TIDMALS
RNS Number : 3930J
Altus Strategies PLC
23 August 2021
Altus Strategies Plc / Index (EPIC): AIM (ALS) TSX-V (ALTS)
OTCQX (ALTUF) / Sector: Mining
23 August 2021
Altus Strategies Plc
("Altus" or the "Company")
First Closing of Cash Paying Royalty on Caserones Copper Mine in
Chile
Altus Strategies Plc (AIM: ALS, TSX-V: ALTS, OTCQX: ALTUF)
announces that it has completed the first closing ("First Closing")
of its recently announced agreement to acquire an effective 0.418%
net smelter return royalty ("NSR") interest on the producing
Caserones Copper Mine ("Caserones"), located in the Atacama region
of northern Chile (the "Acquisition") (see Altus news release dated
17 August 2021). Altus is acquiring the NSR interest for US$34.1
million through a strategic 50:50 partnership with TSX-V and NYSE
American listed EMX Royalty Corporation ("EMX"). Altus and EMX have
created a Special Purpose Vehicle ("SPV") incorporated in Chile
that is owned jointly by Altus and EMX. On completion of the
Acquisition, the SPV will have acquired an effective 0.836% NSR
royalty for US$68.2 million. Altus is principally financing the
Acquisition with a US$29 million acquisition loan facility
agreement ("Facility") provided by La Mancha Fund SCSp ("La
Mancha").
Highlights:
-- First Closing under Acquisition of a 0.418% NSR interest on Caserones copper mine in Chile
-- Initial 76% of 0.418% NSR interest acquired for US$26.15 million
-- Final closing of the remaining 24% NSR interest to occur on 01 September 2021
-- NSR interest is expected to generate cash flow of US$3.2M (post-tax) per year to Altus
-- Caserones has been operating since 2015 and has 17 years of mine life remaining
-- Acquisition part-financed by US$29M loan facility from major shareholder La Mancha
-- La Mancha holds a 35.08% interest in Altus and its Chief Executive is a Director of Altus
-- SPV owned by Altus and EMX to share revenues from a combined 0.836% NSR interest
-- Additional royalty transactions under review globally with a focus on gold and copper
Steven Poulton, Chief Executive of Altus, commented:
"We are delighted to announce the first closing of a significant
cash paying royalty on a long-life copper mine in a tier-1 mining
jurisdiction. Altus is acquiring an effective 0.418% NSR royalty
interest on the Caserones copper mine in the Atacama region of
Chile, for a cash consideration of US$34.1M. The NSR interest is
expected to generate approximately US$3.2 million (post-tax) per
year attributable to Altus. The Caserones mine is owned and
operated by JX Nippon Mining & Metals Corporation of Japan and
has an estimated 17 years of production remaining.
"The Acquisition of the NSR interest is being part-financed by a
US$29 million acquisition bridge loan facility provided by La
Mancha, our largest shareholder, which has recently established a
US$1.4 billion mining investment fund. The provision of the
facility underscores La Mancha's commitment to the long-term growth
of Altus and the quality of this Acquisition. We are also delighted
to have formed a strategic relationship with NYSE American and
TSX-V listed EMX Royalty Corp. to acquire the NSR through the
creation of a Chilean SPV company. Our partnership with EMX is
strengthened by Michael Winn, the Chairman of EMX, who is also a
Non-Executive Director of Altus.
"In addition to our Acquisition, it is notable that TSX-listed
Nomad Royalty Company Ltd, which has a market capitalisation of
approximately C$440 million, has recently agreed to purchase a
further 0.351% NSR royalty interest on the Caserones mine,
increasing their total effective NSR interest to 0.631%. The Nomad
transaction underscores the strength of investor interest in this
high quality royalty.
"Following this Acquisition, Altus will receive significant
quarterly royalty income and will have long- term exposure to
copper. We expect the demand for copper to remain strong in the
years ahead, as the global economy seeks to decarbonise in parallel
with continued infrastructure development, urbanisation and wealth
creation in emerging markets. I look forward to updating
shareholders on the final closing in due course."
First Closing of Caserones NSR
The SPV has agreed to purchase 43% of the issued and outstanding
shares of an underlying royalty holder, Sociedad Legal Minera
California Una de la Sierra Peña Negra ("SLM California"), through
a Share Purchase Agreement with the 16 shareholders of SLM
California and thereby acquire indirect ownership of 43% of SLM
California's 1.944% NSR royalty interest in the Caserones property
(i.e. a 0.836% NSR royalty interest, held as to 0.418% by Altus and
0.418% by EMX).
Under the First Closing announced today, the SPV has acquired
33% of SLM California for US$52.3 million. The First Closing
represents approximately 76% of the NSR being acquired by the SPV.
The second and final closing of the remaining 10% of the shares of
SLM California is anticipated to close by 1 September 2021.
Altus expects the Caserones NSR will provide it with immediate
and long-term cash flows, in line with its stated growth
strategy.
Drawdown of Strategic Acquisition Facility from La Mancha
To finance the Acquisition, Altus has drawn down US$29 million
from a strategic acquisition loan facility ("Facility") with La
Mancha, which holds a 35.08% interest in the Company. The balance
of the consideration is being funded from the Company's existing
cash on hand. Following the Acquisition, Altus will have
approximately GBGBP6.3 million / US$8.7 million of cash on hand.
The amount drawn down, and interest accrued, under the Facility
will be repayable on 17 February 2022.
The Facility bears annualised interest at a rate of the
three-month United States Dollar ("USD") London Inter-bank Offered
Rate ("LIBOR") plus 7% for the first three months, and USD LIBOR
plus 9% thereafter. The Facility is senior secured against the
shares of Altus Royalties Limited, a 100% owned subsidiary of the
Company, of which the only material asset is the shareholding in
the SPV. The Facility incorporates an automatic prepayment
provision which applies to future cash proceeds from equity capital
raised by Altus. Interest will be payable on a quarterly basis. No
break fees, early repayment fees or other fees are payable by Altus
to La Mancha, or to any other party, in connection with the
Facility.
Caserones Royalty Background
Compania Minera Caserones ("CMC") and SLM California originally
staked the mineral claims that overlie the current Caserones
deposit. The 2.88% Caserones NSR was created in a 2009 agreement
("Agreement") between Minera Lumina Copper Chile S.A. as purchaser
and CMC and SLM California as the vendors of the Caserones claims.
SLM California and CMC own a 67.5% and 32.5% share of the 2.88%
royalty respectively equating to an attributable 1.94% NSR interest
for SLM California. Under the Agreement, the NSR interest will be
reduced to 2% and 1% if the London Metal Exchange ("LME") quoted
copper price falls below US$1.25 and US$1.00 per pound
respectively. The LME copper price is currently US$4.27/lb (as at
16 August 2021).
About the Caserones Mine
The Caserones mine is a large, open-pit porphyry
copper-molybdenum deposit, located within a 17,000 hectare land
package at an elevation of approximately 4,300m above sea level in
the borough of Tierra Amarilla, in the Atacama region of northern
Chile. The mine is approximately 15km from the border with
Argentina, 162km southeast of the city of Copiapó and 800km north
of the capital, Santiago.
Located at the southern end of the well documented Maricunga
mineral belt, the geology of Caserones comprises an Early-Miocene
porphyry system associated with a cluster of dacite porphyries and
breccias intruding Palaeozoic granitic, volcanic, and metamorphic
rocks. Caserones has a well-developed supergene enrichment profile
of oxide copper and secondary chalcocite that overlies hypogene
sulfide (chalcopyrite-molybdenite) mineralization.
The mine is owned and operated by Minera Lumina Copper Chile
SpA, an indirect 100% owned subsidiary of JX Nippon Mining &
Metals Corporation ("JX Nippon") of Japan. It produces copper and
molybdenum concentrates from a conventional crusher, mill and
flotation plant, as well as copper cathodes from a dump leach,
solvent extraction and electrowinning plant.
The mine has been in operation for five years, following a
capital investment of approximately US$4.2 billion. It has a
reported average waste to ore strip ratio of 0.47 and in 2020
reportedly produced 104,917 tonnes of copper and 2,452 tonnes of
fine molybdenum in concentrates, as well as 22,056 tonnes of fine
copper in cathodes. Caserones has 17 years of operation remaining
under its current mine plan, along with excellent exploration
potential. In a news release dated 9 November 2020, JX Nippon
announced plans for "stepping up exploration efforts in areas
around the mine" in an effort to expand production and further
extend the mine life.
Qualified Person
The technical disclosure in this regulatory announcement has
been approved by Steven Poulton, Chief Executive of Altus. A
graduate of the University of Southampton in Geology (Hons), he
also holds a Master's degree from the Camborne School of Mines
(Exeter University) in Mining Geology. He is a Fellow of the
Institute of Materials, Minerals and Mining and has over 20 years
of experience in mineral exploration and is a Qualified Person
under the AIM rules and National Instrument 43-101 Standards of
Disclosure for Mineral Projects of the Canadian Securities
Administrators.
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-mail: info@altus-strategies.com
SP Angel (Nominated Adviser)
Richard Morrison / Adam Cowl Tel: +44 (0) 20 3470 0470
SP Angel (Broker)
Grant Barker / Richard Parlons Tel: +44 (0) 20 3470 0471
Shard Capital (Broker)
Isabella Pierre / Damon Heath Tel: +44 (0) 20 7186 9927
Yellow Jersey PR (Financial PR & IR) Tel: +44 (0) 20 3004 9512
Charles Goodwin / Henry Wilkinson E-mail: altus@yellowjerseypr.com
About Altus Strategies Plc
Altus Strategies (AIM: ALS, TSX-V: ALTS & OTCQX: ALTUF) is a
mining royalty company generating a diversified and precious metal
focused portfolio of assets. The Company's differentiated approach
of generating royalties on its own discoveries in Africa and
acquiring royalties globally through financings and acquisitions
with third parties, has attracted key institutional investor
backing. The Company engages constructively with all stakeholders,
working diligently to minimise its environmental impact and to
promote positive economic and social outcomes in the communities
where it operates. For further information, please visit
www.altus-strategies.com .
Cautionary Note Regarding Forward-Looking Statements
Certain information included in this announcement, including
information relating to future financial or operating performance
and other statements that express the expectations of the Directors
or estimates of future performance constitute "forward-looking
statements". 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 programmes on
schedule and the success of exploration programmes. Readers are
cautioned not to place undue reliance on the forward-looking
information, which speak only as of the date of this announcement
and the forward-looking statements contained in this announcement
are expressly qualified in their entirety by this cautionary
statement.
Where the Company expresses or implies an expectation or belief
as to future events or results, such expectation or belief is based
on assumptions made in good faith and believed to have a reasonable
basis. The forward-looking statements contained in this
announcement are made as at the date hereof and the Company assumes
no obligation to publicly update or revise any forward-looking
information or any forward-looking statements contained in any
other announcements whether as a result of new information, future
events or otherwise, except as required under applicable law or
regulations.
TSX Venture Exchange Disclaimer
Neither the TSX Venture Exchange nor the Investment Industry
Regulatory Organisation of Canada accepts responsibility for the
adequacy or accuracy of this release.
Market Abuse Regulation Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
**END**
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