploration costs expensed
7
(3,205,673)
(2,350,028)
Administrative expenses
8
(1,788,914)
(848,794)
Listing and acquisition related costs
9
(443,137)
(88,440)
Foreign exchange gains/(losses)
(273,221)
(328,787)
Share based payments
31
(982,041)
(663,945)
Loss from operations
(6,374,490)
(3,918,569)
Finance costs
13
(613,905)
(4,923)
Other income/(expense)
14
227,150
1,938,615
Gain/(loss) on disposals
15
(461,869)
68,897
Fair value gain/(loss) on financial assets at fair
value through profit or loss
15
44,937
(163,409)
Share of profit of associates accounted for
using the equity method
21
984,727
-
Loss before taxation
(5,691,842)
(2,079,389)
Income tax
16
-
-
Loss for the year
(6,193,450)
(2,079,389)
Other comprehensive income
Exchange differences on retranslation of net
assets of subsidiaries
77,459
-
Total comprehensive loss for the year
(6,115,991)
(2,079,389)
Loss for the year attributable to:
-
Owners of the parent company
(6,190,057)
(2,076,435)
-
Non-controlling interest
(3,393)
(2,954)
(6,193,450)
(2,079,389)
Total comprehensive loss for the year
attributable to:
- Owners of the parent company
(6,112,598)
(2,076,435)
- Non-controlling interest
(3,393)
(2,954)
(6,115,991)
(2,079,389)
Earnings per share (pence) attributable to
the owners of the parent
Basic earnings per share
17
(7.77)
(3.12)
Page | 81
ALTUS STRATEGIES PLC
Group Statement of Financial Position
As at 31 December 2021
Company Registration No. 10746796
The notes on pages 87-119 form part of these financial statements. The financial statements were approved by the
Board of Directors and authorised for issue on 28 April 2022 and are signed on its behalf by:
Steven Poulton
Chief Executive Officer
2021
2020
Notes
£
£
Non-current assets
Intangible assets
18
16,993,769
3,277,381
Property, plant and equipment
19
30,382
4,720
Right of use assets
33
103,671
60,198
Investments in associates accounted for using
the equity method
21
25,366,597
-
Investments at fair value through profit or loss
22
1,721,039
1,320,542
44,215,458
4,662,841
Current assets
Trade and other receivables
23
622,164
853,629
Assets classified as held-for-sale
24
117,967
86,765
Cash and cash equivalents
6,355,011
5,937,486
7,095,142
6,877,880
Total assets
51,310,600
11,540,721
Current liabilities
Trade and other payables
25
(986,247)
(1,144,754)
Borrowings
26
(18,348,516)
-
Liabilities classified as held-for-sale
24
(34,020)
(34,020)
Provisions
27
(15,000)
(15,000)
(19,383,783)
(1,193,774)
Non-current liabilities
Trade and other payables
25
(64,671)
(45,848)
Total liabilities
(19,448,454)
(1,239,622)
Net current assets/(liabilities)
(12,288,641)
5,684,106
Net assets
31,862,146
10,301,099
Equity
Share capital
32
5,866,084
3,504,580
Share premium
32
37,555,608
13,222,115
Share based payment reserve
31
1,613,440
631,399
Other reserves
5,722,494
5,645,035
Retained earnings
(18,790,806)
(12,600,749)
Total equity attributable to owners of the
parent
31,966,820
10,402,380
Non-controlling interest
(104,674)
(101,281)
Total equity
31,862,146
10,301,099
Page | 82
ALTUS STRATEGIES PLC
Company Statement of Financial Position
As at 31 December 2021
Company Registration No. 10746796
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 £4,567,180 (2020: loss of £950,812).
The notes on pages 87-119 form part of these financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 28 April 2022 and are
signed on its behalf by:
Steven Poulton
Chief Executive Officer
2021
2020
Notes
£
£
Non-current assets
Investments in subsidiaries
20
4,608,930
4,608,930
Investments at fair value through profit or loss
22
318,760
413,634
4,927,690
5,022,564
Current assets
Trade and other receivables
23
52,388,337
10,375,059
Cash and cash equivalents
2,273,965
460,131
54,662,302
10,835,190
Total assets
59,589,992
15,857,754
Current liabilities
Trade and other payables
25
(2,602,268)
(328,404)
Borrowings
26
(18,348,516)
-
Total liabilities
(20,950,784)
(328,404)
Net current assets
33,711,518
10,506,786
Net assets
38,639,208
15,529,350
Equity
Called up share capital
32
5,866,084
3,504,580
Share premium
32
37,555,608
13,222,115
Other reserves
31
1,613,440
631,399
Retained earnings
(6,395,924)
(1,828,744)
Total equity
38,639,208
15,529,350
Page | 83
ALTUS STRATEGIES PLC
Group Statement of Changes in Equity
For the Year Ended 31 December 2021
The notes on pages 87-119 form part of these financial statements.
Notes
Share
capital
Share
premium
Other
reserves
Retained
earnings
Total
equity
Non-
controlling
interest
Total
£
£
£
£
£
£
£
Balance at 1 January 2020
2,102,284
7,378,369
5,672,491
(10,524,314)
4,628,830
(98,327)
4,530,503
Year ended 31 December 2020
Total comprehensive loss for the year
-
-
-
(2,076,435)
(2,076,435)
(2,954)
(2,079,389)
Issue of share capital
32
1,402,296
5,843,746
-
-
7,246,042
-
7,246,042
Share based payments
31
-
-
603,943
-
603,943
-
603,943
Total transactions with owners, recognised
directly in equity
1,402,296
5,843,746
603,943
-
7,849,985
-
7,849,985
Balance at 31 December 2020
3,504,580
13,222,115
6,276,434
(12,600,749)
10,402,380
(101,281)
10,301,099
Year ended 31 December 2021
Total comprehensive loss for the year
-
-
77,459
(6,190,057)
(6,112,598)
(3,393)
(6,115,991)
Issue of share capital
32
2,359,841
24,313,586
-
-
26,673,427
-
26,673,427
Issue of warrants
31
-
-
3,863
-
3,863
-
3,863
Exercise of warrants
32
1,663
19,907
-
-
21,570
-
21,570
Share based payments
31
-
-
978,178
-
978,178
-
978,178
Total transactions with owners, recognised
directly in equity
2,361,504
24,333,493
982,041
-
27,677,038
-
27,677,038
Balance at 31 December 2021
5,866,084
37,555,608
7,335,934
(18,790,806)
31,966,820
(104,674)
31,862,146
Page | 84
ALTUS STRATEGIES PLC
Company Statement of Changes in Equity
For the Year Ended 31 December 2021
The notes on pages 87-119 form part of these financial statements.
Share
capital
Share
premium
account
Other
reserves
Retained
earnings
Total
Notes
£
£
£
£
£
Balance at 1 January 2020
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
-
-
-
(950,812)
(950,812)
Issue of share capital
32
1,402,296
5,843,746
-
-
7,246,042
Share based payments
31
-
-
603,943
-
603,943
Total transactions with owners,
recognised directly in equity
1,402,296
5,843,746
603,943
-
7,849,985
Balance at 31 December 2020
3,504,580
13,222,115
631,399
(1,828,744)
15,529,350
Year ended 31 December 2021
Loss and total comprehensive
income for the year
-
-
-
(4,567,180)
(4,567,180)
Issue of share capital
32
2,359,841
24,313,586
-
-
26,673,427
Issue of warrants
31
-
-
3,863
-
3,863
Exercise of warrants
32
1,663
19,907
-
-
21,570
Share based payments
31
-
-
978,178
-
978,178
Total transactions with owners,
recognised directly in equity
2,361,504
24,333,493
982,041
-
27,677,038
Balance at 31 December 2021
5,866,084
37,555,608
1,613,440
(6,395,924)
38,639,208
Page | 85
ALTUS STRATEGIES PLC
Group Statement of Cash Flows
For the Year Ended 31 December 2021
Significant non-cash transactions
Significant non-cash transactions are detailed in note 35.
The notes on pages 87-119 form part of these financial statements.
2021
2020
£
£
Cash flows from operating activities
Loss from continuing operations
(6,193,450)
(2,079,389)
Net interest paid
613,905
4,923
Depreciation
7,342
23,845
Impairment of intangible assets
569,777
20,952
Equity-settled share based payments
982,041
663,945
Bad debt provision
-
(430)
Fair value (gain)/loss on investments
(44,937)
94,512
Receipt of shares as consideration
-
(1,180,838)
Loss on disposal of subsidiary (non-cash)
461,869
-
Share of profit of associate
(984,727)
-
Decrease/(increase) in trade and other receivables
53,050
(609,255)
Increase/(decrease) in trade and other payables
1,234,944
387,622
Other working capital
-
(2,364)
Net cash outflow used in operating activities
(3,300,187)
(2,676,477)
Investing activities
Investment in associate
(24,529,906)
-
Dividend payment from associate
463,722
-
Purchase of intangible assets
(15,511,111)
(95,383)
Purchase of property, plant and equipment
(33,004)
(5,310)
Deconsolidated cash on disposal of subsidiary
(31,466)
-
Interest received
-
1,775
Interest paid
-
(4,947)
Net cash used in investing activities
(39,641,765)
(103,865)
Financing activities
Net proceeds from the issue of shares
26,694,996
6,523,561
Loan from related party
21,068,997
-
Loan repayment to related party
(3,761,762)
-
Interest paid on borrowings
(613,905)
-
Principal element of lease payments
(23,310)
(13,473)
Interest element of lease payments
(5,540)
(4,902)
Net cash generated from financing activities
43,359,476
6,505,186
Net increase in cash and cash equivalents
417,525
3,724,844
Cash and cash equivalents at beginning of the year
5,937,486
2,212,642
Cash and cash equivalents at end of the year
6,355,011
5,937,486
Page | 86
ALTUS STRATEGIES PLC
Company Statement of Cash Flows
For the Year Ended 31 December 2021
Significant non- cash transactions
Significant non-cash transactions are detailed in note 35.
The notes on pages 87-119 form part of these financial statements.
2021
2020
£
£
Cash flows from operating activities
Loss before tax
(4,567,180)
(950,812)
Net interest paid
613,905
396
Fair value (gain) / loss on investments
94,874
(132,848)
Equity-settled share based payments
982,041
663,943
Receipt of shares as consideration
-
(71,833)
Increase in trade and other receivables
(69,116)
(55,271)
Increase in trade and other payables
1,071,328
36,691
Increase in intercompany balances
(39,700,344)
(5,772,643)
Net cash used in operating activities
(41,574,492)
(6,282,377)
Investing activities
Interest paid
-
(396)
Net cash used in investing activities
-
(396)
Financing activities
Net proceeds from the issue of shares
26,694,996
6,523,561
Loan from related party
21,068,997
-
Loan repayment to related party
(3,761,762)
-
Interest paid on borrowings
(613,905)
-
Net cash generated from financing activities
43,388,326
6,523,561
Net increase in cash and cash equivalents
1,813,834
240,788
Cash and cash equivalents at beginning of the year
460,131
219,343
Cash and cash equivalents at end of the year
2,273,965
460,131
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 87
ALTUS STRATEGIES PLC
Notes to the Financial Statements
For the Year Ended 31 December 2021
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 20.
Basis of preparation
These financial statements have been prepared in accordance with UK-adopted International Accounting Standards
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 £4,567,180 (2020: loss of £950,812).
Basis of consolidation
The consolidated financial statements comprise the financial statements of Altus Strategies plc and its subsidiaries as
at 31 December 2021. 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
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 88
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.
Entities are recognised as joint operations if:
-
Their legal form gives parties rights to the assets and obligations for the liabilities relating to the joint
arrangement
-
The contractual terms of the joint arrangement specify that parties have rights to the assets and obligations for
the liabilities relating to the arrangement
-
The arrangement has been designed by the parties so that its activities provide the parties with an output which
represents rights to substantially all of the economic benefits of the assets held in the separate vehicle
Joint operations are accounted for on a proportional assets and liabilities basis.
Investments in associates are accounted for using the equity method, with initial measurement based on costs of
acquisition including transaction costs. The carrying amount is adjusted to recognise the Group’s share of the change
in net assets after the date of acquisition. Distributions received from an associate reduce the carrying amount of the
investment. The Company’s share of post-acquisition profit or loss is recognised in the Statement of Comprehensive
Income based on its economic interest in the associate.
All intra-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
During the year, the Company raised a total £27.5 million (C$47.1 million) in two equity fundraisings. In March 2021,
the Company raised £7.7 million (C$13.4 million) through a 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.
In December 2021, the Company raised £19.8 million (C$33.7 million) before expenses through a placement of
36,930,143 Ordinary Shares of the Company at a price of £0.535 (C$0.90) per share with new and existing institutional
investors and private investors. La Mancha and certain directors and employees of the Group participated in the
placement.
The Directors have assessed the cash resources available to the Company, including balances of cash and investments
held in publicly traded companies at the reporting date. They have reviewed a detailed 24-month budget prepared
by the Company, assessing the likelihood of receiving projected royalty and other income, debt coverage and the
breakdown between committed and discretionary projected expenditure. Given the Company’s previous statement
of the low impact of Covid-19 on operations in the short-to-medium term, a renewed outbreak of Covid-19 has not
been included in the analysis. Based on their assessment, the Directors anticipate that net income from the current
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 89
portfolio of royalties is unlikely to be sufficient to cover exploration and other costs of the business over the next 12
months and that in that period the Company may have to raise additional funding. In making their assessment, the
Directors acknowledged the existence of a number of material uncertainties including volatility in financial and
commodity markets, and political and security risks. These and other risks faced by the Company are outlined in detail
in the Strategic Report on pages 21 to 23.
The Company’s loan liability to La Mancha, the balance of which was £18.3 million at 31 December 2021, is repayable
by 30 June 2022. As at the date of this report, a re-financing of the loan has not been put in place. The Directors note
that, were the Company unable to secure a re-financing of the loan, it could potentially impact the Company’s ability
to maintain its current business operations, and acknowledge that this constitutes a material uncertainty. However,
the Directors also note that Altus has received a number of proposals to re-finance the loan before 30 June 2022, and
they remain confident that the necessary funding will be secured.
Based on their assessment, the Directors have, at the time of approving the financial statements, a reasonable
expectation that the Group will have adequate resources to continue in operational existence for the foreseeable
future. Therefore, 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. Listing 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. IFRS 13 applies a three-level hierarchy, from level 1 for regularly traded assets with a readily
ascertainable market value to level 3 for rarely traded assets which require a high degree of estimation to ascertain
their value. Fair value is applied to the following elements of the Company’s assets.
Subsidiaries
Note 20
Level 2
Investments
Note 22
Level 1
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 foreign currency
translation reserve.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 90
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 2021:
-
Amendment to IFRS 16: Leases - COVID 19 - Related Rent Concessions
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:
Effective date
Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as
Current or Non-Current
TBC*
Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates
TBC*
Amendments to IAS 16: Property, Plant and Equipment
TBC*
Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets
TBC*
Annual Improvements to IFRS Standards 2018-2020 Cycle
TBC*
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform –
Phase 2
TBC*
* subject to endorsement
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
Note 7
Fair value of financial assets
Note 15
Impairment of intangible assets
Note 18
Investments in associates
Note 21
Share based payments
Note 31
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. Royalty income received by associate companies is included in the share of profit or
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 91
loss on associate (see note 21).
2021
2020
£
£
Costs recovered from JV partners
4,747
298,891
Milestone payments
293,923
38,262
Management fees
19,826
24,272
Total
318,496
361,425
Segmental analysis
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker, which is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors.
UK
Africa
S. America
Australia
Total
2021
2021
2021
2021
2021
Group
£
£
£
£
£
Revenue and costs recovered from
JV partners
64,573
253,923
-
-
318,496
Share of profit of associates
-
-
984,727
-
984,727
Loss from operations
(3,680,462)
(2,542,994)
(151,035)
-
(6,374,490)
Reportable segment assets
8,510,123
2,241,132
25,460,350
15,098,995
51,310,600
Reportable segment liabilities
(19,320,381)
(127,892)
(181)
-
(19,448,454)
UK
Africa
S. America
Australia
Total
2020
2020
2020
2020
2020
£
£
£
£
£
Revenue and costs recovered from
JV partners
2,983
358,442
-
-
361,425
Share of profit of associates
-
-
-
-
-
Loss from operations
(2,882,546)
(1,036,023)
-
-
(3,918,569)
Reportable segment assets
7,701,600
3,839,121
-
-
11,540,721
Reportable segment liabilities
(991,704)
(247,918)
-
-
(1,239,622)
Operating loss
2021
2020
Operating loss for the year is stated after
£
£
Exchange (gains)/losses
(44,937)
328,790
Exploration and development costs (note 7)
3,205,673
2,350,028
Depreciation (including right-of-use assets, note 8)
31,540
23,845
Operating lease charges
25,531
20,604
Listing and acquisition related costs
443,137
88,440
Share-based payments
982,041
663,945
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 92
Exploration and development costs
The Group’s costs derived from its operations in countries in which it holds exploration licences are detailed below.
These figures include an 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 was awarded
four projects in Egypt and 10 projects in Morocco, and it relinquished one project in Mali (Pitiangoma Est).
Cameroon
Egypt
Ethiopia
Mali
Morocco
Other
Total
2021
2021
2021
2021
2021
2021
2021
Cost category
£
£
£
£
£
£
£
Drilling
-
-
-
725,309
-
-
725,309
Assays
58,131
-
-
231,507
7,824
-
297,462
Other operational costs
4,623
60,248
640
231,351
16,586
-
313,448
Salaries – Africa geologists
33,063
54,761
63,700
198,284
37,643
-
387,451
Salaries – UK geologists
37,526
75,051
37,526
75,051
75,051
-
300,205
Salaries – UK managers
25,800
51,601
25,800
51,601
51,601
-
206,403
Salaries – Africa support
12,602
835
16,464
27,133
28,598
-
85,632
Salaries – UK support
20,187
40,374
20,187
40,374
40,374
-
161,496
Technical consultants
10,547
29,477
116
26,575
92,496
-
159,211
Travel
11,693
57,060
2,225
121,060
58,116
-
250,154
Africa office rent
9,627
1,214
2,246
6,608
5,836
-
25,531
Africa support costs
66,065
54,514
7,625
140,811
14,595
9,385
292,995
UK support costs
-
-
-
-
-
376
376
Total
289,864
425,135
176,529
1,875,664
428,720
9,761
3,205,673
Costs recovered from
JV partners
-
-
-
(4,747)
-
-
(4,747)
Costs not recovered
289,864
425,135
176,529
1,870,917
428,720
9,761
3,200,926
Cameroon
Egypt
Ethiopia
Mali
Morocco
Other
Total
2020
2020
2020
2020
2020
2020
2020
Cost category
£
£
£
£
£
£
£
Drilling
-
-
-
891,144
-
-
891,144
Assays
14,208
-
5,580
23,555
6,106
-
49,449
Other operational costs
10,616
7,380
3,259
63,753
6,794
2,858
94,660
Salaries – Africa geologists
36,815
-
27,629
63,326
24,318
-
152,088
Salaries – UK geologists
41,047
-
41,047
54,730
54,730
13,682
205,236
Salaries – UK managers
50,847
-
50,871
67,828
67,828
16,957
254,331
Salaries – Africa support
22,597
-
17,316
25,257
28,456
-
93,626
Salaries – UK support
25,516
-
25,516
34,021
34,021
8,505
127,579
Technical consultants
-
-
2,695
94,669
5,602
-
102,966
Travel
43,870
27
5,211
81,667
8,066
-
138,841
Africa office rent
7,855
-
4,147
2,736
5,866
-
20,604
Africa support costs
58,529
54
11,730
83,126
17,109
11,163
181,711
UK support costs
6,857
96
6,498
11,064
8,609
4,669
37,793
Total
318,757
7,557
201,499
1,496,876
267,505
57,834
2,350,028
Costs recovered from
JV partners
-
-
-
(267,493)
-
-
(267,493)
Costs not recovered
318,754
7,557
201,500
1,229,383
267,506
57,835
2,082,535
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 93
Administrative expenses
Administrative expenses include the balances in the table below.
2021
2020
Group
£
£
Employee costs (note 11)
659,940
392,723
Consultants and contractors
-
3,000
Legal fees
47,402
75,547
Audit, accountancy & tax
52,665
87,535
Registrar and Nomad fees
102,132
76,646
Investor relations
148,332
66,109
Other professional expenses
106,189
68,726
Travel expenses
11,123
7,979
Premises and office expenses
58,975
20,127
Depreciation of property, plant and equipment
7,342
3,780
Depreciation of leased assets
24,198
20,064
Impairment of licence
569,777
20,952
Other expenses
839
5,606
1,788,914
848,794
Listing and acquisition related costs
Listing and acquisition related costs primarily related to the acquisitions of the Caserones royalty and Newcrest
portfolio of royalties and were as follows.
2021
2020
£
£
Legal fees
252,594
5,139
Tax advice
39,878
15,117
Stamp duty
145,642
-
Other costs
5,023
68,184
443,137
88,440
Auditor’s remuneration
Fees payable to the company’s auditor for the financial year were as follows.
2021
2020
For audit services
£
£
Audit of the financial statements of the group and company
30,000
25,500
Employees
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense unless those costs are required
to be recognised as part of the cost of inventories or non-current assets. The cost of any unused holiday entitlement
is recognised in the period in which the employee’s services are received. Termination benefits are recognised
immediately as an expense when the Group is demonstrably committed to terminate the employment of an employee
or to provide termination benefits.
The average number of employees of the Group during the year was as follows. Altus Strategies plc has no employees
and incurs no remuneration costs.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 94
2021
2020
Group
Number
Number
Directors
6
6
Employees (excluding consultants and associates)
34
24
40
30
Of the employees, ten (2020: eight) were employed in the UK and 24 (2020: 16) were employed in five (2020: 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.
2021
2020
Group
£
£
Exploration staff costs
1,213,262
817,328
Administrative staff costs
659,940
392,723
1,873,202
1,210,051
Wages, salaries and Non-executive Directors’ fees
909,442
654,087
Contractors
149,146
32,493
Bonuses
100,000
168,000
Social security costs
91,293
93,772
Pension costs
78,161
45,924
Other costs
-
2,733
Total UK costs
1,328,042
997,009
Overseas staff
545,160
213,042
1,873,202
1,210,051
Share based payments
978,178
603,942
2,851,380
1,813,993
Directors’ remuneration
Details of Directors’ remuneration are included in the Directors’ Remuneration Report on pages 63-67.
Fees/salaries
Bonuses
Pensions
Total
2021
2020
2021
2020
2021
2020
2021
2020
£
£
£
£
£
£
£
£
Non-executive
Directors
D. Netherway
45,000
35,000
-
-
-
-
45,000
35,000
R. Milroy
35,000
25,000
-
-
-
-
35,000
25,000
M. Winn
25,000
20,000
-
-
-
-
25,000
20,000
K. Nasr
25,000
11,080
-
-
-
-
25,000
11,080
Executive Directors
S. Poulton
175,000
125,000
50,000
62,500
17,500
12,500
242,500
200,000
M. Grainger
110,000
100,000
15,000
50,000
11,000
10,000
136,000
160,000
Total
415,000
316,080
65,000
112,500
28,500
22,500
508,500
451,080
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 95
During 2021 retirement benefits accrued under defined contribution schemes for two Executive Directors (2020: two
Directors).
Finance (costs)/ income
2021
2020
Group
£
£
Interest on bank deposits
-
1,775
Interest on lease liabilities (note 33)
(5,541)
(6,302)
Interest on loan from LMH Explorers S.à r.l. (note 26)
(608,364)
-
Other interest / Finance costs
-
(396)
(613,905)
(4,923)
Other income
Other income for the financial year was as follows.
2021
2020
Group
£
£
Receipt of shares in respect of contract termination
-
1,726,578
R&D tax credit
218,532
206,040
Event sponsorship
4,313
5,750
COVID-19 rent concession
4,289
-
Other income
16
247
227,150
1,938,615
Other gains and losses
See note 28 for accounting policy and detail of financial assets held at fair value through profit or loss. Fair value of
investments is a Level 1 valuation under IFRS 13 as it is based on quoted market prices of tradable securities.
2021
2020
£
£
Group
Unrealised
Gain/(loss) on revaluation of investments
(217,082)
(162,368)
Other unrealised gains/(losses)
262,019
(1,041)
Total fair value gains/(losses) on financial assets at fair value through
profit or loss
44,937
(163,409)
Realised
Gain/(loss) on disposal of fixed assets
2,586
-
Gain/(loss) on disposal of subsidiaries (note 20)
(464,455)
68,897
(461,869)
(94,512)
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 96
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 (2020: £nil), as follows.
2021
2020
Group
£
£
Income tax expense
-
-
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.
2021
2020
Group
£
£
Loss before taxation
(6,193,450)
(2,079,389)
Expected tax charge based on the standard rate of corporation tax in the UK
of 19% (2020: 19%)
(1,176,756)
(395,084)
Tax effect of:
Expenses not deductible for tax purposes
292,591
181,819
Impairment not deductible for tax purposes
52,953
3,981
Unutilised tax losses for which no deferred tax asset is recognised
831,212
209,284
Tax expense for the year
-
-
The Group has tax losses of approximately £2,758,000 (2020: £1,927,000) 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. An increase in the UK corporate tax rate from 19% to 25% (effective
from 1 April 2023) was substantively enacted on 14 May 2021.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 97
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 5,541,388 and 5,675,000 respectively. No diluted
earnings per share is presented as the loss-making nature means the warrants and options are anti-dilutive.
2021
2020
Loss attributable to owners (£)
(6,190,057)
(2,076,435)
Weighted average number of Ordinary Shares in issue
79,670,038
66,475,493
Basic loss per share (pence)
(7.77)
(3.12)
Intangible assets
Expenditure on exploration activities is written off against profit or loss in the year in which it is incurred. Identifiable
development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be
demonstrated. Amortisation is recognised so as to write off the cost or valuation of assets less their residual values
over their useful lives on the following basis.
- Deferred exploration costs: Not amortised
Deferred exploration costs comprise exploration licence fees capitalised in accordance with IFRS 6 ‘Exploration for
and Evaluation of Mineral Resources’. Licences are initially measured at cost. Management tests quarterly whether
deferred exploration costs require impairment. Each exploration licence is subject to a quarterly review either by a
consultant or senior Company geologist to determine if the exploration results returned to date warrant further
exploration expenditure and have the potential to result in an economic discovery. This review takes into
consideration long-term metal prices, 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.
Royalty assets are recognised at cost upon acquisition. Those assets denominated in a currency other than the
functional currency are revalued at the end of the year. Each royalty asset is the subject of a plan for the units of
production over the life of the mine either at the point of acquisition or at the commencement of mining activity.
Amortisation of the asset is based on the units of production recorded in the period.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 98
At
1 January
2021
Additions
Disposals &
impairment
At 31
December
2021
Group
£
£
£
£
Royalty assets
Australia
Ballarat
-
4,690,652
-
4,690,652
South Kalgoorlie (SKO)
-
2,542,031
-
2,542,031
Exploration Royalties (AER)
-
310,189
-
310,189
Côte d’Ivoire
Bonikro
-
7,556,123
-
7,556,123
Total royalty assets
-
15,098,995
-
15,098,995
Exploration assets
Mali
Korali Sud (Diba)
1,344,579
1,085
-
1,345,664
Lakanfla
582,930
6,568
(589,498)
-
Tabakorole
614,666
-
(614,666)
-
Pitiangoma Est
569,777
-
(569,777)
-
Egypt
Wadi Jundi
16,723
162,994
-
179,717
Gabal Al Shaluhl
8,362
81,755
-
90,117
Gabal Om Ourada
8,362
80,980
-
89,342
Wadi Dubur
4,181
41,007
-
45,188
Cameroon
Laboum
54,159
8,060
-
62,219
Bikoula
51,103
8,529
-
59,632
Ndjele
11,979
4,181
-
16,160
Ethiopia
Daro
1,070
1,151
-
2,221
Zager
2,892
284
-
3,176
Morocco
Agdz
4,644
1,443
(6,087)
-
Takzim
616
-
(616)
-
New “Black Permits”
-
14,079
(14,079)
-
Côte d’Ivoire
Toura (application)
1,338
-
-
1,338
Total exploration assets
3,277,381
412,116
(1,794,723)
1,894,774
Total intangible assets
3,277,381
15,511,111
(1,794,723)
16,993,769
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 99
At
1 January
2020
Additions
Disposals &
impairment
At 31
December
2020
Group
£
£
£
£
Exploration assets
Mali
Korali Sud (Diba)
1,336,143
8,436
-
1,344,579
Lakanfla
582,930
-
-
582,930
Tabakorole
582,908
31,758
-
614,666
Pitiangoma Est
569,777
-
-
569,777
Egypt
Wadi Jundi
-
16,723
-
16,723
Gabal Al-Shaluhl
-
8,362
-
8,362
Gabal Om Ourada
-
8,362
-
8,362
Wadi Dubur
-
4,181
-
4,181
Cameroon
Laboum
46,445
7,714
-
54,159
Bikoula
43,056
8,047
-
51,103
Ndjele
8,313
3,666
-
11,979
Ethiopia
Tigray-Afar
16,495
659
(17,154)
-
Daro
1,070
-
-
1,070
Zager
2,481
411
-
2,892
Morocco
Agdz
4,644
-
-
4,644
Takzim
616
-
-
616
Côte d’Ivoire
Prikro
2,936
-
(2,936)
-
Toura (application)
1,338
-
-
1,338
Liberia
Zolowo
3,798
-
(3,798)
-
3,202,950
98,319
(23,888)
3,277,381
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, fittings and equipment
4 years straight line
Computer equipment
2 years straight line
Plant and machinery
4 years straight line
Motor vehicles
2 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and
the carrying value of the asset, and is recognised in profit or loss.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 100
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.
Plant and
machinery
Fixtures,
fittings and
equipment
Computer
equipment
Motor
vehicles
Total
Group
£
£
£
£
£
Cost
At 1 January 2021
795
44,729
25,891
67,553
138,968
Additions
-
19,365
13,639
-
33,004
Disposals
-
(252)
(6,816)
-
(7,068)
At 31 December 2021
795
63,842
32,714
67,553
164,904
Amortisation and impairment
At 1 January 2021
608
44,621
21,466
67,553
134,248
Charge in the year
139
1,383
5,820
-
7,342
Disposals
-
(252)
(6,816)
-
(7,068)
At 31 December 2021
747
45,752
20,470
67,553
134,552
Carrying amount
At 31 December 2020
187
108
4,425
-
4,720
At 31 December 2021
48
18,090
12,244
-
30,382
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 101
Plant and
machinery
Fixtures,
fittings and
equipment
Computer
equipment
Motor
vehicles
Total
Group
£
£
£
£
£
Cost
At 1 January 2020
795
44,949
25,364
67,553
138,661
Additions
-
-
5,310
-
5,310
Disposals
-
(220)
(4,783)
-
(5,003)
At 31 December 2020
795
44,729
25,891
67,553
138,968
Amortisation and impairment
At 1 January 2020
469
44,691
22,758
67,553
135,471
Charge in the year
139
150
3,491
-
3,780
Disposals
-
(220)
(4,783)
-
(5,003)
At 31 December 2020
608
44,621
21,466
67,553
134,248
Carrying amount
At 31 December 2019
326
258
2,606
-
3,190
At 31 December 2020
187
108
4,425
-
4,720
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. This is a Level
2 valuation under IFRS 13. 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.
Company
2021
2020
£
£
At 1 January
4,608,930
4,608,930
Additions
-
-
Disposals
-
-
4,608,930
4,608,930
Altus Strategies plc has direct investments in the following subsidiary undertakings.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 102
Name of undertaking
Incorporated
% Holding
Principal activity
Altus Exploration Management Limited1
UK
100.00
Business support services
Altus Royalties Limited1
UK
100.00
Royalty holding company
Altus Royalties Holdings Limited1
UK
100.00
Holding company
LGN Holdings (BVI) Inc11
BVI
100.00
Holding company
Altus Strategies plc is the ultimate parent but not the immediate parent of the following subsidiary undertakings.
Name of undertaking
Incorporated
% Holding
Principal activity
Aeos Gold Limited1
UK
100.00
Gold exploration
Auramin Limited1
UK
99.00
Gold exploration
Aluvance Limited1
UK
97.26
Iron ore exploration
Akh Gold Holdings Limited1
UK
100.00
Holding company
Akh Gold Limited1
UK
100.00
Bauxite exploration
Altau Resources Limited1
UK
100.00
Copper exploration
Aterian Resources Limited1
UK
100.00
Mineral exploration
Oxford Mining Club Limited1
UK
50.00
Events
Altus Royalties Australia Limited1
UK
100.00
Royalty holding company
Altus Royalties Mauritius Limited1
UK
100.00
Royalty holding company
Akh Gold Limited (branch)13
Egypt
100.00
Gold exploration
Altau Resources Limited2
Ethiopia
100.00
Copper exploration
Aucam SA5
Cameroon
97.26
Iron ore exploration
Valnord SA5
Cameroon
99.00
Gold exploration
Mining & Exploration Services Limited6
Liberia
99.00
Gold exploration
Azru Resources SARL AU8
Morocco
100.00
Copper exploration
Allegra Gold Mali SARL12
Mali
100.00
Gold exploration
Avalon Gold Mali SARL12
Mali
100.00
Gold exploration
LGC Exploration Mali SARL12
Mali
100.00
Gold exploration
LGC Piti SARL12
Mali
100.00
Gold exploration
The following are dormant subsidiaries.
Name of undertaking
Incorporated
% Holding
Principal activity
Altaucam Resources Limited3
Seychelles
100.00
Dormant
Altau Holdings Limited3
Seychelles
100.00
Dormant
Avance African Group Limited3
Seychelles
97.26
Dormant
Aucam Resources Limited3
Seychelles
97.26
Dormant
Inland Exploration Limited3
Seychelles
100.00
Dormant
Westcoast Exploration Limited3
Seychelles
100.00
Dormant
Mansion Resources Limited3
Seychelles
99.00
Dormant
Altar Resources Limited3
Seychelles
99.00
Dormant
Eagle Resources Limited3
Seychelles
99.00
Dormant
Enigma Resources Limited3
Seychelles
99.00
Dormant
Atlas Minerals3
Seychelles
100.00
Dormant
Atlantic Minerals3
Seychelles
100.00
Dormant
Alboran Minerals3
Seychelles
100.00
Dormant
Addax Minerals3
Seychelles
100.00
Dormant
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 103
Akkari Minerals3
Seychelles
100.00
Dormant
Aures Minerals3
Seychelles
100.00
Dormant
Azilal Minerals3
Seychelles
100.00
Dormant
Altus Diamonds3
Seychelles
100.00
Dormant
Avanor SARL4
Côte d’Ivoire
97.26
Dormant
Avanex SARL4
Côte d’Ivoire
97.26
Dormant
Bauxex SA5
Cameroon
97.26
Dormant
Adrar Resources SARL AU7
Morocco
100.00
Dormant
Altus Mining (SL)9
Sierra Leone
100.00
Dormant
Apalex Sarl4
Côte d’Ivoire
100.00
Dormant
Aza Minerals Sarl7
Morocco
100.00
Dormant
Akassori10
Chad
100.00
Dormant
Legend Mali (BVI) II Inc11
BVI
100.00
Dormant
Legend Mali (BVI) III Inc11
BVI
100.00
Dormant
Legend Mali (BVI) IV Inc11
BVI
100.00
Dormant
Legend Mali (BVI) V Inc11
BVI
100.00
Dormant
Legend Mali (BVI) VI Inc11
BVI
100.00
Dormant
Akh Gold I Limited1
UK
100.00
Dormant
Akh Gold II Limited1
UK
100.00
Dormant
Akh Gold III Limited1
UK
100.00
Dormant
Akh Gold IV Limited1
UK
100.00
Dormant
Akh Gold V Limited1
UK
100.00
Dormant
Akh Gold VI Limited1
UK
100.00
Dormant
Legend Gold Limited1
UK
100.00
Dormant
Legend Mali (UK) II Limited1
UK
100.00
Dormant
Legend Mali (UK) III Limited1
UK
100.00
Dormant
The following entities are held as joint operations.
Name of undertaking
Incorporated
% Holding
Principal activity
Minera Tercero SpA14
Seychelles
50.00
Royalty holding company
Alpha 2 SPV Limited15
Seychelles
50.00
Royalty holding company
Alpha 3 SPV Limited15
Seychelles
80.01
Royalty holding company
Alcrest Royalties Australia (Pty) Ltd16
Seychelles
50.00
Royalty holding company
As at 1 April 2021, a controlling interest in Legend Mali (UK) I Limited and its subsidiary Legend Gold Mali SARL
passed to the Company’s joint venture partner, Marvel Gold Limited. There was no consideration for the transfer, but
Marvel Gold fulfilled various exploration and expenditure milestone requirements under the terms of the JV
agreement covering the two licences. At 31 December 2021, the Company held a 49% interest in Legend Mali (UK) I
Limited. The consolidated net assets derecognised on disposal of Legend Mali (UK) I Limited as a subsidiary were as
follows.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 104
Net assets
£
Intangible assets
1,204,164
Amounts due to related parties
(324,603)
Cash and cash equivalents
31,466
911,027
Fair value of 49% share of assets of associate
446,572
Loss on disposal of subsidiary
(464,455)
The fair value of the net assets was based on the value the intangible assets and other assets and liabilities as recorded
in accordance with the Company’s relevant policies. This constituted a Level 2 valuation under IFRS 13.
The registered office addresses applying to the tables in this note are as follows.
Registered office addresses
1. 14 Station Road, Didcot, Oxfordshire OX11 7LL, United Kingdom
2. Bole Sub-City, Kebele 08/09, House No. 811/A, P.O. Box 2633, Addis Ababa, Ethiopia
3. Suite 24, First Floor, Eden Plaza, Eden Island, Victoria, PO Box 438, Mahé, Seychelles
4. Cocody Les Deux Plateux, Rue des Jardins, Résidence Aziz, Porte B, 20 BP 725 Abidjan 20, Côte d’Ivoire
5. BP: 5405 Bastos, Dernier poteau, Yaoundé, Cameroon
6. PO Box 10-3218, 1000 Monrovia 10, Liberia
7. Appt 9, IMM 18, Rue Jbel Tazekka, Agdal, Rabat, 10090, Morocco
8. 46, Avenue Oqba, Appt No. 2, Agdal, Rabat, Morocco
9. 2, Berthan Macauley Street, Freetown, Sierra Leone
10. Quartier Diguel Nord, N’Djamena, Chad
11. MMG Trust (BVI) Corp, Pasea Estate, Road Town, Tortola, British Virgin Islands
12. Porte 608, Rue 136, Korofina Nord, Bamako, Mali
13. 2nd Floor, Dorchester House, 4 Mohamed Abd Wahab St, Zamalek, Cairo, Egypt
14. Av. Andrés Bello 2711, Piso 8, 7550611, Las Condes, Santiago, Chile
15. 24th Floor, Al Sila Tower, Abu Dhabi Global Market Square, Al Maryah Island, Abu Dhabi, United Arab Emirates
16. 35 The Crescent, Vaucluse, NSW 2030, Australia
Investments in associates
During the year, the Company acquired an investment in associate in relation to the purchase of an interest in the
Caserones mining royalty. In addition, there was a partial disposal of a Malian subsidiary with a loss of management
control which resulted in the derecognition of the subsidiary and the recognition of an investment in associate.
Investments in associates are accounted for using the equity method. The Company’s share of post-acquisition profit
or loss is shown in the Statement of Comprehensive Loss and distributions received from an associate reduce the
carrying amount of the investment.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 105
These Company’s investments in associates are as follows.
SLM California
Legend Gold
Mali
Total
2021
£
£
£
At 1 January
-
-
-
Acquisition of investment
24,976,478
446,572
25,423,050
Share of profit
984,727
-
984,727
Dividend received
(1,236,885)
-
(1,236,885)
Foreign exchange
195,705
-
195,705
At 31 December
24,920,025
446,572
25,366,597
SLM California
In August 2021, the Company acquired an interest in a net smelter return (“NSR”) royalty on the Caserones copper
mine in northern Chile. The royalty is payable to Sociedad Legal Minera California Una de la Sierra Peña Negra (“SLM
California”). In conjunction with EMX Royalty Corp. of Canada, the Company incorporated a 50:50 joint entity in Chile,
Minera Tercero SpA (“Tercero”), to acquire 43% of the issued shares of SLM California for US$68.2 million. SLM
California holds a 1.94% NSR royalty on the Caserones mine, giving the Company an effective royalty interest of
0.418%. The acquisition value for the Company was US$34.1 million structured as a 25% equity investment (US$8.5
million) and a 75% loan from the Group to Tercero (US$25.6 million).
The Company has determined that Tercero should be treated as joint operation due to the fact that it has been
designed by the joint owners to be the recipient and distributor of funds arising from the Caserones royalty. Therefore,
the Company consolidates its share of the assets, liabilities, equity and profit or loss of Tercero. The Company has
also determined that Tercero’s 43% ownership of SLM California and its right to appoint one director to serve on the
Board of SLM California does not give it control but does give it significant influence.
During the year, Tercero received dividends from SLM California in respect of the royalty on production at the
Caserones mine during Q2 2021 and Q3 2021 of 1,158 million Chilean pesos (US$1.4 million). A further dividend of
351 million pesos (US$0.4 million) on production in the same quarter was paid to Tercero by SLM California after the
period end. The dividends were calculated after provisions by SLM California for expenses and Chilean income tax.
The royalty is treated as an intangible asset within the individual financial statements of SLM California. An
amortisation charge is made against the royalty asset in respect of royalties paid, and is based on the production
data underlying the royalty payment as a proportion of the lifetime expected production from the mine.
Set out below is the unaudited summarised financial information for SLM California. SLM California’s financial
statements are not prepared under IFRS. The information below reflects the amounts presented in the financial
statements of SLM California adjusted for differences in accounting policies between the Company and SLM
California, which includes the recognition and subsequent amortisation of an intangible royalty asset.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 106
2021
SLM California
£
Summarised balance sheet at 31 December 2021
Non-current assets
112,924,511
Current assets
3,784,886
Current liabilities
(3,648,362)
Non-current liabilities
-
Net assets
113,061,035
Summarised statement of comprehensive income for
the period of ownership ending 31 December 2021
Royalty income
12,320,266
Profit before tax for the period
4,642,228
Legend Gold Mali
Legend Gold Mali SARL was a 100% owned subsidiary of the Company that held the Lakanfla and Tabakorole gold
exploration projects in western and southern Mali respectively, and which was the subject of a joint venture
agreement between the Company and Marvel Gold. Under terms of the agreement, Marvel Gold increased its
ownership of the company to 51% during 2021 following the completion of specified exploration activities on the
projects and the payment of certain project stage fees. Both parties acknowledged that management control of the
company had passed to Marvel Gold as of April 2021. Legend Gold Mali SARL was de-consolidated at that date and
subsequently equity accounted as an associate.
2021
Legend Gold Mali
£
Summarised balance sheet at 31 December 2021
Non-current assets
7,858,478
Current assets
1,044,605
Current liabilities
(8,899,984)
Non-current liabilities
(1,818)
Net assets
1,281
Summarised statement of comprehensive income for
the period of ownership ending 31 December 2021
Profit before tax for the period
-
Under Marvel Gold, all of the exploration expenditure made by Legend Gold Mali is capitalised as an exploration
asset.
Investments
The Group holds both financial assets at amortised cost and financial assets at fair value through profit and loss. See
note 28 for further information on the accounting policies applied to financial assets.
Investments carried at fair value through profit or loss comprise listed equity shares (IFRS 13 - Level 1). The fair value
of these equity shares is determined by reference to published price quotations in an active market.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 107
Group
Company
2021
2020
2021
2020
£
£
£
£
At 1 January
1,320,542
302,072
413,635
208,953
Additions
617,579
1,180,838
-
71,839
Disposals
-
-
-
-
Revaluation gains/ (losses)
(217,082)
(162,368)
(94,875)
132,842
1,721,039
1,320,542
318,760
413,634
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 - 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.
Group
Company
2021
2020
2021
2020
£
£
£
£
Trade receivables
-
-
-
-
VAT recoverable
68,179
30,526
25,523
13,833
Amounts due from group undertakings
-
-
52,247,263
10,303,101
Amounts due from related parties
32,832
33,366
-
-
Prepayments
90,541
63,089
70,076
58,125
Accrued income
-
5,919
-
-
Accrued other income from receipt of shares
45,475
617,579
45,475
-
R&D tax credit
218,532
100,288
-
-
Bid bonds on Egyptian licences
161,246
-
-
-
Other receivables
5,359
2,862
-
-
622,164
853,629
52,388,337
10,375,059
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.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 108
The Group has concluded agreements that include the transfer of a number of its subsidiaries which have
subsequently been designated as held-for-sale. An agreement made on 21 November 2021 provided for the transfer
to Eastinco of UK-incorporated Aterian Resources Limited, its Seychelles subsidiary, Atlantic Minerals Limited, its
Moroccan subsidiaries, Azru Resources SARL AU and Adrar Resources SARL AU and the Group’s portfolio of
exploration licences in Morocco including the Agdz licence. An agreement of February 2019 provided for the transfer
to Canyon of the Group’s Seychelles subsidiary, Aucam Resources Ltd, its Cameroon subsidiary, Aucam SA, and the
Group’s Birsok exploration licence in Cameroon.
2021
2020
£
£
Current assets
Intangible assets
117,967
85,967
Cash and cash equivalents
-
798
117,967
86,765
Current liabilities
Amounts due to related parties
(34,020)
(34,020)
Trade and other payables
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.
Group
Company
2021
2020
2021
2020
£
£
£
£
Current liabilities
Trade payables
499,156
291,843
17,542
38,266
Amounts due to group undertakings
-
-
2,355,349
111,533
Amounts due to related parties
69,192
59,034
69,192
-
Accruals and deferred income
376,954
772,232
160,185
178,605
Lease liabilities (IFRS 16)
40,945
20,065
-
-
Other payables
-
1,580
-
-
986,247
1,144,754
2,602,268
328,404
Non-current liabilities
Lease liabilities (IFRS 16)
64,671
45,848
-
-
1,050,918
1,190,602
2,602,268
328,404
Borrowings
During the year, the Company drew down the full value of a US$29.0 million acquisition loan facility provided by its
shareholder LMH Explorers S.à r.l. Funds were used primarily to complete the acquisition of the Caserones royalty.
Before the end of the year, US$5.0 million of the loan principal was repaid. Under its original terms, the facility bore
annualised interest at a rate of 7% plus three-month USD LIBOR for the first three months and 9% plus three-month
USD LIBOR thereafter, and was repayable by 17 February 2022. After the year end, the facility was extended to 30
June 2022 with interest at 10% plus three-month USD LIBOR. The outstanding liability on the loan was £18,348,516
at 31 December 2021. The facility is senior secured against the shares of Altus Royalties Limited, the material asset of
which is the Company’s 50% shareholding in the Chilean SPV, Tercero.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 109
2021
£
Loan from related party
21,068,997
Loan repayment
(3,761,762)
Interest charges
613,905
Foreign exchange revaluation
427,376
18,348,516
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.
Group
Company
2021
2020
2021
2020
£
£
£
£
Provisions
15,000
15,000
-
-
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.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 110
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 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.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 111
The Group’s financial assets are recorded as follows.
2021
2021
2020
2020
Assets at
amortised cost
Assets at
FVPL
Assets at
amortised cost
Assets at
FVPL
Group
£
£
£
£
Investments
-
1,721,039
-
1,320,542
Cash and cash equivalents
6,355,011
-
5,937,486
-
Trade and other receivables
531,620
-
790,540
-
6,886,631
1,721,039
6,728,026
1,320,542
The Company’s financial assets are recorded as follows.
2021
2021
2020
2020
Assets at amortised
cost
Assets at
FVPL
Assets at
amortised cost
Assets at
FVPL
Company
£
£
£
£
Investments
-
318,760
-
413,634
Investments in subsidiaries
4,608,930
-
4,608,930
-
Cash and cash equivalents
2,273,965
-
460,131
-
Trade and other receivables
52,318,261
-
10,316,934
-
59,201,156
318,760
15,385,995
413,634
The Group and Company have the following financial liabilities.
2021
2020
Liabilities at amortised
cost
Liabilities at
amortised cost
Group
£
£
Trade and other payables
1,050,918
1,190,602
Borrowings
18,348,516
-
19,399,434
1,190,602
Company
£
£
Trade and other payables
2,602,268
328,404
Borrowings
18,348,516
-
20,950,783
328,404
Financial risk management
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. The Group has substantially renewed its risk
management processes during the year to take account of new risks arising from the acquisition of cash-paying
royalties which affect several areas of risk as outlined below.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 112
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, its royalty income is in US dollars and Australian dollars
and its major purchases are transacted in pounds sterling, US dollars, West African francs, Egyptian pounds, Ethiopian
birr and Moroccan dirham. 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 2021, the Group had an exchange loss of £271,183 (2020: £328,790
loss) which was not considered material to its operations.
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 holding of cash-paying mining royalty interests expose it to
the risk that mine operators will not fulfil their contractual obligations to make royalty payments to the Group. The
Group will mitigate this risk by continually engaging with mine operators, visiting producing mines where possible
and by obtaining regular operational and financial information with respect to the mines themselves and the
operating companies.
With respect to its exploration activities, the Group undertakes due diligence on new suppliers and seeks to use
respected suppliers within the industry. With respect to the Group’s cash balances, risk is mitigated by depositing
surplus cash with financial institutions with acceptable credit ratings in accordance with the Group’s treasury
management policies. 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.
2021
2020
Group
£
£
Trade receivables
-
-
Other receivables
5,356
2,862
R&D tax credit
218,532
100,288
VAT recoverable
68,179
30,526
Amounts due from related parties
32,832
33,366
Prepayments
90,541
63,089
Accrued income
-
5,919
Accrued other income from receipt of shares
45,475
617,579
Cash and cash equivalents
6,355,011
5,937,4866
Deposits
161,246
-
Held-for-sale assets
117,967
86,765
7,095,139
6,877,880
Commodity price risk
The Group’s principal activity is the acquisition and generation of mining royalty interests. During the year, it acquired
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 113
its first cash paying royalties. The Group is therefore exposed to commodity price risk in the valuation of the royalties
it receives, and in the effect that a change in commodity prices may impact the viability of continued operations at a
mine on which it holds a royalty. In addition, changes in commodity prices may impact the economic assessment of
the exploration projects in which it holds an interest, which may restrict the availability of future finance for the
project. The Group therefore maintains a diversified portfolio of both royalties and exploration licences, covering a
range of nine base and precious metals including gold, silver, copper and nickel, in order to mitigate the risk of
changes in the prices of individual metals.
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. Details of the Company’s loan liability are included in note 1 and in the Financial
Review on pages 29-30.
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.
Up to 3
months
3 to 12
months
Over 12
months
Total
2021
£
£
£
£
Trade payables
499,156
-
-
499,156
Borrowings
18,348,516
-
-
18,348,516
Related parties
69,192
-
-
69,192
Lease payables
10,503
30,443
64,671
105,617
Accruals and deferred income
376,953
-
-
376,953
Provisions
-
-
15,000
15,000
Held-for-sale liabilities
34,020
-
-
34,020
19,338,340
30,443
79,671
19,448,454
Up to 3
months
3 to 12
months
Over 12
months
Total
2020
£
£
£
£
Trade payables
291,843
-
-
291,843
Related parties
59,034
-
-
59,034
Lease payables
4,841
15,224
45,848
65,913
Other payables
1,580
-
-
1,580
Accruals and deferred income
772,232
-
-
772,232
Provisions
-
-
15,000
15,000
Held-for-sale liabilities
34,020
-
-
34,020
1,163,550
15,224
60,848
1,239,622
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’s debt is restricted to the loan facility
provided by its significant shareholder, La Mancha, which attracts a fixed rate of interest and is due for repayment by
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 114
30 June 2022. Altus has received a number of proposals from recognised lenders to refinance the existing facility. The
Group seeks to manage interest rate risk by reducing the level of debt in the short term, by restructuring debt with
fixed rates of interest over a longer term and by minimising the amount of debt it takes on to finance royalty
acquisitions.
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 2021, unpaid employer’s pension liabilities stood at £6,344 (2020:
£16,732) of which £3,209 was for Executive Directors (2020: £3,959).
2021
2020
Defined contribution scheme
£
£
Charge for the year
78,161
45,924
Share based payments
On 20 August 2021, the Company granted to employees and consultants options to acquire 575,000 Ordinary Shares.
There were no performance conditions attached to these 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. This is a Level 1 valuation under IFRS 13. The vesting
terms of the options granted in August 2021 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 the original grant
of options under the scheme in August 2020 plus a 10% premium. Options are fair valued at grant date using the
Black-Scholes model, and expensed over the vesting period.
Movements in the number of options outstanding and their related weighted average exercise prices were as follows.
2021
2020
Ordinary
Shares
issuable
under
options
Weighted
average exercise
price (p)
Ordinary
Shares
issuable
under
options
Weighted
average exercise
price (p)
At 1 January
5,100,000
73.15
-
-
Granted
575,000
73.15
5,100,000
73.15
At 31 December
5,675,000
73.15
5,100,000
73.15
Of the options to purchase 5,675,000 Ordinary Shares which were outstanding at 31 December 2021, 3,200,000 were
exercisable. The weighted average exercise price of the exercisable options was 73.15p. Of the outstanding options,
5,100,000 will expire in 2025 and 575,000 will expire in 2026.
The fair value of options granted during the year, as calculated using the Black Scholes model, was 26.51p (2020:
31.50p). The significant inputs into the model were as follows.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 115
2021
2020
Weighted average share price at grant date
62.00p
66.50p
Exercise price
73.15p
73.15p
Weighted average expected volatility
60%
60%
Weighted average risk free rate
0.00%
0.00%
Dividend yield
0.00%
0.00%
Weighted average expected life
5 years
5 years
During the year warrants to purchase 63,065 Ordinary Shares were issued (2020: nil), 33,266 warrants were exercised
(2020: nil) and 149,106 warrants expired (2020: nil). Warrants issued during the year have an exercise price of £1.125
and expire after two years. Outstanding warrants carried through the year 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 a C$1.50 exercise price. 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.
2021
2020
Ordinary Shares
issuable under
warrants
Weighted
average exercise
price (£)
Ordinary Shares
issuable under
warrants
Weighted
average exercise
price (£)
Outstanding as at 1 January
5,660,695
0.864
28,303,477
0.173
Consolidation 5:1
-
-
(22,642,782)
-
Granted
63,065
1.125
-
-
Expired
(149,106)
0.653
-
-
Exercised
(33,266)
0.648
-
-
Outstanding as at 31 December
5,541,388
0.880
5,660,695
0.864
Exercisable at 31 December
5,541,388
0.880
5,660,695
0.864
Both the warrants granted during the year and the warrants carried throughout the year expire in 2023.
The fair value of warrants granted during the year, as calculated using the Black Scholes model, was 15.80p per
warrant. The significant inputs into the model were as follows.
2021
Weighted average share price at grant date
75.00p
Weighted average exercise price
112.50p
Weighted average expected volatility
60%
Weighted average risk free rate
0.00%
Dividend yield
0.00%
Weighted average expected life
2 years
The total share-based payment expense recognised in the Statement of Comprehensive Income was £982,041 (2020:
£663,945) of which £978,178 (2019: £603,943) was in respect of director and employee share options and £3,893 was
in respect of the issue of warrants.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 116
The balance of the share based payment reserve was as follows.
2021
2020
£
£
Balance at 1 January
631,399
27,456
Options granted during the year
978,178
603,943
Warrants granted during the year
3,863
-
Balance at 31 December
1,613,440
631,399
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.
Number of shares*
Ordinary
share capital
Share
premium
Company
£
£
At 1 January 2020
210,228,461
2,102,284
7,378,369
Issue of new shares (pre-consolidation)
140,229,389
1,402,294
5,843,746
Consolidation 5:1
(280,366,280)
-
-
Issue of new shares (post consolidation)
31
2
-
At 31 December 2020
70,091,601
3,504,580
13,222,115
Issue of new shares
47,196,811
2,359,841
24,313,586
Exercise of warrants
33,266
1,663
19,907
At 31 December 2021
117,321,678
5,866,084
37,555,608
* All shares have been issued, authorised and fully paid
Leases
The group holds two leases that it accounts for under IFRS 16, which were signed in January 2019 and September
2021. 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 did not have borrowings to use as a benchmark. It
is in line with the interest rates charged on its acquisition loan facility obtained during the year. 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.
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 117
2021
2020
£
£
For the year
Cash outflow
28,850
24,500
Capital paid
23,310
18,198
Interest paid
5,540
6,302
Depreciation charge
24,200
20,064
Interest charge
5,540
6,302
At 31 December 2021
Right-of-use asset
At 1 January
60,196
80,262
Additions
67,675
-
Depreciation
(24,200)
(20,064)
At 31 December
103,671
60,198
Lease liability
Less than 12 months
40,945
20,065
Greater than 12 months
64,671
45,848
Total lease liability
105,616
65,913
Lease liabilities are included in trade and other payables as shown in note 25.
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.
2021
2020
Group
£
£
Within one year
11,483
4,587
Between 2 and 5 years
360
-
11,843
4,587
Related party transactions
For detail on Directors’ remuneration in the year see the Directors’ Remuneration Report on pages 63-67 and in note
12. Details of Directors’ participation in the fundraises of March and December 2021 are also included in the Directors’
Remuneration Report.
Seabord Services Corp. 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 £12,163 (2020: £53,386). The
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 118
amount payable to Seabord at the end of the year was £877 (2020: £nil).
EMX Royalty Corp. was the Company’s strategic partner in the acquisition of the Caserones NSR royalty. Michael Winn
is the chairman of EMX. During the year, EMX recharged costs relating to the acquisition totalling £69,192 which were
outstanding at the end of the year (2020: £nil).
Canyon was a former JV partner of the Group in respect of the Birsok project in Cameroon. One non-executive director
of the Group, David Netherway, is also a director of Canyon. The value of services provided to Canyon during the year
was £nil (2020: £nil). The amount receivable from Canyon at the end of the year was £43,501 (2020: £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 £871 (2020: £509). The
amount payable to Aegis at the end of the year was £nil (2020: £53,386 receivable), which included a short term cash
loan of £59,609 which was repaid on 12 February 2021.
During the year, La Mancha provided an acquisition loan facility to the Group with a value of US$29 million. The
amount drawn down, and interest accrued, under the facility will be repayable on 30 June 2022. The facility bore
annualised interest at a rate of the three-month USD London Inter-bank Offered Rate (“LIBOR”) plus 7% for the first
three months, and USD LIBOR plus 9% until the original repayment date of 17 February 2022. It bears interest at USD
LIBOR plus 10% for the period to 30 June 2022. The facility is senior secured against the shares of Altus Royalties
Limited, the only material asset of which is the shareholding in Minera Tercero Tercero SpA. The facility incorporates
an automatic prepayment provision which applies to future cash proceeds from equity capital raised by Altus. Interest
is payable on a quarterly basis. No break fees, early repayment fees or other fees are payable by Altus to La Mancha,
or to any other party, in connection with the facility. At 31 December 2021, La Mancha held a 35.08% interest in the
Company and the CEO of La Mancha, Karim Nasr, is a non-executive director of the Company. The balance of the
loan was £18,348,516 at 31 December 2021. After the end of the financial year, on 7 March 2022, Gérard de Hert
Managing Director of Technical services at La Mancha was appointed as a director of the Company.
Significant non-cash transactions
In August 2021 the Company granted 575,000 options to purchase new Ordinary Shares in the Company at an
exercise price of £0.7315 per share to employees and consultants of the Company.
During the year, warrants were issued for the purchase of 63,065 new Ordinary Shares of the Company at an exercise
price of £1.125 per share to external third parties.
As at 1 April 2021, the Company recognised the loss of ownership control of Legend Gold Mali SARL, which holds the
Lakanfla and Tabakorole projects, resulting from the completion of milestones per the Joint Venture Agreement with
Marvel Gold, and from that date recognised a 49% share in Legend Gold Mali SARL as an associate.
Capital commitments
At 31 December 2021, the Company had capital commitments of £167,596 (2020: no material commitments).
Subsequent events
Project updates
The Company announced further significant gold intersections from RC drilling at the Diba & Lakanfla gold project
in western Mali, following the completion of a 11,832m DD, RC and AC drilling programme. RC results include 1.23
g/t Au over 127m from 21m and 0.90 g/t Au over 66m from 41m (not true widths) at the Lakanfla Central Prospect
ALTUS STRATEGIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page | 119
and 8.74 g/t Au over 7m from 119m and 4.76 g/t Au over 12m from 102m (not true widths) at the Diba NW Prospect.
The results extended the mineralised strike of Lakanfla Central by approximately 200m to approximately 750m, with
mineralisation remaining open to the northeast and at depth.
On 12 April 2022, the Ministry of Energy Transition and Sustainable Development of Morocco issued a 10-year mining
licence in respect of the Company’s Agdz copper and silver project. The project is part of a portfolio that will be
vended to Eastinco Mining and Exploration Plc, subject to Eastinco completing its proposed admission to the London
Stock Exchange Standard List.
On 19 April 2022, the Ministry of Mines, Energy and Water in Mali issued a small-scale gold mining licence in respect
of the Company’s 100% owned Korali Sud licence, containing the Diba gold project located in western Mali. The
licence and is valid for an initial four year period, renewable for successive four year periods, and there are no statutory
minimum expenditure commitments under the licence.
Investments
On 31 January 2022, the Company completed the second and final closing of the acquisition of a portfolio of 24
royalties and royalty interests from Newcrest Mining Ltd. The second close covered royalties on nine development
and exploration stage assets in Australia for consideration from Altus of US$4.0m.
Joint venture
On 19 January 2022, the Company signed amended Joint Venture and Earn-In Agreement (“JVA”) with Marvel Gold,
which replaces the agreement signed on 17 June 2020. The new JVA comprises the Tabakorole gold project and two
contiguous gold licences for a total of 292km2. Marvel holds a 70% equity interest in the licences and retains the right
to increase their holding to 80% by sole funding a Definitive Feasibility Study on the licences. Altus retains a 30%
equity interest and a 2.5% NSR royalty on the licences.
Sale of project
On 14 March 2022, the Company executed a Sale and Purchase Agreement (“SPA”) with Firering Strategic Minerals
Plc (“Firering”) for the sale of the Company’s Toura nickel-cobalt licence application located in western Côte d'Ivoire.
In consideration for the project, Firering will grant the Company a Gross Revenue Royalty of up to 1.0% on nickel and
cobalt sales from the project and pay the Company €15,000 in consideration.
Extension of loan facility
On 12 February 2022, the repayment date on the loan facility provided to the Company by La Mancha was extended
to 30 June 2022. The annualised interest rate of the facility was increased from 9% plus the USD London Inter-bank
Offered Rate (“LIBOR”) to 10% plus USD plus LIBOR. All other provisions of the facility remained unchanged.