TIDMALS
RNS Number : 1431I
Altus Strategies PLC
22 November 2018
Altus Strategies Plc / Index: AIM / EPIC: ALS / Sector:
Mining
NOT FOR DISTRIBTUION TO US NEWSWIRE SERVICES NOR FOR
DISSEMINATION IN THE UNITED STATES OF AMERICA
22 November 2018
Altus Strategies Plc
("Altus" or the "Company")
Quarterly Report & Financial Statements
Altus Strategies Plc (AIM: ALS & TSX-V: ALTS), the Africa
focused exploration project generator, announces that it has today
published its unaudited financial results for the three month and
nine month periods ending 30 September 2018 and the Management
Discussion & Analysis for the three month period ending 30
September 2018. These documents have been posted on the Company's
website www.altus-strategies.com and are also available on SEDAR at
www.sedar.com.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
For further information you are invited to visit the Company's
website www.altus-strategies.com or contact:
Altus Strategies Plc Tel: +44 (0) 1235 511 767
Steven Poulton, Chief Executive E: info@altus-strategies.com
SP Angel (Nominated Adviser) Tel: +44 (0) 20 3470 0470
Richard Morrison / Soltan Tagiev
SP Angel (Broker) Tel: +44 (0) 20 3470 0471
Richard Parlons / Jonathan Williams
Blytheweigh (Financial PR) Tel: +44 (0) 20 7138 3204
Tim Blythe / Camilla Horsfall /
James Husband
About Altus Strategies Plc
Altus is a London (AIM: ALS) and Toronto (TSX-V: ALTS) listed,
diversified and Africa focused mineral exploration project
generator. Through our subsidiaries we discover new projects and
attract third party capital to fund their growth, development and
ultimately exit optionality. This strategy enables Altus to remain
focused on the acquisition of new opportunities to be fed into the
project generation cycle and aims to minimise shareholder dilution.
Our business model is designed to create a growing portfolio of
well managed and high growth potential projects and royalties,
diversified by commodity and by country. Altus currently has
eighteen projects in six commodities across six countries. We aim
to position our shareholders at the vanguard of value creation, but
with significantly reduced risks traditionally associated with
investments in the mineral exploration sector.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this news release contain forward-looking
information. These statements address future events and conditions
and, as such, involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the statements.
Such factors include without limitation the completion of planned
expenditures, the ability to complete exploration programs on
schedule and the success of exploration programs. Readers are
cautioned not to place undue reliance on the forward-looking
information, which speak only as of the date of this news
release.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Company Registration No. 10746796 (England and Wales)
ALTUS STRATEGIES PLC
MANAGEMENT'S DISCUSSION AND ANALYSIS
THREE MONTH AND NINE MONTH PERIODSED 30 SEPTEMBER 2018
As approved for issue on 21 November 2018
ALTUS STRATEGIES PLC
MANAGEMENT'S DICSUSSION AND ANALYSIS
FOR THE THREE MONTH AND NINE MONTH PERIODSED 30 SEPTEMBER
2018
GENERAL
This discussion and analysis ("MD&A") of financial position
and results of operations is prepared as at 21 November 2018 and
should be read in conjunction with the interim unaudited condensed
consolidated financial statements for the three months and nine
months ended 30 September 2018 and the annual audited consolidated
financial statements of Altus Strategies plc (the "Company" or
"Altus" and together with its subsidiaries "the Group") for the
year ended 31 December 2017 and the related notes thereto. Those
annual consolidated financial statements were the first financial
statements that the Company has prepared in accordance with
International Financial Reporting Standards ("IFRS"). The financial
statements have been prepared using accounting policies in
compliance with IFRS as adopted for use in the European Union and
issued by the IASB and with those parts of the Companies Act 2006
applicable to companies reporting IFRS (except as otherwise
stated). Except where otherwise noted, all figures included herein
are quoted in pounds sterling ("GBP" or "GBP"). Additional
information on the Company's activities can be found on
https://beta.companieshouse.gov.uk/, www.sedar.com and on the
Company's website at www.altus-strategies.com.
DESCRIPTION OF BUSINESS
Altus is a public limited company incorporated and domiciled in
England and Wales. The Company's shares are listed on the AIM
Market of the London Stock Exchange ("AIM") under the symbol "ALS"
as of 10 August 2017 and on the TSX Venture Exchange under the
symbol "ALTS" as of 06 June 2018.
The Company's principal activity, undertaken through its
subsidiaries, is the exploration for economic mineral deposits in
Africa. Altus operates a 'Project Generator' business model whereby
having discovered a potentially economic project the Company seeks
third party capital to either fund its further exploration and
development, or to acquire the asset in full in return for
milestone payments and a project royalty being paid to Altus. This
strategy enables Altus to remain focused on the acquisition of new
opportunities to be fed into the project generation cycle and aims
to minimise equity dilution at the parent company level.
The Company's business model is designed to create a growing
portfolio of well managed and high growth potential projects,
diversified by commodity and by country. Altus currently has
eighteen projects in six commodities across six African countries,
covering more than 4,000km(2) . Altus aims to position its
shareholders at the vanguard of value creation, but with a
significant reduction in the risks traditionally associated with
investments in the mineral exploration sector.
FORWARD LOOKING INFORMATION
This MD&A may contain "forward-looking statements" that
reflect the Company's current expectations and projections about
its future results. When used in this MD&A, 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's
actual 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: 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.
The operating plan is also dependent on being able to raise new
equity funds as required to ensure there are sufficient capital
resources to acquire and explore new properties. Other factors
which affect Altus' operating plan are gaining access to
exploration properties by concluding agreements with local
communities, and commodity prices. If any of these factors are
affected negatively, such as joint venture partners being unable to
raise sufficient capital to complete option agreements or if the
Company is unable to raise sufficient capital of its own, there
will be a significant impact on the Company's operating plan and on
any forward-looking statements contained herein.
Any references made in this report to historical information,
including historical geologic and technical information cannot be
verified. A Qualified Person has not verified the sampling,
analytical, and test data underlying any such historical
information. The Company has obtained historical information from
sources that it believes to be reliable and assumes it is accurate
and complete in all material aspects. While the Company has
carefully reviewed the available historical information, it cannot
guarantee its accuracy and completeness. The forward looking
information and statements included in this announcement are
expressly qualified by this cautionary statement and are based on
the beliefs, estimates and opinions of the Company on the date of
this announcement. Except as required by securities laws the
Company does not undertake any obligation to publicly update or
revise any forward looking statements in the event that
management's beliefs, estimates or opinions, or other factors,
should change.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
MD&A 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 MD&A,
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.
HIGHLIGHTS
Highlights for the three months ended 30 September 2018 and to
the date of this report are as follows:
Corporate highlights:
-- Letter of Intent signed with Raptor Resources Ltd in respect
of a potential listing on the Australian Stock Exchange ("ASX") of
the Company's 100% owned Morocco focused exploration subsidiary
(Aterian Resources Ltd)
-- Preliminary discussions are underway with potential partners
in respect of joint ventures and other transactions involving the
Company's projects
Operational highlights:
-- New prospects defined at Daro Copper Gold project in northern Ethiopia
-- Bauxite Joint Venture ("JV") partner ASX listed Canyon
Resources Ltd ("Canyon") granted Minim Martap project in central
Cameroon
-- Strike length of Bikoula colluvial iron ore project extended in southern Cameroon
-- Further artisanal gold workings discovered at Laboum gold project in Northern Cameroon
-- Over 14km of artisanal gold workings mapped at Zolowo gold project in western Liberia
-- Copper mineralisation mapped at the Ammas project in central Morocco
-- Reconnaissance sampling completed at Manankoto gold project in western Mali
-- Initial exploration completed at the Prikro gold project in eastern Côte D'Ivoire
Financial highlights:
-- Cash on hand and marketable securities of GBP2,088,055
(C$3,499,622) at 30 September 2018 (31 December 2017:
GBP1,124,880)
-- Exploration expenditure incurred of GBP527,447 for nine
months ending 30 September 2018 (nine months ended 30 September
2017: GBP436,727)
Post period:
-- Letter of Intent signed with Canyon to vend the Company's
bauxite JV into Canyon for up to an additional 30 million Canyon
shares and a US$1.5/t royalty on the Birsok project
-- Purchase of Ordinary Shares ("Shares") undertaken by certain
directors of the Company totalling 1,520,431 Shares representing
0.85% of the issued share capital. Total director shareholding in
the Company of 63,017,998 Shares, representing 35.45% of the issued
share capital
-- Drill targets defined at Lakanfla gold project in western Mali
OPERATIONS REPORT
Altus is a project generator which is focused on Africa. The
Company's business model is to make mineral discoveries, prior to
undertaking joint ventures with third parties who can either
finance the next stages of exploration in exchange for an equity
participation in the project, or acquire the project in return for
milestone payments and a project royalty.
Due to its large size, many parts of Africa remain
under-explored or not explored at all. Altus believes that
significant economic deposits can still to be discovered at or
close to surface. Importantly this means that in Africa the speed
of discovery can potentially be faster and the cost of discovery
can potentially be lower for shareholders, when compared to more
mature mining jurisdictions.
At the time of writing, Altus has a diversified portfolio of
eighteen precious metal (gold and silver) and base metal (copper,
zinc, bauxite and iron ore) exploration projects across six African
countries (Morocco, Ethiopia, Cameroon, Liberia, Côte d'Ivoire and
Mali). The Company has two active joint ventures, with both its
partners being listed on the Australian Stock Exchange. The
Company's current partners are Resolute Mining Ltd. (ASX:RSG) on
the Company's Pitiangoma Est gold project in southern Mali, and
Canyon Resources Ltd. (ASX: CAY) on the Company's Birsok &
Mandoum bauxite project in central Cameroon.
During the quarter ending 30 September 2018, the Company's
technical team has undertaken a series of exploration programmes
across its projects, as well as examining new potential
opportunities to be fed into the project pipeline.
The following is a review of the Company's activities by
jurisdiction and project during the period:
1.0 Mali Operations
Altus holds six projects in the Republic of Mali. The projects
are held through the Company's 100% owned subsidiary, LGN Holdings
(BVI) Inc., which was acquired in January 2018 through a plan of
arrangement with Legend Gold Corp., which was previously listed on
the Toronto Venture Exchange ("TSXV").
1.1 Korali Sud (Diba) Gold Project (83.1 km(2) ), Western
Mali
The Korali Sud licence is located in the Kayes region,
approximately 450 km northwest of the capital city, Bamako, and 13
km southwest of the Sadiola gold mine, operated by AngloGold
Ashanti, IAMGOLD and the Malian government. Geologically, both
Korali Sud and the Sadiola mine lie on the Senegal-Malian shear
corridor within the world renowned 'Kenieba window'. No material
exploration was completed on the Diba project during the period,
while the Company compiled the historic data on the project for
review by potential joint venture partners. The next phase of work
at Diba is expected to include soil sampling, trenching and
drilling and ultimately an updated independent resource statement
in accordance with NI 43-101.
1.2 Lakanfla Gold Project (24 km(2) ), Western Mali
The Lakanfla project is located 5 km east of the Diba project.
It is considered geologically analogous to the karst-type FE3 and
FE4 open pits (part of the Sadiola gold mine) as well as the Yatela
deposit mined between 2001-2015 located approximately 6.5 km and 35
km northwest respectively. The primary target is a substantial
gravity low anomaly located along the margin of the Kantela
granodiorite intrusion. The target is considered to be a karst-type
dissolution system with supergene gold enrichment.
No material exploration was completed on the Lakanfla project
during the period, while the Company compiled the historic data on
the project for review by potential joint venture partners. The
next phase of work at Lakanfla is expected to include drill testing
of the karst model. Six priority targets have been established by
Altus for follow up exploration. A new Lakanfla exploration licence
with an initial three-year term was received during the period.
1.3 Djelimangara Gold Project (55 km(2) ), Western Mali
Djelimangara is located approximately 3 km south east of the
Diba project. Four prospects have been discovered at Djelimangara
to date: Sourounkoto, Kamana, Woyanda and Manankoto. These are each
characterised by gold in soil anomalies of up to 2.5 km in length,
coincident with hard rock and / or alluvial artisanal gold workings
in fine metasedimentary rocks.
Results from a termite mound sample programme undertaken in the
previous quarter were interpreted during the period. The next phase
of work at the Djelimangara project is expected to include infill
termite mound sampling, channel sampling of artisanal workings,
trenching and infill auger sampling. The programme will aim to
generate a number of priority drill targets.
1.4 Sebessounkoto Sud Gold Project (28 km(2) ), Western Mali
The Sebessounkoto Sud project is located approximately 15 km
southeast of the Korali Sud licence (Diba project) and hosts a 2.7
km long gold in soil anomaly, as well as a number of active and
historic artisanal workings which are up to 150 m long and 40 m
deep.
During the period the Company interpreted the results from
earlier prospecting (rock chipping) and mapping programmes at the
Soa prospect, where significant artisanal working activity has been
documented.
The next phase of work at Sebessounkoto Sud is expected to
include trenching and auguring, in addition to further surface
mapping and sampling along the priority geophysical target. A new
Sebessounkoto Sud licence with an initial three-year term was
received during the period.
1.5 Tabakorole Gold Project (100 km(2) ), Southern Mali
The Tabakorole project is located in southern Mali,
approximately 280 km south of Bamako. The project sits on the
Massagui Belt which hosts the Morila gold mine operated by London
and NASDAQ listed Randgold Resources Ltd. Project exploration to
date has identified a 2.7 km long shear zone which is up to 200 m
wide.
No material activity was completed in the period. The next phase
of work at Tabakorole is expected to include scoping studies and
resource definition drilling. The Tabakorole licence was renewed
for a further two years after the period.
1.6 Pitiangoma Est Gold Project (106 km(2) ), Southern Mali
The Pitiangoma Est licence is located in southern Mali,
approximately 300 km southeast of Bamako. Geologically, it is
situated on the Syama shear zone and strategically located 15 km
and 40 km south of the Tabakoroni deposit and Syama gold mine
respectively, both of which are owned by ASX-listed Resolute Mining
Ltd ("Resolute"). The project is subject to a joint venture with
Resolute, whereby Resolute can earn up to a 70 % interest in
Pitiangoma Est by funding US$3M in exploration and completing a
feasibility study.
No material activity was completed in the period, and the next
phase of work at Pitiangoma Est is expected to include exploration
and resource definition drilling. The Pitiangoma licence was
renewed for a further two years after the period.
2.0 Cameroon Operations
Altus holds three projects in the Republic of Cameroon including
the Laboum gold project, held through the Company's 99 % owned
subsidiary Auramin Ltd and the Birsok & Mandoum bauxite and
Bikoula & Ndjele iron ore projects that are held though the
Company's 97.3 % owned subsidiary, Aluvance Ltd.
2.1 Laboum Gold Project (189 km(2) ), Northern Cameroon
The Laboum licence is located in the northeast of Cameroon,
approximately 110 km southeast of the provincial capital of Garoua,
which is served by a regional airport, and 600 km northeast of the
capital city, Yaoundé. The project area was selected due to the
presence of a 26 km long northeast-southwest striking regional
shear zone, which is mapped as being 5 km wide in places and is
coincident with gold anomalies as defined by the Bureau de
Recherches Géologiques et Minières ("BRGM") in the 1990s.
During the period, the Company conducted an exploration
programme focusing on underexplored parts of the Kalardje, Tapare
and Rey prospects. The programme involved mapping and sampling of
lithologies and quartz veins, some of which contained finely
disseminated sulphides and visible gold. In addition, a number of
artisanal workings were discovered including a selection of active
sites where gold-in-pan was observed. The collected rock-chips have
been submitted for assay and the results are currently pending.
The next phase of work at Laboum is expected to include a
systematic trenching programme in order to define priority drill
targets across the extensive gold in soil and ground magnetic
anomalies defined to date.
2.2 Birsok (198 km(2) ) & Mandoum (174 km(2) ) Bauxite
Project, Central Cameroon
The Birsok and Mandoum licences are located in the centre of
Cameroon, approximately 370 km northeast of Yaoundé and less than
10 km from an operating rail line between Ngaoundere and the
Atlantic port at Douala. In 2013, the Company entered into a joint
venture with ASX-listed Canyon Resources Ltd (ASX:CAY), allowing
Canyon to earn up to a 75 % interest in the Birsok and Mandoum
project by funding A$6M in exploration expenditure over five years
in two stages. As part of the agreement, Altus received and
continues to hold 8,000,000 shares in Canyon, currently trading at
price of A$0.22 equating to GBP1,760,000 (as of 21 November
2018).
During the period Canyon announced that it has been granted
three exploration licences in Cameroon, which include the Minim
Martap bauxite project (the "Minim Martap project") located
adjacent to Birsok. Also during the period Canyon announced an
independent mineral resource estimate of 550MT at an average grade
of 45.5% total Al(2) O(3) and 2.06% total SiO(2) , comprising an
indicated resource of 88MT averaging 41.8% Al(2) O(3) and 1.3%
SiO(2) and an inferred resource of 466MT averaging 46.2% Al(2) O(3)
and 2.2% SiO(2) . The resource estimate was completed by SRK
Consulting (Australia) in accordance with the JORC Code (2012).
JORC is the Australasian code for reporting of exploration results,
mineral resources and ore reserves. Canyon noted that the resource
estimate was calculated on approximately 40% of the known bauxite
plateaux, indicating that potential may exist for the resource to
be expanded in due course.
After the period the Company announced it had signed a Letter of
Intent ("LOI") with Canyon, to terminate its existing bauxite Joint
Venture Agreement with Canyon and to transfer to Canyon a 100%
interest in the Company's Birsok and Mandoum licences (the "Birsok
project"). Under the terms of the LOI Altus will receive up to 30M
new shares in Canyon and a royalty of US$1.5/t on ore mined and
sold from the Birsok project. The Birsok project is located
contiguous with the Minim Martap project that is owned by
Canyon.
The terms of the LOI are as follows:
Part A: In lieu of the termination of the JVA, Canyon will issue
to Altus:
-- 15,000,000 ordinary free trading Canyon shares (the "Initial Shares")
-- 10,000,000 ordinary escrowed Canyon shares, to be issued 12
months following the Initial Shares and subject to a 12 month
voluntary escrow
Part B: In lieu of the transfer of the Birsok project:
-- 5,000,000 ordinary escrowed Canyon shares, to be issued upon
the execution of a mining convention on the Minim Martap project
and subject to a 12 month voluntary escrow
-- a US$1.50 per tonne royalty on ore mined and sold from the Birsok project
The issue of shares by Canyon to Altus will be subject to final
documentation, the termination of the JVA, the transfer of the
Birsok project and any regulatory or other approvals as may be
required. Completion of the transaction is expected to occur by the
end of this year. The LOI is subject to conditions precedent, final
documentation and regulatory approval. No assurance can be given by
the Company that the deal will be successfully concluded.
An application to renew the Birsok licence for a two-year period
from 4 December 2016 is currently pending approval.
2.3 Bikoula (200 km(2) ) & Ndjele (200 km(2) ) Iron Project,
Southern Cameroon
The Bikoula and contiguous Ndjele licences are located in the
south of Cameroon, approximately 150 km south of Yaoundé. The
project is located on the westerly geological strike of the Nkout
iron ore deposit and roughly 160 km northwest of the Mbalam iron
ore deposit. The licences are located on the road network that
links to the deep-water port at Kribi and approximately 30 km from
the proposed trans-Cameroon iron ore rail line.
During the period the company completed a programme of
reconnaissance geological mapping and pitting over two previously
untested magnetic anomalies at Bikoula. Surface mapping has
identified oxidised supergene magnetite banded iron formation
("BIF") as well as haematite colluvium. Five hand dug pits, each up
to 5m depth, were excavated and logged across the target area.
Mapping of the pit walls revealed a number of oxidised and highly
weathered BIF clasts, within an iron rich matrix, confirming the
likely continuation of the colluvial target into this area.
The next phase of work at Bikoula is expected to include further
pitting to define targets for drill testing. An application for the
renewal of the Ndjele licence is currently pending approval.
3.0 Morocco Operations
Altus holds four projects in the Kingdom of Morocco through its
100 % owned subsidiary, Aterian Resources Ltd., targeting copper,
lead, zinc, silver and gold.
During the period the Company announced an LOI with Raptor
Resources Ltd ("Raptor") a private company incorporated in
Australia whereby Raptor may earn up to a 100% interest in Atlantic
Resources Ltd ("Atlantic") a wholly owned subsidiary of Aterian
Resources Ltd ("Aterian"), the Company's wholly owned Moroccan
focused exploration subsidiary. Under the terms of the LOI, Altus
is to receive equity in Raptor, an initial cash payment and a net
smelter return royalty. Raptor intends to list its shares on the
ASX. The LOI is subject to conditions precedent, final
documentation and regulatory approval. No assurance can be given by
the Company that the deal will be successfully concluded.
3.1 Agdz Copper-Silver Project (60 km(2) ), Central Morocco
Agdz is the Company's most advanced project in Morocco. It
comprises a block of four licence situated in the Anti-Atlas
Mountains, approximately 350 km south of the capital of Rabat and
approximately 14 km southwest of the Bouskour copper mine which is
operated by Managem Group.
Generative exploration and prospecting was undertaken at Agdz
during the period. The licence was renewed during the period and is
valid for a further two year period. The next phase of work is
expected to include a systematic trenching programme, followed by
drilling, across priority target areas.
3.2 Takzim Copper-Zinc Project (72 km(2) ), Central Morocco
The Takzim project encompasses five licence blocks incorporating
the three Takzim Est licences. The project is located 200 km south
of Rabat and 6.5 km east of the historic Hir n Hass copper
mine.
During the period the Company completed a MMI (mobile metal ion)
soil survey over key target areas within the Takzim project where
previous sampling had identified anomalous zinc values including
4.48 % Zn. Assay of the MMI soil samples confirmed three areas of
anomalous zinc mineralisation with one primary target greater than
500m in length. Additional rock chip sampling results during the
period includes further high grade zinc results including 4.64% Zn,
4.68% Zn and 1.39% Zn. After the period the Company undertook a
further programme of rock chip sampling and prospecting across the
Takzim and Takzim Est licences including follow of areas of highly
anomalous cobalt and nickel from historic data. These samples are
currently pending assay. The next phase of work is expected to
include further detailed soil surveys and ground magnetics at
Takzim, with further prospecting and geological mapping at the
Takzim Est permits.
3.3 Zaer Copper Project (96 km(2) ), Central Morocco
The Zaer project comprises six licence blocks located
approximately 80 km south of Rabat. The project targets 20 km of
metamorphic aureole on the western margin of the Zaer granite. In
addition the project hosts six historically-mapped quartz veins,
with a combined strike length of roughly 2.3 km and which
reportedly host copper mineralisation.
During the period, Altus undertook a reconnaissance programme of
prospecting across the Zaer licences. A further programme of
prospecting is planned to commence shortly.
The next phase of work is likely to include detailed geological
mapping and rock-chip sampling of quartz veins that are considered
most prospective for copper and tin-tungsten mineralisation.
3.4 Ammas Zinc-Lead Project (32 km(2) ), Central Morocco
The Ammas project comprises two licence blocks situated in
central Morocco, approximately 30 km south of Marrakech and 3 km
along strike of the Hajjar Zn-Pb-Cu mine, operated by Managem
Group. The project is geologically located in the Guemassa Massif
which, along with the Jebilet Centrale located 40 km to the north,
forms a major volcanogenic massive sulphide ("VMS") province in
Morocco that hosts numerous active and former VMS mines.
During the period Altus undertook a reconnaissance programme of
prospecting across the Ammas licences, including the assessment of
several remote sensing targets.
The next phases of work will likely include further prospecting
and geological mapping, a structural assessment and potential soil
survey to establish VMS targets on the licence.
4.0 Ethiopia Operations
Altus holds two projects in the Federal Democratic Republic of
Ethiopia at Tigray-Afar and Daro. Both projects are held by the
Company's 100 % owned subsidiary, Altau Resources Ltd.
4.1 Daro Copper-Gold Project (411 km(2) ), Northern Ethiopia
Daro is located in the Tigray Regional State, approximately 95
km west of the Company's Tigray-Afar project, 100 km northwest of
Mekele and 570 km north of Addis Ababa. The licence is situated
within the Neoproterozoic Nakfa Terrane which hosts a number of
significant VMS projects, including the polymetallic Bisha mine
(Nevsun Resources Ltd.), Harvest and Adyabo projects (East Africa
Metals Inc.) and Asmara project (Sichuan Road & Bridge Mining
Investment Corp Ltd.) located 190 km northwest, 35 km west and 100
km north of Daro respectively. The Nakfa Terrane forms part of the
wider Arabian Nubian Shield, which hosts several substantial gold
deposits including the Sukari gold mine in Egypt.
During the period the Company completed a programme of rock chip
sampling at the Teklil prospect which returned results of 4.4 g/t
Au from quartzite and 11.6% Cu from metamudstone in the immediate
hanging wall of a newly discovered gossan. A total of 75 rock chip
and float samples were collected as part of the programme. As
previously reported a sample of gossan float from Teklil assayed at
34% Cu and follow up exploration in the vicinity of this sample has
discovered in-situ gossanous material, a sample of which has
assayed 6.95% Cu and 1.06 g/t Au. An additional sample of gossanous
float collected in this area assayed 22.7% Cu and 6.51 g/t Au. The
gossan zone at Teklil has been mapped discontinuously for
approximately 900m and is up to 15m wide. During the period results
from a previous stream sediment survey, located approximately 750m
to the north of the Teklil prospect returned anomalous gold
(including 9ppb Au and 6ppb Au), which when coupled with a 4.4 g/t
Au sample of outcrop in the vicinity, indicate that the prospect
potentially remains open to the north.
The next phase of work at Daro is expected to involve prospect
scale mapping, soil surveys and channel sampling.
4.2 Tigray-Afar Copper-Silver Project (242 km(2) ), Northern
Ethiopia
The Tigray-Afar project is situated in the Tigray Regional
State, approximately 95 km east of the Company's Daro project, 45
km north of the regional centre of Mekele and 580 km north of the
capital, Addis Ababa. The licence targets the prospective
Proterozoic volcanic and volcanoclastic terranes of the Arabian
Nubian Shield.
The Company has completed a re-evaluation of data and generated
a series of drill targets for a potentially significant sediment
hosted copper model. The proposed drill programme would initially
focus on previously untested tectonised gossans within a zone that
has been mapped as up to 60 m wide and which coincides with a 5km
VTEM (Versatile Time Domain Electromagnetic) anomaly and visible
gold in outcrop.
5.0 Liberia Operations
Altus holds two projects in the Republic of Liberia through its
100 % owned subsidiary, Auramin Ltd. Both projects target orogenic
lode gold deposits within the Man Shield which forms part of the
West African Craton.
5.1 Zolowo Gold Project (466 km(2) ), Western Liberia
The Zolowo project is located in western Liberia, approximately
190 km northeast of Monrovia and 25 km northeast of the Bella Yella
project. The project is situated along the same regional trend that
hosts the New Liberty gold mine, encompassing 22 km of a 33 km long
and 2.5 km wide Archaean greenstone belt that was historically
mapped by the United States Geological Survey.
During the period, a programme of reconnaissance exploration was
conducted by the Company including rock-chip sampling and mapping
of artisanal workings. Over 200 artisanal working sites, with
several up to a few hundred metres in length were mapped. The
workings are primarily alluvial in nature and found along multiple
first and second order rivers and streams across a strike length of
approximately 17 km. Many of the workings yielded coarse angular
gold, indicating the presence of multiple proximal sources. Local
reports are that active gold workings have been in the area since
the 1930s, some involving hard-rock mining and crushing.
A total of 71 grab samples were collected as rock-chips from
outcrop or float during the period. Of the 75 reconnaissance
samples, 1 returned a grade above 0.1 g/t Au, with an assay result
of 2.95 g/t Au. All sample preparation and analysis was undertaken
by ALS Global at its laboratories in Monrovia (Liberia) and
Loughrea (Republic of Ireland) respectively. Given the early stage
nature of these programmes, no QAQC samples have been sent for
assay. Samples were crushed with 90 % passing < 2 mm with the
resultant fraction being pulverized with 85 % passing < 75 um.
The fine fraction of each sample underwent a four-acid digestion
with ICP-AES analysis for a suite of 33 elements and a fire assay
for gold.
The next phase of work is expected to include geological
mapping, rock-chip sampling and a regional soil survey in order to
further define prospective targets.
5.2 Bella Yella Gold Project (640 km(2) ), Western Liberia
The Company failed to receive sufficient reassurance from the
Ministry of Lands Mines and Energy in respect of the tenure of the
licence. As such the Company has elected to not seek renewal of the
licence and has impaired its value by 100%.
6.0 Côte d'Ivoire Operations
Altus holds one granted licence (namely Prikro) and two licence
applications in the Republic of Côte d'Ivoire. The licence and
applications are held through the Company's 100 % owned subsidiary,
Aeos Gold Ltd.
6.1 Prikro Gold Project (369.5 km(2) ), Southwestern Côte
d'Ivoire
The Prikro licence is located approximately 240 km northeast of
the capital, Abidjan. This project was selected due to the presence
of highly prospective Birimian-aged greenstone geology, an
interpreted 10 km long fold hinge structure, a series of reported
mineral occurrences and the existence of artisanal gold workings in
the surrounding areas.
During the period, the Company's technical team undertook a
reconnaissance programme of prospecting across the Prikro licence,
including the assessment of several remote sensing targets.
The next phase of work is expected to include further
prospecting and mapping focused on the southern part of the
licence, along with termite mound sampling and a ground magnetic
survey over the priority remote sensing targets.
Qualified Person
Steven Poulton, a Fellow of the Geological Society of London and
a Fellow of the Institute of Materials, Minerals and Mining is the
Company's Qualified Person as defined by National Instrument
43-101, and is responsible for the accuracy of the technical
information in this MD&A.
OUTLOOK
The Company's strategy for the next twelve months will be
to:
-- secure joint venture partnership or royalty transactions for its projects;
-- advance its exploration projects to the stage where they are ready to be transacted on;
-- generate new projects within its current countries of operation; and
-- evaluate early to advance stage project and royalty
acquisition opportunities, which may exist privately or within
listed companies.
The Company looks forward to progressing and formally closing
its agreements with Canyon and Raptor in Cameroon and Morocco
respectively. Separately the Company is actively seeking
partnerships on its remaining projects and expects to enter further
LOIs with potential joint venture partners or groups seeking a
corporate transaction on one or more of the Company's projects. The
Company continues to monitor and consider opportunities to apply
for or acquire new licences in and outside of its existing
countries of operation.
In the meantime, the Company remains focused on six countries at
present namely Mali, Ivory Coast, Liberia, Cameroon, Morocco and
Ethiopia. The Company's current exploration programmes are expected
to generate technical results that will be reported upon in due
course.
RESULTS OF OPERATIONS
Three Months Ended 30 September 2018
For the three months ended 30 September 2018, Altus had a net
profit of GBP17,990 compared to a net loss of GBP517,565 for the
three months ended 30 September 2017. The favourable variance was
due to a larger fair value gain on investments and lower IPO,
listing and acquisition related costs which were offset by higher
exploration costs and administrative expenses in 2018 versus 2017.
Administrative expenses were higher in 2018 as incurred higher
corporate travel expenses and higher legal and professional
expenses in 2018 compared to 2017, these were offset by currency
gains in 2018 compared to losses in 2017. Exploration expenses have
increased in 2018 in comparison to 2017 due to increased
administrative and operational expenditure spent on the progression
and ongoing maintenance of the Company's licences.
Nine Months Ended 30 September 2018
For the nine months ended 30 September 2018, Altus had a net
loss of GBP1,045,555 compared to a net loss of GBP1,738,946 for the
nine months ended 30 September 2017. The favourable variance was
due to lower administrative, IPO, listing and acquisition costs and
a fair value gain on investments in 2018 versus a loss in 2017.
This favourable variance is offset by higher exploration costs and
lower management fees and costs recovered from joint venture
partners in 2018 compared to 2017. Administrative expenses were
lower in 2018 due to bonuses and equity settlement of debt which
were paid to employees and directors in 2017 whereas nil has been
paid in 2018, currency gains in 2018 versus currency losses in 2017
and lower costs were incurred on behalf of joint venture partners
in 2018 compared to 2017. These positive variances in
administrative expenses are offset by higher legal and professional
expenses, corporate travel expenses and premises costs in 2018
versus 2017. Exploration expenses have increased in 2018 in
comparison to 2017 due to increased administrative and operational
expenditure spent on the progression and ongoing maintenance of the
Company's licences.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at 30 September 2018 were GBP1,157,281
compared to GBP523,344 at 31 December 2017. The Company had working
capital of GBP860,988 at 30 September 2018 compared to working
capital of GBP320,958 at 31 December 2017. Cash and cash
equivalents have increased by GBP647,081 due to the private
placement and exercise of warrants resulting in net proceeds of
GBP2,258,175. This was offset by cash used in operations of
GBP1,431,745, primarily exploration and corporate overheads, cash
expended of GBP124,777 on professional fees for the acquisition of
Legend Gold Corp. and the effect of foreign translation gains. The
Company also holds 8,000,000 shares in ASX listed Canyon Resources
Limited, valued on 30 September 2018 at GBP930,774. The value of
the holding in Canyon as of 21 November 2018 is GBP1,760,000. Altus
believes its cash position and marketable securities will provide
it with sufficient working capital to maintain its operations and
execute its business plan for the next twelve months.
SUMMARY OF QUARTERLY RESULTS
2018 2018 2018 2017
------------------------ -------------------- ---------------------- ---------------------- ----------------------
Quarter Ended 30 Sep 30 Jun 31 Mar 31 Dec
------------------------ -------------------- ---------------------- ---------------------- ----------------------
Net profit/(loss) from
operations GBP 17,990 GBP (550,094) GBP (513,451) GBP (121,199)
Net profit/(loss) per
share - basic and
diluted 0.00 (0.00) (0.00) (0.00)
2017 2017 2017 2016
------------------------ -------------------- ---------------------- ---------------------- ----------------------
Quarter Ended 30 Sep 30 Jun 31 Mar 31 Dec
------------------------ -------------------- ---------------------- ---------------------- ----------------------
Net income (loss) from
continuing operations GBP (517,565) GBP (1,064,368) GBP (157,013) GBP (200,714)
Net loss from continuing
operations per share
Basic (0.01) (0.00) (0.00) (0.00)
Diluted (0.01) (0.00) (0.00) (0.00)
Net income (loss) GBP (517,565) GBP (1,064,368) GBP (157,013) (171,309)
Net loss per share -
basic (0.01) (0.00) (0.00) (0.00)
Net loss per share -
diluted (0.01) (0.00) (0.00) NA
------------------------ -------------------- ---------------------- ---------------------- ----------------------
The Company's level of activity and expenditures during a
specific quarter are influenced by the availability of working
capital, the availability of additional external financing, the
time required to gather, analyse and report on geological data
related to mineral properties and the amount of expenditure
required to maintain its exploration licences in good standing and
to advance its projects.
The Company had a net profit of GBP17,990 for the quarter ended
30 September 2018 compared to a net for the prior quarter. The
favourable variance was due to a fair value gain on investments
compared to a fair value loss in the prior quarter and lower IPO,
listing and acquisition related costs. Within administrative
expenses legal and professional expenses and employee expenses were
lower for the quarter compared to previous quarter. This was offset
by higher corporate travel expenditure in the quarter and lower
currency gains in comparison to the quarter ended 30 June 2018.
The Company had a net loss of GBP550,094 for the quarter ended
30 June 2018 compared to a loss of GBP513,451 for the prior
quarter. The unfavourable variance was due to increased exploration
expenses, increased employee costs and higher legal and
professional expenditure. This was partially offset by lower
management fees and costs recovered from joint venture partners, a
smaller loss on fair value revaluation of investments and currency
gains in the period versus currency losses in the prior
quarter.
The Company had a net loss of GBP513,451 for the quarter ended
31 March 2018 compared to a loss of GBP121,199 for the prior
quarter. The unfavourable variance was due to increased exploration
expenses and a fair value loss on investments in 2018 whereas the
prior quarter had a fair value gain.
The Company had a net loss of GBP121,199 for the quarter ended
31 December 2017 compared to a loss of GBP517,565 for the prior
quarter. The favourable variance was due to fair value gain on
investments and significantly lower professional fees and lower
exploration expenses.
The Company had a net loss of GBP517,565 in the quarter ended 30
September 2017 compared to a loss of GBP1,064,368 in the prior
quarter. The favourable variance was due to lower costs for:
directors' remuneration, staff salaries and fair value gain on
investments partially offset by higher costs for professional
fees.
The Company had a net loss of GBP1,064,368 for the quarter ended
30 June 2017 compared to a loss of GBP157,013 in the prior quarter.
The unfavourable variance was the result of lower revenue due to
lower recharged costs and higher administrative expenses.
Administrative expenses were higher due to significantly higher
compensation costs for directors and staff which include the
settlement of unpaid fees in equity and significantly higher legal
and professional fees due to the Initial Public Offering of the
Company's shares on AIM.
The Company had a net loss of GBP157,013 for the quarter ended
31 March 2017 compared to a loss of GBP200,714 for the prior
quarter. The favourable variance was due to higher revenue and
lower administrative expenditures partially offset by lower other
gains and losses. In the March quarter, revenue was higher due to
increased billings from recharged costs. Administration costs were
lower due to minor fair value gains on investments compared to
significant fair value losses in the prior quarter. These were
partially offset by higher recharged costs and higher exploration
expenditures.
OFF-BALANCE SHEET ARRANGEMENTS
The Company had no off-balance sheet arrangements.
RELATED PARTY TRANSACTIONS
The Company entered into a number of transactions with key
management personnel. The remuneration of key management personnel
includes those persons having the authority and responsibility for
the planning, directing and controlling of the activities of the
Company are as follows:
Nine months ended 30 September Pension
2018 Remuneration Contribution Total
Directors GBP 204,083 GBP 15,525 GBP 219,608
------------------------------- ------------- -------------- ------------
The above payments for director compensation are payments made
in the normal course of business. The amounts paid for these
services are negotiated in good faith by both parties and fall
within normal market ranges. The Remuneration Committee reviews
executive compensation annually. The Board of Directors considers
any changes recommended by the Remuneration Committee and approves
these changes if appropriate.
All balances due to or from related parties are included in
trade or other payables or trade and other receivables. The
employment contracts with senior management are ongoing monthly
commitments which can be terminated by either party with sufficient
notice.
The following are the related party balances at 30 September
2018 and 31 December 2017:
30 September 31 December
Related party current assets/(liabilities) 2018 2018
------------------------------------------- ------------- ---------------------------
Canyon Resources Ltd GBP 39,137 GBP 31,468
Seabord Services Corp. GBP (42,738) -
Aegis Asset Management Ltd GBP 130 -
GBP (3,471) GBP 31,468
------------------------------------------- ------------- ---------------------------
Canyon Resources Ltd
David Netherway is a director and shareholder of the Company. He
is also a director of Canyon Resources Ltd ("Canyon") which is
listed on the Australian Stock Exchange. Altus has a joint venture
arrangement with Canyon in relation to the Birsok and Mandoum
projects in central Cameroon. Altus incurs and recharges expenses
to Canyon. As at 30 September 2018, the balance owing to Altus was
GBP39,137 (31 December 2017: GBP31,468).
Seabord Services Corp.
Michael Winn is a director and shareholder of the Company. He is
also the controlling party of Seabord Services Corp. ("Seaboard").
Seabord has an agreement with Altus to provide Chief Financial
Officer services and administrative support to Altus. As at 30
September 2018, the balance due from Altus was GBP42,738 (31
December 2017: GBPnil). This balance largely relates to costs
incurred by Legend with Seabord, prior to the acquisition of Legend
by the Company.
Aegis Asset Management Ltd
Three of the directors and shareholders of the Company are also
directors of Aegis Asset Management Ltd ("Aegis"), which was
formerly a subsidiary of the Company. Altus incurred some
incidental costs which it recharged to Aegis. As at 30 September
2018, the balance due from Altus was GBP130 (31 December 2017:
GBPnil).
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
In the application of the Group's accounting policies, the
directors are required to make judgements, estimates and
assumptions about the carrying amount of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised where the revision
affects only that period, or in the period of the revision and
future periods where the revision affects both current and future
periods.
The estimates and assumptions which have a significant risk of
causing a material adjustment to the carrying amount of assets and
liabilities are outlined below.
Critical Judgments
Share based payments
Estimating fair value for share based payment transactions
requires determination of the most appropriate valuation model,
which depends on the terms and conditions of the grant. For issues
of shares in respect of debt the Company values the shares based on
the lower of the closing price on the AIM or TSXV of the shares on
the prior day or on the volume weighted average for a reasonable
period determined by management. For the grant of share options or
share warrants, the Company uses the Black Scholes Model. This
estimate also requires determination of the most appropriate inputs
to the valuation model including the expected life of any share
option or appreciation right, volatility and dividend yield and
making assumptions about them.
Stability of Joint Venture Partners
The stability of the Group's joint venture partners is
periodically reviewed in determining the likelihood of future
funding for related projects.
Impairment of Deferred Exploration Costs
Deferred exploration costs had a carrying value as at 30
September 2018 of GBP4,215,003 (31 December 2017: GBP151,875).
Management tests quarterly whether deferred exploration costs have
a carrying value in accordance with the accounting policy stated in
note 1.7 in the annual audited consolidated financial statements of
Altus Strategies plc. Each exploration project 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 joint venture partners. In the event that a project
does not represent an economic exploration target and results
indicate that there is no additional upside, or that future funding
from joint venture partners is unlikely, a decision will be made to
discontinue exploration. A further review of the recommendations of
the consultant or senior Company Geologist is then performed by
management. The Directors have reviewed the estimated value of each
project prepared by management and do not consider any further
impairment necessary.
FINANCIAL RISK MANAGEMENT
Altus's strategy with respect to cash is to safeguard this asset
by investing any excess cash in very low risk financial instruments
such as term deposits or by holding funds in the highest yielding
savings accounts with major United Kingdom banks. By using this
strategy, the Company preserves its cash resources and can
marginally increase these resources through the yields on these
investments. The Company's financial instruments are exposed to
certain financial risks, which include currency risk, credit risk,
liquidity risk and interest rate risk.
Currency Risk
The Company's functional currency is the Pound Sterling, and
major purchases are transacted in Pounds Sterling, US Dollars,
Canadian Dollars, West African Francs, Ethiopian Birrs, Moroccan
Dirhams and Liberian Dollars. The Company's head office
expenditures are mainly incurred in Pounds Sterling and the
majority of its exploration costs are incurred in the local African
currencies. Some of the Company's subsidiaries have functional
currencies other than Pounds Sterling. The Company is therefore
exposed to unrealised foreign currency on the translation of the
subsidiary's net assets. Management believes the foreign exchange
risk derived from currency conversions is not significant to its
operations, and therefore does not hedge its foreign exchange risk.
For the nine months ended 30 September 2018, the Company had an
exchange gain of GBP48,619 (2017 - loss of GBP8,885) which was not
material to its operations and an unrealised gain on retranslation
of net assets of its subsidiaries of GBP135,596 (2017 -
GBPnil).
Interest Rate Risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in the market interest rates. When the Company has
sufficient cash, it is invested in term deposits which can be
reinvested without penalty after thirty days should interest rates
rise. As at 30 September 2018 the Company did not have any
interest-bearing loans. Accordingly, the Company does not have
significant interest rate risk.
Credit Risk
Credit risk is the risk that one party will cause a financial
loss for another party by failing to discharge an obligation. The
Company's credit risk is primarily attributable to receivables. The
Company has no significant concentration of credit risk arising
from operations. Financial instruments included in receivables
consist of trade receivables and amounts due from associates.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they fall due. The Company'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. Altus
completed a private placement in April 2018 raising gross proceeds
of approximately C$4.1 million (GBP2.3 million) and consequently
has sufficient working capital to discharge its current liabilities
and fund ongoing operations for the next twelve months.
FINANCIAL INSTRUMENTS
The Group completed an assessment of its financial assets and
liabilities as 1 January 2018. The following table shows the
original classification of the Group and Company's financial
instruments under IAS 39 and the new classification under IFRS
9:
Financial Assets and Original Classification New Classification
Liabilities - IAS 39 - IFRS 9
---------------------------- ---------------------------- -------------------
Cash and cash equivalents Loans and other receivables Amortised cost
Trade and other receivables Loans and other receivables Amortised cost
Equity investments Fair Value Through Fair Value Through
Profit or Loss Profit or Loss
Trade and other payables Amortised cost Amortised cost
---------------------------- ---------------------------- -------------------
The adoption of IFRS 9 did not result in any changes to the
Group and Company's financial statements.
Fair Values
The Company's financial instruments consist of cash and cash
equivalents, trade and other receivables, investments, and trade
and other payables. Financial instruments are initially recognized
at fair value with subsequent measurement depending on
classification as described below. Classification of financial
instruments depends on the purpose for which the financial
instruments were acquired or issued, their characteristics, and the
Company's designation of such instruments. The Company has
classified its financial instruments as follows:
Investments Amortised
at FVTPL Cost Total
As at 30 September 2018 GBP GBP GBP
----------------------------- ------------ ------------ --------------
Cash and cash equivalents - 1,157,281 1,157,281
Trade and other receivables - 155,313 155,313
Non-current investments 930,774 - 930,744
Trade and other payables - (436,606) (436,606)
GBP 930,774 GBP 875,988 GBP 1,806,732
----------------------------- ------------ ------------ --------------
Financial instruments measured at fair value on the statement of
financial position are summarized into the following fair value
hierarchy levels:
a) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
b) Level 2: inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from
prices).
c) Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
OUTSTANDING SHARE DATA
As of the date of this MD&A, the Company had 177,782,686
ordinary shares issued and outstanding. There were also 28,603,477
share purchase warrants outstanding as follows:
Warrants outstanding Exercise price* Issue date Expiry date
300,000 C$0.083 (GBP0.050) 30 January 2018 8 September 2019
911,861 C$0.225 (GBP0.134) 18 April 2018 17 April 2021
27,391,616 C$0.30 (GBP0.179) 18 April 2018 17 April 2023
(*) Exercise prices in GBP are determined by reference to the
underlying Canadian Dollar price and the exchange rate as at 30
September 2018.
RISKS AND UNCERTAINTIES
No Assurance of Titles or Borders
The acquisition of the right to exploit mineral properties is a
very detailed and time-consuming process. There can be no guarantee
that the Company has acquired title to any such surface or mineral
rights or that those rights will be obtained in the future. To the
extent they are obtained, titles to the Company's surface rights or
mineral properties may be challenged or impugned and title
insurance is generally not available. The Company's mineral
properties may be subject to prior unregistered agreements,
transfers or claims and title may be affected by, among other
things, undetected defects. Such third-party claims could have a
material adverse impact on the Company's operations.
Mineral Property Exploration and Mining Risks
The business of mineral deposit exploration and extraction
involves a high degree of risk. Few properties that are explored
ultimately become producing mines. At present, none of the
Company's properties has a known commercial ore deposit. The main
responses to operating risks include: ensuring ownership of and
access to mineral properties by confirmation that option
agreements, claims and leases are in good standing and obtaining
permits for drilling and other exploration activities. There can be
additional risks involved in some countries where pending
applications for claims or licenses can be affected by government
changes to application procedures.
Some of the Company's mineral properties are located within or
near local communities. In these areas, it may be necessary as a
practical matter to negotiate surface access with these local
communities. There can be no guarantee that, despite having the
legal right to access a mineral property and carry on exploration
activities, that the Company will be able to negotiate a
satisfactory agreement with the existing land owners or communities
for this access. Therefore, the Company or one of its joint venture
partners may be unable to carry out exploration activities on a
property. In those circumstances where access has been denied by a
local community or land owner, the Company may need to rely on the
assistance of local officials or the courts to gain access or it
may be forced to abandon the property.
Altus may acquire properties through option agreements in the
future. Acquisition of title to the properties under these kinds of
agreements is only completed when all the option conditions have
been met. These conditions generally include making property
payments, incurring exploration expenditures on the properties and
can include the satisfactory completion of pre-feasibility studies.
If the Company does not satisfactorily complete these option
conditions in the time frame laid out in the option agreements, the
Company's title to the related property will not vest and the
Company will have to write-off the previously capitalized costs
related to that property.
Joint Venture Funding Risk
When appropriate, Altus seeks partners through joint ventures or
option agreements to fund exploration and project development. The
main risk of this strategy is that funding partners may not be able
to raise sufficient capital to satisfy exploration and other
expenditure terms in a particular option agreement. As a result,
exploration and development of one or more of the Company's
property interests may be delayed depending on whether Altus can
find another partner or has enough capital resources to fund the
exploration and development on its own.
Commodity Price Risk
Altus is exposed to commodity price risk. Declines in the market
prices of gold, base metals and other minerals may adversely affect
its ability to raise capital or attract joint venture partners to
fund exploration on its mineral properties. Commodity price
declines could also reduce the amount the Company would receive on
the disposition of one of its mineral properties to a third
party.
Financing and Share Price Fluctuation Risks
Altus has limited financial resources, has no reliable source of
operating cash flow and has no assurance that additional funding
will be available to it for further exploration and development of
its projects. Further exploration and development of one or more of
the Company's projects may be dependent upon the Company's ability
to obtain financing through equity issues, debt financing or the
sale of some of its exploration properties. Failure to obtain this
financing could result in delay or indefinite postponement of
further exploration and development of its projects which could
result in the loss of one or more of its properties.
Securities markets often experience a high degree of price and
volume volatility, and the market price of securities of many
companies, particularly those considered to be development stage
companies such as Altus, have experienced wide fluctuations in
share prices which have not necessarily been related to their
operating performance, underlying asset values or prospects. As a
result, there can be no assurance that the Company will be able to
attract additional capital or whether share prices will be strong
to enough to make private placements advisable.
Political and Currency Risks
The Company is operating in Africa, where there is a higher risk
of political uncertainty and instability. The Company regularly
monitors the political situation in each country in which it
operates. Changing political situations may affect the manner the
Company operates. The Company's equity financings are sourced in
Pounds Sterling and Canadian Dollars but it incurs a significant
portion of its expenditures in US Dollars and West African Francs,
Ethiopian Birr and Moroccan Dirham. There are no currency hedges in
place. Therefore, a weakening of its funding currencies against the
US Dollar, West African Franc, Ethiopian Birr and Moroccan Dirham
could have an adverse impact on the amount of exploration
conducted.
Insured and Uninsured Risks
During exploration, development and production on mineral
properties, the Company is subject to many risks and hazards in
general, including adverse environmental conditions, operational
accidents, labour disputes, unusual or unexpected geological
conditions, changes in the regulatory environment and natural
phenomena such as inclement weather, floods, and earthquakes. Such
occurrences could result in damage to the Company's property or
facilities and equipment, personal injury or death, environmental
damage to properties of the Company or others, delays, monetary
losses and possible legal liability.
Although the Company may maintain insurance to protect itself
against certain risks in such amounts as it considers reasonable,
its insurance may not cover all the potential risks associated with
its operations. The Company may also be unable to maintain
insurance to cover these risks at economically feasible premiums or
for other reasons. Should such liabilities arise, they could reduce
or eliminate future profitability and result in increased costs,
have a material adverse effect on the Company's results and cause a
decline in the value of the Company's securities. Some work is
carried out through independent consultants and the Company
requires that all consultants carry their own insurance to cover
any potential liabilities because of their work on a project.
Environmental Risks and Hazards
The activities of the Company are subject to environmental
regulations issued and enforced by government agencies.
Environmental legislation is evolving in a manner that will require
stricter standards and enforcement and involve increased fines and
penalties for non-compliance, more stringent environmental
assessments of proposed projects, and a heightened degree of
responsibility for companies and their officers, directors and
employees. There can be no assurance that future changes in
environmental regulation will not adversely affect Altus's
operations. Environmental hazards may exist on properties in which
the Company holds interests which are unknown to the Company at
present.
Conflicts of Interest
The Company's directors and officers may serve as directors or
officers of other companies or have significant shareholdings in
other resource companies and to the extent that such other
companies may participate in ventures in which the Company may
participate, some directors of the Company may have a conflict of
interest in negotiating and concluding terms respecting the extent
of such participation. If such a conflict of interest arises at a
meeting of the Company's directors, a director who has such a
conflict will abstain from voting for or against the approval of
such participation or such terms. In accordance with the laws of
British Columbia, the directors of the Company are required to act
honestly, in good faith and in the best interests of the Company.
In determining whether the Company will participate in a program
and the interest therein to be acquired by it, the directors will
primarily consider the degree of risk to which the Company may be
exposed and its financial position at that time.
Key Personnel Risk
The Company's success is dependent upon the performance of key
personnel working in management and administrative capacities. The
loss of the services of any senior management or key personnel
could have a material and adverse effect on the Company, its
business and results of operations.
Competition
The Company will compete with many companies and individuals
that have substantially greater financial and technical resources
than the Company for the acquisition and development of its
projects as well as for the recruitment and retention of qualified
consultants and employees.
Company Registration No. 10746796 (England and Wales)
ALTUS STRATEGIES PLC
INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHSED 30 SEPTEMBER 2018
NOTICE
These condensed consolidated interim financial statements have
been prepared by management and approved by the Audit Committee and
the Board of Directors of the Company. These condensed consolidated
interim financial statements have not been reviewed by the
Company's external auditors.
CONDENSED CONSOLDIATED INTERIM STATEMENT OF COMPREHENSIVE LOSS
For the three months For the nine months
ended ended
30 September 30 September
2018 2017 2018 2017
Notes GBP GBP GBP GBP
Continuing
operations
Management fees and
costs
recovered from
joint venture
partners 4,122 4,761 45,447 387,987
Exploration costs
expensed 3 (199,036) (134,562) (527,447) (436,727)
Administrative
expenses 4 (292,732) (221,441) (816,475) (1,209,851)
IPO, listing and
acquisition
related costs - (212,047) (108,234) (400,732)
--------------------- ----------------------- ----------------------- -------------------------
Loss from operations (487,646) (563,289) (1,406,709) (1,659,323)
Investment
receivable 17 12 30 46
Interest paid - - - (3,643)
Other operating
income 10,440 88 32,951 20,226
Fair value
gain/(loss)
on investments 494,883 43,563 329,238 (98,058)
Profit/(loss) before
taxation 17,694 (519,626) (1,044,490) (1,740,752)
Taxation - - - (846)
Profit/(loss) for
the
period 17,694 (519,626) (1,044,490) (1,741,598)
===================== ======================= ======================= =========================
Exchange differences
on retranslation of
net assets of
subsidiaries 103,281 - 135,596 -
Total comprehensive
income/(loss) for
the
quarter 120,975 (519,626) (908,894) (1,741,598)
===================== ======================= ======================= =========================
Profit/(loss) for
the
quarter attributable
to:
- Owners of the
parent
company 17,990 (517,565) (1,045,555) (1,738,946)
-
Non-controlling
interest (296) (2,061) 1,065 (2,652)
(17,694) (519,626) (1,044,490) (1,741,598)
===================== ======================= ======================= =========================
Total comprehensive
income/(loss) for
the
quarter attributable
to:
- Owners of the
parent
company 121,271 (517,565) (909,959) (1,738,946)
-
Non-controlling
interest (296) (2,061) 1,065 (2,652)
120,975 (519,626) (908,894) (1,741,598)
===================== ======================= ======================= =========================
Basic earnings per
share
(pence)
attributable
to the owners of
the
parent 11 0.01 (0.50) (0.65) (1.76)
Diluted earnings per
share (pence)
attributable
to the owners of
the
parent 11 0.01 (0.50) (0.65) (1.76)
===================== ======================= ======================= =======================
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
Company Registration No. 10746796 (England and Wales)
As at As at
30 September 31 December
2018 2017
Notes GBP GBP
Non-current assets
Intangible assets 5 4,215,003 151,875
Property, plant
and equipment 9,393 2,386
Investments 930,774 601,536
5,155,170 755,797
Current assets
Trade and other
receivables 155,313 110,669
Cash and cash equivalents 1,157,281 523,344
1,312,594 634,013
Total assets 6,467,764 1,389,810
------------------- ------------------
Current liabilities
Trade and other
payables 436,606 298,055
Provisions 15,000 15,000
Total liabilities 451,606 313,055
Net assets 6,016,158 1,076,755
=================== ==================
Equity
Share capital 7 1,777,827 1,076,808
Share premium 7 5,994,256 999,000
Translation reserve 135,596 -
Other reserves 5,879,636 5,727,614
Retained earnings (7,702,219) (6,656,664)
------------------- ------------------
Total equity attributable
to owners of the
parent 6,085,096 1,146,758
Non-controlling
interest (68,938) (70,003)
Total equity 6,016,158 1,076,755
=================== ==================
The financial statements were approved by the board of directors
and authorised for issue on 21 November 2018 and are signed on its
behalf by:
Signed Signed
.............................. ..............................
Mr R Milroy Mr S Poulton
Director Director
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
Nine months
ended 30
September Share Share premium Translation Retained Non-controlling
2017: capital account reserve Other reserves earnings Total equity interest Total
GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1
January 2017 104,526 5,770,590 - (92,323) (4,807,839) 974,954 (67,343) 907,611
-------------------- ------------------------ ------------------------------ --------------------- -------------------------- ----------------- ------------------------------ --------------------
Loss and total
comprehensive
loss for the
period - - - - (1,738,946) (1,738,946) (2,061) (1,741,007)
-------------------- ------------------------ ------------------------------ --------------------- -------------------------- ----------------- ------------------------------ --------------------
Issue of share
capital 127,200 1,901,106 - - - 2,028,306 - 2,028,306
Issue of
warrants - - - 3,643 - 3,643 - 3,643
Capital
reorganisation 845,082 (6,672,696) - 5,827,614 - - - -
Share options
exercised - - - (11,320) 11,320 - - -
-------------------- ------------------------ ------------------------------ --------------------- -------------------------- ----------------- ------------------------------ --------------------
Total
transactions
with owners,
recognised
directly in
equity 972,282 (4,771,590) - 5,819,937 11,320 2,031,949 - 2,031,949
-------------------- ------------------------ ------------------------------ --------------------- -------------------------- ----------------- ------------------------------ --------------------
Balance at 30
September 2017 1,076,808 999,000 - 5,727,614 (6,535,465) 1,267,957 (69,404) 1,198,553
==================== ======================== ============================== ===================== ========================== ================= ============================== ====================
Nine months
ended 30
September
2018:
Balance as at 1
January 2018 1,076,808 999,000 - 5,727,614 (6,656,664) 1,146,758 (70,003) 1,076,755
-------------------- ------------------------ ------------------------------ --------------------- -------------------------- ----------------- ------------------------------ --------------------
Loss for the
period - - - - (1,045,555) (1,045,555) 1,065 (1,044,490)
Other
comprehensive
loss for
the period - - 135,596 - - 135,596 - 135,596
-------------------- ------------------------ ------------------------------ --------------------- -------------------------- ----------------- ------------------------------ --------------------
Loss and total
comprehensive
loss for the
period - - 135,596 - (1,045,555) (909,959) 1,065 (908,894)
-------------------- ------------------------ ------------------------------ --------------------- -------------------------- ----------------- ------------------------------ --------------------
Shares issued
for Legend
acquisition 410,603 3,079,519 - - - 3,490,122 - 3,490,122
Warrants
acquired on
Legend
Acquisition - - - 100,000 - 100,000 - 100,000
Shares and
warrants
issued
for private
placement 273,916 1,917,207 - 109,567 - 2,300,690 - 2,300,690
Share issuance
costs - (146,274) - 27,455 - (118,819) - (118,819)
Exercise of
share warrants 16,500 144,804 - (85,000) - 76,304 - 76,304
-------------------- ------------------------ ------------------------------ --------------------- -------------------------- ----------------- ------------------------------ --------------------
Total
transactions
with owners,
recognised
directly in
equity 701,019 4,995,256 - 152,022 - 5,848,297 - 5,848,297
-------------------- ------------------------ ------------------------------ --------------------- -------------------------- ----------------- ------------------------------ --------------------
Balance at 30
September 2018 1,777,827 5,994,256 135,596 5,879,636 (7,702,219) 6,085,096 (68,938) 6,016,158
==================== ======================== ============================== ===================== ========================== ================= ============================== ====================
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
For the three months For the nine months
ended ended
30 September 30 September
2018 2017 2018 2017
Notes GBP GBP GBP GBP
Cash flows from
operating
activities
Profit/(loss) for the period
after taxation 17,694 (519,626) (1,044,490) (1,741,598)
Adjustments for:
Taxation charged - - - 509
Interest received (17) (12) (30) (46)
Interest paid - - - 3,643
Impairment of non-current
assets 20,198 - 20,529 -
Depreciation and impairment
of property, plant and
equipment 1,853 - 5,469 738
Equity settled share-based
payments - 351,981 - 351,981
Other gains and losses (494,883) (43,563) (329,238) 98,058
Movements in working
capital:
(Increase)/decrease in
trade and other receivables (45,456) (35,873) (117,086) 112,815
Increase/(decrease) in
trade and other payables 110,323 (76,697) (33,101) (87,502)
Taxation paid - - - (252)
----------------------- ---------- -------------------- --------------------
Cash flows used in operating
activities (390,288) (323,790) (1,431,745) (1,261,654)
Investing activities
Purchase of intangible
assets (6,659) - (44,266) (46,236)
Purchase of property plant
and equipment (3,147) - (10,336) (583)
Purchase of subsidiaries
net of cash received - - (124,777) 1,820
Interest received 17 12 30 46
----------------------- ---------- -------------------- --------------------
Net cash used in investing
activities (9,789) 12 (179,349) (44,953)
Financing activities
Proceeds from issue of
shares - 760,537 2,181,871 1,678,843
Proceeds from
exercise
of share warrants - - 76,304 -
----------------------- ---------- -------------------- --------------------
Net cash generated from
financing activities - 760,537 2,258,175 678,843
Net increase/decrease in
cash and cash equivalents (400,077) 436,759 647,081 372,236
======================= ========== ==================== ====================
Cash and cash equivalents
at beginning of the period 1,594,598 351,391 523,344 415,914
Foreign exchange gains
and losses (37,240) - (13,144) -
Cash and cash equivalents
at the end of the period 1,157,281 788,150 1,157,281 788,150
======================= ========== ==================== ====================
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. Accounting policies
General information
Altus Strategies plc ("the Company") is a public company limited
by shares incorporated in England and Wales. The registered office
is 14 Station Road, The Orchard Centre, Didcot, Oxfordshire, OX11
7LL. The principal activity of the Company and its subsidiaries
(together the "Group") is that of a mineral exploration project
generator. There is no seasonality or cyclicality to the Group's
operations.
The Company's shares are listed on the Alternative Investment
Market of the London Stock Exchange ("AIM") and the TSX Venture
Exchange ("TSXV"). The Company's shares were admitted to trading on
the AIM on 10 August 2017 and the TSXV on 6 June 2018.
1.1 Basis of preparation
These condensed consolidated interim financial statements have
been prepared in accordance with International Accounting Standard
34, Interim Financial Reporting ("IAS 34") using accounting
policies consistent with International Financial Reporting
Standards (IFRS) and IFRS interpretations committee (IFRS IC)
interpretations as adopted for use in the European Union and IFRS
and their interpretations issued by the International Accounting
Standards Board (IASB). These financial statements do not
constitute statutory accounts as defined in the Companies Act
2006.
These condensed consolidated interim financial statements have
been prepared on a going concern basis in accordance with the same
accounting policies and methods of application as the most recent
audited financial statements for the year ended 31 December 2017,
and those envisaged for the year ended 31 December 2018, except for
the new policies outlined in note 1.6 and note 1.7. The Group has
not adopted any standards or interpretation in advance of the
required implementation dates. It is not anticipated that the
future adoption of any new or revised standards or interpretations
issued by the IASB will have a material impact on the Group's
earnings or shareholder's funds. The effect of the adoption of IFRS
9 is outlined in note 1.8 below.
These condensed interim financial statements are for the three
month and nine month periods ended 30 September 2018. Comparative
information has been provided for the unaudited three month and
nine month periods ended 30 September 2017, and where applicable
the audited twelve month period from 1 January 2017 to 31 December
2017.
The financial statements are prepared in British Pounds Sterling
(GBP), which is the functional currency of the Company. Monetary
amounts in these financial statements are rounded to the nearest
whole pound.
The financial statements have been prepared on the historical
cost basis, except for the valuation of investments at fair value
through profit or loss.
These condensed consolidated interim financial statements have
not been audited or reviewed by the Company's external auditors,
PKF Littlejohn.
1.2 Basis of consolidation
These condensed consolidated interim financial statements
comprise the accounts of the parent company, and its subsidiaries,
after the elimination of all material intercompany balances and
transactions.
Altus Strategies plc was incorporated on 28 April 2017. On 14
June 2017, Altus Strategies plc acquired the entire share capital
of Altus Exploration Management Limited by way of a share for share
exchange. The transaction has been treated as a group
reconstruction and has been accounted for using the reverse merger
accounting method. Accordingly, the financial information for the
current period and comparatives have been presented as if Altus
Exploration Management Limited has been owned by Altus Strategies
plc throughout the current and previous periods.
1.3 Going concern
The Directors have at the time of approving these condensed
consolidated financial statements, a reasonable expectation that
the Group and Company have adequate resources to continue in
operational existence for the foreseeable future. In common with
many junior resource investment and exploration companies, the
Group and Company raise funds in discrete tranches from existing
shareholders and /or new investors. The Directors and management
are using funds for the evaluation of resource investment and
exploration opportunities. The current funds are forecast to
provide sufficient working capital through the next financial year
and additional funds will be raised as and when required. Thus,
they continue to adopt the going concern basis of accounting in
preparing the financial statements.
1.4 Risks and uncertainties
The Directors continuously assesses and monitors the key risks
of the business. The key risks that could affect the Group's medium
term performance and the factors that mitigate those risks have not
substantially changed from those set out in the Annual Report and
Financial Statements for the Year Ended 31 December 2017, a copy of
which is available on the Group's website,
www.altus-strategies.com, and on SEDAR, www.sedar.com. The key
financial risks are liquidity risk, foreign exchange risk, credit
risk, commodity risk and interest rate risk.
1.5 Critical accounting estimates
The preparation of condensed consolidated interim financial
statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the end of the
reporting period. Significant items subject to such estimates are
set out in Annual Report and Financial Statements for the Year
Ended 31 December 2017. The nature and amounts of such estimates
have not changed significantly during the interim periods.
The Company issued share warrants as compensation for finders'
fees in the period, the assumptions and model for estimating the
fair value of these share-based payments are disclosed in note
10.
1.6 Foreign exchange gains and losses on consolidation
On consolidation, the results of overseas operations measured
using a different functional currency to British Pounds Sterling,
are translated into British Pounds Sterling at rates approximating
to those ruling when the transactions took place. All assets and
liabilities of these overseas operations are translated at the rate
of the reporting date. Exchange differences arising on translating
the opening net assets at opening rate and the results of overseas
operations at actual rate are recognised in other comprehensive
income.
1.7 Valuation of equity units issued in private placements
The Company has adopted a residual value method with respect to
the measurement of shares and warrants issued as private placement
units. The residual value method first allocated value to the more
easily measurable component based on fair value and then the
residual value, if any, to the less easily measurable
component.
The fair value of the ordinary shares issued in private
placements are determined to be the more easily measurable
component and were valued at their fair value, as determined by the
closing quoted bid price on the day of issuance of the ordinary
shares. The balance, if any, was allocated to the attached
warrants. Any fair value attributed to the warrants is recorded in
other reserves.
1.8 Adoption of IFRS 9
On 1 January 2018, the Group adopted all of the requirements of
IFRS 9 - Financial Instruments. IFRS 9 uses a single approach to
determine whether a financial asset is classified and measured at
amortised cost or fair value, replacing the multiple rules in IAS
39. The approach in IFRS 9 is based on how an entity manages its
financial instruments and the contractual cash flow characteristics
of the financial asset. Most of the requirements in IAS 39 for
classification and measurement of financial liabilities were
carried forward in IFRS 9, therefore the Group's accounting policy
with respect to financial liabilities is unchanged.
The Group completed an assessment of its financial assets and
liabilities as 1 January 2018. The following table shows the
original classification of the Group and Company's financial
instruments under IAS 39 and the new classification under IFRS
9:
Financial Assets and Liabilities Original Classification New Classification
- IAS 39 - IFRS 9
--------------------------------- ---------------------------- -------------------
Cash and cash equivalents Loans and other receivables Amortised cost
Trade and other receivables Loans and other receivables Amortised cost
Equity investments Fair value through Fair value through
Profit or Loss Profit or Loss
Trade and other payables Amortised cost Amortised cost
--------------------------------- ---------------------------- -------------------
The adoption of IFRS 9 did not result in any changes to the
Group and Company's financial statements.
1.9 Accounting pronouncements not yet effective
The following standard has been issued by the IASB and has not
yet been adopted by the Company. The Company is currently
evaluating the impact the new standard is expected to have on its
consolidated financial statements.
IFRS 16 Leases was issued in January 2016 (effective 1 January
2019) and provides a single lessee accounting model, requiring
lessees to recognize assets and liabilities for all leases unless
the lease term is 12 months or less or the underlying asset has a
low value.
2. Segmental Analysis
The Group operates principally in the UK, Canada and Africa,
with operations managed on a project by project basis within each
geographical area. Activities in the UK and Canada are mainly
administrative in nature whilst the activities in Africa relate to
exploration and evaluation work.
UK & Canada Africa Total UK & Canada Africa Total
2018 2018 2018 2017 2017 2017
GBP GBP GBP GBP GBP GBP
For the three months
ended 30 September
Management fees and
costs recovered from
joint venture partners - 4,122 4,122 - 4,761 4,761
Loss from operations (295,031) (192,615) (487,646) (496,069) (67,220) (563,289)
For the nine months
ended 30 September
Management fees and
costs recovered from
joint venture partners 1,033 44,414 45,447 - 387,987 387,987
Loss from operations (824,278) (582,431) (1,406,709) (1,491,942) (167,381) (1,659,323)
Reportable segment
assets 2,140,263 4,327,501 6,467,764 1,029,974 427,957 1,457,931
Reportable segment
liabilities (345,549) (106,057) (451,606) (242,338) (17,040) (259,378)
3. For the three months ended 30 September
Exploration
Expenses
Administrative Operational Travel Administrative Operational Travel
Location and licence expenses expenses expenses Total expenses expenses expenses Total
2018 2018 2018 2018 2017 2017 2017 2017
GBP GBP GBP GBP GBP GBP GBP GBP
Cameroon - Bikoula 3,046 1,213 - 4,259 - 22 - 22
Cameroon - Ndjele 1,010 1 - 1,011 1 - - 1
Cameroon - Birsok 5,221 - - 5,221 - - - -
Cameroon - Mandoum 3,252 61 - 3,313 - - - -
Cameroon - Laboum 14,954 8,398 2,150 25,502 15,116 10,530 6,580 32,226
Cameroon - General 4,537 9,168 340 14,045 12,700 611 906 14,217
Ethiopia - Daro 310 12,887 1,782 14,979 - - - -
Ethiopia - Tigray-Afar 315 39 - 354 4,441 2,882 2,257 9,580
Ethiopia - Negash - - - - - - - -
Ethiopia - General 12,627 139 702 13,468 11,636 29 1,059 12,724
Ivory Coast - Prikro 1,679 1,938 907 4,524 - - - -
Ivory Coast - General 9,012 1,870 300 11,182 - - - -
Liberia - Bella Yella - - - - 69 426 13 508
Liberia - Zolowo 15,865 13,976 6,697 36,538 23,564 - - -
Liberia - General (4,553) 705 38 (3,810) - - - -
Mali - Korali Sud (Diba) 12,851 178 1,352 14,381 - - - -
Mali - Djelimangara 3,728 (142) 579 4,165 - - - -
Mali - Lakanfla 1,195 1,613 2,317 5,125 - - - -
Mali - Pitiangoma Est 458 2,840 21 3,319 - - - -
Mali - Sebessounkoto Sud 11,689 2,726 2,122 16,537 - - - -
Mali - Tabakorole 1,231 (52) 64 1,243 - - - -
Morocco - Agdz 759 15 - 774 267 5,939 2,167 8,373
Morocco - Ammas - 1,433 82 1,515 - - - -
Morocco - Takzim 18 7,152 1,505 8,675 - 306 - 306
Morocco - Zaer - 176 14 190 - - - -
Morocco - General 14,779 (205) (23) 14,551 13,754 2,888 892 17,534
Other 51 306 (2,382) (2,025) 4,141 3,425 2,186 9,752
Total 114,034 66,435 18,567 199,036 85,689 27,058 16,060 128,807
------------------------ ----------------------- ---------------------- ------------------- ------------------------- ------------------------- ----------------------- ----------------
For the nine months ended 30 September
Location and Administrative Operational Travel Administrative Operational Travel
licence expenses expenses expenses Total expenses expenses expenses Total
2018 2018 2018 2018 2017 2017 2017 2017
GBP GBP GBP GBP GBP GBP GBP GBP
Cameroon -
Bikoula 13,267 7,257 6,075 26,599 262 22 - 284
Cameroon -
Ndjele 2,941 426 - 3,367 1,454 3,099 1,692 6,245
Cameroon -
Birsok 16,283 - - 16,283 1,032 189 - 1,221
Cameroon -
Mandoum 7,454 61 - 7,515 - - - -
Cameroon -
Laboum 37,229 10,646 2,810 50,685 46,752 37,256 26,299 110,307
Cameroon -
General 51,030 9,776 1,552 62,358 51,157 (1,319) 906 50,744
Ethiopia - Daro 1,564 30,115 6,522 38,201 - - - -
Ethiopia -
Tigray-Afar 5,711 271 50 6,032 20,058 44,101 13,838 77,997
Ethiopia -
Negash - - - - - - - -
Ethiopia -
General 35,100 1,727 3,774 40,601 56,381 234 5,100 61,715
Ivory Coast -
Prikro 2,329 9,850 1,766 13,945 - - - -
Ivory Coast -
General 16,739 5,478 4,898 27,115 - - - -
Liberia - Bella
Yella - 1,143 - 1,143 9,336 2,817 23 12,176
Liberia -
Zolowo 19,315 22,372 12,710 54,397 23,564 - - 23,564
Liberia -
General 7,815 835 38 8,688 - - - -
Mali - Korali
Sud (Diba) 16,289 2,470 1,401 20,160 - - - -
Mali -
Djelimangara 4,372 6,998 600 11,970 - - - -
Mali - Lakanfla 13,631 3,491 2,402 19,524 - - - -
Mali -
Pitiangoma Est 458 2,840 21 3,319 - - - -
Mali -
Sebessounkoto
Sud 13,712 13,437 2,202 29,351 - - - -
Mali -
Tabakorole 14,251 913 67 15,231 - - - -
Morocco - Agdz 3,418 1,143 224 4,785 297 6,255 4,476 11,028
Morocco - Ammas - 1,433 82 1,515 - - - -
Morocco -
Takzim 18 7,286 1,508 8,812 457 572 38 1,067
Morocco - Zaer - 176 14 190 - - - -
Morocco -
General 46,139 2,315 2,706 51,160 55,299 6,682 2,891 64,872
Other 3,657 844 - 4,501 4,141 3,425 2,186 9,752
Total 332,722 143,303 51,422 527,447 270,190 103,333 57,449 430,972
---------------------- --------------------- -------------------- ------------------- ---------------- ---------------- ---------------- ----------------
4. Administrative Expenses
Administrative expenses include For the three months For the nine months
the following balances: ended ended
30 September 30 September
2018 2017 2018 2017
GBP GBP GBP GBP
Employee costs 163,453 159,599 500,862 866,363
Costs incurred on behalf of
joint venture partners - 3,039 - 172,679
Legal and professional expenses 47,668 12,314 137,758 66,750
Corporate travel expenses 41,008 5,902 68,473 15,597
Premises expenses 10,132 6,245 44,505 22,862
Exchange losses/(gains) (14,821) 10,345 (48,619) 8,885
Depreciation of property, plant
and equipment 1,853 - 5,469 738
Other expenses 43,439 23,997 108,027 55,977
292,732 221,441 816,475 1,209,851
============== ========= ==================== =============
5. Intangible Assets
At 1 January Disposals Exchange At 30 September
Licence Country 2018 Additions and Impairments Adjustments 2018
GBP GBP GBP GBP GBP
Korali Sud
(Diba) Mali - 1,368,808 - 51,658 1,420,466
Lakanfla Mali - 597,582 - 22,138 619,720
Djelimangara Mali - 389,066 - 14,759 403,825
Sebessounkoto
Sud Mali - 403,020 - 14,759 417,779
Tabakorole Mali - 590,564 - 22,139 612,703
Pitiangoma Est Mali - 583,599 - 22,138 605,737
Laboum Cameroon 22,202 - - - 22,202
Bikoula Cameroon 17,419 - - - 17,419
Ndjele Cameroon 2,054 - - - 2,054
Birsok Cameroon 44,130 - - - 44,130
Mandoum Cameroon 29,375 - - - 29,375
Tigray-Afar Ethiopia 14,406 - - - 14,406
Daro Ethiopia - - - - -
Negash Ethiopia 331 - (331) - -
Agdz Morocco 1,759 - - - 1,759
Takzim Morocco - 616 - - 16
Zaer Morocco - - - - -
Ammas Morocco - - - - -
Ivory
Prikro Coast - 1,474 - - 1,474
Zenoula Ivory
(application) Coast - - - - -
Toura Ivory
(application) Coast - 1,338 - - 1,338
Bella Yella Liberia 20,198 - (20,198) - -
Zolowo Liberia - - - - -
151,874 3,936,067 (20,529) 147,591 4,215,003
--------------- ----------------------- ----------------- -------------------- -----------------------
6. Legend Acquisition
On 30 January 2018, Altus acquired all of the outstanding shares
of Legend Gold Corp. ("Legend"). A summary of the preliminary
purchase price allocation for the Legend Acquisition is as
follows:
Preliminary Purchase Price
Legend common shares outstanding as at January 30,
2018 13,686,752
----------------------------------------------------- ------------------------------
Exchange Ratio 3.0
----------------------------------------------------- ------------------------------
Altus common shares issued to Legend shareholders 41,060,256
Fair value of Altus common share, in GBP on January GBP0.085
30, 2018
----------------------------------------------------- ------------------------------
Fair value of Altus common shares issued, in GBP GBP3,490,122
Fair value of outstanding Legend warrants exchanged GBP102,000
for Altus warrants
Altus transaction costs GBP138,000
----------------------------------------------------- ------------------------------
Preliminary Purchase Price GBP3,728,122
----------------------------------------------------- ------------------------------
Purchase Price Allocation GBP
Cash and cash equivalents 13,223
Receivables 3,534
Intangible assets 3,890,657
Property and equipment 2,133
Trade and other payables (140,249)
Notes payable (41,176)
-------------------------------- ------------------------------
Total purchase price 3,728,122
--------------------------------- ------------------------------
The value of the Altus ordinary shares was calculated based on
the issuance of 41,060,256 shares at a price per share of GBP0.085
which was closing Altus share price on 30 January 2018.
The replacement of Legend's warrants has been valued using the
Black-Scholes option pricing model. The weighted average
assumptions used in the Black-Scholes option pricing model are as
follows:
Weighted average: Warrants
----------------------------- --------------
Discount rate 0.60%
Expected life (years) 1.42
Expected volatility 100%
---------------------------- --------------
At the time of acquisition Altus had only recently become a
public company and therefore does not have much trading history on
which to base volatility. A volatility of 100% has been assumed for
the purposes of this calculation. The fair value of the replacement
warrants is based on the outstanding 2,888,618 warrants outstanding
adjusted for the Share Exchange Ratio of 3.0 of Altus common shares
per Legend warrant. The fair value per common share of Altus is the
closing price on the Alternative Investment Market ("AIM") on
January 30, 2018 and the foreign exchange rate of 1.7396 is the
closing GBP to CAD exchange rate published by the Bank of England
on January 30, 2018.
The transaction has been treated as an asset acquisition by
Altus and therefore estimated transaction costs attributable to the
acquisition totalling GBP138,000 have been included in the
preliminary purchase price. The transaction costs are mainly legal
expenses.
Under IFRS 3, a business must have three elements: inputs,
processes and outputs. Legend Gold Corp. ("Legend") was an early
stage exploration company and had no mineral reserves and no plan
to develop a mine. Legend did have title to mineral properties, but
these could not be considered inputs because of their early stage
of development. Legend had no processes to produce outputs. Legend
had not completed a feasibility study or a preliminary economic
assessment on any of its properties and had no infrastructure or
assets that could produce outputs. There was also no management or
personnel within the Company that had any experience or expertise
in mine development, mining, construction of mill equipment or in
milling processes. Therefore, our conclusion was that the
transaction was an asset acquisition and not a business
acquisition.
7. Share Capital
Share capital Share premium Total
Number
of shares GBP GBP GBP
At 1 January 2018 107,680,814 1,076,808 999,000 2,075,808
Shares issued in period 68,451,872 684,519 4,996,726 5,681,245
Share issuance costs
in period - - (146,274) (146,274)
Warrants converted to
shares in period 1,650,000 16,500 144,804 161,304
At 30 September 2018 177,782,686 1,777,827 5,994,256 7,772,083
============== ======================= =============== ============
On 18 April 2018, the Company completed a non-brokered private
placement offering of units ("Units") at an issue price of C$0.15 /
GBP0.0846 per Unit to raise gross proceeds of GBP2,300,690. Each
Unit was comprised of one Ordinary Share and one Ordinary Share
purchase warrant of Altus ("Warrant") exercisable to purchase one
Ordinary Share for five years at an exercise price of C$0.30. Of
the GBP2,300,690 a fair value of GBP2,191,123 was assigned to the
share capital and premium, GBP109,567 was assigned to the share
warrants. Share issuance costs of GBP146,174 were incurred with
respect to this capital raise.
8. Share warrants
Warrants Warrants
outstanding outstanding
at 1 Warrants Warrants Warrants at 30 Exercise
Issue January issued exercised lapsed September price Expiry
date 2018 in period in period in period 2018 GBP date
10
August 9 August
2017 110,000 - - (110,000) - 0.100 2018
30
January 5 April
2018(1) - 204,000 - (204,000) - 1.114 2018
30 5
January September
2018(1) - 6,613,584 - (6,613,584) - 1.094 2018
30 8
January September
2018(1) - 1,950,000 (1,650,000) - 300,000 0.050 2019
18 April 17 April
2018(1) - 911,861 - - 911,861 0.134 2021
18 April 17 April
2018(1) - 27,391,616 - - 27,391,616 0.179 2023
110,000 37,071,061 (1,650,000) (6,927,584) 28,603,477
============ =========== ============ ============ ============
(1) Exercise prices are determined by reference to the underlying
Canadian Dollar price and the exchange rate as at 30 September 2018.
The approximate weighted average exercise price of outstanding warrants
is GBP0.176.
Warrants issued on 30 January 2018 represent outstanding warrants
of Legend which were replaced by the Company when it acquired Legend.
9. Share Options
The Company does not presently operate a share option plan
10. Share based payments
The fair value of share warrants issued in compensation for finder's
fees on the private placement during the period was determined using
the Black Scholes option pricing model.
Share price on issue GBP0.080
Exercise price of share GBP0.125
warrants
Expected volatility 75.00%
Expected life 3 Years
Risk free rate 0.89%
Dividend yield 0.00%
Finder's fees recognised as a deduction from share premium for
the nine months ended 30 September amounted to GBP27,455 (nine
months ended 30 September 2017: GBPnil).
11. Earnings per share
The calculation of the basic earnings per share of 0.01 pence
for the three months ended 30 September 2018 (2017: loss of 0.50
pence) is based on the profit attributable to the equity holders of
the Company of GBP17,990 for the three month period ended 30
September 2018 (2017: loss of GBP517,565) divided by the weighted
average number of shares in issue during the period of 177,782,686
(2017: 103,980,813).
The calculation of the basic loss per share of 0.67 pence for
the nine months ended 30 September 2018 (2017: 1.76 pence) is based
on the loss attributable to the equity holders of the Company of
GBP986,796 for the nine month period ended 30 September 2018 (2017:
GBP1,738,946) divided by the weighted average number of shares in
issue during the period of 161,298,758 (2017: 99,047,479).
The basic and diluted profit per share are the same, as the
warrants in issue were not dilutive at 30 September 2018.
Details of warrants that could potentially dilute earnings per
share in future periods are disclosed in note 8 above.
12. Dividends
No dividend has been declared or paid by the Company during the
three months or nine months ended 30 September 2018 (GBPnil).
13. Related party transactions
Key management personnel of the Group received remuneration
during the three month period ending 30 September 2018 of GBP68,375
(2017: GBP69,367) and for the nine month period ended 30 September
2018 of GBP219,608 (2017: GBP373,145).
For the three months and nine months ended 30 September 2018,
the Group incurred expenses of GBP11,428 (2017: GBPnil) and
GBP25,778 (2017: GBPnil) respectively, for services provided by
Seabord Services Corp. ("Seabord"), a company controlled by one of
the directors. Seabord is a management services company that
provides the services of a Chief Financial Officer ("CFO") and
administrative support to the Group. At 30 September 2018,
GBP42,738 was due to Seabord (at 31 December 2017: GBPnil).
For the three months and nine months ended 30 September 2018,
the Group recharged GBP4,000 (2017: GBP4,761) and GBP45,242 (2017:
GBP49,873) respectively, of costs to Canyon Resources Ltd
("Canyon") with respect to the Birsok & Mandoum project joint
venture between Canyon and Altus. Canyon is a company with a mutual
director. At 30 September 2018, GBP39,137 was due from Canyon (at
31 December 2017: GBP31,468).
For the three months and nine months ended 30 September 2018,
the Group recharged GBP122 (2017: GBPni) and GBP205 (GBPnil)
respectively, of costs to Aegis Asset Management Limited. Aegis
Asset Management Limited is a company with mutual directors. At 30
September 2018, GBP130 was due from Aegis Asset Management (at 31
December 2017: GBPnil).
14. Ultimate controlling party
The Directors believe there to be no ultimate controlling
party.
15. Approval of financial statements
These condensed consolidated interim financial statements were
authorised for issue by the board of directors on 21 November
2018.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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